Growing truly entrepreneurial ecosystem


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Slides from invited keynote at 2011 European Summer University for Entrepreneurship ( in Sevilla, Spain September 2011

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Growing truly entrepreneurial ecosystem

  1. 1. Getting to “Entrepreneurial”? … growing a more entrepreneurial ecosystem Norris Krueger, PhD Entrepreneurship Northwest Max Planck Institute of Economics
  2. 3. Nurturing a Resilient, Self-Renewing Economy To Build Entrepreneurial Potential = 1) Entrepreneurial Mindset, 1A) Entrepreneurial Ecosystem
  3. 4. Entrepreneurial Potential? <ul><li>We need more opportunities </li></ul><ul><li>We need somebody to see those opportunities </li></ul><ul><li>Those “somebodies” are entrepreneurs </li></ul>
  4. 5. What’s different about entrepreneurial economies? (entrepreneurial societies ?) … and why does it matter? (and... what’s the key leverage point?)
  5. 6. Did You Know What Entrepreneurs Do ???   Economic Role: “residual claimant of rents” [entrepreneurs create value for others] Entrepreneurs see opportunities to create value for others . Entrepreneurs find ways to act on those opportunities Entrepreneurs deliver value, then get paid. Economic Role: “churn” Creative destruction and Creative con struction Economic Role: Driver of Innovation “ ICE”: Innovation = Creativity + Entrepreneurship  
  6. 7. Why entrepreneurs matter
  7. 9. … the smoking gun? Opportunity Entrepreneurship (peaked in 2005) Necessity Entrepreneurship (not to scale)
  8. 11. Where Did Idaho's Jobs Come From? (2000-2007; <ul><li>  New businesses created around 297,000 jobs (58%) </li></ul><ul><li>Expanding businesses created around 200,000 jobs (40%) </li></ul><ul><li>Businesses moving in created around 10,000 jobs (2%). </li></ul><ul><li>  but now… let's look at the net job figures: </li></ul><ul><li>Businesses opening: created 296,983 jobs </li></ul><ul><li>Businesses closing: destroyed 291,824 jobs </li></ul><ul><li>Net jobs from business creation: +5,519 jobs </li></ul><ul><li>  Business expansions: created 200,383 jobs </li></ul><ul><li>Business contractions: destroyed 133,502 jobs </li></ul><ul><li>Net jobs from business expansion: 64,781 jobs </li></ul><ul><li>  Businesses moving into Idaho: created 10,555 </li></ul><ul><li>Businesses moving out of Idaho: destroyed 10,757 </li></ul><ul><li>Net jobs from business attraction: -202 jobs </li></ul><ul><li>(1977-2005, the US created 450 million jobs & lost 406 million jobs) </li></ul>
  9. 12. Schumpeter was right... <ul><li>Creative destruction is normal. </li></ul><ul><li>Creative destruction is healthy. </li></ul><ul><li>Creative CONstruction! </li></ul><ul><li>Policy Conclusion #1: </li></ul><ul><li>Focus on job creation, not job loss </li></ul><ul><li>What does a job-creating ecosystem look like? </li></ul>
  10. 13. Ideas  Reality (think “ICE”!) <ul><li>Knowledge Spillover (eg, Audretsch, Acs) </li></ul><ul><li>Execution/Implementation “pulls” </li></ul><ul><li>Market-pull >> Idea-push! </li></ul><ul><li>Policy Conclusion: Focus -> Execution </li></ul>IDEAS REALITY EXECUTION
  11. 14. Where do entrepreneurs come from? <ul><li>Latest intel (~1 month old) – the three top predictors of entrepreneurial entry: And Entrepreneurial Potential! </li></ul><ul><li>Global Entrepreneurship Monitor </li></ul><ul><li>Global Entrepreneurship & Development Index (GEDI) </li></ul><ul><li>PSED, KFS </li></ul><ul><li> </li></ul>
  12. 15. Where do entrepreneurs come from? [per Paul Reynolds 2010/2011] <ul><li>#1 Personal preparedness (HC?) </li></ul><ul><ul><li>mindset, role identity </li></ul></ul><ul><ul><li>actually see personally-viable opportunity </li></ul></ul><ul><li>#2: Cultural/social support (SC?) </li></ul><ul><ul><li>good career choice, media </li></ul></ul><ul><ul><li>“ old-school” values (success attributions) </li></ul></ul><ul><li>#3: Perceived barriers (PC?) </li></ul>
  13. 16. Policy implications? <ul><li>#1 Personal preparedness (HC?) </li></ul><ul><li>Policy Conclusion: </li></ul><ul><ul><li>Grow the mindset. In EVERYONE </li></ul></ul><ul><ul><li>Experiential; engage ecosystem ! </li></ul></ul><ul><li>#2: Cultural/social support (SC?) </li></ul><ul><li>Policy Conclusions: </li></ul><ul><ul><li>Grow the ecosystem. Map it. Vision it. Align resources. </li></ul></ul>
  14. 17. “ Ecosystem”: Preaching to the choir? <ul><li>Regional/local Innovation Systems vs. </li></ul><ul><li>Clusters vs. Ecosystems </li></ul><ul><li>Top-down vs bottom-up [vs heterarchy/social networks?] </li></ul><ul><li>Triple helix... misses the linkages? </li></ul><ul><li>Liaison-animateur -> connectors are more than brokers </li></ul>
  15. 18. “ Ecosystem” <ul><li>Policy Conclusions: </li></ul><ul><li>Emphasize/support Liaison-animateur </li></ul><ul><li>Understand it IS an ecosystem </li></ul><ul><li>Framework that supports the emergence of opportunities </li></ul><ul><li>Intangible infrastructure often trumps the tangible (people >>$$$) </li></ul>
  16. 19. Some other basic tools… <ul><li>Comprehensive Entrepreneurship Development Strategy (CEDS?) </li></ul><ul><li>“ Framework for emergence” (Volery) </li></ul><ul><li>Mapping, Visioning, Aligning </li></ul><ul><ul><li>Lots of tools (ABCD, AI, etc.) </li></ul></ul><ul><li>Identifying Key Leverage Point(s) </li></ul><ul><ul><li>Often…. = human capital! </li></ul></ul><ul><ul><li>Key leverage to HC is growing mindsets! </li></ul></ul>
  17. 20. So what might a strategy look like? <ul><li>* Comprehensive, inclusive </li></ul><ul><li>* Bottom-up, building networks (& connectors) </li></ul><ul><li>* Entrepreneurial Human Capital </li></ul><ul><ul><li>Foster entrepreneurial thinking: broad & deep </li></ul></ul><ul><ul><li>Inspire next generation of ideas (ICE) </li></ul></ul><ul><li>* Entrepreneurial Social Capital </li></ul><ul><ul><li>Revitalize entrepreneurial communities </li></ul></ul><ul><ul><li>Enhance entire entrepreneurial ecosystem </li></ul></ul>
  18. 21. The FIRE Model (sample CEDS) <ul><li>F : F oster entrepreneurial mindset </li></ul><ul><ul><li>Broadly & deeply; mentor, mentor, mentor </li></ul></ul><ul><li>I : I nspire next generation of ideas </li></ul><ul><ul><li>Entrepreneurship as life skill </li></ul></ul><ul><li>R : R e-entrepreneurialize communities </li></ul><ul><ul><li>Help communities take initiative </li></ul></ul><ul><li>E : E nhance entire ecosystem </li></ul><ul><ul><li>Identify, support liason-animateurs </li></ul></ul>
  19. 22. “ 21 st Century Economic Development”: The Basics   MULTIPLE APPROACHES * Adds business creation, nonprofit creation, and an entrepreneurial approach to business expansion (to the existing mechanisms for business attraction/recruitment & retention).   * Focus strongly on job-creating growth in parallel to supporting non-growth firms that provide economic diversity.
  20. 23. “ 21 st Century Economic Development”: The Basics   * Bridging assets (BA) which link and support innovation assets (IA) and entrepreneurial assets (EA) – and does so proactively (not a passive liaison but actively identifying and promoting connections). * Focus on technology as both an end (e.g., a high tech firm) and as a means (e.g., using technology to support firms to be more competitive) .  
  21. 24. “ 21 st Century Economic Development”: The Basics <ul><li>PARTNERSHIPS & NETWORKS </li></ul><ul><li>* Works to build genuine partnerships among potential resources and clients. </li></ul><ul><li>* Creates networks of networks, take advantage of partners’ own networks. </li></ul><ul><li>* Identifies each partner’s distinctive competence and applies it where needed. </li></ul><ul><li>* Understand your connectors, your liaison-animateurs </li></ul><ul><li>* Connect locally, regionally and nationally! </li></ul>
  22. 25. “ 21 st Century Economic Development”: The Basics <ul><li>THE ‘HEART’ of 21 st CENTURY DEVELOPMENT </li></ul><ul><li>* Understands that at the heart of development are passionate professionals who entrepreneurially identify opportunities to use institutions to help entrepreneurship.  </li></ul><ul><li>Understands how entrepreneurs, technologies, small firms, large firms, academe and government fit together in a healthy economy that is resilient and growing . </li></ul>
  23. 26. We know how to teach individuals (and organizations and communities) to think more entrepreneurially, to truly make a difference; we now understand why and how .
  24. 27. BUT...... if mindset is so important…, the linchpin of entrepreneurial potential?? and if you don't think so... [ ]
  25. 28. Creating the Mindset: Entrepreneurial Learning: from Novice to Expert! <ul><li>Knowledge Content? or Structure ? </li></ul><ul><li>Deep Beliefs (role identity?)‏ </li></ul><ul><li>Importance of entrepreneurial emotion </li></ul><ul><li>Understanding cognitive change... </li></ul>
  26. 29. Novice Expert Entrepreneurial Mindset Critical Developmental Experiences Change in what we know (content) Change in how we know it (knowledge structures) Change in Deep Beliefs But… How do we do this? What deep beliefs? What CDEs?
  27. 30. Homework: CDE's <ul><li>So think about the most powerful tool you use in teaching/training... </li></ul><ul><li>What is it? </li></ul><ul><li>What is the key lesson they learn? </li></ul><ul><li>How does it bend brains? (change knowledge structure ) How do you know? </li></ul>
  28. 31. Think your brain doesn't light up? (your brain on unfairness)
  29. 32. So what IS this “entrepreneurial mindset” anyway?? <ul><li>Before I share what others have suggested... </li></ul><ul><li>What do YOU think?? </li></ul><ul><li>[audience participation/homework!] </li></ul>
  30. 33. Proposed facets/definitions of “entrepreneurial mindset” <ul><li>Seeing opportunities </li></ul><ul><li>Strategic thinking </li></ul><ul><li>Dot-connecting / pattern recognition </li></ul><ul><li>Effectual thinking (bricolage, improv) </li></ul><ul><li>Optimist (attributional) </li></ul><ul><li>Metacognition </li></ul><ul><li>Bias for action </li></ul><ul><li>Value creation as sine qua non </li></ul><ul><li>Surviving “failure”! </li></ul>
  31. 34. Brain-Changing: Where Might We Find Immersion Experiences MENTORING! The “lean” model Startup Weekend What else??
  32. 35. YES NO LOGIN    /    REGISTER How can I help YOU get involved?
  33. 36. Global Entrepreneurship Week Nov 13-19 http:// ; http://www. (How can I help YOU get involved?)
  34. 37. More FUN Homework! <ul><li>An easy one! </li></ul><ul><li>Ready? </li></ul><ul><li>“ FTMM” </li></ul><ul><li>What is ONE simple thing that you can do yourself to help your own local entrepreneurial ecosystem? </li></ul><ul><li>One thing you can do First Thing Tomorrow Morning </li></ul>
  35. 38. … please stay in touch! <ul><li>Norris Krueger, PhD </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li>@entrep_thinking </li></ul></ul><ul><ul><li>Facebook </li></ul></ul><ul><ul><li>LinkedIn </li></ul></ul><ul><ul><li>Slideshare </li></ul></ul>