India Economic Survey Complete for the year of 2022 to 2023
Schlesinger
1. BABSON
Entrepreneurship Ecosystem
Project
Economic Development through Cultivating
Entrepreneurship Ecosystems
U.S. Saudi Business Opportunities Forum
Entrepreneurship and the Development of SMEs
Len Schlesinger
December 7, 2011
2. BABSON
Our “E-Prize” Entrepreneurship Ecosystem
Project
An innovative new project with a Big Mission:
“To demonstrate that we can impact
societies (regions) to foster high growth
entrepreneurial ventures on a self-
sustaining basis using a codifiable and
replicable methodology”
Mission of the Babson Entrepreneurship Ecosystem Project
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3. BABSON
What Doesn’t Work Entrepreneurship Ecosystem
Project
• Attempts to copy Silicon Valley
– Russia’s Skolkovo; Singapore’s Biopolis
• Piecemeal (“silver bullet”) policies and programs
– Incubators, angel networks, venture
capital, education, microfinance, tax credits, tech transfer
(universities)
• Top-down winner-selection (sectors, companies)
– Sector-based clusters, direct investment
• Broad national policies
– Competitiveness, national innovation systems
• Government-giveaways
– Indiscriminate funding programs
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4. Significant problems BABSON
Entrepreneurship Ecosystem
with Project
• Angel networks
• Government supported venture capital
• Incubators, innovation centers
• Comparative advantage strategies
(Clusters, Competitiveness)
• University technology transfer
• Financial incentives to debt providers
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6. BABSON
Summary Entrepreneurship Ecosystem
Project
• Target high potential entrepreneurship
• Target very specific geographies
• Impact the entire ecosystem with
independent, temporary organization
• Work against specific objectives 1/100K
• Stop when you reach them
• Avoid mistakes of government over-
involvement (e.g. cluster strategies)
• Experiment, learn, try again
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7. BABSON
The Policy Paradox Entrepreneurship Ecosystem
Project
“The capable can “We cannot create
High manage wealthy elites or help
for themselves” the rich get richer”
Quality
of
venture
Low “We cannot let the “We need to distribute
disadvantaged fail” resources equally”
No Yes
Do they get
resources?
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8. Healthy BABSON
entrepreneurship ecosystems Entrepreneurship Ecosystem
Project
Venture death generates
information and
“learning” about what works
High …as it is for
the good
ones to get
Quality supported
of
ventures
It is as
Low important
Venture death frees up
that bad resources (people, money, IP)
ventures that can be useful
“die”…
No Yes
Do they get
resources?
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9. So the “system” gets BABSON
Entrepreneurship Ecosystem
it backwards…. Project
Bad
outcome:
High Lost opportunity
No growth
Entrepreneurship
discouraged
Quality
of
venture Bad
outcome:
Wasted resources
Low
Life style SMEs,
Micro-ventures
No Yes
Do they get
resources?
9
10. Principles for government support of venture finance:
(based on everything we know collectively)
Government should
Incentivize providers of capital to invest directly
Have a “sell-by date” for programs
Cultivate deal flow (ecosystem) simultaneously
Encourage financial innovation and allow for quick learning
Always require some matching funds and require payback
(not debt)
Pay attention to the entire financing chain, from pre-seed
to public (beware angel networks) 10
11. BABSON
Entrepreneurship Ecosystem
Project
There is no force as powerful as an
idea whose time has come.
Victor Hugo
Today entrepreneurship is such
an idea.
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Hinweis der Redaktion
They are not the same. True you can define them as the same, but definitions are like rubber bands: when you stretch them, they break and become useless. So let’s use the lay definitions of an entrepreneur who creates a new business, even a rapidly growing and dynamic one. An example of an non-innovative entrepreneur is Cinemex. Innovative is more complex, but let us define it as a new device or process that results from study and experimentation (Princeton). Open source (Linux) is an example of a great innovation that is not, in and of itself, entrepreneurial.Hong Kong: lots of entrepreneurship, not much innovation, and Singapore, lots of innovation, and not much entrepreneurship. Singapore has about 4 x patenting activity poer capita than HK.In fact I would argue that entrepreneurship is more closely tied to economic growth and development, and innovation may or may not directly impact economic development.I would also put out for the sake of argument, at least, that entrepreneurship is the scarcer and more valuable commodity (although I could think of counter arguments; and no doubt when they occur together they are powerful).I would also argue that it is easier for entrepreneurs to become innovative, than for innovators to become entrepreneurial.My own experience is that the fact that you can be an entrepreneur without being very innovative is a tremendously liberating insight at the micro level, and my experience is that it brings the individual entrepreneurial choice that much closer.