A Brit abroad

The UK has reportedly invaded all but 22 countries in its history.

So it is not always the case that Britons are warmly welcomed when they travel. But last week’s launch party for the Silicon Valley office by the publishing company producing Global Corporate Venturing and Global University Venturing was as much a celebration of the unique role the area around Palo Alto, California, holds in the world’s innovation economy as it was about the latest visa holder to fly into its blue skies.

That there are more active corporate venturing units in Silicon Valley than there are venture capital members of the local trade association certainly meant it was a full room for the hosts, law firm DLA Piper, while Silicon Valley Bank kindly provided the excellent wine from some of its clients’ vineyards.

The evening also saw accountants Deloitte join the Corporate Venture Innovation Initiative (CVI2), a non-exclusive service providers’ forum, founded by DLA Piper and consultants Bell Mason Group (whose managing partners Heidi Mason and Liz Arrington provided the dynamism and leadership to effectively organise the evening’s events).

Personally, it was wonderful to see so many subscribers to Global Corporate Venturing in the room as my visa was predicated on the publication having more than half its revenues and customers from the US. My thanks also to so many of the others attending who signed up to subscribe afterwards.

I would say the chances of the US-dominated subscriber proportion falling would appear to be slim but, while venture capital firms have struggled to scale and move beyond local pastures, one of corporate venturing’s more noticeable differences is its global ambitions.

Partly because so many corporate venturing units have multinational parents, so their investing subsidiaries or affiliates are encouraged to look at the global innovation hotspots, almost regardless of country of origin.

US-headquartered parents still lead by numbers of corporate venturing units, with about 360, compared to about 300 in Europe and 84 and 49 in Japan and China, respectively. But the speed of internationalisation of non-American firms is remarkable as they look to tap into the mystique of the Valley’s innovation culture and also the tangible successes this place has delivered since Fred Terman at Stanford’s school of engineering encouraged his students to become entrepreneurs and the traitorous eight left Shockley to form Fairchild and – crucially – get backing from east coast financers.

While perhaps a majority of ‘American’ corporate venturing units remain local because of the opportunities created by its entrepreneurs, overseas firms appear less insular. The soft power victory of the US has been to attract these investors, which buoys up local real estate and hot company valuations, but also more importantly has meant others have created innovation ecosystems and struck venture deals using American templates.

As the wave of more than 200 corporate venturing unit and fund launches over the past two years start to strike more deals the overall number of investments globally but particularly in the US is likely to increase.

The vulnerability the Valley shows in this globalised innovation ecosystem will only show if it fails to continue to ride the next hot topic. A risk that is perhaps increasing as its venture industry broadly continues to consolidate on narrower fields, as healthcare migrates to the Boston region, clean-tech implodes and venture firms show few signs of looking beyond software to, say, manufacturing.

But these risks currently appear relatively slight. The Valley’s uniqueness lies as much in the overall quality of discussions that can be had, and openness of people to sharing thoughts, as well as the vision of an overwhelming number of people with the resources to make them potentially come true. While these ultimate arbiters of an innovation economy remain intact, the Valley will continue to attract other fast-growing, global entrepreneurial businesses.

Governments will play their part in encouraging this outreach of talent if they can see benefits accruing domestically through the transfer of skills, ideas and capital. My other thanks for the evening was to UK Trade and Investment, which partnered with Global Corporate Venturing for last year’s Symposium and has supported our international development.

The UK government agency will also be supporting our next Symposium in London in May where 250 industry powerbrokers between entrepreneurs and corporate parents, as well as Al Gore, 45^th Vice President of America, will be attending from around the world.