Start-ups sustainability ought to worry corporations, government


Support for start-ups is becoming increasingly important across markets especially as we navigate a recession. FILE PHOTO | SHUTTERSTOCK

Support for start-ups is becoming increasingly important across markets especially as we navigate a recession.

In their early stages as a whole or through a part of their product or service, they are characterised by high uncertainty and many risks.

Despite the high level of risk, they form an engine of innovation, economic growth, and job creation.

A recent study has shown that start-ups have been responsible for nearly all the net new job growth in many economies including the US.

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As we reflect on the new year and as the new government settles in, we will need to ask ourselves if the Kenyan economy can benefit from the opportunities presented by start-ups in the near future.

Roughly three-quarters of all startups don't make it past their first year, and only a tiny fraction become "unicorns" companies that achieve billion-dollar valuations.

This is one of the reasons most corporations and governments withhold support, citing the larger probability of failure, especially in the Third World where most start-ups rely on support from the Western world or end up closing prematurely without reaching their potential.

Government's role is to provide an enabling environment through policies, and regulations and build a start-up infrastructure that will make it easier for founders to push their idea into products and services.

Corporations, on the other hand, have a major role to play when it comes to supporting start-ups as most industry captains need to see themselves and their organisations as enablers.

Over the years large corporates have tried internal innovation as a way of seeking growth; the results are mixed, depending on the industry as well as the capacity of execution.

In most cases, this mode of innovation has been slow, expensive, and distracting from core business priorities.

Working with start-ups and nurturing them allows access to new ideas, more agile delivery, different ways of thinking and execution approaches that will enable companies to better leverage their own resources, assets and technology.

In a sustainable development era, governments, corporations and start-ups will become winners if they embrace innovation and collaborations with new innovations.

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In a world that is dynamic and that requires development to be sustainable, innovation will become the solution and especially when it is coupled with sustainability elements.