Innovation Outposts: A Growing Element in Silicon Valley’s Dynamic Innovation Ecosystem

Is it time for Finnish Urban Innovators to establish an outpost in Silicon Valley?

Eilif Trondsen, Ph.D., Chair, Special Interest Group on Entrepreneurship and Learning, Silicon Vikings; and Director, Strategic Business Insights writes:

”The rising economic position and performance of China, the growth and dramatic impact of new technologies on most industries, and new entrepreneurial hot spots around the world are just a few of many developments that are now shaping the global as well as regional and local economies.

Over the long run these and other developments may create regional innovation ecosystems that may rival that of Silicon Valley, especially if policy makers and ecosystem players in Silicon Valley are not successful in addressing some of the challenges—especially on the social front (including housing, transportation and growing disparity of income and wealth)—that could weaken and undermine the economic vitality of the region. (1)

A recent report, Silicon Valley Competitiveness and Innovation Project – 2015 (2) provides a data-rich description of Silicon Valley and its innovation ecosystem, and also identifies and analyzes the major challenges facing Silicon Valley. The report provides a comparative statistical analysis that shows how Silicon Valley ranks compared to Seattle, Southern California, Austin, Boston and New York—referring to key factors that drive the innovation ecosystems of these regions (including talent, capital, R&D, various innovation process elements, business competitiveness, quality of life, opportunity and jobs). The result of this comparative analysis makes clear why Silicon Valley has become a popular location for what I refer to as SV-IOs.

As far as I know, relatively little published literature currently exists on SV-IOs, and no generally accepted definition of SV-IOs currently exists. From my perspective, the innovation outposts should not be narrowly defined, as they can take many forms and shapes depending on the needs of the (mostly large) companies that set up these SV-IOs. As the importance of, and interest in, innovation has increased significantly over the last decade or more, including inside large organizations that see innovation (and especially so-called “open innovation”) as an imperative for future growth, SV-IOs have grown rapidly in numbers—for reasons that will hopefully become clear as you read this article. (The box below provides some of my “Definitional Perspectives” on SV-IOs.).As I see them, SV-IOs are created by large companies that hope to take advantage of, and benefit from, being part of the Silicon Valley dynamic ecosystem.

Brad Power, in an article in Harvard Business Review, put it this way: “How can you build your organization’s ability to sense and respond to rapid improvements in technology? Many large, successful companies are creating offices in California’s Silicon Valley to spot big new trends and learn how they can transform their organization in ways they couldn’t otherwise imagine. It’s no longer good enough to wait for change to come to your industry; you need to be out there where it’s happening. And a lot is happening in Silicon Valley.” (3) In my view, SV-IOs focus not only on technology but on many other emerging trends and developments that can have important impacts on a company’s future innovation strategy and activities.”

Read the article here. 

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