Ruth Fischer-Smith discusses new-venture accelerators and the skills and capability gains made by people as a result.
New-venture accelerators have become a common part of the innovation landscape, both in Aotearoa New Zealand and around the world. These programmes support a team to develop a new business idea over a few months, ideally leading towards funding the new venture.
Sometimes these new ventures go on to become established companies. Sometimes they don't. In either case, the people who participate in these accelerators remain part of the labour force — as do the skills they’ve gained during an accelerator.
Measuring the human skills gained through accelerator programmes
Our work measures the skill and capability gains in individuals (human capital gains) as a result of taking part in an accelerator programme. These gains translate into up-skilled employees for the firms, agencies and organisations that support or run accelerators. Human capital gains are the missing link in the story of accelerators.
Many starts-ups emerge and ‘stay-up’ after participating in an accelerator, contributing to economic growth for their industries and regions. However, most ventures emerging from accelerators don’t become ‘unicorns’ (the exponentially high-growth, high-revenue companies often alluded to in promoting accelerators).
We don’t have to see non-unicorns as a failure. The people behind ventures and ideas that grow slowly, or fail, are still learning from accelerators and contributing to society. And these individuals grow and develop in ways that are wider than pure economic activities.
Their capability gains enhance the places where they work, and, over time, can change local ecosystems and labour markets. These human capital gains are part of the accelerator story.
Developing awesome people
We’ve studied several accelerator programmes in Wellington (including Mahuki and Lightning Lab GovTech). We found that individuals in an accelerator programme experience significant capability gains — they become more confident, more adaptable, and better at communicating ideas.
Whether individual entrepreneurs or employees of large firms or organisations, their capability gains translate into a greater skills base within a local ecosystem or socio-economy (the relationship between society and the economy).
Understanding the wider impact of accelerators
We’re among the first in the world to focus on these non-financial impacts of accelerators. As we build an evidence base, our findings can impact the thinking and design of:
- internal innovation and development programmes within a firm or organisation, or
- local labour market policy settings to grow and retain talent within a region or an industry.
In our first year of study we found that people in an accelerator programme:
- demonstrated substantial increases in their confidence that their start-up businesses would be a success, and in their creative self-efficacy (confidence, creativity, influencing, collaboration and resilience)
- increased their self-efficacy in planning entrepreneurship and general creativity (10% and 6%), suggesting that a programme not only made participants more confident in their business skills, but also in their high-level creative capabilities
- improved their presentation skills, as the teams developed simpler and more engaging ways to describe their ideas, and
- developed greater clarity and coherence about their ‘business model’, its value, and how that value could be best expressed to others, such as key stakeholders.
Using accelerators to innovate within an organisation
Beyond the creation of new start-up ventures, accelerators have also become an innovation ingredient for large agencies, firms and other organisations. Accelerators are often used as safe spaces to test and de-risk innovations in products, services and design prior to being scaled up more widely.
Accelerators in this internal context shift the dial on what value is being created. In an internal accelerator, participating individuals hold dual roles: they’re entrepreneurs of a new ‘venture’ (or product or process), and are also permanent employees of the firm or organisation hosting or supporting the accelerator.
The value of participation in an accelerator has two units of value: new ‘ventures’ and capability gains for the permanent employee.
Still, existing metrics in this internal context focus on product outcomes, or how frequently or successfully a new product from the accelerator becomes scaled or embedded into the day-to-day business of the organisation. So, in both models of accelerators, there’s a lack of understanding about how these programmes grow human capital.
Building a dataset
We’re building a dataset on the gains individuals experience during and after an accelerator programme. Specifically, the research measures the change in individuals’ self-efficacy through their time in an accelerator programme.
By creating a dataset on individuals’ development within accelerator programmes, our research will provide answers to some of the big questions around accelerators and their wider impact.
For organisations and employers this may improve targeted use of accelerators to develop employees who are innovative and confident. For sectors of the economy, this may help shift the balance to focus on developing innovative and confident individuals, alongside developing innovative new ventures and products.
Accelerators as an innovation tool
Our research also has broader implications for the use of accelerators as an innovation tool. Whether in a private or a public sector context, accelerator programmes offer more than new ventures, new products or economic growth.
Better understanding of what they offer individuals — confidence, adaptability, resilience and influencing (human capital growth) can help agencies, firms and organisations use accelerators more effectively.
They can be used as part of talent development and retention, as well as long term agency culture change.
What we’re working on
Our team is currently working with the 2019 Lightning Lab GovTech Accelerator and presenting our initial findings in academic fora. We’re keen to share our findings more widely and inform future thinking.
Read more about the Lightning Lab GovTech programme:
If you’re interested in hosting a roundtable or would just like to learn more about our research, please get in touch.
The team carrying out this research is made up of people from the Victoria Business School and the New Zealand public sector. They are Ruth Fischer-Smith, Stephen Cummings, Ben Walker, Jesse Pirini and Rebecca Downes.