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Ideas Roundtable: Advancing the Conversation Around Topics that Shape Our Lives
Content provided by GE
Ideas Roundtable: Advancing the Conversation Around Topics that Shape Our Lives

How to Nurture America's Start-ups and Stay Globally Competitive


Storm clouds may be gathering on the horizons of United States competitiveness, but you should see the size of the silver-lining. As sensors become cheaper and more plentiful, and as the Cloud itself becomes even more integrated into people's thinking and hardware designs, the United States stands to benefit enormously. 

My domains of expertise are internet startups and startup accelerators, and when it comes to internet and software innovations, the United States is still the global leader. We can remain there if our government and organizations don't make moves that are counter-productive.

The United States was at a competitive disadvantage for a long time in the mobile space because the mobile carriers insisted on holding court as gatekeepers. This lack of openness caused a lag in the adoption of innovation in the United States mobile telecommunications marketplace. 

The failure of the mobile carriers to open-up was the death knell of many mobile startups a decade ago - including one I started called iContact - that might have thrived in the current App Store environment. 

The App Stores of Apple, Microsoft, Google, and RIM may still have some gatekeepers, but the industry is far more open for United States-based mobile application developers than it is used to be.

On a broader scale, as a country, we need to stop shooting ourselves in the foot. I am not a huge fan of the government getting involved in the startup arena -- other than maybe shining a light on what is working. Things like the tax credits that some states offer are not necessarily additive. In fact, in some cases the way they hand out money can create adverse selection. 

But the thing that probably bugs me -- and many in the technology field -- the most is our short-sighted immigration policies. We need the US Senate and House of Representatives to push for and approve the Startup Visa to allow foreign-born startup founders with venture capital and employees to stay here and build their businesses and create American jobs.

But it's not just immigration changes that will make the climate for startups in the United States better. There are lessons that we can learn from countries and innovation clusters all over the world about what works and what doesn't. 

Lots of people are talking about Singapore and their efforts to ignite entrepreneurship through recruiting the world's best mentors and teachers. Based on my visits, its seems like they've got lots of programs for entrepreneurs but not enough entrepreneurs. It's like walking into a restaurant with 20 waiters standing by to serve you and nobody there to eat dinner. Only time will tell if these tactics prove to be successful. I have my own thoughts about what it takes to make a successful startup cluster.

Here are my seven essential ingredients to creating entrepreneurial communities:

  1. Place Matters
  2. Entrepreneurs Must Lead
  3. Create a Rally Point for the Community
  4. Startups Need Fresh Talent
  5. Entrepreneurial Density Matters
  6. Promote the Region
  7. Create Visible Entry Points into the Entrepreneurial Community

When it comes to building a successful innovation cluster -- startup and entrepreneur density matters. The key is to create a very dense neighborhood of startups and entrepreneurs. It allows entrepreneurs to bounce ideas off each other, share knowledge and resources, and it also allows visitors (like venture capitalists) to come through and make very efficient visits. 

If you look at New York City, their innovation cluster isn't really the whole city. Instead the New York startup scene is more about Brooklyn and Union Square. When you look at Los Angeles, their innovation cluster is really Santa Monica. 

But my favorite example is what London is doing with Tech City (check out this cool interactive map). They are purposely trying to create a very dense neighborhood for innovation and entrepreneurship.

There is no reason why the United States can't stay at the forefront of global competitiveness. It's simple: startups are the key to future global competitiveness, so we must work together to help them thrive.

To do so we just have to be smart about immigration, take measured approaches to how we build our innovation clusters to encourage startups that can grow and succeed, and ultimately keep from shooting ourselves in the foot. We can do that can't we?

To learn more about the state of innovation around the world, explore the above Innovation Barometer 2012 data visualization »

David Cohen - David Cohen is the founder and CEO of TechStars, a mentorship-driven seed stage investment program for Internet startups. David is an active startup advocate, advisor, board member, and technology advisor who comments on these topics on his blog at You can find David on Twitter @davidcohen.

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