Healthy Entrepreneurial Ecosystems

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What is a healthy entrepeneurial ecosystem? Answer + application to the Netherlands

Transcript of Healthy Entrepreneurial Ecosystems

  • A Healthy Entrepreneurial Ecosystem Workshop Entrepreneurial Ecosystems, Utrecht, 14 July 2014 Prof Dr Erik Stam
  • NL employment of the 5 largest multinational firms, 1985-2012 (-74%) 0 10000 20000 30000 40000 50000 60000 70000 80000 1985 1997 2003 2007 2012 Philips DSM AKZO Shell Unilever
  • Outline I. Entrepreneurial Ecosystem concept II. NL situation: Entrepreneurship Paradox III. NL policy
  • I. Entrepreneurial Ecosystem Concept
  • A Healthy Entrepreneurial Ecosystem? An entrepreneurial ecosystem is an interdependent set of actors that is governed in such a way that it enables entrepreneurial action
  • Entrepreneurial activity Entrepreneurial Ecosystem Elements
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Innovative start-ups High-growth start-ups Entrepreneurial employee activity Productivity Income Employment Well-being Support services / intermediaries Value creation Outcomes Outputs Entrepreneurial activity Entrepreneurial Ecosystem Elements
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Support services / intermediaries Entrepreneurial Ecosystem Elements The framework conditions that enable/constrain the development and interaction of actors in the entrepreneurial ecosystem
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Support services / intermediaries Entrepreneurial Ecosystem Elements Hermann Hauser - Cambridgeshire
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Support services / intermediaries Entrepreneurial Ecosystem Elements
  • II. NL situation: Entrepreneurship Paradox
  • A Healthy NL Entrepreneurial Ecosystem?
  • NL: Entrepreneurship Paradox Amazing growth of entrepreneurship in the Netherlands, 1987-2012 Miracle: no country in which the TEA rate has grown as much as in the Netherlands over the period 2003-2012 (and precourse of rising new firm formation and self-employment) Paradox: increasingly a matter of growing number of solo self-employed, and low/mediocre rates of growth-oriented entrepreneurship
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Innovative start-ups High-growth start-ups Entrepreneurial employee activity Productivity Income Employment Well-being Support services / intermediaries Value creation Outcomes Outputs Entrepreneurial activity Entrepreneurial Ecosystem Elements NOT SELF-EMPLOYMENT & NEW FIRMS PER SE
  • Self-Employment & New Firms, NL
  • Solo Self-Employed & Employers, NL
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Innovative start-ups High-growth start-ups Entrepreneurial employee activity Productivity Income Employment Well-being Support services / intermediaries Value creation Outcomes Outputs Entrepreneurial activity Entrepreneurial Ecosystem Elements NOT SELF-EMPLOYMENT & NEW FIRMS PER SE
  • 0 1 2 3 4 5 6 7 8 9 10 11 12 Belgium Germany Netherlands Sweden UK Israel US Job growth expectations start-ups (2013) 20 or more jobs 5-19 0-5 Shareoftheadultpopulation
  • Entrepreneurial Employees
  • (Eco)systemic Causes & Consequences Positive feedback: virtuous circle (for self-employment!) Changing preferences Changing formal institutions Lower entry barriers Higher entry rates + Context: high labour protection, concentrated financial sector, + Shocks: 1997-2001 dot.com boom&bust 2008+ financial crisis
  • Rise of solo-self employment more relevant as condition for entrepreneurial ecosystem (culture), than as output But, might be indicator of lack of ambitions, and constrained labor mobility as well
  • (Eco)systemic Causes & Consequences Negative/no feedback No build up of system for high-growth start-ups (vicious circle high-growth start-up scandals early 2000s: Baan, World Online) a) Mobility of skilled labour: employment protection legislation, non compete clauses b) Capital market: VC, trade-sales, IPO c) Lack of venturesome demand: innovative procurement d) a)+b): Lack of serial entrepreneurs/informal investors No champion of intrapreneurship, like Nordic countries (in spite of high levels of trust, knowledge work, and decentralized decision making)
  • III. NL Policy
  • Towards a Healthy NL Entrepreneurial Ecosystem
  • Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Innovative start-ups High-growth start-ups Entrepreneurial employee activity Productivity Income Employment Well-being Support services / intermediaries Value creation Outcomes Outputs Entrepreneurial activity Entrepreneurial Ecosystem Elements
  • Framework conditions changing formal institutions to enable labor mobility (development and circulation of talent); opening up public demand for entrepreneurs, to provide finance for new knowledge creation and application; stimulating a culture of ambitious entrepreneurship and entrepreneurial leadership; adapting or creating physical infrastructure to enhance knowledge circulation and networks.
  • Improved Monitoring of Entrepreneurial Ecosystem(s) National Regional Corporate
  • Entrepreneurial Ecosystem Index NL ?
  • Entrepreneurial Ecosystem Index NL 0 2 4 6 8 10 12 14
  • Regelgeving Cultuur Netwerken Leider- schap Finan- ciering Talent Fysieke infrastructuur Vraag Nieuwe kennis DV Bedrijven Noord-Brabant
  • Research agenda What is the effect of leadership, role models, mentoring on entrepreneurial activity? Relevant context(s)? Region, country, corporation, Relative weight, interdependence, and evolution of entrepreneurial ecosytem elements? Better measures
  • Conclusions Entrepreneurial ecosystem approach provides new insights for public policy and entrepreneurial leadership (leaders & feeders) Entrepreneurial ecosystem analysis as starting point for discussions about changing framework conditions and systemic conditions
  • A Healthy Entrepreneurial Ecosystem Workshop Entrepreneurial Ecosystems, Utrecht, 14 July 2014 Prof Dr Erik Stam