by Nitin Dahad
Go anywhere in the world today, and you’ll see initiatives to create and grow startup companies, and to foster entrepreneurship. From Arizona to Angola, colleges and universities nurture innovation and entrepreneurship, and state or regional startup initiatives have proliferated, as have business plan competitions, investor groups, and related ventures.
It suggests that to advance growth and innovation, key stakeholders need to reframe the debate on entrepreneurship; Donna Kelley, Professor of entrepreneurship at Babson College, and co-author of the report for the Global Entrepreneurship Monitor, says “There is a need to focus entrepreneurship policies and initiatives on those entrepreneurs who advance the greatest change in society.”
Michael Drexler, head of investors industries at the World Economic Forum, said, “Building on this insight, a paradox arose from our research: the most advanced economies typically have less early-stage entrepreneurial activity, and many of them lack in either ambitious or innovative entrepreneurship, too. That means they miss out on much of the positive impact entrepreneurs can have on their economy.”
The report says that of the 44 economies compared for their entrepreneurial activity, ambition and innovation, only Colombia and Chile perform highly across all the dimensions of entrepreneurship examined. This indicates their entrepreneurs are placed to create growth, jobs and innovative offerings. All other countries miss out on at least one variable.
In terms of dynamic economies such as the United States, Israel and Ireland, they have a large share of highly ambitious entrepreneurs who anticipate fast growth, but they show only average or lower rates of early-stage entrepreneurial activity. In many of the Latin American countries, including Brazil, Ecuador, Mexico, and Peru, they have high rates of early-stage entrepreneurial activity, but only a small portion of their entrepreneurs are ambitious or innovative.
Interestingly, most highly competitive European economies – including Germany and Switzerland, Sweden, Finland and Norway as well as Greece, Italy, Portugal and Spain – don’t have many entrepreneurs, and even fewer ambitious and innovative ones.
Channel entrepreneurs for optimum results
The key now, as I have mentioned in a previous article, is to take these companies to the next level. Or as the Ewing Marion Kauffman Foundation highlighted in its newly published Kauffman Thoughtbook 2015, the critical next step is channeling all of this action into optimum results. Given so many different programs for entrepreneurs, it asks: “What works best and in which circumstances? How can diverse efforts be integrated?”
It also looks at entrepreneurial communities, and paths to entrepreneurship, with some interesting initiatives, like its metro strategy and the 1 Million Cups (1MC) program – the latter is designed to engage, educate, and connect entrepreneurs in their local communities. 1MC helps build startup ecosystems at the grassroots level through a simple format: for one hour every Wednesday morning, two early-stage startups present their companies to a room full of their peers, mentors, advisors, and potential investors. Each founder presents for six minutes, followed by a twenty-minute question-and-answer session with the audience.
The power of local, interpersonal networking is evident from 1MC’s rapid growth in cities across the USA. Local community organizers, all entrepreneurs, fuel this growth. Each 1MC city is led by a team of entrepreneurs who volunteer hours every week to caffeinating their local 1MC.
The metro strategy addresses the ‘Metropolitan Statistical Area’ (MSA) – today’s economy may be global in the largest sense but it is still made up of many metro areas that function as natural economic units thereof. Studies confirm that MSAs perform best when they breed new businesses prolifically. Therefore, Kauffman will experiment in selected metros, including in Kansas City, with ways to get everybody cooperating to that end. Ultimately, it plans to launch a competitive metro challenge to support the best ideas for spurring entrepreneurial activity in select metropolitan regions.
The thinking behind this metro strategy is that all sectors play vital roles, so when collaborating equally, they should be able to produce difference-making entrepreneurial growth—regardless of the region’s current size or strength.
As the World Economic Forum report and Ewing Marion Kauffman Foundation Thoughtbook show, the key thought leaders are now trying to move the debate beyond just the act of entrepreneurship. Forbes magazine put it well last year in this article, suggesting that entrepreneurship by itself is an overused word and has therefore almost lost its value. In fact it says that most successful entrepreneurs don’t call themselves entrepreneurs, but founders, CEO, or some other more descriptive term of their role in the business.
There is now a clear understanding that entrepreneurship is one thing, but making it count is the next major goal.