A new report from researchers at Harvard, Columbia and Duke suggests that your startup idea doesn't have to be big and you don't have to go national to be successful. In fact, most startups are not big, glamorous giants like Amazon or Uber. Many are small businesses that stay local and do not aim to create new markets.
The study posits that small businesses such as 3D printing labs and internet cafes are essential for innovation, because even though they are not the point of origin of new technology, they play an essential role in making sure technology reaches people at the local level.
“Businesses such as auto repair services, video rental stores, or IT consulting are not in themselves innovative, but they both exist because of and are critical to realizing the value of an underlying technological innovation (motor vehicles, video cassettes) , computers),” newspaper. read.
PhD student at Harvard University About Colaiacovoprofessor at Columbia Business School Jorge Guzmanand Duke University professor Daniel Gross published explorativewhich offers new evidence that small startups may have an economic advantage over the Amazons and Ubers of the world: They may simply know local markets better and use that to their advantage.
Connected: The Little Cafe that asks customers not to be quiet
“Our canonical video rental store or auto mechanic entrepreneur can recognize local demand growth ahead of major competitors, secure exceptional assets (eg, prime locations) and build market presence,” it said. in study.
Local Main Street startups are an important part of the entrepreneurial ecosystem, according to the study, because by selling accessories or providing services, small startups play an important role in allowing innovation to spread throughout the economy.
A small startup might not necessarily make a new phone, for example, but might sell phone cases or offer repair services.
Although knowing more about a local market can give them an advantage, small businesses come with their own challenges. About 18% of small businesses close their doors within a year, and half close within 5 years, according to Statistics BY US Bureau of Labor.
Connected: Why this entrepreneur left Tesla to open a technical repair franchise
The researchers used patent data to identify 386 new technologies over the past 100 years and then linked those technologies to business registration data from 47 states to get a better picture of how innovation leads to businesses. small.