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BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
Economic Development through Cultivati...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
Our “E-Prize”
2
An innovative new proj...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
What Doesn’t Work
• Attempts to copy S...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
Significant problems
with
• Angel netw...
5
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
Summary
• Target high potential entrep...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
The Policy Paradox
7
“The capable can
...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
Healthy
entrepreneurship ecosystems
Do...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
So the “system” gets
it backwards….
9
...
Principles for government support of venture finance:
(based on everything we know collectively)
Government should
Incenti...
BABSON
Entrepreneurship Ecosystem
Project
BABSON
Entrepreneurship Ecosystem
Project
There is no force as powerful as an
id...
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Business Forum: Entrepreneurship and the Development of SMEs - Schlesinger

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Presentation at the US-Saudi Business Opportunities Forum (Dec 5-7, 2011, Atlanta, GA). Leonard Schlesinger, President, Babson College, presented at the panel titled, "Entrepreneurship and the Development of SMEs".

Published in: Business, Economy & Finance
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  • They are not the same. True you can define them as the same, but definitions are like rubber bands: when you stretch them, they break and become useless. So let’s use the lay definitions of an entrepreneur who creates a new business, even a rapidly growing and dynamic one. An example of an non-innovative entrepreneur is Cinemex. Innovative is more complex, but let us define it as a new device or process that results from study and experimentation (Princeton). Open source (Linux) is an example of a great innovation that is not, in and of itself, entrepreneurial.Hong Kong: lots of entrepreneurship, not much innovation, and Singapore, lots of innovation, and not much entrepreneurship. Singapore has about 4 x patenting activity poer capita than HK.In fact I would argue that entrepreneurship is more closely tied to economic growth and development, and innovation may or may not directly impact economic development.I would also put out for the sake of argument, at least, that entrepreneurship is the scarcer and more valuable commodity (although I could think of counter arguments; and no doubt when they occur together they are powerful).I would also argue that it is easier for entrepreneurs to become innovative, than for innovators to become entrepreneurial.My own experience is that the fact that you can be an entrepreneur without being very innovative is a tremendously liberating insight at the micro level, and my experience is that it brings the individual entrepreneurial choice that much closer.
  • Transcript of "Business Forum: Entrepreneurship and the Development of SMEs - Schlesinger"

    1. 1. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project Economic Development through Cultivating Entrepreneurship Ecosystems U.S. Saudi Business Opportunities Forum Entrepreneurship and the Development of SMEs Len Schlesinger December 7, 2011
    2. 2. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project Our “E-Prize” 2 An innovative new project with a Big Mission: “To demonstrate that we can impact societies (regions) to foster high growth entrepreneurial ventures on a self- sustaining basis using a codifiable and replicable methodology” Mission of the Babson Entrepreneurship Ecosystem Project
    3. 3. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project What Doesn’t Work • Attempts to copy Silicon Valley – Russia’s Skolkovo; Singapore’s Biopolis • Piecemeal (“silver bullet”) policies and programs – Incubators, angel networks, venture capital, education, microfinance, tax credits, tech transfer (universities) • Top-down winner-selection (sectors, companies) – Sector-based clusters, direct investment • Broad national policies – Competitiveness, national innovation systems • Government-giveaways – Indiscriminate funding programs 3
    4. 4. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project Significant problems with • Angel networks • Government supported venture capital • Incubators, innovation centers • Comparative advantage strategies (Clusters, Competitiveness) • University technology transfer • Financial incentives to debt providers 4
    5. 5. 5
    6. 6. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project Summary • Target high potential entrepreneurship • Target very specific geographies • Impact the entire ecosystem with independent, temporary organization • Work against specific objectives 1/100K • Stop when you reach them • Avoid mistakes of government over- involvement (e.g. cluster strategies) • Experiment, learn, try again 6
    7. 7. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project The Policy Paradox 7 “The capable can manage for themselves” “We cannot create wealthy elites or help the rich get richer” “We cannot let the disadvantaged fail” “We need to distribute resources equally” Do they get resources? Quality of venture High Low No Yes
    8. 8. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project Healthy entrepreneurship ecosystems Do they get resources? Quality of ventures High Low No Yes It is as important that bad ventures “die”… …as it is for the good ones to get supported Venture death frees up resources (people, money, IP) that can be useful Venture death generates information and “learning” about what works 8
    9. 9. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project So the “system” gets it backwards…. 9 Do they get resources? Quality of venture High Low No Yes Bad outcome: Lost opportunity No growth Entrepreneurship discouraged Bad outcome: Wasted resources Life style SMEs, Micro-ventures
    10. 10. Principles for government support of venture finance: (based on everything we know collectively) Government should Incentivize providers of capital to invest directly Have a “sell-by date” for programs Cultivate deal flow (ecosystem) simultaneously Encourage financial innovation and allow for quick learning Always require some matching funds and require payback (not debt) Pay attention to the entire financing chain, from pre-seed to public (beware angel networks) 10
    11. 11. BABSON Entrepreneurship Ecosystem Project BABSON Entrepreneurship Ecosystem Project There is no force as powerful as an idea whose time has come. Victor Hugo 11 Today entrepreneurship is such an idea.
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