A few weeks ago, we learned about Chile’s drop in the Global Competitiveness Index. It not only was surprising because the country reached its worst historical position (44th) dropping 19 positions in 10 years, but also due to the contrast in terms of entrepreneurial activity, where Chile ranked second in the world during its early stages.
Despite the pandemic, startups have kept their pace and have even accelerated their development of innovative technology-based solutions in order to respond to new challenges.
It is well known that Chile’s reputation on the global map increased after Start-UP Chile was created. We currently have Cornershop, our first local unicorn, which after the acquisition of the remaining 47% by Uber, was valued at US$ 3 billion, which will undoubtedly increase our country’s image in the ecosystem. However, we cannot ignore the work developed by so many other promising startups such as NotCo, Betterfly, or others in which our own fund has invested, such as Zippedi, Instacrops, Agrourbana, Simpliroute, Webdox, Wheel The World, TMining, and Poliglota, among others.
For a moment, let’s change the selective perception of the poor results in the ranking and see the tremendous opportunity, where we have excelled, not only in the startups seedbed relating to future topics, but in what more consolidated companies can learn from this entrepreneurial virtue.
Fundación Chile’s experience in Open Innovation, which we channel through two platforms; Expande and ChileGlobal Ventures, has allowed us to observe the virtuous work between large corporations and startups, where more than competition, a critical meeting point is achieved by combining the understanding of the challenges of these large companies with the creativity and flexibility in the solutions generated by startups. Thus, we have seen that dynamic ventures are not exclusive domain of venture capital funds, but have become vehicles that enable large corporations to quickly capture the value of new technologies. This can happen through investment or other type of ties that allow them to capture not only a good financial return but also a direct connection with a dynamic, creative, and innovative hub such as the start-up scene. This is why we should not underestimate this second place in the ranking, as it promises to give answers for the future, generating quality jobs, and immediate connection of large corporations to possible questions that so far have no found solutions through traditional mechanisms.
This corporate-startup connection, also known as corporate venturing, which in the FORTUNE 100 countries’ ranking has an adoption rate of 75%, contrasts with what is happening in our region, where the average adoption rate is only 16%, therefore the opportunities for growth are enormous. So far, the activity has been centralized in 7 cities including Santiago, Sao Paulo (Brazil), Mexico City (Mexico), Bogota and Medellin (Colombia), Buenos Aires (Argentina), and Lima (Peru) where most companies have engaged with startups that are involved with financial services, information technology, consulting, and telecommunications.
Open innovation, collaboration, and systemic responses between the private world and entrepreneurs is thus presented as a key element for sustainable reactivation and job creation, becoming a highly efficient tool to boost productivity and competitiveness of companies. Let us not be complacent with the significant drop in the global competitiveness ranking, but let us not be short-sighted when deciding where to start from in order to rebuild a sustainable and forward-looking reactivation.