The geography of entrepreneurship is “barbed”, which means that there are significant differences in business start-up rates from region to region, and in particular “scaling” – latest firms that transform into larger enterprises.
This can be explained by the indisputable fact that successful entrepreneurship occurs in “fertile soil” – economic and social environments favorable to entrepreneurial activity. In some places, these environments – or ecosystems – are much higher at generating and supporting entrepreneurial activity than others.
Some entrepreneurship ecosystem is a grouping of interconnected people, organizations and bodies that facilitate and support entrepreneurial activity. This ecosystem provides startups with resources – money, people, markets and infrastructure – inside an open, inclusive culture that has supportive policies and leadership.
Supporting the development of entrepreneurship ecosystems is currently a primary focus economic development policy. Cities and regions normally have dozens organizations supporting entrepreneurship (ESOs), which are fully funded public bodies or not-for-profit organizations whose funding comes from the government. These European standardization organizations provide information, advice, networking, training, mentoring and financial assistance that are considered essential for entrepreneurial activities.
For example, there is one in Scotland recent research identified 43 European standards organizations in Edinburgh focused exclusively on technology entrepreneurs. Our own ongoing research has identified 87 European Standards Organizations in Glasgow, covering all sectors including social enterprise.
However, this multitude of European standardization organizations is considered to be confusing for entrepreneurs who have difficulty navigating the support infrastructure, raising concerns that there is overlap in the services provided by European standardization organizations. However, this implies misunderstanding how entrepreneurial ecosystems work.
Everything is connected
Every yr, the University of Glasgow runs a program to support 4 start-up teams with a grant of £2,500 and 12 weeks of one-to-one mentoring from a student enterprise manager. This includes an introduction to ESO in the wider ecosystem, training and space in a university ‘incubator’ to help teams develop their seed start-up.
Companies that successfully accomplished the program received further support from various European standards organizations in the local ecosystem and beyond. Typically, each participant receives a support package from Scottish Enterprise Institute (MYSELF). This helps them connect with the local ecosystem and gain access to lawyers, accountants and other specialists, provides assistance in start-up competitions and access to networking events.
For example, dragon lair Corien Staels participant, founder KołoAir – a company that developed a cooling backrest for wheelchair users – received support from ESO called Entrepreneurship Campus to cover initial operating costs.
Staels won SIE New Ventures Competition and several other awards that provided money, business support, training and mentoring. After rejecting an offer of financing from Dragons’ Den, she began raising equity funds from several people.
Staels’ example shows the interconnectedness of the entrepreneurial ecosystem, where European standardization organizations provide a range of various types of assistance. Entrepreneurs’ learning and support needs change as their business grows. No single organization can provide all the support and resources latest ventures need as they grow. This is why many European standards organizations focus on specific forms of entrepreneurs and stages of the process – idea, start-up, development, etc. – and specialize in the forms of support they supply. This signifies that entrepreneurs can profit from a number of organizations as they grow their business.
Most importantly, these relationships in the entrepreneurial ecosystem are reciprocal. Just as firms emerging from start-up programs need broad support to grow, European standardization organizations need “stepping stone” initiatives, similar to the University of Glasgow program, that nurture start-ups that can eventually turn out to be their clients.
A healthy ecosystem
Policymakers mustn’t interpret the size of European standardization organizations as a sign of duplication and waste. The real world is dirty. The diversity of entrepreneurs and their changing needs on their entrepreneurial journey signifies that for these ecosystems to be effective, there must also be a number of supports.
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Instead, they need to ask key questions to assess the health of entrepreneurial ecosystems. Do the services provided by the involved NGOs cover the entire entrepreneurial process, enabling individual organizations to ‘hand over’ entrepreneurs as their needs change, providing ongoing support as their businesses grow?
Do the European standardization organizations collectively provide an adequate mixture of general and specialist resources and support? Do they have common goals and a sense of common mission? Or perhaps each of them competes with each other and achieves business success through their very own efforts? And finally, are these ESOs run by people with experience in starting businesses – entrepreneur entrepreneurs?
Recognizing the need for connectivity between different ESOs is key here. Working together in isolation does not help young start-ups, which is able to thrive best in an environment where European standardization organizations recognize that their effectiveness depends on each other. To paraphrase the African proverb, “it takes a village to raise a child,” it takes an ecosystem – not a single person or organization – to feed, nurture and nurture a successful entrepreneurial enterprise.