Healthy Entrepreneurial Ecosystems

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

10000

20000

30000

40000

50000

60000

70000

80000

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



Formal institutions


Systemicconditions

Culture



New knowledge

Support services /

intermediaries


The framework conditions that enable/constrain the development and interaction of actors in the entrepreneurial ecosystem

Formal institutions


Systemicconditions

Culture



New knowledge

Support services /

intermediaries


Hermann Hauser - Cambridgeshire

Formal institutions


Systemicconditions

Culture



New knowledge

Support services /

intermediaries


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


Systemicconditions

Culture



New knowledge

Innovativestart-ups




Support services /

intermediaries

Value creation

Outcomes

Outputs



NOT SELF-EMPLOYMENT & NEW FIRMS PER SE

Self-Employment & New Firms, NL

Solo Self-Employed & Employers, NL

Formal institutions


Systemicconditions

Culture



New knowledge

Innovativestart-ups




Support services /

intermediaries

Value creation

Outcomes

Outputs



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


Systemicconditions

Culture



New knowledge

Innovativestart-ups




Support services /

intermediaries

Value creation

Outcomes

Outputs




• 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

Noord-Braban

t

Utrecht

Gelderl

and

Zuid-Hollan

d

Limburg

Noord-Hollan

d

Groningen

Overijss

el

Flevo

land

Zeelan

d

Friesl

and

Drenthe

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14

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

Business

Healthy Entrepreneurial Ecosystems