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CES 2023: The importance of government support for startups

In preparation for CES 2023, Gallium Ventures supported promising Japanese startups to get ready for the influential technology showcase, Showstoppers, thanks to the encouragement of their government-related organization JETRO.

The responsibility a government has to support entrepreneurs within their region is an ever-evolving picture. Various countries are taking their support of startups far more seriously to help boost the economy and it is a crucial role for the government to play.

Fast-growing startups are seen as a PR stroke to many governments as proof that businesses should either open shop or expand out to their neck of the woods, and the technology space is no different in projecting the type of success stories every country wants to showcase globally. 

In order to do this though, various schemes to co-invest alongside private enterprise, grants and non-dilutive funding options can be offered in order to encourage local R&D and give a kickstart to businesses looking to take that next big step. 

We take a look at what just a few countries are doing to support the growth of their local economy, and why founders are drawn to such locations. 

Switzerland 

Switzerland tips the scale as one of Europe’s most attractive countries for founders and startups. This is thanks to the number of public grants a startup can receive – no strings attached. These government grants are therefore meant to drive innovation and free up startups to focus on what’s most important, while Innovation hubs dotted throughout the country encourage spreading of resources. This has allowed Swiss startups to raise $3.1B in 2021 and create a combined enterprise value of around $149B. With the Swiss government supporting companies through proof of concept, discovery and more it has seen unicorn density reaching 6x higher than that of France. It is due to the ever-growing figures that means we can project the Swiss ecosystem to become one of the top ten hubs worldwide over the next few years. 

France

The French government has taken great strides in supporting the development of founders and their startups as they look to disrupt the technology space. The country continues to climb the ranks in the Global innovation index (France currently stands at 12th), is in the top two European countries in venture capital raised and also fourth place globally in terms of patents issued. The French government prides itself in the level of financial support it provides for young and innovative enterprises, along with tax credits and grants to help founders. Even the Programme Investissement d’Avenir 4 has meant France plans on investing 20B Euros in higher education, innovation, research, and companies in order to build and maintain a healthy pipeline.  

Japan

Japan has seen startups become key to boosting economic growth, and for good reason as Fumio Kishida made startup support one of his top economic objectives. This focus on building a startup ecosystem within Japan has meant funding raised by startups has jumped to ¥780B in the past year and seen several unicorns jump into the limelight. The Japan External Trade Organization (JETRO) is a Japanese government-related organization that supports local startups and their founders in promoting Japanese exports abroad. This support has included training sessions/courses, such as the ones Gallium Ventures has created for them, bringing companies to events like CES and MWC and even promoting direct foreign investment into Japan in order to help small and medium businesses as they look to go global. 

With JETRO as an example of how Gallium is working with governmental bodies to support startups and scaleups, it shows the level of creativity in which a founder and their business can be supported moves beyond just grants, but training teams on how they can support themselves and create a solid foundation for success. 

This support can be seen in PR training, event training, global event support, and experiences that will stay with a founding team throughout their time and be used as a solid foundation to scaling their own business. It is also with these educational sessions that countries can contribute valuable knowledge from seasoned professionals and into their direct startup ecosystem. 

When a government is able to support financially via grants (or other options), training across areas of the business (whether that be PR, marketing, financials, etc) and even take startups to global tech events to showcase their products and services it allows greater reach which is that PR win for the government and improves the investment coming into the boarders itself thanks to greater visibility. 

In the long run, though, will this see founders moving their businesses across borders in order to benefit from the support? Yes, it already is happening. And it benefits everyone involved along the way. 

Heather Delaney
Heather Delaney
I run things