Executive Summary of the Harvard Business Review June 2010 Article
“To ignite venture creation and growth, governments need to create an ecosystem that sustains entrepreneurs.” There is no exact formula for creating an entrepreneurial economy, but in How to Start An Entrepreneurial Revolution in this month’s HBR issue, Daniel J. Isenberg argues that there are roadmaps and key principles that leaders can use in order to jump start the creation of an entrepreneurial ecosystem.
Individual elements such as leadership, culture, capital markets and open-minded customers, combine in complex ways to create a sustainable entrepreneurial system. Government leaders can focus on the following nine areas in order to catalyze venture creation and growth.
- Stop Emulating Silicon Valley. While still the gold-standard for an entrepreneurial ecosystem, it would be near impossible to recreate the circumstances that drove its development.
- Shape the Ecosystem Around Local Conditions. The vision is the most crucial aspect for a government to achieve; and should be tailored to fit the local entrepreneurship dimensions, style and climate.
- Engage the Private Sector From the Start. Ecosystems cannot be built in isolation; the private sector can support the government in initiatives through creating a dialogue.
- Favor the High Potentials. While many programs spread scarce resources among several bottom-of-the-pyramid ventures, it is important to include support for high-potential ventures.
- Get a Big Win on the Board. Even one success can have a surprisingly stimulating effect on an entrepreneurship ecosystem, even if it is merely through inspiring imitators.
- Tackle Cultural Change Head-On. It is extremely difficult to change a deeply ingrained culture; better to focus on changing attitudes and perceptions through the innovative use of media.
- Stress the Roots. It is better to allow even high-potential ventures to experience the rigors of the market, rather than flood them with easy investments.
- Don’t Overengineer Clusters: Help Them Grow Organically. Allow the network of companies, service providers, training institutions and support organizations to form for itself.
- Reform Legal, Bureaucratic and Regulatory Frameworks, as these are critical to thriving entrepreneurship.
By strategically redesigning business and entrepreneurship within an area, governments, leaders and communities benefit together. One example of this includes Rwanda’s dramatic rise in global business standing, through initiatives such as the Rwanda National Innovation and Competitiveness’ formation. Another took place in Taiwan, when determined government leaders decided to transform brain drain into brain gain by bringing expatriate entrepreneurs home through the Science and Technology Advisory Group (STAG). Initiatives such as these can create a climate for sustainable growth of people, planet and profit.