Issue Overview

Entrepreneurship is a key factor for economic prosperity and employment. While there is broad agreement on the components of an entrepreneurship ecosystem, how such ecosystems can support the scaling of their enterprises is less well understood.

The specific factors that generate successful start-ups and scale-ups vary from one local context to another. The many attempts to recreate a “Silicon Valley” miss the point that Silicon Valley was not “built”, it grew – and mostly on its own. While many projects celebrate and support entrepreneurs, few connect local policy-makers and other stakeholders in an ecosystem that addresses local challenges and assets and that supports the transformation of entrepreneurial firms into productive enterprises.

The factors include:

• Funding. Venture capital has gone through a difficult decade, and new channels of financing are increasing in importance. Private, risk-based finance is most effective since investors have a direct interest in the success of the business and can often provide micro-guidance and macro-regulation.
• Legislation/regulation. The ease of starting a business, the ability to adjust the workforce to changes in revenue/skill needs, the possibility of exiting certain business activities and the availability of forgiving bankruptcy laws are fundamental for entrepreneurs. 
• Skills/talent. A basic educational infrastructure is key for entrepreneurs and their employees. Policy-makers often overlook the need for communication and management skills, and technical and entrepreneurship training. More human potential could be realized by allowing more talent mobility (cross-border reciprocity of qualifications, simplified visa/immigration regulations).
• Culture. Social stigma around failure, wealth, misunderstanding of entrepreneurship and lack of role models are inhibitors to entrepreneurial activity. 
• Customers and partners. Governments and large businesses have vast resources in training and management skills and facilities to share with start-ups, and as customers or suppliers of those start-ups, they have intrinsic incentives to do so. Good customers supply not just revenues, but also feedback and important signals to improve the relevance and quality of entrepreneurs’ offerings.

Did You Know?

A recent survey of over 8,000 entrepreneurs from 35 countries found that:

• Surveyed entrepreneurs increased their headcount in 2011 by 18% in the US, 16% in AsiaPacific and 12% in Europe, ahead of job growth in the wider economy. Also, 68% planned to further increase their workforce in their home country and 44% internationally.
• Most entrepreneurs hired more experienced, non-management employees than administrative employees; most entry-level individuals had university degrees.
• Entrepreneurs’ main concerns are fiscal and economic outlook in their country, education policies and regulation. They are also actively engaged in improving the quality of local labour pools – one in four has created, endowed or sponsored an educational programme.

Quotes

“Always make new mistakes.”
Esther Dyson, Chairman, EDventure Holdings

“Entrepreneurship is an equal opportunity employer.”
Daniel Isenberg, Professor of Management Practice, Babson College

"When the economy turns down, entrepreneurs look up! Times of crisis are excellent opportunities for entrepreneurship and innovation.”
Linda Rottenberg, Co-Founder and Chief Executive Officer, Endeavor

Further resources

Getting the Arab youth into employment
The multiplier effect: How a network of entrepreneurs created a tech sector in Argentina
Business angel investing in emerging economies: Policy implications for South-East Asia
How to start an entrepreneurial revolution

Calendar

Global Entrepreneurship Congress
18-21 March 2013
Rio di Janeiro, Brazil

Celebration of Entrepreneurship: E-Commerce
2-3 June 2013
Amman, Jordan

Ernst & Young’s Entrepreneur of the Year
5-6 June 2013
Monte Carlo, Monaco

TEDx Global
10-14 June 2013
Edinburgh, Scotland

Council Insights

The Global Agenda Council on Fostering Entrepreneurship aims to assemble and maintain a repository of resources and services available to support aspiring entrepreneurs. The Council does not focus only on entrepreneurial start-up, but also on scale-ups to enterprises that effectively use capital and resources, and employ significant numbers of people productively. The Council does not support the idea of the hero-entrepreneur or innovation over utility, but rather a healthy economy that creates value by starting and scaling new firms that often use existing resources in new, more efficient and effective ways. 

Entrepreneurs are the spark, but they must leverage many other people and resources to contribute to society significantly.

Council projects:

• A list of lists. Many resources are already targeted at entrepreneurs, ranging from government programmes and offices to incubators, publications, websites and curricula. The Council plans to consolidate these resources into one curated and continually updated database of useful resources for entrepreneurs. 
• A set of curricula. Many curricula for aspiring entrepreneurs exist on such topics as fundraising, management, market surveys and how-to guides. Some are teaching guides, whereas others comprise content for teachers or for self-taught students. The Council aims to assemble the best of these and participate in projects to create new curricula targeted at specific, mostly geographic, markets. 
• A constructive challenge to large enterprises and governments. Entrepreneurs and start-ups may benefit the economy and the world at large, but they threaten the status quo and incumbent players. The Council plans to challenge or incentivize large organizations to support entrepreneurs, whether by buying from, investing in or mentoring them.
• A series of entrepreneurship/policy teaching cases. Such case studies are aimed at helping policy-makers and corporations learn from the experiences of other institutions and governments around the world. Cases have been written about the Boston Innovation District, Endeavor and Denmark’s Entrepreneurship Policy. Additional cases are underway on Jumpstart America and the Tenmou (Bahrain) Angel Network.

Contact Information

Council Manager: Lina Borén, Senior Associate, Global Agenda Councils, lina.boren@weforum.org 
Forum Lead: Michael Drexler, Senior Director, Head of Investors Industries, michael.drexler@weforum.org