Before I share my take on the new landscape for today's entrepreneurs, bear with me one moment for a brief history lesson. If we look back to the late 18th century, global economies underwent a seismic change with the advent of improved manufacturing processes, collectively known as the First Industrial Revolution. A second revolution began in the mid 19th century as new technologies -- electrification, mass production, transportation advancements -- again had a dramatic impact on business. In both waves, economies underwent fundamental, irreversible change. Businesses either evolved or were left in the dust. Today we find ourselves in the midst of a third wave of the Industrial Revolution.
The Digital Revolution
Technological developments in the last few decades have undeniably reshaped our current economy. Science and technology will continue to grow to be the primary drivers of economic growth in the 21st century as new products are developed and new applications for existing tech are found. Smart businesses will find ways to leverage new technology and create value through international and cross-industry partnerships. This increasing importance of digitization in the business world creates exciting opportunities to upend the status quo. New companies and products will emerge in this new landscape, either to challenge existing businesses or introduce entirely new products/services. Old-fashioned business models that focus on slow and steady incremental improvements will lose ground to new companies focused on disruptive innovation.
The Explosive Success of Start-Ups
The past ten years have seen a small number of young start-ups develop into billion dollar businesses. In this new era of entrepreneurship, such businesses will no longer be the exception. Small start-ups are becoming increasingly important in the economic landscape because of their potential for explosive success. Facebook grew from zero to 145 million users in only 4 years time. Soon thereafter, WhatsApp went from zero users to 419 million users in the same amount of time. Look for future start-ups to grow at an even faster rate.
Advances in technology are partially responsible for creating an environment that enables such success. Looking at the progression of the web from the 1990's to current day, the dropping costs of infrastructure/prototyping are clearly visible. In addition, a more connected generation of entrepreneurs has led to people around the world launching businesses collaboratively. These groups are leveraging existing tools and communities to build the big businesses of tomorrow in a brand new way. Start-ups know no boundaries in this day and age.
A New Kind of Entrepreneurship
NASDAQ CEO Bob Greifeld just said in a CNBC interview that "the new economy which we talked about 15 years ago has really become THE economy," so it is fair to say that in 10 years from now, the start-ups of today are THE economy of tomorrow. Corporations that want to maintain and grow their market share need to acknowledge that start-ups are increasingly responsible for the breakthrough technologies of tomorrow. When these large companies recognize start-ups as potential assets instead of competitors, we begin to see a new form of business: Entrepreneurship 3.0.
The ideal ecosystem for Entrepreneurship 3.0 involves three parties: a university, a start-up, and a large corporation. The university utilizes its intellectual minds and vast resources towards Research & Development. The start-up leverages its entrepreneurial culture with the resources of the university and corporation to develop innovative products/services. Lastly, the corporation contributes financing and the infrastructure to quickly commercialize those new products/services. It's essential that the corporation enables the start-up with resources without assimilating them into the larger company culture. Maintaining the entrepreneurial mindset of disruptive innovation is paramount to a successful partnership.
Collaboration on a Global Scale
The world is currently facing a number of global problems that require innovative solutions. Climate change, clean energy, food production, water supply, and healthcare are all fundamental challenges that will be greatly affected by the development and application of science and technology. Start-ups that develop smart technology to combat these global issues can become instant competitors to large companies, but Entrepreneurship 3.0 is the most efficient path towards progress and financial success for everyone. Universities and independent organizations are already funneling huge sums of money into R&D. If start-ups work together with corporations, they can more quickly and more effectively tackle today's challenges through prosperous joint ventures.
Preparing for the Problems of Tomorrow
Corporations need to act today to set themselves for long-term success. Strategic partnerships are the answer. Companies need to develop relationships with start-ups outside of their core business and help them without eliminating their spirit of entrepreneurship. They need to find foster collaboration with other large companies who face similar issues in other industries. By maintaining cultures of innovation through Entrepreneurship 3.0, companies prepare themselves for the problems of the future, even though they may be unknown at present.