BY Pippa Jacks


WTM 2018: governments must create 'startup-friendly ecosystems' to boost innovation

UNWTO Ministers Summit 2018

Friction between governments and disruptors was on the agenda at the annual UNWTO and Ministers’ Summit at WTM London.


A panel of investors outlined the important role innovation and particularly startups can play in growing and facilitating tourism, and in addressing challenges such as overtourism.


But they also called on governments to do more to create startup-friendly “ecosystems”, and to reduce red tape, in order to allow startups to launch and thrive.


“It needs to be very easy for startups to operate and expand. They need to be able to flourish without regulations that keep them down,” said Katherine Grass, venture partner at venture capitalist Thayer Ventures.


“When you change the rules too quickly, startups don’t understand, and it makes investors become cautious,” she warned. She also reminded ministers to look to local entrepreneurs to solve specific challenges. “Hyperlocal problems are going to be best served by a startup in that region,” she pointed out.


Lio Chen, managing director of the travel and hospitality division of Plug & Play - a California-based startup incubator and support platform - advised government ministers to focus on encouraging partnerships between big business and startups.


“Running pitching competitions for startups and giving cash prizes has little impact on the actual startups,” he said. “They don’t need cash. Instead, incentivise your top five corporates, that have the biggest impact on your GDP, to work with startups on some form of minimal viable product.”


Entrepreneur and investor Morten Lund, founder of Poshtel and ConsultingXO, said governments were often right to be enforce restrictions and regulations.


“In Denmark we pay 51% tax and I love it. Governments should be tough on these companies who come in and avoid paying pensions and all the right things,” he insisted. “Governments should be tough in their ideology.”


However, he likewise called for governments to do more to facilitate innovation. “I want a strong framework for innovation, that enables governments to take a chance on fixing some of the world’s biggest problems, like carbon emissions. It is super-doable.”


Chen highlighted that, currently, travel and tourism is one of the least attractive sector for investors. “Of 260 investments we might see in a year, only a fraction are in travel, he admitted. “Investors are afraid of not getting a return of more than 10 times.”

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