Research into the social and economic environment affecting local or regional entrepreneurship is relatively new but has started to attract attention across a range of disciplines including international business and international entrepreneurship. A recent award from the University’s Research Endowment Trust Fund allowed researchers from Henley Business School to work with partner institutes in eleven countries, interviewing more than 1600 experts across 16 cities to build a picture of how local and national policymakers can support the development of vibrant entrepreneurial ecosystems.
Warsaw skyline. Image-by-Rudy-and-Peter-Skitterians-from-Pixabay.
Our recent work in Eastern Europe, South East and Central Asia has highlighted an exponential growth of interest in the drivers of the ecosystem – physical and digital infrastructure, connectivity, entrepreneurial culture and positive attitude towards entrepreneurs, development of informal and informal networks, sustainability awareness and policy. Factors that prevent entrepreneurial ecosystem quality and connectivity are corruption, lack of entrepreneurial orientation, dominance of large firms, low quality of institutions and rule of law.
This interest comes from entrepreneurs and investors, policymakers and professors. They all want to know how to create a positive environment for the development of entrepreneurial ecosystems. While entrepreneurial ecosystems in developed counties are characterised by strong formal institutions, in developing countries they may still include a substantial share of necessity-driven unproductive entrepreneurs. We found that adoption of sustainability policy is very important for economic agents as it levels out institutional voids and can create a conducive business environment to promote entrepreneurial activity. This means that responsible behaviour and social innovation, and increasing standards to welfare and human-oriented approach to products and services need to further drive developing economies.
In order to foster a positive business environment policymakers and investors will need to further develop agglomeration economies and regional markets and in particular capital cities. Capital cities in developing economies contribute most to the quality of entrepreneurial ecosystems.
In order to foster a positive business environment policymakers and investors will need to further develop agglomeration economies and regional markets and in particular capital cities. Capital cities in developing economies contribute most to the quality of entrepreneurial ecosystems.
In order to foster a positive business environment, policymakers and investors will need to further develop agglomeration economies and regional markets and in particular capital cities. Capital cities in developing economies contribute most to the quality of entrepreneurial ecosystems. While we found mixed and unexpected results related to the difference between the government support to entrepreneurship and the effectiveness of regulatory framework on the quality and quantity of entrepreneurship, our findings suggest there would be benefits to further research on potential nonlinear relationships between institutions and entrepreneurial ecosystem quality and quantity. In particular, our research demonstrated that the bottom-up approach to productive entrepreneurship which has recently gained momentum helps regions with weaker institutions to converge in entrepreneurial intensity, productivity and connectivity with regions with stronger institutions.
One of the major challenges we faced in our work was the difficulty of connecting with policymakers in post-Soviet countries. First they are not easily approachable, stemming from the traditions of Soviet bureaucracy which maintained its distance from researchers. More interestingly, they do not consider themselves a stakeholder of an entrepreneurial ecosystem – even though they have an obvious role to play. A third factor in the highly corrupt environment of some countries, is that government representatives maybe afraid to give an opinion to foreign scholars and are afraid they could be prosecuted if they criticise the government. In these circumstances, working with local researchers is essential to network, connect and develop relationships with regional and national policymakers.
Working with local researchers has also helped us to build a ‘triple helix’ model of communication, involving government, industry and university representatives. Our plans for the future will bring together economic development officials from the 16 cities we have surveyed to date, and industry representatives to recreate this model and extent our work to other ‘creative spark countries, potentially Armenia, Azerbaijan, Moldova and Uzbekistan.
Maksim Belitski and Andrew Godley from Henley Business School received funding from the University’s Research Endowment Trust Fund in January 2019 for a pilot phase of this project. They worked with universities in Austria, Bosnia and Herzogovina, Bulgaria, Croatia, Georgia, Hungary, Kazakhstan, Poland, Romania, Turkey, Ukraine as well as three British Council Creative Sparks projects and the Business Technical University in Georgia, Kazakh-British Technical University in Almaty and Kyiv National Economic University in Ukraine.