7. Recommendations

Our recommendations for governments fall largely into these main categories:

• harmonize rules and regulations across regions
• create better foundations for future hardware innovation
• provide very early funding of innovation
• conduct more research into how hardware is created

Regulatory Harmonization

Unlike software which operates almost without borders because of the Internet, hardware startups are very much aware of the existing boundaries between countries. Hardware needs shipping from the producer to the customer, and there are quite a few opportunities to lower the current obstacles in a meaningful way:

Simplifying and harmonizing import / export rules and procedures would let companies spend more time on their business and would result in cheaper products to the customers as the administration overhead is reduced.

There are many regulatory areas where the differences between countries make it difficult to create a single product for multiple countries. For example the division of the wireless spectrum varies quite widely between countries, and there are situations when a network-enabled product cannot simultaneously fulfill the requirements of even neighboring countries. Another example is certification requirements (such as FCC, CE, and similar marks around the world). Cross-regional collaboration in this matter has a potential to spark further waves of innovation.

Building Foundation for Innovation

One of the key determinant of the number of hardware startups is the number of people creating hardware as a hobby. Improving proficiency with the latest workshop and prototyping tools, promoting tinkering and experimentation, supporting inventions have a great potential pay dividends for decades to come.

As makerspaces are a great example of places where this kind of learning takes place, we suggest governments to start supporting the creation of more makerspaces, especially where people are already learning. There are very interesting examples of universities setting up their own workshops and tinkerer communities, and we are hoping that in the future there won’t be a university without a makerspace. This process should not stop at the higher education, judging by the examples of successful hardware projects targeting kids of various ages, gradually makerspaces could be created at high schools, elementary schools, and in some form even at the kindergarten level. Governments have the power and resources to bring about these changes by financial support for equipment, training, and making tangible creation part of the mission of educational institutions.

Early Funding for Innovation

One of the most critical time for any startup is the very beginning, getting to the first prototype and the first customer. Now with better access to the technological tools, the next bottleneck is the time available for people to work on their project. Providing early stage funding for budding startup teams can bridge that gap between idea and realization as they could focus on the development instead of making ends meet.

We would like to encourage governments to support more incubators who are already doing such work, and develop schemes of very early stage (angel) funding. These should take forms that fits both the governments’ general low tolerance to risk, and the benefits technological entrepreneurship to the entire society.

Mapping the Regional Hardware Ecosystems

More knowledge is required by mapping out the evolving hardware ecosystem to spot opportunities and provide support at the weak points. We suggest governments to take stock of their hardware creation environment, their strengths and challenges. This should include all stakeholders in the process, from traditional manufacturers, financial institutes, small and large businesses, educational institutes, legal experts, transportation providers, hardware related service industry players, and so on.

This could serve as a good foundation for discovering a country’s unique value proposition for hardware makers, and attract more value creators to their territory.