Delivering Impact At Scale: The Transformative Effect Of Startup Ecosystems

A successful startup ecosystem is created when the entrepreneurial community, governments, investors, and innovation centers, all collaborate.

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The word "ecosystem" was coined by the botanist Arthur Tansley to describe a community of living organisms that interact with each other, and with non-living environmental factors, such as air, water, soil, and other elements. They collaborate, share resources, and adapt together to external disruptions.


Similarly, startup ecosystems depend on a number of factors to survive and thrive. A successful startup ecosystem is created when the entrepreneurial community, governments, investors, and innovation centers, all collaborate. Creating the avenues and infrastructure for these interactions to happen, at scale and efficiently, requires time and effort, but is definitely a worthwhile endeavor. The benefits percolate to all strata of society- while cities are the perfect unit to make it happen.

Cities play a vital role in nurturing startups by creating favorable grounds on which they thrive, from education and infrastructure, to financing and talent attraction. Around the world, we have seen ecosystems growing in number and importance, and becoming the focal point for specific innovation verticals, be it the high concentration of healthcare innovation in San Francisco, London's fintech community, or the information technology (IT) hub of Bengaluru. These clusters can create true economic flywheels, continuously creating knowledge, and attracting human, political, and financial capital.

Precisely because of their contribution towards development (more than 80% of global GDP is generated in cities), these cluster play an increasingly critical role in shaping the future. By 2050, it is predicted that 70% of the world's population will live in cities, increasing the complexity and their ability to be sustainable. Housing, transportation, sanitation, and green spaces are just some of the challenges cities face in their quest towards sustainability and assuring quality of life for residents. To continue to unlock prosperity, cities need to keep investing in innovation. It is a symbiotic relationship: to the same extent that startups feed off cities, cities need future-looking startups to grow sustainably.

The Dubai story

Dubai has been leading the way in the region in transforming its economy, pivoting from a hydrocarbons-based one to a knowledge-based one by investing in its innovation and startup ecosystems. The city has been ranked 29th in the world on the Startup Cities Index, thanks to its growing focus on the technology sector, while the recently published Global Talent Competitiveness Index, scores the Emirate very highly compared to other international hubs in terms of ease of doing business, jobs created through new investments and connectivity. The soundness of the ecosystem is reflected by its ability to attract foreign capital– in 2020, Dubai-based startups attracted over AED2.3 billion in foreign direct investment.

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Its pro-entrepreneurship policies are paying dividends. The city is home to large global tech companies such as the Yalla Group and Careem, and rising stars such as Kitopi and Bayzat. The city's plural business environment has allowed the growth of startups in fields ranging from financial to consumer services, health to entertainment.

When it comes to future-readiness, the city has renewed its committed to a sustainable approach for the development of the local ecosystem. In June, new initiatives were announced to equip the workforce with skills of the future, alongside and an integrated platform for investment policies and opportunities. Beyond holding Expo 2020 Dubai with sustainability at its core, the city has brough global citizenship to the forefront of its development strategy, through the announcement of UAE's "Principles of the 50," permeated by the concept of shared prosperity, moral duty, peace, and social harmony.

Education for innovation

One of the structural measures to promote innovation is investment in education. Higher education institutions play a critical role in growing innovative economies, as they provide a unique environment for free-thinking and experimentation, combined with methodology. To support this point, beyond the notorious cases of innovations born inside research labs, from the world wide web to DNA sequencing, there is fundamental economic evidence: the social rate of return from investment in academic research is at least 40%, and, in developed countries like the UK, innovation is believed to contribute to two-thirds of private-sector productivity growth in recent development periods.

The contribution of academia to the society and the planet can be truly boundless with the right incentives. We see that trend only intensifying at Global Grad Show, for example: higher education has faced many challenges over the past two years, but the depth of the research and the graduates' motivation to take their solutions to the world are stronger than ever, which is particularly reassuring, especially because all program participants are developing solutions for a better future.

The value of the human capital that is nurtured inside universities is unmatched, and it is also paramount for the development of any sustainable innovation ecosystem. It is no surprise that most of the global indexes measuring the ability of cities and countries to grow their economies are heavily reliant on ratings about human capital attraction, development, and retention. That is proof of another symbiotic relationship within innovation ecosystems: talent gravitate to talent (and, very frequently, concentrates at universities).

Education infrastructure is a key component for long-term global competitiveness and, by consequence, economic sovereignty. Countries that systematically create knowledge are better prepared to respond and benefit from tech revolutions and, more importantly, to lead them.

As Dubai embarks on a new era of socio-economic development, the talent and innovation presented at Global Grad Show, hailing from hundreds of universities around the world, illustrate how a city's support can indeed help to grow the startup ecosystem of the future.

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