REFLECTIONS ON QUALITY ENTREPRENEURSHIP FOR KNOWLEDGE BASED ECONOMIES

Dr. Yancy Vaillant

CATALUNYA

“knowledge-based economies” - economies which are directly based on the production, distribution and use of knowledge and information. (OECD 1996)

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Economic prosperity is increasingly determined by a community’s capacity to transform knowledge into potential commercial products, processes, and services - where entrepreneurs are the drivers of the transforming process. (OECD, 1996)

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Old and New Industrial Paradigm Old Approach New Approach

Strategic focus Efficiency-driven Knowledge-driven

Competitive strategy Cost Leadership Innovation-based differentiation

Source of competitive advantage Tangible resources,

Market Power Human and intangible resources

Keys for competitiveness Scale efficiencies,

Process innovation

Flexibility,

Strategic innovation

Productive objectives Quantity Quality

Capital focus Financial capital Social and human capital

Organisational Structure Rigid organisational structure Flexible organic structure

Preferred leadership style Managerial Entrepreneurial

Dominant firm size Large corporations SMEs

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Catalysts of the paradigm change: • Globalization of markets/industries, • ICTs, • “Rise of the creative class”, • Post materialist era, • And the current financial crisis.

Old and New Industrial Paradigm

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But entrepreneurship is still being analysed through the

lens of the old paradigm.

(trauma)

Problem Statement Q

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Entrepreneurship Research

=

Entrepreneurship Advocacy

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Entrepreneurship:

The solution for everything!!!!

Or maybe not…

Repaso de la investigación empresarial

The more the merrier? (indiscriminate promotion)

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Entrepreneurship:

‘Tool’ for development

not an ‘end’

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Entrepreneurship in EU

EU’s Economic and Social objective

“to become the most competitive and

dynamic knowledge-based economy in

the world” (Lisbon 2000)

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Strong hypotheses amongst EU policy makers that:

Innovation as factor of production

Innovation a produce of R&D

R&D = Economic growth

R&D = Productivity Increase

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But empirical evidence in Europe shows:

Highest R&D as % of GDP = Scandinavian

Highest GDP growth = Ireland, Spain, Med.

Highest productivity = Germany, Ireland…

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The missing ingredient is ENTREPRENEURSHIP:

R&D creates knowledge and opportunities, entrepreneurship is needed to transform these into economic growth and enhanced productivity

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“Need for radical economic transformation”

Compared to the US, the EU has:

- Less entrepreneurial dynamism,

- Less entrepreneurial initiative,

- Less entrepreneurial growth,

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EU Green Book on E-ship

EU Green Book on Entrepreneurship

The challenge for the EU is to identify the

key factors for building a climate in which

entrepreneurial initiatives can thrive (2003).

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EU Entrepreneurship Action Plan

EU Entrepreneurship Action Plan (2004): 1. Fuelling entrepreneurial mindsets

2. Encouraging more people to become entrepreneurs

3. Gearing entrepreneurs for growth and competitiveness

4. Improving the flow of finance

5. Creating a more SME-friendly regulatory framework

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Innovation & competitiveness

Knowledge creation

Business creation

Territory

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HOWEVER: E-Ship not having the desired socio-economic impact (Minniti, 2008; Shane, 2009)

WHY: Policy focus on quantity rather than quality (Shane, 2009; Henrekson & Johansson, 2010)

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THEREFORE: Target individuals with High Actual Human Capital (HAHC) (Wright et al., 2007 ; Samuelsson & Davidsson, 2009; Hvide, 2009)

BECAUSE: HAHC individuals–

Opportunity identification ability (Shepherd and Detienne,2005; Haynie et al., 2009),

Pursue innovative ventures (Koellinger,2008; Ucbasaran et al., 2008),

Growth-oriented (Cooper et al., 1994; Barringer et al., 2005; Colombo and Grili, 2009).

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BUT, HAHC individuals face

High opportunity cost (Raphael et al., 1995),

Fear of failure (Vaillant and Lafuente, 2007),

Lack of self-confidence (Arenius and Minniti, 2005).

DISCOURAGES (quality) ENTREPRENEURIAL ACTIVITIES.

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Quality Entrepreneurship

?????

Quality Entrepreneurship Q

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Entrepreneurial Activity

Employment Creation

Economic Growth

Innovation

Greater Impact?

Quality Entrepreneurship Q

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Greater Survival?

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- Greater Impact ≠ Greater Survival

- Not limited to Techno-Industrial

- Not limited to Higher Education

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Quality entrepreneurship:

Allows a territory to commercialise its endogenous resources and capabilities efficiently and sustainably through an optimal use of the region’s human capital, whether as entrepreneur or as employee. (Vaillant 2011, OECD 2011)

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REFLECTIONS ON QUALITY ENTREPRENEURSHIP FOR KNOWLEDGE BASED ECONOMIES

Dr. Yancy Vaillant

CATALUNYA