You are on page 1of 9

How to measure an Entrepreneurial Ecosystem?

How to measure an
Entrepreneurial Ecosystem?

Prepared by Mohamed Adam BOUKHIRA

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

Introduction

The economic dynamism of a region is widely dependent on his entrepreneurs.


The innovation, the job creation and the economic development pass partially by
the entrepreneurship. This is why entrepreneurship is a fashionable theme, both at
the level of the government policies and in the media.

The new technologies allow today to start companies with much fewer
investments than 10 years ago, what offers numerous opportunities to
entrepreneurs ‘new generation. Furthermore, it is easy to establish a “Start-up”
wherever, if there is a good internet connection. In the center of this new wave of
technological entrepreneur what finds itself what we call the Entrepreneurial
Ecosystem. An ecosystem is in fact the environment in which interact all the
participants of entrepreneurship. The dynamism of this ecosystem makes certain
cities more interesting than others for the starting up and the growth of
technological companies. Examples of dynamic ecosystem are New York,
Boston, Tel Aviv, Waterloo, and of course, the Silicon Valle, but how we can
measure this dynamism of entrepreneurial ecosystem?

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

What is an Entrepreneurial Ecosystem?

The term ecosystem comes from the term “ecological ecosystem”, defined by
Arthur George Tansley 1 in 1935. This botanist saw an ecosystem as “a system
of interactions between the population of various sort living in the same site, and
between these populations and the physical environment”. Thus, transposed into
the entrepreneurship, he can be defined as direct links which a company or
entrepreneur is going to weave with the various participant of the entrepreneurial
environment. The more of these links are frequent and in large numbers.
Such as developed in its work “Startup communities: Building an
Entrepreneurial Ecosystem in your city”, Brad Feld2 explain that an
entrepreneurial ecosystem worthy of the name has have the following
characteristics:
 The ecosystem must be led by entrepreneurs;
 The participants by being a member have to commit to it for long period
(20 years);
 Events have to be regularly kept there to favor the commitment of the
member of the ecosystem;
 The participant have to give before thinking of receiving. They have to
make him with the objective make increase the ecosystem without
mattering on a short-term return.

Thus, more an ecosystem is dynamic, he makes an attractive city for


entrepreneurs, because this activity offers him the access to three essential
components are:

 The access to the expertise, and experience


 The financing

1 (15 August 1871 – 25 November 1955) was an English botanist and a pioneer in the science of ecology.
2 Brad Feld (born December 1, 1965) is an American entrepreneur, author, blogger

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

 Networks of local and international contacts

1. Measuring the Entrepreneurial Ecosystem

Measure entrepreneurial ecosystem is crucial question. For years, universities,


cities, regions, countries try to estimate if they are rather innovative and
entrepreneurial. Unfortunately, it is often measured by the condition frames but
not by the result. Sometimes for good reasons, the stake holders can offer
favorable conditions but after all it is the entrepreneurs and the companies which
“Makes”, the ecosystem being there only to help.
The foundation Kauffman 3 has proposed in an article a set of metrics to help
estimate an entrepreneurial ecosystem, it is ambitious proposals because the
metric is not easy to obtain, they are classified in 4 categories :
A. Density
 Number of new and young companies for 1000 inhabitants:

Where “young person” can mean less than 5 or 10 years. This first element will
show in simplest way how the entrepreneurship evolves over times with regard to
the population.

 Part of employment represented by the new and young companies :

The entrepreneurial dynamism must be not only measured by the number of


companies, it’s should also include all the people implied in these companies. It
includes founders and employees.

 Density of the new and young companies in term of specific sectors:

Certain places can already have a particular branch of industry, which was
identified as the major component of an ecosystem, such as the industries of

3
Created and endowed by Ewing Marion Kauffman (1916-1993), a successful pharmaceutical entrepreneur,
baseball team owner .

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

manufacturing or “Creative”. Here also it is advisable to use the size of the


population as denominator.

B. Fluidity
 Flow of the population or the people moving between cities or
regions:

The entrepreneurial dynamism implies people who arrive and leave.

 Flows of population with in a given region:

The individuals also have to be capable of finding the good adequacy with various
jobs in a region. The rhythm in which they are capable of passing from an
employment to the other one and between organizations should be an important
indicator of dynamism.

 The number and the density high-growth companies:

Which are responsible on one hand disproportionate of the job creation and the
innovation. A concentration of high growth companies indicates if yes or not the
entrepreneur are capable of assigning resources to purposes that are more
productive.

C. Connectivity
 Connectivity of the programs or the resources for the entrepreneurs.

A dynamic entrepreneurial ecosystem is not simply a collection of isolated


elements the connections between elements matter just as much as elements
themselves. The entrepreneurs move in an ecosystem, assembling knowledge and
help of various sources, and the connectivity of the organizations of support
should contribute to help the development of a robust network of company.

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

 Rate of spin-off:
The "genealogy" of companies of a given region, such as measured by the links
between the entrepreneurs and the existing companies, is an important indicator
of vitality.

 The network of “Dealmakers”


The people with a rich share capital, who have numerous links within the regional
savings or who have a role of mediation of the relations, connections and
facilitator in the creation of companies play an essential role in a dynamic
entrepreneurial ecosystem.

D. Diversity:
 Economic diversification

An important concept, because city or region should be not excessively dependent


of an industry in particular. At the level of countries, the search showed that the
economic complexity is correlated to the growth and the innovation.

 Activity or assimilation of immigrants:

Historically, the immigrants have a very high entrepreneurial propensity.

 Economic mobility

That is the probability to go up or lower the economic scale through various


quintiles of income. The objective is to improve the quality of life of the citizens,
to widen the offered possibilities, and to create a virtuous circle of opportunities,
growth and prosperity.

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

To complete all the elements, which I quoted before, they exist in my opinion
other important elements allowing measuring an entrepreneurial ecosystem;

a. Innovation :

It is the major element which determined the performance of an ecosystem, if we


refer on the Silicone Valley we shall find that it produces the innovation for 100
years and all the actors of this region share the same passion for her.

b. Scientific Research :

To support innovation we need to train people for this, networks of universities


that provide quality and diversified education that produces the skills required by
an ecosystem, is an important indicator, and it is an asset that makes the difference
between nations, a highly skilled population propels the entrepreneurial
ecosystem.

c. Growth and evolution of the number of companies

The number of firms with strong continuous growth and that of newly created
firms can reflect the good potential of this ecosystem.

d. Support from the government authorities

An entrepreneurial ecosystem cannot be successful without the participation of


the government, because it implements the entire infrastructure needed by
companies, simplifies administrative and tax procedures to ensure the prosperity
of all businesses, for example how can we imagine a startup without a well-
developed telecommunication network.

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

Conclusion

The ultimate goal for measuring an entrepreneurial ecosystem is to develop it,


thus a performing ecosystem is the result of long-term strategy, the Silicone
Valley is built during 100 year of entrepreneurship economy, and ISRAEL
developed venture capital through YOZMA program a government initiative.

Morocco has great potential to create an efficient entrepreneurial ecosystem, we


just need to promote entrepreneurship culture in society, and strengthen scientific
research, and liberate the telecommunication sector, because is the base for the
digital economy which represent the future.

Master EMPME 2017-2019


How to measure an Entrepreneurial Ecosystem?

Bibliographie

Anker, P. (2002). The Context of Ecosystem Theory. New york: Springer-Verlag


New York Inc.

Charest, M. (2016). Quel écosystème entrepreneurial et innovant pour notre


société? http://www.lesaffaires.com/blogues/coefficient-
entrepreneurial/quel-ecosysteme-entrepreneurial-et-innovant-pour-
notre-societe/591139.

Colin, N. (2016). La transition numérique de l’économie.


https://salon.thefamily.co/la-transition-num%C3%A9rique-au-
c%C5%93ur-des-territoires-671d9ebcf0e1.
(s.d.). Comment mesurez-vous votre écosystème entrepreneurial?
http://www.startup-book.com/fr/2015/03/26/comment-mesurez-vous-
votre-ecosysteme-entrepreneurial/.
Erik, S., & Ben , S. (2016). Entrepreneurial Ecosystem. Utrech school of
economie.

Fassi-Fihri, A. (2016). TIC: Le Maroc peut créer une Silicon Valley au Maghreb, .
http://www.maghrebemergent.info/actualite/maghrebine/61035-tic-le-
maroc-peut-creer-une-silicon-valley-au-maghreb-mais-expert.html.

FELD, B. (2014). Startup Communities: Building an Entrepreneurial Ecosystem in


Your City,. MONTREAL.
STANGLER, D., & MASTERSON-BELL, J. (MARCH 2015). MEASURING AN
ENTREPRENEURIAL ECOSYSTEM. Kauffman foudation researche series.

Master EMPME 2017-2019