David Homik has a nice post on VentureBlog about the problems incubators and government grants create for startups. Both have played a visible role in Europe’s strategy for bringing about an entrepreneurial culture. My past experience at an incubator, at a corporate venturing unit, and presently as an entrepreneur in a country where government grants are a common source of new business funding corroborate Homik’s reasoning that both can be recipes for disaster. Homik writes:

Traditional incubators and economic grants can do more harm than good to a startup culture when there is not already a well-engrained and robust entrepreneurial ecosystem upon which these startups may grow and thrive.

The question that logically follows from Homik’s arguing is, how might a well-engrained and robust entrepreneurial ecosystem arise if not by channeling resources into incubators and government support? I think it’s reasonable to assume this requires instruments that are perhaps not financial as much as they are cultural in nature. Entrepreneurial activity is linked with a culture of taking things apart, making ad-hoc fixes, and a general inclination to come up with customized local solutions to problems that have already been ‘solved’. Europe’s got to rediscover this in its tradition if it wants to become the ecosystem Homik points to.

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marko
September 12th, 2006 at 2:23 pm (#)

Speaking from personal experiences with government programs supposed to support entrepreneurship, I think the best thing the government can do is not to get directly involved. The people responsible for decision making don’t understand (or care) what should be done….if they did, they would be doing it themselves in the private sector. It’s all about skills following incentives.

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