loopback0 – Douglas Gourlay's Blog Data Centers, Virtualization, and Cloud Computing

On Innovation in Emerging Markets

The US Council on Competitiveness delegation to Brazil is going quite strong, this is the first moment of downtime I have had since things kicked off yesterday afternoon. One of the main discussion areas has been on how to take technologies out of the university and lab environment and bring innovations to market.

One of the constant themes was that Brazil, while the second largest economy in the western hemisphere is 20 years or so behind on venture capital and having an innovation culture and trajectory- there are several serious inhibitors to innovation based entrepreneurial ventures right now: lack of strong capital markets, business employment taxation, lack of corporate venturing, challenges creating companies because of 'red tape', concerns over intellectual property laws, and a culture where failure is absconded. (you'd think failing is bad, but you can learn a lot from having managed through a downturn/liquidation).

One of the ideas we floated was creating a free trade zone for innovation based entrepreneurship. Basically a physical geography where ventures can be incubated, the venture capitalists can work (think South Sand Hill Road), there are labor law and tax incentives that encourage the rapid development of technology, product, service but then allow the business to take flight and contribute back to the economy when of a sustainable size. Imagine a central network and data center infrastructure that provides 'cloud-style' services to all the members of the technology free-trade-zone but lowers the cost by bypassing stiff import duties and tariffs.

Bring in top universities and skilled entrepreneurs and establish leadership and mentorship opportunities for the companies that are in the FTZ. Bring in the top government sponsored enterprises and largest employers in the region, have them co-fund investment in solving their top-5 research projects. Create a culture of corporate venturing and link the University, the Entrepreneur, and the existing commercial partner- function as a broker to ensure commercial market viability for the innovations. Also! don't forget to provide good PR: Imagine TechCrunch.br providing coverage and acknowledgment of the local venture community and entrepreneurial companies. Whereas the student population today aspires to government or large industry jobs, create heroes out of the innovators.

Lastly start early. Have the top businesses and government agencies that carry an interest in the success of the national and regional economy invest in the creation of the Brazilian equivalent of the Westinghouse Prize. Target science and math research in high school, have a collegiate and graduate version that requires teams to work together and includes business plan development.

Create a culture of rewarding hard work, innovation, inspiration, and invention - groom and cultivate the best ideas, fund them in a pilot program that removes barriers to the opportunity for economic success and wealth creation. Provide the counsel, mentorship, and resourcing to speed time to market and increase the success rate of the ventures. Stimulate the economy of the future, with investment at multiple levels, today.

dg