To bring an idea to market, entrepreneurs need to survive the difficult period in the early stage of the life cycle of a company known as the “Valley of Death” — the period between the initial capital contribution and the company generating a steady revenue stream.

We all know this is a challenging task and that many — if not most — businesses will fail at this early stage. Most obviously, meeting this challenge requires entrepreneurs to raise a significant amount of money. But this need for money raises a series of daunting questions:

“Who should we turn to for investment?”

“What kind of money do we want to attract?”

“When is the right moment to seek investment?”

“Where should we locate our company, if our dream is to build a global business?”

This last question — think of it as the “Where question” — is perhaps the most important, not least because it determines the options for answering the other questions.

Could Colombia — or more specifically, its capital Bogota — be a realistic or practical answer to the “Where question”?

After my first trip here in 2008, my answer would have been a definite “NO”. The reasons are simple; a reputation of internal conflict and drugs.

But my views have gradually evolved since then. Yearly trips have given me the opportunity to teach university students and share my ideas about innovation and entrepreneurship with the local business community. This experience has made me realize that the entrepreneurial potential in Colombia is enormous and that Bogota now represents a good option for any young business looking to scale.

Two distinct strategies aimed at stimulating entrepreneurship have been relevant in arriving at this conclusion. First, the Colombian government has modernized and simplified corporate law statutes in order to offer business forms in which small and medium-sized enterprises (SMEs) can be easily set up and then nurtured and developed. Second, a series of programs have been launched under which investors are provided with various other legal and tax benefits.

Based on these developments, I predicted in 2014 that Bogota could be the “next” Silicon Valley in South America. Unsurprisingly, this prediction was received with a great deal of skepticism. Such skepticism is well-founded, as earlier efforts to create sustainable innovation ecosystems have rarely been successful.

Nevertheless, I am currently back in Bogota and the question is whether my 2014 prediction still holds.

The good news is that Bogota attracts more and more attention as a startup hub in South America in the media. However, as is often the case with local startup communities, there are inevitably still capacity deficits of various kinds, such as the city’s transportation infrastructure, the immaturity of the investor community, the lack of specialized consultants, etc.

What then can the Colombian and local government and policy makers be doing in order to ensure that multiple startups decide to locate in Bogota?

Two “success conditions” seem important here.

Local DNA/Unique Selling Points

First, Bogota, as with any startup ecosystem, has to find its own identity and direction based on the unique selling points of the region, which are clearly in the areas of natural resources, such oil, gas and gold.

In developing a network of new firms that provides the kind of supportive infrastructure, an important consideration is the history and pre-existing capacities of the city or region.

Although we inhabit a rapidly globalizing economy, place and location still matter. Not every city or town can develop a startup community and not every city or town is equally well-placed to benefit from the opportunities of a globalizing economy. In this regard, the local character and path dependencies of a region are an important consideration.

The construction of a regional startup community needs to be built — at least, initially — on existing capacities, what we can think of as the “local DNA” or unique selling points of a region. In the short term, it makes no sense to attempt to replicate other regions, but rather to ask how can existing areas of expertise attract and add value to the global economy (which in the Bogota-case is with environmental and green technologies).

Connecting to the Global Startup Community

Second, one important consequence of the emergence of a global innovation space is that local startup communities no longer need to aspire to being self-contained and fully autonomous. Actually, it may well be a mistake to think of them in this way. Instead, leveraging the “local DNA” to build links with global capacities and resources is the most effective way of increasing the dynamism and attractiveness of a region.

Within the “global” innovation ecosystem, everything and everywhere is now connected, or at least has the potential to be connected, and this means that understandings of the locality and proximity of regional innovation systems needs to be re-thought. The traditional view of proximity as distance from an innovation hub, no longer seems applicable in a globally networked world.

This isn’t to suggest that place no longer matters. The best-case scenario for any local innovation eco-system is that it can become an important hub in the global eco-system. However, it is important for any local ecosystem to be in a position to utilize the capacities and resources of the global system. As such, policy makers need to realize that the key to success for a local ecosystem is to develop and maintain a strong connection with the global ecosystem.

In the case of Bogota, this means more emphasis on English programs, building global connections, encouraging expats to relocate to the region, promoting a strong technology focus on natural resources, stimulating clean energy as the next wave of innovation, etc.