Entrepreneurial_Ecosystem.NLMiracle and Paradox

“ENTREPRENEURIAL ECOSYSTEMS AND GROWTH-ORIENTED ENTREPRENEURSHIP”International Workshop jointly organised by the OECD LEED Programme and

The Netherlands’ Ministry of Economic Affairs

Prof Dr Erik StamUtrecht University School of Economics &

Utrecht Center for Entrepreneurship

Entrepreneurial_Ecosystem.NL

Oh no, not the next Silicon Somewhere…

Entrepreneurial_Ecosystem

Reflects two shifts:Societal: from Managed Economy to

Entrepreneurial Economy (Thurik, Stam & Audretsch 2013)

Scientific: from Equilibrium Economics to Complexity Economics (Beinhocker 2007)

NL: Entrepreneurship Miracle or 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

Entrepreneurship NL Facts - I

Entrepreneurship Facts - II

TEA Rate 2003-2012 (GEM)

Paraphrasing Einstein

• Not all entrepreneurship that counts can be counted, and not all entrepreneurship that can be counted counts.

• Entrepreneurship: explore and exploit opportunities for new value creation

Entrepreneurship Facts - III

Entrepreneurship Facts - IV

Entrepreneurship Facts - V

(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

(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 Scandinavian countries (in spite of high levels of trust, knowledge work, and decentralized decision making)

Is Entrepreneurial_Ecosystem.NL successful?

Is Entrepreneurial_Ecosystem.NL successful?

+ Relatively low unemployment rates- >175.000 self-employed below poverty line…

(CBS)

Is Entrepreneurial_Ecosystem.NL successful?

+ Relatively low unemployment rates- >175.000 self-employed below poverty line…

(CBS)- No increase in innovativeness SME sector

Entrepreneurial_Ecosystem.NL

• One entrepreneurial ecosystem, or many (self-empl, high-growth start-ups, intrapreneurship)?

• One national ecosystem, or many (reg, sect, corp)?– Regional ecosystems: e.g. Amsterdam, Eindhoven area,

Utrecht, Twente, …– ‘Sectoral’ ecosystems: e.g. gaming, biotech, (construction?)– Corporate ecosystems: intrapreneurship

• Systemic causes– Institutions -> resources (capital, labour) for value creation

• Success? Successful? +/-/-

What’s next?

• Transition from an EE focused on self-employment,

• To EE that facilitates high-impact new value creation: – High growth start-ups– Intrapreneurship – Coalitions of self-employed and other

organizations

How?

• Education: stimulate ambition and entrepreneurship (preferences, skills)

• Facilitate / incentivize capital & labour towards high-impact opportunities

Entrepreneurial_Ecosystem.NLMiracle and Paradox

“ENTREPRENEURIAL ECOSYSTEMS AND GROWTH-ORIENTED ENTREPRENEURSHIP”International Workshop jointly organised by the OECD LEED Programme and

The Netherlands’ Ministry of Economic Affairs

Prof Dr Erik StamUtrecht University School of Economics &

Utrecht Center for Entrepreneurship