20140714 stam_dutch_entrepreneurial_ecosystems

A  Healthy    Entrepreneurial  Ecosystem  

Workshop  Entrepreneurial  Ecosystems,  Utrecht,  14  July  2014  

Prof  Dr  Erik  Stam    

Outline  

I.  Entrepreneurial  Ecosystem  concept  II.  NL  situa6on:  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  acDon  

Entrepreneurial  ac6vity  

Entrepreneurial  Ecosystem  Elements  

Formal  ins6tu6ons  

Framework  condi6ons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Innova6ve  start-­‐ups  

High-­‐growth  start-­‐ups  

Entrepreneurial  employee  ac6vity  

Produc6vity   Income   Employment     Well-­‐being  

Support  services  /  

intermediaries  

Value  crea6on  

Outcomes    

Outputs  

Entrepreneurial  ac6vity  

Entrepreneurial  Ecosystem  Elements  

Formal  ins6tu6ons  

Framework  condi6ons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Support  services  /  

intermediaries  

Entrepreneurial  Ecosystem  Elements  

The  framework  condiDons  that  enable/constrain  the  development  and  interac6on  of  actors    in  the  entrepreneurial  ecosystem  

Formal  ins6tu6ons  

Framework  condi6ons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Support  services  /  

intermediaries  

Entrepreneurial  Ecosystem  Elements  

Formal  ins6tu6ons  

Framework  condi6ons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Support  services  /  

intermediaries  

Entrepreneurial  Ecosystem  Elements  

II.  NL  situa6on:  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  forma6on  and  self-­‐employment)  

•  Paradox:  increasingly  a  maZer  of  growing  number  of  solo  self-­‐employed,  and  low/mediocre  rates  of  growth-­‐oriented  entrepreneurship  

Formal  ins6tu6ons  

Framework  condi6ons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Innova6ve  start-­‐ups  

High-­‐growth  start-­‐ups  

Entrepreneurial  employee  ac6vity  

Produc6vity   Income   Employment     Well-­‐being  

Support  services  /  

intermediaries  

Value  crea6on  

Outcomes    

Outputs  

Entrepreneurial  ac6vity  

Entrepreneurial  Ecosystem  Elements  

NOT    SELF-­‐EMPLOYMENT  &  NEW  FIRMS  PER  SE  

Self-­‐Employment  &  New  Firms,  NL  

Solo  Self-­‐Employed  &  Employers,  NL  

Formal  ins6tu6ons  

Framework  condi6ons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Innova6ve  start-­‐ups  

High-­‐growth  start-­‐ups  

Entrepreneurial  employee  ac6vity  

Produc6vity   Income   Employment     Well-­‐being  

Support  services  /  

intermediaries  

Value  crea6on  

Outcomes    

Outputs  

Entrepreneurial  ac6vity  

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  expecta6ons  start-­‐ups  (2013)  

20  or  more  jobs   5-­‐19   0-­‐5  

Entrepreneurial  Employees  

(Eco)systemic  Causes  &  Consequences    

•  Posi6ve  feedback:  virtuous  circle  (for  self-­‐employment!)  

Changing    preferences  

Changing    formal  

 ins6tu6ons  

Lower  entry  barriers  

Higher  entry  rates  

+  Context:    high  labour  protec6on,    concentrated  financial  sector,    +  Shocks:    1997-­‐2001  dot.com  boom&bust  2008+  financial  crisis    

Rise  of  solo-­‐self  employment    

•  more  relevant  as  condi6on  for  entrepreneurial  ecosystem  (“culture”),    than  as  output  

•  But…,  might  be  indicator  of  lack  of  ambi6ons,  and  constrained  labor  mobility  as  well  

(Eco)systemic  Causes  &  Consequences    

•  Nega6ve/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  protec6on  legisla6on,  non  compete  clauses  

b)  Capital  market:  VC,  trade-­‐sales,  IPO  

c)  Lack  of  venturesome  demand:  innova6ve  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  ins6tu6ons  

Framework  condiDons  

Systemic  condi6ons  

Culture  

Networks   Leadership   Finance   Talent  

Physical  infrastructure  

Demand  

New  knowledge  

Innova6ve  start-­‐ups  

High-­‐growth  start-­‐ups  

Entrepreneurial  employee  ac6vity  

Produc6vity   Income   Employment     Well-­‐being  

Support  services  /  

intermediaries  

Value  crea6on  

Outcomes    

Outputs  

Entrepreneurial  ac6vity  

Entrepreneurial  Ecosystem  Elements  

Framework  condi6ons  

•  changing  formal  ins6tu6ons  to  enable  labor  mobility  (development  and  circula6on  of  talent);    

•  opening  up  public  demand  for  entrepreneurs,  to  provide  finance  for  new  knowledge  crea6on  and  applica6on;    

•  s6mula6ng  a  culture  of  entrepreneurship  and  entrepreneurial  leadership;    

•  adap6ng  or  crea6ng  physical  infrastructure  to  enhance  knowledge  circula6on  and  networks.  

Improved  Monitoring  of  Entrepreneurial  Ecosystem(s)  

•  Na6onal    •  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  ac6vity?  

•  Relevant  context(s)?    – Region,  country,  corpora6on,  …  

•  Rela6ve  weight,  interdependence,  and  evolu6on  of  entrepreneurial  ecosytem  elements?  

•  BeZer  measures  •  …  

Conclusions  

•  Entrepreneurial  ecosystem  approach  provides  new  insights  for  public  policy  and  entrepreneurial  leadership  (leaders  &  feeders)  

•  Entrepreneurial  ecosystem  analysis  as  star6ng  point  for  discussions  about  changing  framework  condi6ons  and  systemic  condi6ons  

A  Healthy    Entrepreneurial  Ecosystem  

Workshop  Entrepreneurial  Ecosystems,  Utrecht,  14  July  2014  

Prof  Dr  Erik  Stam