The power of startup ecosystems

In the modern economy, startup ecosystems have become critical drivers of innovation and growth. Startups are more than just small businesses; they also contribute to a city’s global reputation, drawing investors, partners, and innovators who are eager to collaborate in a thriving, forward-thinking community. This interplay between startups and the broader ecosystem catalyses knowledge exchange, technological progress, and competitiveness, all of which are vital for cities aiming to transition to a knowledge-based economy.

Recognising these benefits, many cities are investing in targeted initiatives to grow and support their startup ecosystems. These initiatives often focus on creating spaces for collaboration, providing access to funding, and fostering connections between entrepreneurs and key stakeholders like investors and mentors. 

By fostering an environment that nurtures entrepreneurship, local authorities can position themselves as dynamic hubs of creativity and opportunity. Successful ecosystems not only stimulate the development of local startups but also attract international talent, creating a virtuous cycle of investment, innovation, and economic vitality.  

Building a thriving startup ecosystem in Riga

In 2021, the City of Riga embarked on a transformative journey to elevate its startup ecosystem by shifting from direct financial support for individual startups to a broader, ecosystem-focused approach. Recognising the critical role of collaboration and coordinated activities in fostering innovation, Riga has implemented two key programs that underline its strategy to attract world-class startups, while supporting the growth of local ventures. The programs are managed by the Riga Investment and Tourism Agency. 

The memorandum of cooperation: A foundation for collaboration 

The first pillar of Riga’s approach is the Memorandum of Cooperation for the Startup Ecosystem, signed on March 22, 2021. This initiative formalised collaboration between the city and organisations deeply embedded in the ecosystem and playing a role in organising activities and providing services that support startup growth.

They are mostly public (University of Latvia Student Business Incubator, Riga Stradins University, Riga Technical University, etc.) or private not for profit organisations representing different technology sectors (Green and Smart Technology Cluster, Fintech Latvia Association, Digital Health Society, etc.) or further  investment and startup communities (Latvian Start-up Association, Latvian Private and Opportunity Capital Association (LVCA), etc.). Together, they represent a significant part of the Latvian startup and investment community. As of today, about 20 organisations have signed the memorandum. 

A hallmark of this program is the regular meetings held about every 4 months throughout the year, bringing together representatives of the city and the startup ecosystem. These gatherings serve as a platform for stakeholders to:

• exchange updates,
• share challenges,
• and communicate needs directly to city representatives.

By maintaining an open dialogue, the city ensures that its policies and programs remain responsive to the evolving needs of the ecosystem. This collaborative structure not only fosters trust but also ensures that Riga’s support mechanisms are rooted in the realities of the startup community. 

Support program to empower specialised organisations 

Complementing the Memorandum is Riga’s Support Program for Startup Ecosystem Activities, a good practice from the SKALE2CT project (further details on the program and its implementation guidelines are also to be found here). This initiative underscores a strategic shift: rather than focusing on individual startups, the city allocates funds to organisations whose daily operations revolve around supporting and nurturing startups. By funding these specialised actors, Riga amplifies its impact, enabling them to organise events and activities that benefit the ecosystem as a whole. The maximum support for any single activity will remain EUR20,000, ensuring a wide distribution of resources across operators and events. 

After having supported 18 activities in 2023, including high-profile events such as the "TechChill" conference, "Startup Day," and "Startup BBQ", the interest of potential beneficiaries in the program kept rising. Building on this success, the city has increased the program’s budget for 2024, signalling its commitment to further strengthening the ecosystem, and supported 27 activities.

As for 2025, the total budget for the program is EUR200,000. By February 2025, 17 activities submitted by 12 different applicants have been approved, indicating a concentration of the budget on a lower number of impactful activities. The assessment was based on the applicants’ experience, the scope of participants involved in the activities, the contribution to the startup ecosystem and the city of Riga, as well as the requested funding in relation to the total activity costs.  

The activities already delivered in the previous years not only provided startups with critical exposure and networking opportunities but also enhanced Riga’s reputation as a startup-friendly city on the international stage. As a result., international organisations showed interest in the support program to organise events in Riga. 

A scalable and transferable model 

Riga’s approach offers valuable lessons for other cities and regions looking to support their entrepreneurial ecosystems. By channelling resources into ecosystem-wide activities rather than individual startups, the city reaches a broader base of beneficiaries, maximising its investment’s impact. This model also leverages the expertise of specialised organisations, allowing them to focus on what they do best—whether organising world-class conferences or facilitating connections between startups and investors.

Through these initiatives, Riga has positioned itself as a dynamic and forward-thinking hub for startups. By fostering collaboration, investing in specialised ecosystem actors, and maintaining a focus on measurable impact, the city has created an environment where startups can thrive. This strategy not only promotes local economic growth but also enhances Riga’s international appeal, attracting startups, investors, and innovators from around the world.