How technology is helping more innovators gain access to entrepreneurship than ever before
In today's world, more innovators are answering the call to entrepreneurship than at any time previous. Here at GIST, we have heard countless stories from innovators around the world who doubted that they could be entrepreneurs, let alone successful ones. Yet founders globally are finding more opportunities than ever before to leverage their unique perspective and find solutions to some of the most challenging problems we face today. From expanding the importance given to diversity to the ways in which emerging technologies have leveled the playing field, more innovators are finding the path towards entrepreneurship laid out before them that is ready to be walked along, as soon as they are ready to take the first step.
Entrepreneurship in general has grown at an amazing rate, even despite the pandemic. According to the latest Global Startup Ecosystem report from the Global Entrepreneurship Network, entrepreneurship is thriving and doesn’t show signs of stopping; currently, the global startup economy is worth over $3.8 trillion in Ecosystem Value, more than the individual GDP of most G7 economies. Additionally, there are now 79 ecosystems generating over $4 billion in value which is more than double the number identified in 2017; in all, 91 ecosystems created unicorns in 2020, an unprecedented number. What is behind this exceptional rise, even in an era as uncertain and challenging as the one we are currently experiencing? Well, the truth is, there is no single answer; a constellation of systems and efforts decades in the making are finally paying off collectively at many scales (GIST being one of them, as we celebrate our 10 Year Anniversary!). That being said, we can analyze these systems and understand three key trends generally contributing towards this expansion of entrepreneurship:
- The proliferation of incubators, accelerators, and educational programs...
- The number of potential innovators being reached expanded through meaningful engagement with the task of building ecosystem and founder diversity...
- The role technology plays in both expanding access to the two former trends, as well as across the board expanding access to tools, capabilities, customers, and more.
In looking at the role of incubators, accelerators, and other educational programs, it’s important to understand how recent many of those developments are. While hackathons and university-based incubator programs, start-up labs and coworking spaces might seem typical now, they are actually quite recent inventions, at least at the current scale, only really emerging in the last decades. Collectively, they have wholly shifted our sense of what the innovation ecosystem looks like. Within the GIST Network alone, there are dozens of incubators and programs that constitute our Innovation Hub network, connecting places as diverse as their founders in a global entrepreneurship community. From Detroit to Kosovo, young founders and innovators can find an entrepreneurial support system right in their neighborhood, one that reflects who they are, where they come from, and what is possible. Not only has this proliferation expanded the types of future founders themselves, but also the kinds of places they come from, and the economic infrastructure they might build and reinvest there. The amount of work still needed is sizable; indeed, while entrepreneurship is growing, some research suggests that the bulk of funding is done in only a few cities globally. Despite the real challenges, however, the number of support spaces increasing can only plant seeds for future growth we are only now beginning to see and understand.
Ultimately, while the rise in the number of entrepreneurial support spaces and the diversity they induce is growing, there is one trend that makes that expansion all the more impactful: the rise of technology, and the role it plays in expanding access to the aforementioned institutions, as well as deeper and wider knowledge-sharing than ever before.
First within these trends is the way that technology makes more widely available the existing (and expanding) entrepreneurial support network. Over the last two years, despite its many challenges, the COVID-19 crisis has expedited this process. If the innovation ecosystem was already walking toward a more accessible and democratized virtual community, it began a full on sprint during quarantine in an effort to meet people where they are. GIST has been exploring this as an option, as we hosted our first ever virtual pitch competition recently, and have taken more of our programming online. Many other organizations are following similar strategies, bringing mentorship, insights, and in some instances, even funding, through virtual spaces and encounters. This shift to virtual spaces is allowing more entrepreneurs, no matter where they are, to be able to access the best information and most transformative guidance.
Similarly, the urgency to transform a physically connected society into a virtually connected one has validated many technologies that were already leading in these spaces. Tools that once required huge teams or experts with specialized knowledge are now available to even the least technical founders, all from their home office. These shifts in technology are emerging in various sectors, with many transformative examples. The rise of micro-acquisitions, crowdfunding, retail investing, NFTs and blockchain are all enabling every-day people to become investors; whereas before meaningful investment could only come from the top-floor, now founders can take their ideas to the masses. The proliferation of no-code/low-code is allowing founders to experiment with ideas and build solutions, all without making additional hires or using experts, particularly at the deeply experimental and iterative early stages of venture development and product testing. This is enabling a whole new type of founder to begin to express their vision, much earlier on and much more readily than they ever would have previously.
From apps that help with graphic design to those that help founders create a business plan, more and more tools are making the work that used to take months and entire teams happen in days, if not hours, sometimes with a team of only one person. Even the types of data-analytics that used to require data-centers or supercomputers are now available to founders, as business-intelligence software is now available to all kinds of founders, from social media analytics to supply chain optimization. Research indicates that the proliferation of technology has actually helped diversify the founding landscape, allowing women to gain access to entrepreneurial tools far more easily, as well as those in remote or under-supported areas. Look at our latest GIST Insights (link to Insights) as we breakdown what some of these tools are, what the emerging trends look like, and how to best leverage them in your venture.
In our research, a few key technologies emerge that are rapidly transforming the state of contemporary entrepreneurship, and present opportunities not only for founders to innovate more nimbly, but also present startup opportunities in themselves. After all, many of the best solutions for founders can be created by other entrepreneurs who know what founders need!
Here are 10 key examples of emerging technologies democratizing the state of entrepreneurship:
Retail investing, and with it, masses of retail investors, are having an effect on the funding landscape that truly can not be overstated. Historically, only large venture firms, operating at the national or international level, could make meaningful investments in companies, especially privately or in pre-IPO settings. Now however, a wave of new investment platforms are allowing a new kind of investor, the everyday person, to invest in ventures at all levels of financial liquidity. While this can bring about its own new set of concerns, particularly regarding risk and scalability, it nevertheless remains a powerful force shaping the future of entrepreneurship, providing ventures new opportunities for meaningful, early stage growth and funding, often from the very customers or markets they hope to reach. The full effects of this new paradigm in investing are not yet fully known and in many ways are difficult to predict, but one meaningful shift we have been able to observe is the rise of investing as a social good, with retail investors, particularly of younger generations, driven not only by profitability and bottom-lines, but the opportunity to invest in innovations that reflect their values, passions, and ideologies.
In many ways the indie older-sibling to retail investing, early developments in crowdfunding over the last decade set the stage for popular participation in innovation, and remains an incredibly useful tool, not only for raising capital for prototypes and early-stage innovations, but also for market testing and research, as well as delivering early sales. One of the most compelling elements of crowdfunding and other types of decentralized microfinancing is the role it has had in driving diversity in the funding landscape, a vital element for the future of entrepreneurship.
According to The World Economic Forum, 10% of global GDP is set to utilize blockchains or blockchain-based technology by 2025, an enormous increase since its creation only a decade ago. Blockchain technologies, in their various and expanding forms, including cryptocurrency, NFTs, smart contracts, tokens and ICOs, and new utilizations emerging in this field every day, are transforming the landscape of many industries, and taking entrepreneurship on a journey to new places, the destination of which we can only start to predict. Blockchain, when utilized in service of democratization, can increase transparency, build trust, and expand opportunities for investment. It’s impact on business-success is still deeply rooted in issues of liquidity, but for many innovators, blockchain is emerging as a viable catalyst for democratizing access to entrepreneurship.
There has been a whole new wave of financial technology tools emerging that are democratizing access to credit, lending, and non-dilutive startup capital. Many of these trends benefit small-businesses, but from credit cards for startups to new forms of insurance, the role of emerging FinTech tools is making the dream of entrepreneurship, from mom-and-pop shops to future blue-chip blockbusters, more accessible than ever before.
The rise of no-code/low-code solutions, or tools that allow you to build digital infrastructures without being a technologist, are transforming the startup landscape. Research forecasts that low-code application platforms will account for 65 percent of all app development by 2024. This means the majority of apps created in 2024 will be developed using platforms and tools that provide turnkey ways to program. This is hugely disruptive, and opens the door for all kinds of innovators to quickly experiment with digital interfaces and tools without using funding to prematurely grow a team. The rise of no-code in general presages the shift in many countries from hardware-based industrial economies to information-based economies, an enormous shift with huge repercussions for all kinds of founders, but one which opens up incredible opportunities as well.
A whole new wave of applications and trends are expediting productivity and content-creation. Now anyone can create compelling logos and graphics, videos, audio and podcasts, websites, and other forms of content to reach the widest audiences possible, more easily and with a higher degree of sophistication than ever before. This is enabling founders to have more control over the creative vision of their ventures, as well as interface and engage directly with their communities; an ever-growing assortment of digital tools is making all of this and more far more affordable and accessible for entrepreneurs.
Some of the biggest shifts in work over the last two years are the use of platforms which allow more people to freelance and build their own experience as a single-provider entrepreneur. Not only is this opening a doorway to entrepreneurship for all kinds of people who never thought they could make it out on their own, but it is also allowing startups and small, lean ventures to utilize experts and team members in a more ephemeral way; while many people refer to this shift as a growing “gig economy,” it has shifted to really speak to a new way of doing work collaboratively, and can allow young ventures to have much more flexibility.
The social media space has been in enormous flux lately… while this can be challenging for established companies, new ways of engaging with social media and emerging platforms are allowing entrepreneurs to find and engage with their communities in wholly unprecedented, and oftentimes deeper, ways. Getting specific and having smaller but deeper community ties enables ventures to not only know their customer, but also forces them to really know themselves, and navigate their own identity, position, and what they want to cultivate. This shift from broad-stream marketing to a narrower focus can help foster newer, more inclusive approaches to entrepreneurship.
Data has long been a distinguisher for venture success; historically, however, the tools and strategies by which to attain and implement insights have often been either extremely expensive or difficult to understand and utilize. Technological developments in machine-learning and AI are actually beginning to help all kinds of businesses make key decisions as the tools to do so become more affordable and readily accessible. This new wave of analytics is democratizing this information and making it easier to understand, allowing all kinds of ventures to have the same tools for success as much bigger companies.
Over the last two years, remote work solutions have allowed companies to forgo the office and work in a much more decentralized way. This can translate into huge savings for startups, who no longer need to use valuable capital on office space in expensive cities, but can now base their operations anywhere, and have a team that stretches beyond geographical location. Emerging research has found that remote work has had a profoundly democratizing effect on global entrepreneurship; as we navigate the creation of a healthy collective remote work culture, ventures have an enormous amount to gain in this process.
We are excited about the role technology plays in expanding entrepreneurship; but more importantly, we are excited by the very thing that guides our work to begin with: allowing people to fulfill their passions and visions through entrepreneurship and innovation, and elevating the people, places, and tools that make that happen. Stay tuned for more GIST content as we bring you key takeaways and global insights to take your venture to the next level.