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Entrepreneurial Ecosystems and the role of the entrepreneur
In this 5 minute blog, you will learn which factors are essential for an entrepreneurship ecosystem. A system that can help economic development in a region or country. Furthermore, the 6 areas where E-Scan can help speed up this process to economic growth.
Start-ups are – despite a high failure rate – of added value for an economy. Therefore, the added value would be even higher if these companies survive and grow. In addition, the entrepreneur plays a crucial role in achieving this type of success. For example, proper preparation and connecting the business and personal goals of an entrepreneur to his competencies increase the chance of success.
Entrepreneur Scan offers an online platform and program for entrepreneurial skills development. With their E-Platform, the services of experts and local entrepreneurial partners come together seamlessly. Moreover, it provides economic bodies with the chance to fulfill the needs of a broad and diverse target group. Not only on a large national scale, but also locally, for example, by offering customized services.
In addition, regional entrepreneurship projects such as ‘Ik Start Smart’ (OECD, 2014) have already shown the added value of deploying the Entrepreneur Scan. It affects the entrepreneur’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.
The economic and social added value: more prosperity and well-being
The purpose of economic policy is generally economic growth, which reflects:
- more companies;
- job creation;
- a strong international competitive position;
- more innovation and all this concerning a lively and liveable environment for the citizen.
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 an entrepreneurial attitude 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. Entrepreneur in education, as an employee and for his 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 company are also important. For instance, the quality and chance of survival of the new company increases through:
- individual guidance during and after the start,
- competence development,
- financing at the right time and
- contact with other entrepreneurs increase.
Scientists developed an ‘Entrepreneurial Ecosystem.’ The system offers a “framework” to create the context for starters 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 an entrepreneur and his company in a region or country.
In addition, the competencies of an entrepreneur, networks, formal institutions, talent 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 characterizes a well-functioning ecosystem.
In addition, value creation from entrepreneurship involves:
- the competencies of an entrepreneur,
- formal institutions,
- 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 characterizes a well-functioning ecosystem.
Hence, the Entrepreneurial 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. The same individual can react differently in a different context, and the current monitors do not measure this. Entrepreneur Scan provides the information at the individual level. It adds the missing essential information to research and analysis.
Entrepreneur 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 entrepreneur plays a crucial role in achieving success. Therefore, the business and personal goals of an entrepreneur must match his competencies. Pre and post research shows growth for all competencies. 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. Entrepreneur 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. Entrepreneur Scan offers the investors more certainty on the business opportunities of the business plan and its match with the entrepreneur.
#4. Networks and formal institutions
Fourthly, besides the qualities of the entrepreneur, the presence of networks and formal institutions are 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 finance, technologies, and new markets. Our Software as Service is prepared for a community where entrepreneurs 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 entrepreneur 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, sector organizations and (local) governments. 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.
Are you a policy advisor or currently involved in an entrepreneurship ecosystem project? Please let us know and we will setup a meeting with Dr. Martijn Driessen for further discussion.