Healthy Entrepreneurial Ecosystems

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

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Healthy Entrepreneurial Ecosystems

  1. 1. A Healthy Entrepreneurial Ecosystem Workshop Entrepreneurial Ecosystems, Utrecht, 14 July 2014 Prof Dr Erik Stam
  2. 2. 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
  3. 3. Outline I. Entrepreneurial Ecosystem concept II. NL situation: Entrepreneurship Paradox III. NL policy
  4. 4. I. Entrepreneurial Ecosystem Concept
  5. 5. 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
  6. 6. Entrepreneurial activity Entrepreneurial Ecosystem Elements
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. Formal institutions Framework conditions Systemic conditions Culture Networks Leadership Finance Talent Physical infrastructure Demand New knowledge Support services / intermediaries Entrepreneurial Ecosystem Elements
  11. 11. II. NL situation: Entrepreneurship Paradox
  12. 12. A Healthy NL Entrepreneurial Ecosystem?
  13. 13. 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
  14. 14. 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
  15. 15. Self-Employment & New Firms, NL
  16. 16. Solo Self-Employed & Employers, NL
  17. 17. 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
  18. 18. 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
  19. 19. Entrepreneurial Employees
  20. 20. (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
  21. 21. 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
  22. 22. (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)
  23. 23. III. NL Policy
  24. 24. Towards a Healthy NL Entrepreneurial Ecosystem
  25. 25. 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
  26. 26. 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.
  27. 27. Improved Monitoring of Entrepreneurial Ecosystem(s) • National • Regional • Corporate • …
  28. 28. Entrepreneurial Ecosystem Index NL ?
  29. 29. Entrepreneurial Ecosystem Index NL 0 2 4 6 8 10 12 14
  30. 30. Regelgeving Cultuur Netwerken Leider- schap Finan- ciering Talent Fysieke infrastructuur Vraag Nieuwe kennis DV Bedrijven Noord-Brabant
  31. 31. 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 • …
  32. 32. 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
  33. 33. A Healthy Entrepreneurial Ecosystem Workshop Entrepreneurial Ecosystems, Utrecht, 14 July 2014 Prof Dr Erik Stam

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