Entrepreneurial Ecosystems and the role of the entrepreneur
In this 5 minute blog, you will learn which factors are essential for an entrepreneurship ecosystem. An entrepreneurial ecosystem that helps a country’s economic development. Furthermore, the 6 areas where E-Scan can help speed up this process to economic growth.
New business, startup – despite a high failure rate – and serial entrepreneurs are of added value for an economy. Therefore, the added value would be even higher if these companies would evolve into high growth firms. In addition, the local entrepreneur plays a crucial role in achieving this type of success. For example, proper preparation and connecting the business and personal goals of the businessperson to his competencies increase the chance of success.
E-Scan offers an online platform and program for entrepreneurial skills development. With their E-Platform, the services of experts and an entrepreneurial support organization come together seamlessly. Moreover, it provides policymakers with the chance to fulfill the needs of a broad and diverse target group. Not only on a large national scale but also local entrepreneurial ecosystems, for example, by offering customized services.
In addition, a regional and successful entrepreneurial ecosystem such as ‘Ik Start Smart’ (OECD, 2014) has already shown the added value of deploying the E-Scan. It affects the owner-manager’s chance of survival after five years greatly. In contrast to the national average of 49%, the chance of survival rises to 89% after five years. On top of that, the growth of the entrepreneurial mindset in one year was 44,4%.
The economic and social added value: more prosperity and well-being
The purpose of economic policy is generally economic growth, which reflects:
- more firms;
- job creation;
- a strong international competitive position;
- more innovation and all this concerning a lively and liveable environment for the community.
The aim of strengthening the capacity for innovation and competitiveness comes from the need for prosperity. The more prosperous a country, the more productive and innovative companies must become to remain competitive in order to grow wages and wealth.
The European Union always emphasizes the importance of innovation and creativity through entrepreneurship. For example, the European Union identifies the connection between creativity, the innovation process, and entrepreneurial activity as essential instruments for preserving prosperity and for finding ways to a sustainable society; welfare.
The added value of entrepreneurial policy
More countries are evolving towards a more entrepreneurial society. Entrepreneurial education, entrepreneurial employees (intrapreneurs) and aspiring entrepreneurs who pursue entrepreneurial ventures at their own account and risk. Creating space for entrepreneurs. Moreover, rewarding creativity, risk-seeking behavior, in short entrepreneurship, has increased in importance. We need these entrepreneurs to remain competitive in a very dynamic environment.
However, for sustainable growth, the quality and infrastructure of the new venture are also important. For instance, the quality and chance of survival of the new company increase through:
- individual guidance during and after the start,
- competence development,
- capital at the right time and
- contact with other firms increase.
Scientists wrote an article ‘Entrepreneurial Ecosystems.’ The system offers a “regulatory framework” to create the context for a startup and ambitious entrepreneurship.
Source: Stam, E. et al. 2016. Entrepreneurial Ecosystem.
The added value of an Entrepreneurial Ecosystem
To realize growth and innovation, the ecosystem must function well for entrepreneurs. Such an “entrepreneurial ecosystem” is an interactive network of actors who influence each other and the chances of survival of a venture creator and his company in a region or country.
In addition, the competencies of a business owner, networks, formal institutions, human capital and culture, new knowledge, and financing are also crucial for value creation from entrepreneurship. The challenge is to let all these elements complement each other in such a way that together, they provide more value. That is what characterizes a well-functioning ecosystem.
In addition, value creation from entrepreneurship involves:
- the competencies of the owner-manager,
- formal support organizations,
- human capital,
- new knowledge and
The challenge is to let all these elements complement each other in such a way that together, they provide more value. In essence, that’s what denotes a well-functioning ecosystem.
Hence, the Entrepreneurship Ecosystem is therefore complex. So, what is essential is not only data at the macroeconomic level but also at the individual level. For example, think of entrepreneurial behavior, ambition levels, and skills of the founders of a startup. The same individual can react differently in a different context, and the current monitors do not measure this. E-Scan provides the information at the individual level and team level of the founders of a startup. It adds the missing essential information to research and analysis.
E-Scan can play a role in the determinants of the ecosystem. The Software as a solution works as a connector, lubricating oil, and a concrete, tailor-made development program. The result is a flywheel effect on entrepreneurial performance and the impact of the ecosystem.
Entrepreneur Scan can influence six determinants of an Entrepreneurial Ecosystem
#1. Competence development
Firstly, the small business owner plays a crucial role in achieving success. Therefore, the business and personal goals of the owner-manager must match his competencies. Pre and post research shows growth for all traits and skills. Furthermore, business coaching combined with E-Scan and its additional tools has proven to successfully impact survival rates.
#2. Enterprising culture and leadership
Secondly, creating an entrepreneurial culture is a development that takes time. An entrepreneurial attitude as a skill can be fully integrated into education as one of the necessary skills. E-Scan is already widely used in education from primary to university level. It could act as a student tracking system. The instrument is already used for setting goals by individual students and for personal development.
Thirdly, access to credit for small and medium-sized businesses is limited at the moment; risks are often considered too large. E-Scan offers the investor more certainty on the success of a venture and its match with the businessperson.
#4. Networks and formal institutions
Fourthly, besides the qualities of the firm owner, the presence of networks and formal institutions is also an essential precondition for successful and ambitious entrepreneurship. For instance, a network is a good way for entrepreneurs to gain knowledge about other important components of the ecosystem, such as access to venture capital, technologies, and new markets. Our Software as Service is prepared for a community where entrepreneurial companies can search and find each other.
#5. Talent and new knowledge
Fifthly, the presence of sufficient diversity and the ability of talented human capital is also important. Particularly, in relatively small fast-growing small businesses the owner does not always have the knowledge and skills to adapt to changes quickly enough. Hence, the exchange of knowledge and interaction with experts is of great importance. E-Scan has a platform where business coaches, mentors, and specialists, can be linked to the entrepreneurial community.
#6. Intermediary services
Sixthly, an ecosystem cannot do without the intermediary services of advisors, coaches, in addition: small business and start-up coaches, support organizations, and (local) government policy. Moreover, a business development organization functions as a spider in the web and acts as a facilitator. That’s a crucial part of any ecosystem.
Entrepreneurs aren’t born, they are made. Entrepreneurial ecosystems play an essential role in facilitating and fostering entrepreneurship.
Our company offers a range of entrepreneur coaching and community software tools. Maybe you are curious about the E-Scan and how entrepreneurial you are? If so, you can take the freemium version of the E-Scan here.