I have just read an extremely interesting article entitled: “Government’s Positive Role in Kick-Starting Entrepreneurship” which is an interview with Josh Lerner.

The interview discusses the role that government must play in developing entrepreneurs and I thought it made for quite an interesting debate given the current economic environment and the increasing dependance on government to support small businesses.

Lerner points out that government did a lot of work to stimulate what is now Silicon Valley in the US in terms of making an investment and venture capital friendly place for entrepreneurs.

With initiatives like Silicon Cape gathering some traction it proves that there are opportunities for government, funders and entrepreneurs to work together.

However – and this is important – the partnerships need to decide whether they are investing in entrepreneurship or they are investing in a couple of small businesses to create a couple of temporary jobs.

They need to be working together for the right reasons.

For these initiatives to be taken seriously from an entrepreneurship and innovation perspective they need to be treated as such. If they are simply there to create jobs then historically these initiatives have proven unsustainable.

(I heard a statistic the other day that out of 800+ investments that SEDA made into small businesses – start-ups – over the last 5 years, not a single one has survived)

One line that jumped out at me from the interview is where Lerner said: “it is far easier to found a start-up if there are 10 other entrepreneurs nearby. In many respects, founders and venture capitalists benefit from their peers.”

This is an excellent point and I think it is one of the reasons that things like Silicon Cape are retaining their momentum. We are not talking about a couple of individuals trying to motivate eachother – you have an entire venture capital and innovation community working together.

Another point raised by Lerner: ” Often, in their eagerness to get to the “fun stuff” of handing out money, public leaders neglect the importance of setting the table, or creating a favorable environment.”

This is something that the steering committee for Silicon Cape cannot lose sight of. While it is great to talk about the successes of investments being made, they need to remember that their job is to ’set the table’ for other funders, innovators and entrepreneurs to come into the picture.

Check out the full article here.