growth-seeking entrepreneurship: the role of the support system
DESCRIPTION
A keynote speech at the award ceremony of the annual Icelandic Innovation Award, 10 April 2014, Grand Hotel ReykjavikTRANSCRIPT
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Growth-seeking entrepreneurship: The role of the support system
Petri Rouvinen ETLA , The Research Institute of
the Finnish Economy
Nýsköpunarverðlaun Íslands Grand hótel Reykjavík April 10th, 2014
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What I mean by…
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Invention Innovation≠
$+
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Innovation ≈ Seeking opportunities
1% spark – 99% sweat
Needs (some) money
Mostly not technical
Mostly incremental
Increasingly digital
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Innovation Entrepreneurship≈
$+ $+ +
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Entrepreneurship Self-employment
Perceives economicopportunities andintroduces them
in the market
Works but is notemployed by others;may employ others
but typically not
Overlap under 10%
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EU Innovation Scoreboard:Finland among leaders &Iceland among followers(above the EU average)
Source: European Union, Innovation Union Scoreboard, 2014
Finland Iceland
0.684
0.593
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0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Economic effectsInnovatorsIntellectual assetsLinks, entrepren.Firm investmentsFinance, supportResearch systemsHuman resources
Economic effects: Finland
Innovators: Iceland
Intellectual assets: Finland
Links, entrepreneurs: Iceland
Firm investments: Finland
Finance, support: Iceland
Research systems: Iceland
Human resources: FinlandNew PhDs,upper sec. ed.
Int. co-publicat.,non-EU grad stu.
Pub-privco-publ.
Patents, trademarksprotected designs
Share ofInnovative sales
Dimensions of Innovation Union Scoreboard
Source: European Union, Innovation Union Scoreboard, 2014
VCn/a
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“ Iceland is the only country for which innovation has not improved over the 2006–2013 period.”
Innovation Union Scoreboard 2014, p. 71
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Early-Stage Entrepreneurs:
Iceland leads the advanced countries
Source: Global Entrepreneurship Monitor, 2010 Global Report.Measure: Early-Stage Entrepreneurial Activity / Adult pop.
Finland Iceland
5.7
10.6
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• History: Attitudes & culture hostile to growth companies… but since the crisis Finland to a global startup hotbed!
• Why?– Aalto university
– Encouraging examples
– Challenges of incumbents
– Digitalization & globalization
– Several good policy measures
Startup in Finland !?
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A new Act in 2009 “privatized” universities and reformed management & decision-making
3 former university merged to form Aalto Univ. in 2010
Aalto’s faculty & students became cheerleaders for startups:Aalto Entrepreneurial Society, Aalto Centre for Entrepreneurship …
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A brochure of Tekes and NeoGames by the same name.
After 50 failures, Rovio hits the jackpot with
Angry Birds
Over 800 employees
After just three years of operation, Supercell
sold a 51% stake for €1.5bn
150 employees
2012 2013
250
900TurnoverMillion €
1,800 pers. 2,200 pers.
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0.5 0.3 0.5 0.7 0.8 1.1 1.2 1.8 2.5 3.1 4.0 3.3 3.6 3.8 3.0 2.9 3.1 3.2 2.6 1.2 1.2 0.5-0.1
0.5
Nokia’s Share of Finnish GDP, % Source: Ali-Yrkkö, ETLA
est.
Beyond corporate & public employment…
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1011010111000010
3D
IoT
Cost of entry ↓ Market reach ↑
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With outsourcing &offshoring: size & location matters less
Ability to position oneself in global value chains
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Vigo Accelerators Tekes: Shift in Emphasis
10 Vigos, public–private Tekes startup funding, m€
partnership business
accelerators: €220mn
private & €70mn public
investment to 90 target
firms in 2009–2013.
Some public measures
20032004
20052006
20072008
20092010
20112012
45 40 42
61 58
7488
102
127134
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Conclusions
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Some observations regarding Finland
• Seeking a list of (broad) growth industries inconsistent with global realities (cf. megatrends)
– Businesses do grow, but across a range of industries & often in small increments
• Too focused on “big hits” & the VC market?– A number of “nice growth” companies
may jointly matter more for society
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Humble questions regarding Iceland
• Good scientific base ... Applications ???
• Icelanders with sufficient tools for thought ?
• Banks & family/friends finance 90% of new firms – But does not fulfill needs of growth-seeking startups– 5–10 rounds of startup finance before maturity: path?
• Manifold innovation support in Finland ... Iceland at its optimal level of public support?
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Growth-seeking entrepreneurs (and similarly-minded corporate intrapreneurs)
are a necessary link between ideas & their societal impacts …
Is this link sufficient in Iceland ?
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For Iceland to do?• Lessons from Finland?– Vigo Accelerators?
• A Norwegian-style tax incentive (≈ Tekes)?
• But: No silver bullets – this domain is systemic– A broad set of framework conditions needed
for innovation & entrepreneurship (cf. Nordic Innovation: 20 categories)
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Try a lot, fail fast and often, scale up or try again.