As I mentioned in my previous blog, you can’t build a successful innovation ecosystem without fostering both innovation and entrepreneurship. But how can governments or corporations actually do this? What should they be doing to get the most of each of these activities?

There are three key ways governments can foster the intersection between innovation and entrepreneurship.

• Developing the ecosystem. Governments are in a unique position to drive attraction related to innovation and entrepreneurialism within a specific jurisdiction, whether the country of Australia, individual states like New South Wales, or cities like Sydney and Melbourne. One of the most foundational components of this is by lowering the risk of capital by providing a range of benefits – tax measures, grants or other incentives. These types of government initiatives can help attract a range of people and companies to a location, attract foreign capital and create a strong ecosystem where innovators, entrepreneurs and corporates can come together to create more value than any one might be able to do on their own.
• Developing talent. Fostering talent is a significant role that governments must play in order to develop the talent necessary to support an innovation economy. From pre-school to university, governments can create and foster programs that support science, technology and other key areas of learning, while encouraging students and those with a more entrepreneurial bent.
• Shaping culture. While slow to change, the culture of a country provides the foundation for how people live, work and play. When it comes to building an innovation economy, governments need to foster a culture where innovation and entrepreneurship is encouraged, celebrated and rewarded. Fostering talents and showcasing success stories like Scott Farquhar, Mike Cannon-Brookes, Matt Barrie and Jodie Fox, who are all having an impact on a global stage can go a long way toward this objective.

Companies can also do a lot to encourage both innovation and entrepreneurialism within their own organizations. As a starting point, corporations need to focus on three critical areas:

• Providing leadership. The way leaders act, talk and reward employees will determine whether innovation and entrepreneurship can take root successfully. For boards and leadership teams, this may require taking a longer-term view of investments, creating space for innovation to happen and developing rewards and KPIs that highlight and reward the successes they want to encourage.
• Fostering diverse input. Creativity often comes out of diversity - of vision, background, culture, working style and any number of other factors. Companies need to focus on creating an environment where as many people as possible are given an opportunity to share their voice, rather than one where unique ideas are stomped on the minute they emerge. By encouraging diverse opinions, companies can create an environment of creativity – where people can come together to examine ideas and possibilities without the risk of failure.
• Thinking inclusively. Companies need to move beyond the ‘single way to do things’ mentality and create environments that are as inclusive as possible. This means creating ways to bring together both innovators and entrepreneurs and fostering those intersection points. This could include various forms of activities, from fostering internal innovation, to setting up a VC arm or working directly with start-ups to explore how innovations can create value. Established corporations can harness and develop innovative ideas from crowdsourcing – see my blog on this topic for details.

When it comes to fostering innovation and entrepreneurship, there is a big role for both governments and corporates. The key is finding ways to work together to foster an ecosystem where both sides of the equation are given a chance to thrive.

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James is the head of KPMG Innovate in Australia. He also actively worked to establish Sydney’s first industry led Fintech hub called Stone & Chalk, and collaborated with industry participants, government and industry associations to co-author a landmark piece of thought leadership into financial services technology startups, titled: “Unlocking the potential: The Fintech opportunity for Sydney”. James is also the key sponsor for elevate61 within KPMG, a rapid growth entrepreneur program delivered in partnership with Advance, to help enterprise B2B startups scale and grow their businesses globally.