Central Europe’s potential for innovation

What can Visegrad do to improve it?

Ronald Binkofski
11 February 2015

“Why shouldn’t we manage money earmarked for education, a bit like a venture capital?” asks Ronald Binkofski, general manager of Microsoft Poland, in conversation with Kornel Koronowski.

 

Kornel Koronowski: Can a state plan creativity?

Maybe not plan, but provide a suitable environment in which creativity is developing, through appropriate programs and initiatives to stimulate creativity and entrepreneurship, provide appropriate solutions – both legislative and business.

I am convinced that there is a potential in society and the will for change, to seek innovation, to improve the lives of many, to create new services, which are the need of our times. To create the right environment, an environment conducive to creative people should not encounter barriers to developing their ideas – this is exactly what the state should do.

 

Today, these barriers…

I think they exist, and there are still a lot of them. And they are not only barriers on how fast you can open a business – this is the smallest problem. In my opinion, too much attention is paid to building infrastructure, the tool, not the innovation. Let’s look at technology parks. We start from huge infrastructure, very costly, and not from the idea.

I think we should rather invest in local initiatives that have the chance to transform into commercially rewarding projects for creative people with enthusiasm. Surely you cannot generate creativity programs? I think the word “creativity” denies that. What we can do is to support it, stimulate, arouse actions targeted at young people.

 

Should we copy solutions from other countries such as Israel?

I am convinced that the most effective use of the theme “best practices” is not the creation of new projects of this type, but the use of best practices from around the world. So, definitely yes. Only you need to do it wisely. You have to look at this and wonder what it is possible to use in a given location. We must remember that the success of an idea, a project is determined by a range of cultural, business, legal issues, etc.

I have heard many times that we will build Silicon Valley in Poland. In each country we hear similar things. Silicon Valley happened at a very specific time, place, using an excellent economic situation and the great interest of investors. Similar things, of course, on an appropriate scale, can happen here in Poland, but we cannot force the indiscriminate copying of other designs. We always have to apply the solution to the nature of the environment in which we find ourselves. Do not limit ourselves and support what has a chance of commercial success.

 

You have experience in working in the Central and Eastern Europe. Do you think that regional structures – Visegrad or wider – could serve to improve innovation in the region?

That was indeed the object of my discussion with representatives of government and business. We need to realize one thing: our country, Poland, and neighboring countries such as the Czech Republic, Slovakia, and Hungary are all relatively small countries, which are limited in terms of size, population, and territory. So, we should think more often about the whole region and the potential that lies in it. Poland, at the same time, is a potentially interesting situation, because it is among the biggest of all the European states, and I think one of the best opportunities for us to become the incubator of innovation for the entire region of Central and Eastern Europe. Our economy is growing faster. But there is need for an open policy.

We need an import talent policy, which Poland doesn’t have. Historically, we are the most disadvantaged country when it comes to importing talent. We are very homogeneous society in which there has been too much immigration. Countries such as Hungary and Romania have always lived on the edge of several nationalities. I think this is an opportunity and a great challenge for Poland. It will be very important not only from the point of view of innovation, but also to improve our economic attractiveness.

 

We are preparing students for a future reality that we cannot predict. In five or ten years, some professions may no longer exist. Do students need to focus on learning skills?

Modern technologies will certainly be the creator of new professions. This has already been explored. Over 65% of people who start learning today, will work in jobs that we do not know today. Microsoft motivates people toward creativity and entrepreneurship, based on the latest technologies. As a result, the people who go into business with new good ideas, will have the best chance to achieve a leading position in the market.

We have programs such as BizSpark, where young entrepreneurs build their business ventures. We give them the tools, we motivate them. We also have the Imagine Cup competition, where students from around the world compete with each other, working on ideas and applications that have changed our world for the better. Students at this stage create unique, future projects. Very often the result of such competitions is some very good ideas, which are converted to profitable businesses.

But, this is the only the platform. We motivate, give them the tools, technologies, so they can test their creativity. The Imagine Cup competition and projects show the enormity of motivation, initiative, and creativity. You have to create opportunities for their release and mutual inspiration. It’s a direction.

 

What institutional changes should take place in the area of education?

Why shouldn’t we manage money earmarked for education, a bit like a venture capital? In fact, a lot of money is poorly used; people throw it into schematic programs, regardless of whether they have a chance of succeeding or not. I think that creativity goes beyond these schemes. The best ideas seldom repeat some well-worn path of action, and it cannot and should not be a limitation when looking for state support.

Therefore, the investor might not be official; it must be someone who is an entrepreneur, who is open, who can and wants to take the risk. He or she knows how to identify potential, but also how to estimate the hazard. So, to think freely, as much as possible, to seek new ways of doing things, test solutions, just to provide young people with an opportunity to break the routine and go beyond the scheme.

 

So state equity?

In my view, the role of the state is to create opportunities, and not necessarily invest in the private sector. There is certainly a field for cooperation between the public and private sectors. Innovation success does not consist of the fact that someone came up with something innovative, but that he or she knew how to realize this idea, and the result was something that is adopted by society and business. I can think of a dozen such ideas, but the problem is about suitability for implementation. So, it is a combination of several elements: the management element, the implementation element, and the idea. And all these elements must work together to create something of value.

 

What incentives should the state and entrepreneurs create to bring investors here?

There is an interesting example that comes from Chile. They started from the idea of giving the opportunity for anyone to invest, regardless of where the company comes from. It did not have to be a Chilean company. And what happened? Companies began to appear from other countries, from other parts of the world, which strongly reinforced the Chileans who could manage it, drawing benefits for its economy and improving its competitiveness. This program has proven to be a hit – no matter whether you are from Vietnam or Chile, you have 50,000 dollars to start working on forging a good idea into a real business.

Often I see that investors want to be very secure in these types of projects. And in this segment you need to be able to take a chance. This is natural for startups. I think another element of support for young people is to give them not only a business environment but also provide them with an attractive space for them to live. Why was Silicon Valley in California founded? Because it is also a fantastic place to live, ideal for young, active people. They do not just want to work hard, but they also want to be able to consume what they have earned; quite simply, they want to have fun.

 

Is there a need to change the perception of making money to developing global enterprises?

Money is important, and an integral part of business. Success is measured by the amount of profit. But if someone starts to do something only thinking about money, I do not remember any valuable case for this to succeed. Frequently, success occurs when someone actually has the passion, and the money comes later. I myself know many people in Poland who have done something really interesting and attractive, because they do not want to work for someone else, but they never proceeded from the assumption that they are doing it just for the money.

I also know those who have created global companies in Poland, and started just from the fact that they had a passion. This passion is in my opinion always a prerequisite. If the direction is only money, this story starts to get bored quickly, because either the money comes very quickly and someone loses the commitment for what they do, or they do not have the money, and this kills all the creativity and blocks thinking.

I think that this is not the direction. It should also be borne in mind how important it is that those who are creative, are surrounded by those who are operational. This is the same in any small business. There are people who are creative, but not often are they the best in the management of the company. What is needed is diversity within the company.

 

Ronald Binkofski is the general manager of Microsoft Poland.

Kornel Koronowski is a project coordinator for “New Europe 100.”

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