Entrepreneurial Growth Companies & Regions: The Role of Culture

1. Entrepreneurial Growth Companies& Regions: The Role of Culture Patrick Von Bargen Executive Director November 17, 2000

2. Regions & Culture • Critical because regions (distance) matter • Saxenian “Tale of Two Cities’ • Route 128 (dispersed) vs. Silicon Valley (dense) • Critical because culture matters • Difference in performance NOT due to taxes, cost of real estate, cost of wages, etc. It was the character of the ‘industrial systems” of each region, or their “regional cultures.”

3. A Critical Mass of Regional Resources • Financial Capital (friends, family, angels, seed funds, VCs) • Human Capital (managers, technical, “skilled” workforce • Technology (R & D at other companies, universities, labs) • Suppliers & Customers (industrial, technical, professional) • Infrastructure (transport, communications, amenities, environment, education)

4. Elements of Regional Culture • History & Current Culture. Region has leaders, a vision of itself, ancestral companies, heroes & role models, and values. Compatible with entrepreneurial culture? • Little history: Silicon Valley • Lots of history: Pittsburgh, Nor. Virginia • Obvious opportunity to change the current culture: Austin

5. Elements of Regional Culture • The Importance of Leaders. Private sector, public sector, university sector, non-profit sector. • Fred Terman, David Packard, and Bill Hewlett and Silicon Valley • George Kozmetsky, Mark White, and Pike Powers and Austin • Mario Morino and Others in Nor. Virginia

6. Elements of Regional Culture • Vision of the Region. What is the story? What are all the entrepreneurs,venture capitalists, supplier companies, universities, etc. trying to accomplish here, in this region? • Silicon Valley’s vision • Austin’s vision • Northern Virginia’s vision

7. Elements of Regional Culture • Ancestor Companies, Heroes, and Emerging Role Models. Remind everyone that “it can be done here, in this region,” and “if he or she can do it, why can’t I?” • Silicon Valley, Fairchild, Intel, then Jobs • San Diego, Irwin Jacobsen, Bob Beyster • Austin, Tracor, Kozmetsky, Dell • Boston?

8. Elements of Regional Culture • Vibrant Networks. THE critical institution in regional industrial systems. • They connect all of the “regional resources” listed above with each other and with entrepreneurs • They engender collaboration and cooperation among all the “regional resources” • They give entrepreneurs real-time information on money, people, technology developments, market developments, and job opportunities • They transmit the values of the culture

9. Elements of Regional Culture • Vibrant Networks. THE critical institution in regional industrial systems. • “Homebrew Computer Club” in Silicon Valley, the Wagon Wheel and other watering holes • Netpreneur in Northern Virginia • CED in Research Triangle Park • IC2 in Austin • VC networks and “zaibatsu” in SV

10. Elements of Regional Culture • Values: What is honored, rewarded? • Cooperation + competition vs. competition • Collaboration + interdependence vs. independent and even antagonistic action • Start-up vs. climbing the corporate ladder • Building companies vs. making money • Spinning off or out vs. staying w/ employer • Loyalty to the networks vs. loyalty to employer

11. Elements of Regional Culture • More Values Choices: • Change + adaptation vs. stability + consistency • Openness + sharing info vs. secrecy • Risk-taking + honor and learning in failure vs. risk-avoidance + stigma for failure • Speed vs. deliberation • Democracy + networks vs. hierarchy

12. Regional Role: Policy and Leadership? • Identifying and supporting the core group of leaders • Primary Role: catalyzing the development of networks • coordinating -- not managing -- relations of all the actors in a regional economy: • ECGS, larger companies, smaller supplying companies, business associations, universities and colleges, local government

13. Regional Role: Policy and Leadership? • Spreading the Stories of: • The “old economy” culture and history • How visionary leaders have put the region on an entrepreneurial course • The ancestry of ECGs • The historical and current role models • The current and future vision of what we’re doing here and why • Even small victories of the new values

14. Regional Role: Policy and Leadership? • Tools for Telling the Stories: • The local press can play a huge role • Boston Globe vs. San Jose Mercury and Puget Sound Business Journal • Events, awards, role of public officials • Network events, communications