healthy entrepreneurial ecosystems
DESCRIPTION
What is a healthy entrepeneurial ecosystem? Answer + application to the NetherlandsTRANSCRIPT
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%)
1985 1997 2003 2007 20120
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Philips DSM AKZO Shell Unilever
Outline
I. Entrepreneurial Ecosystem conceptII. NL situation: Entrepreneurship ParadoxIII. NL policy
I. Entrepreneurial Ecosystem Concept
A HealthyEntrepreneurial 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
Systemicconditions
Culture
Networks Leadership Finance Talent
Physical infrastructure Demand
New knowledge
Innovativestart-ups
High-growthstart-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
Systemicconditions
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
Systemicconditions
Culture
Networks Leadership Finance Talent
Physical infrastructure Demand
New knowledge
Support services /
intermediaries
Entrepreneurial Ecosystem Elements
Hermann Hauser - Cambridgeshire
Formal institutions
Framework conditions
Systemicconditions
Culture
Networks Leadership Finance Talent
Physical infrastructure Demand
New knowledge
Support services /
intermediaries
Entrepreneurial Ecosystem Elements
II. NL situation: Entrepreneurship Paradox
A Healthy NLEntrepreneurial 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
Systemicconditions
Culture
Networks Leadership Finance Talent
Physical infrastructure Demand
New knowledge
Innovativestart-ups
High-growthstart-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
Systemicconditions
Culture
Networks Leadership Finance Talent
Physical infrastructure Demand
New knowledge
Innovativestart-ups
High-growthstart-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
Belgium Germany Netherlands Sweden UK Israel US0
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Job growth expectations start-ups (2013)
20 or more jobs 5-19 0-5
Shar
e of
the
adul
t pop
ulati
on
Entrepreneurial Employees
(Eco)systemic Causes & Consequences
• Positive feedback: virtuous circle (for self-employment!)
Changing preferences
Changing formal
institutions
Lowerentry
barriers
Higherentryrates
+ Context: high labour protection, concentrated financial sector,
+ Shocks: 1997-2001 dot.com boom&bust2008+ 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, IPOc) Lack of venturesome demand: innovative procurementd) 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 NLEntrepreneurial Ecosystem
Formal institutions
Framework conditions
Systemicconditions
Culture
Networks Leadership Finance Talent
Physical infrastructure Demand
New knowledge
Innovativestart-ups
High-growthstart-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
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Utrecht
Gelderl
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Zuid-Hollan
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Limburg
Noord-Hollan
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Groningen
Overijss
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Flevo
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Zeelan
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Friesl
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Drenthe
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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