Consider your own business or the business you are planning to set up. If you do not have a venture of your own and if you are not intending to start one either, you can also take e.g. family business as an example. The purpose of the analysis is to analyze the current networks of the venture and systematically map the relevant actors in your sector as well as analyze the regional characteristics of the entrepreneurial ecosystem.
-> analyze the current networks of the venture by using some network indicators provided in the material
-> consider the sector of the business
• what are the key characteristics?• what are the key players in the field?
-> consider the entrepreneurial ecosystem in the region
• what are the key characteristics?• what are the key players in the field?
Please utilize the frameworks given in the the materials and illustrate your findings by using them. You may study the topic completely based on materials available in the Internet and other public sources. If you wish, you may also interview key actors e.g. representatives in the organizations providing knowledge and resources for early stage ventures, incubators, co-working spaces, universities. If you decide to do interviews, please remember the social distancing and prefer virtual meetings during the times of the pandemic.
The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ ________________________________________________________________________
[email protected] +1 (781) 239-6290 The Entrepreneurship Ecosystem Strategy as a New Paradigm for Economic Policy: Principles for Cultivating Entrepreneurship1 Daniel Isenberg, Ph.D. Professor of Management Practice, Babson Global Executive Director, the Babson Entrepreneurship Ecosystem Project May 11, 2011 I would like to propose a challenging and, I believe, extremely important thesis, namely, that we know enough about how entrepreneurship develops in the world to deliberately create the conditions so that there will be measurably more of it, and do so in a relatively short period of time, that is, years and not decades. Furthermore, we know enough about how to accomplish this XPRIZE-like challenge so that entrepreneurship will be relatively self-sustaining, self-generating. Finally, achieving this will generate tremendous amounts of economic and social benefit. To present this thesis I draw on decades of experience around the world, as well as my own as an entrepreneur, academic, venture capitalist, angel investor, government advisor (including playing a small role advising the White House’s StartUp America). I also lived in Israel for 22 years and participated in the miraculous entrepreneurial transformation of that society. To accomplish this ambitious objective, public leaders, by which I mean elected, professional, and private sector, need to operate according to several interrelated principles, a few of which I will specify below, along with their implications for policy. Collectively, supported by a growing body of professional practice and specific methodologies we have been developing at Babson, they comprise what I call the “entrepreneurship ecosystem strategy” for economic development. I believe the entrepreneurship ecosystem strategy represents a novel and cost-effective strategy for stimulating economic prosperity. I believe that it either replaces, or at least is a necessary complement, or even pre-condition to, cluster strategies, innovation systems, knowledge based economies, and national competitiveness policies. The entrepreneurship ecosystem strategy is evolving to address some of the policy mistakes resulting from the way these strategies are conceived and executed, including: - Allocation of too low a public priority to entrepreneurship - Lack of clarity of entrepreneurship policy objectives - Inadvertent weakening of aspirational entrepreneurship - Unintended repulsion of providers of entrepreneurial finance - Perverse consequences piecemeal programs, such as education causing brain drain The ideas are evolving in the context of results-oriented projects that Babson is conducting in various regions around the world, and they are still growing “a full set of teeth.” So I hope my comments will generate discussion, debate, but more importantly, action-learning, because the stakes are high. By the way, I am not referring specifically to what Ireland should or should not do because I do not know enough about what Ireland is doing as a nation or society: my initial impression is that entrepreneurship programs here are advanced and apologize if I preach a little bit to the choir. 1 Based on an invited presentation at the Institute of International and European Affairs, May 12, 2011, Dublin Ireland. http://www.iiea.com/ The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ ________________________________________________________________________
[email protected] +1 (781) 239-6290 Principle. Distinguish among self-employment, SMEs, and entrepreneurship, and focus on the latter, in which case most of the former two will take care of themselves. Before getting to the “how” of entrepreneurship creation, we have to start with the question, “what and why,” because we cannot get to the “how” if we are unclear about the “what” and the “why.” This is partly a semantic issue, but I believe that the term entrepreneur (at least, in English) with all of its derivatives runs the risk of being broadened out of meaning.2 I am referring very narrowly and classically to the entrepreneur as a person who is continually pursuing economic value through growth and as a result is always dissatisfied with the status quo. Entrepreneurship is aspirational and risk-taking, and, as I shall argue, intrinsically contrarian. Self-employment per se, is not entrepreneurship: self-employment- plus-aspiration, usually is; aspiration, not business ownership per se, is the continental divide between the entrepreneur and the non-entrepreneur. In fact, in some ways self-employment and entrepreneurship are diametrically opposed. My immigrant grandfather dropped out of grade school and eventually had his own wall paper store in Philadelphia in the first half of the 20th century but he did not aspire to be the Wal (Paper) Mart. He wanted to make enough money to put my father and aunt through school so that they could get good jobs. Four generations later my son has started his first of a chain of night clubs in Israel, opening this month, and he is employing about 150 people. My grandfather was self-employed, and my son is an entrepreneur. Risk is intrinsic to entrepreneurship because entrepreneur engages in an activity which will only generate value, if at all, later. Investing in designing a new music player or mobile payment service will not pay off immediately, and even if it eventually does pay off, we can never have perfect foresight about how much. The reason that entrepreneurs make those risky investments is because they actually perceive their risks to be lower than others’ due to their perception that they possess some asset (e.g. intellectual property or real estate) or information (e.g. that the Persians like silver implements and there are silver ore deposits in Iberia), or assessment (e.g. that the geological formation underneath the Eastern Mediterranean suggests the presence of large amounts of gas) or idea (e.g. that larger numbers of people will buy smaller amounts of music for $1 if it is easy for them to do so) or ability (e.g. I can inspire, excite, and organize people). Entrepreneurs, in the broadest economic sense, buy inputs low, transform them through risk, and sell them high. This perception that you know or have something that others don’t know or have, implies the intrinsically contrarian nature of entrepreneurship, because the perception of opportunity is based on the belief that other potential entrepreneurs either don’t see what you see, and/or view exactly the same situation differently, and/or in fact, until it is too late, perceive your assets or ideas or assessments as relatively worthless, impossible, or stupid. I will give one simple example of Sandi Cesko of Slovenia who created the largest television shopping channel in 20 Central and Eastern European countries (it took him 20 years), starting at a time when conventional wisdom had it that no consumers in that region would trust anything sold over television. No one would invest so he boot strapped it. No one would sell him prime time TV slots so he bought the scrap time. The Western shopping channels had a business model based on outsourcing media, customer service, delivery, payment, and Sandi in-sourced everything. Today Studio Moderna is the 2 By the way, we do not have a native English word for entrepreneur, as there is in French, Russian, Spanish, Japanese, Chinese, Hebrew, German, and Arabic. The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ ________________________________________________________________________
[email protected] +1 (781) 239-6290 leading multi-channel retailer in 20 CEE markets growing organically 30% throughout the recession, with I would estimate on the order of half a billion EURO in revenues. Policy implications. One policy implication is that entrepreneurship needs different policies and environments, as well as a different government “home,” than self-employment and, arguably, SMEs. Treating business ownership as the common denominator for entrepreneurship policy makes about as much sense as treating gun ownership as the regulatory common denominator for gun ownership. Of course, regulation is needed, but we don’t lump together police, hunters, competitive marksmen, soldiers, and criminals, all of whom own guns. Policy for these individuals resides in internal security, defense, culture and sport, and justice ministries. We should also separate the self-employed and the entrepreneur, one belonging, for example, in the Ministry of Labor and/or Welfare, the other in the Ministry of Economic Development. But as I look at the world of economic policy, I see near-universal policy confusion among self- employment, small business ownership, and entrepreneurship. Governments have SME programs, banks have SME teams, chambers of commerce have SME departments. We have small business administrations and micro-finance. Not only are these activities more different than not, but many entrepreneurs actually dislike being lumped together with the “SMEs;” they view being small or medium as an uncomfortable transitional state that is often perceived of as a stigma that connotes a static presence as a small, second-tier supplier. Their aspiration is to sell, partner with, compete with, and outsmart the large incumbents. From the preceding analysis it will not be surprising that empirically there is remarkably little transfer from micro-to-macro enterprise. 1000 micro-enterprises do not evolve to 100 SMEs which in turn evolve into 10 high growth businesses. Yet I believe that this is an implicit and even unconscious assumption of many public leaders and policy makers. I am, of course, not saying that micro-enterprises or SMEs are without value; I am saying that they are not, in-an-of themselves, entrepreneurship; I am saying that the terms subtly suggest that entrepreneurs lower their aspirations; I am saying that if you have to choose where to spend limited resources, spend them developing aspirational entrepreneurship, and the SMEs and