Effects of human capital on entrepreneurial ecosystems in the emerging economy

1 Introduction
Exploring the complex link between intellectual capital and inventive performance has become a
significant issue in the world of entrepreneurial ambition and venture formation. The crucial part
that intellectual capital plays in determining the development of entrepreneurial efforts has been
emphasized by experts [1]. In addition, the idea of entrepreneurial ambition is dependent on human
resources skills and knowledge, which are linked to the availability of entrepreneurial possibilities.
This insight has made it necessary to consider how knowledge can be efficiently converted into
value. The growth of knowledge-based human resource management (HRM) and the improvement
of technology skills may strengthen the delicate relationship between entrepreneurial intention and
human capital [2].
The need to consider how knowledge would be translated to value has arisen because of this
approach. In other words, knowledge-based human resource management (HRM) and enhanced
technology capabilities may both contribute to a rise in the number of people who say they are
interested in starting their own businesses [4]. Therefore, for entrepreneurial initiatives to flourish,
business owners need to increase their prowess in the digital realm and be open to trying new
things [5].

In this regard [6] has presented the idea of "artificial intellectual capital" in the wake of digitization,
particularly in the context of industry. Many management and economic studies have focused on
the concept of "entrepreneurship" in recent years [7]. Scholars have been examining
entrepreneurial ecosystems in this new setting to see whether being an entrepreneur is a realistic
career option [8]. Other academics have shared the view that when thinking about starting a
business, it's important to think about things like the local environment and the country's economic
development prospects. The health of businesses and the economy may be evaluated by examining
the role of entrepreneurial ecosystems. Transitioning from requirement-based to opportunity-based
entrepreneurship is challenging for both developed and developing nations, but notably for
emerging economies [9]. One definition of an entrepreneurial ecosystem is "a framework that
allows private sector and social actors, often with different tradition and motivation and of different
size and area of influence to act together and create wealth in a symbolic relationship". The existing
research has shown how an organization's human capital, when combined with knowledge and
innovative management, may boost its digitalized inventive potential in the setting of developed
nations [10].

However, no research has looked into the effects of knowledge-based HRM and the technical
capability of an enterprise on its human capital, which would stimulate an entrepreneurial
ecosystem by facilitating digital expertise and creativity under the controlling impact of
technology turbulent conditions in developing nations like India. The value of human capital and
the diversity of available business chances are two factors that have been studied in the existing
literature [11]. Current literature has explored how knowledge may be transformed into value.

Figure1.1: Expansion of Entrepreneurship

The importance of entrepreneurial ecosystems, particularly in developing nations, cannot be

understated in the dynamic environment of today's global economy. The development and success
of startup businesses are greatly influenced by the dynamism and agility of these ecosystems.
However, there has long been a gap in our knowledge of the complex factors that form
entrepreneurial ecosystems, which prompted the authors to undertake this extensive investigation.

Furthermore, research on entrepreneurial ecosystems driven by human capital and the accessibility
of entrepreneurial opportunities across multiple knowledge areas abound in the body of existing
literature. However, there is still a huge research gap that has to do with turning information into
value. Notably, there isn't much research that examines how knowledge and technology transfer
within the field of intellectual human capital might support organizational innovation capacities in
digitalized contexts. Our present research, with a focus on developing markets, is motivated by
this deficit.

2 Research Gaps
To go forward with our study's theoretical underpinning and hypothesis creation, it is critical to
identify key research gaps in the collection of current literature. To give a thorough understanding
of the interaction between intellectual capital, human capital, digital knowledge competence,
innovation capability, and entrepreneurial ecosystems, these gaps call for more investigation.
The research that is currently available mostly focuses on industrialized nations, leaving a
significant vacuum in our knowledge of the distinctive dynamics of emerging nations like
Pakistan. By examining how the interaction between entrepreneurial ecosystems and ecosystems
of human capital operates specifically in the context of Pakistan, our research aims to fill this gap.
Role of Startup Incubation Programs from the past has shown the importance of startup incubation
programs in providing entrepreneurs with essential resources including money, mentorship,
networking, and training. However, our study does not explore the role of these programs within
the Pakistani entrepreneurial ecosystem, which is another area that needs exploration. Comparative
Analysis of India and Pakistan provide for an interesting comparative case study since they are
close neighbors with different political, economic, and social environments. However, a
comparison of the entrepreneurial ecosystems in these two countries is not included in the available
research. Our research may provide light on the contextual elements influencing entrepreneurial
activity in both nations. The impact of various types of innovation (such as product, process, or
organizational innovation) on the entrepreneurial ecosystem is not covered in depth by the study.
We can develop a sophisticated understanding of these many kinds of innovation's impact on
digital knowledge competence, innovation capability, and technological turbulence inside
organizations by examining them. Our analysis suggests that the sample size might be increased
to 500, while the basis publication only employed a sample size of 300. The influence of this
modification on the accuracy and dependability of the findings is uncertain. We want to strengthen
the statistical power and generalizability of our results by looking at the effects of this increase.

3 Contribution of Our Study

Contribution 1: Addressing Developing Country Dynamics

Scope: Investigating the interplay between human capital ecosystems and entrepreneurial
ecosystems in Pakistan.

Impact: Advancing understanding of entrepreneurship in developing countries.

Contribution 2: Exploring Startup Incubation Programs

Scope: Examining the role of startup incubation programs in the Pakistani entrepreneurial
ecosystem.

Impact: Providing insights into resources and support mechanisms for entrepreneurs.
Contribution 3: Comparative Analysis of India and Pakistan

Scope: Conducting a comparative study of entrepreneurial ecosystems in India and Pakistan.

Impact: Shedding light on contextual factors influencing entrepreneurial activities.

Contribution 4: Types of Innovation

Scope: Investigating the influence of different innovation types on digital knowledge capability,
innovation capability, and technology turbulence.

Impact: Advancing knowledge on the relationship between innovation and entrepreneurial

ecosystems.

Contribution 5: Sample Size Consideration

Scope: Examining the potential effects of increasing the sample size to 500.

Impact: Enhancing the study's statistical power and generalizability of findings.

4 Literature review
Human resource management (HRM) and knowledge perspective have been shown to have an
important influence in creating an environment conducive to entrepreneurship. Although many
studies have looked at how HRM affects innovation and intellectual capital, only a select few have
looked at how the two interact with one another and what effect that has on innovation [12].
Firms' social structural capital demonstrates the breadth and depth of their relationships with
various stakeholders. Authors [13] argue that these relationships are crucial avenues for businesses
to obtain diverse forms of information. At the same time, the diversity of the information that can
be shared across multiple channels is seen as essential to the success of corporate innovation. When
these bonds are solid, businesses get access to a plethora of information that can be used to create
new products and services. Alliances and cooperation agreements are only two examples of the
various channels via which businesses may engage with one another. These efforts have reduced
the dangers associated with information asymmetry and shortened the time it takes for enterprises
to share knowledge with one another, making it simpler for businesses to boost their innovation
performance.
 Figure 4.1: Social entrepreneurial intention formation model prior positioning

Companies now have the technological tools to generate opportunities that strengthen their
competitive edge. As a result, it's crucial to the success of digital technologies that we comprehend
the factors that drive their acceptance. The author analyzes the factors influencing business
organizations' decision to use new technologies and examines how incorporating digital disruption
has affected the effectiveness of a company's dynamic capacities. By eliminating the need for
middlemen, digital disruption saves money and makes better use of technology [14].
Ecosystems for startups tend to flourish in areas with distinctive resources. The University of
Oxford, for instance, is a thriving hub for startups because of its closeness to Heathrow Airport in
London. Entrepreneurial ecosystems are characterized by a process of expansion that is motivated
by the reusing of existing entrepreneurs. Knowledge-centric human resource management (HRM)
and the use of current technology that affects human capital must converge in order to boost the
entrepreneurial ecosystem [15].
Human capital may influence business ecosystems when channeled via digital know-how and
inventive capacity, as shown by earlier research. An organization's automated ability to innovate
can increase its chances of success depending on the quality of its human capital and the knowledge
and creativity of its management. The author defined the term "entrepreneurial ecosystem" and
saw that the collective efforts of people, businesses, and government may lead to economic growth
[16].
The growing interest in entrepreneurial ecosystems and their evolution has resulted in a substantial
body of study investigating the complex interaction between human resource management (HRM),
intellectual capital, and innovation. According to much research, HRM and the knowledge
perspective play a crucial role in forming and fostering entrepreneurial ecosystems. The
relationship between HRM, intellectual capital, and innovation has been the subject of numerous
studies; however, there is a notable lack of empirical research that examines the effects of this
relationship.

Figure 4.2: Model for sequentially acquiring and applying knowledge.

It's interesting that these earlier studies haven't explicitly discussed how human capital, an essential
part of intellectual capital, affects the entrepreneurial ecosystem, particularly when it's mediated
by digital knowledge and innovation capabilities. The 2015 study by Abeer Pirzada, which was
carried out in Pakistan and Canada, underlined the value of technical expertise for human resource
professionals in attaining corporate success. This conclusion emphasizes the significant influence
that human capital's competence and abilities may have on entrepreneurial endeavors.
 Figure 4.3: Model for sequentially acquiring and applying knowledge.

Furthermore, it is widely known that the larger business environment and the ecosystem in which
an organization works have a significant impact on entrepreneurship performance. The
entrepreneurial ecosystem includes organizations that actively promote entrepreneurship and
entrepreneurial processes, as [17] eloquently said, in addition to prospective or actual
entrepreneurs. Stakeholders in this ecosystem might include a wide range of organizations, from
venture capitalists to educational institutions including universities and government organizations.

5 Theoretical underpinning and hypothesis development

This section lays out the conceptual framework for our research and develops hypotheses based
on the recognized constructs. The Resource-Based View (RBV) theory serves as the foundation
for our investigation, while the Absorptive Capacity theory serves as its backbone. Understanding
the connections between knowledge-based HRM (KBH), human capital (HUC), and
entrepreneurial ecosystems is based on these notions.

Theoretical underpinning
We have found several constructs that have an impact on entrepreneurial ecosystems after carefully
analyzing current ideas and literature. Additionally, we have thought about how the two main
indicators of an entrepreneurial environment interact with technological turbulence. We then go
on to state our hypothesis in more detail.

Knowledge-Based Human Resource Management (KBH) and Human Capital (HUC)

According to the conceptual framework shown in Figure 1, we suggest that Technical Capability
(TEC) and Knowledge-Based Human Resource Management (KBH) have the capacity to
influence Human Capital (HUC) inside the entrepreneurial ecosystem. This claim is consistent
with the Resource-Based View (RBV) viewpoint, which emphasizes the importance of knowledge
as a key element of an organization's human resources [18]. According to [19], KBH refers to a
collection of procedures intended to improve the generation, acquisition, capture, and sharing of
knowledge inside an organization. Given the fluidity of the modern corporate environment, it is
critical to support ongoing employee development and performance enhancement via KBH. It
helps an organization's technical skills grow, improving activities like hiring new employees,
designing and analyzing jobs, budgeting salaries and benefits, and more [20]. Human resource
management (HRM) practices unquestionably play a crucial part in developing an organization's
human capital, even if it is recognized that they may not naturally qualify as valuable, rare, unique,
or non-substitutable (VRIN) assets [21]. The Accumulated Quality of Human Capital (AQC)
within the entrepreneurial ecosystem is therefore seen to be favorably influenced by KBH.

Hypothesis 1a (H1a): Knowledge-Based Human Resource Management (KBH) exerts a positive

influence on Human Capital (HUC) within the entrepreneurial ecosystem.

Technical Capability (TEC) and Human Capital (HUC)

Using the theoretical framework shown in Figure 1, we argue that the entrepreneurial ecosystem's
Technical Capability (TEC) also affects HUC. This claim is supported by the realization that
knowledge-based human resource management (KBH), as previously explained, is crucial in
forming knowledge-based resources that enhance technical competence [22]. To gain leverage
over knowledge, [23] emphasizes the ongoing interaction among intellectual capital's components,
which include human capital (HUC), structural capital, and relational capital. Several studies [24]
have highlighted the crucial significance of human capital (HUC) as a significant antecedent of
intellectual capital. These studies contend that the growth of the other two elements of intellectual
capital depends significantly on human capital, which includes skills, knowledge, and motivation
[25]. Furthermore, the relationship between technical development and Human Capital has been
extensively studied. Lucas (1990) correctly noted that a lack of human capital endowment is the
cause of the inadequate transfer of technology to economically underdeveloped countries.
Technology development and the idea of "artificial intellectual capital" are closely intertwined in
the modern setting, which is characterized by the emergence of Industry 4.0 [26].
Drawing from these discussions, we posit the following hypothesis:

Hypothesis 1b (H1b): Technical Capability (TEC) exerts a positive influence on Human Capital
(HUC) within the entrepreneurial ecosystem.

Human Capital (HUC) and Innovation Capability (INC)

Using the framework of our conceptual model (Figure 1), we argue that HUC is a key driver of
Innovation Capability (INC) in the context of the entrepreneurial ecosystem. This claim is
supported by the notion that knowledge, which is firmly ingrained in human capital, is one of an
enterprise's most important resources and has a significant influence on the entrepreneurial
ecosystem. To promote creativity inside businesses, knowledge is transformational. It enables
businesses to nurture employee diversity and creativity, which in turn promotes an innovative
culture [26]. Enterprises are required to strengthen their ecosystems in the modern environment,
which is characterized by technological advancements and the emergence of Industry 4.0, by
fostering their employees' knowledge, skills, expertise, and innovativeness all of which are crucial
for successfully utilizing modern digital technology [27].
Therefore, we posit the following hypothesis:

Hypothesis 2b (H2b): Human Capital (HUC) positively influences the Innovation Capability
(INC) of an enterprise within the entrepreneurial ecosystem.

Digital Knowledge Capability (DKC) and Entrepreneurial Ecosystem (EEC)

A recurring theme has developed in the field of operational management research, highlighting the
tremendous influence of digital knowledge transformation on different industrial sectors [28]. The
idea of "Digital Human Resources" has emerged in the context of this transformation, focusing
primarily on how technology can be strategically used to carry out operational tasks and facilitate
the achievement of an enterprise's goals [29]. Numerous studies have highlighted the importance
of programs that support digital knowledge transformation, arguing that they may have a real
impact on an enterprise's ecosystem. Businesses all over the globe are dealing with complex issues
in the quickly changing digital era, need quick and ongoing adaptation to the shifting digital
environment. Scholars agree that for businesses to stay competitive, they need to provide them
with the tools and competencies necessary for the new digital paradigm [30].
Considering the above considerations, we propose the following hypothesis:

Hypothesis 3a (H3a): Digital Knowledge Capability (DKC) positively influences the

Entrepreneurial Ecosystem (EEC) of the enterprise.
Innovation Capability (INC) and Entrepreneurial Ecosystem (EEC)

A key component of business growth and success is innovation. Everyone agrees that innovation
is a continual, iterative process that aims to develop fresh techniques by using both new and
preexisting knowledge [31]. The idea of innovation capability encompasses the enterprise's ability
to successfully manage innovation. The capacity to innovate is often seen as a key factor in
determining how well a business performs overall. In this situation, an organization's inventive
capability (INC) stands out as a crucial factor in determining its capacity to thrive in its ecosystem.
The development and enhancement of workers' abilities and innovation, which are essential
elements of human capital (HUC), is made possible through INC. The entrepreneurial environment
(EEC) in which the firm works may be considerably impacted when these components are
strengthened and enhanced [32].

Consequently, we posit the following hypothesis:

Hypothesis 3b (H3b): Innovative capability (INC) positively influences the Entrepreneurial
Ecosystem (EEC) of the enterprise.

Moderating Role of Technology Turbulence (TT)

Technology turbulence (TT), which is defined by disruptive developments in technology and
information, usually presents problems for businesses. According to [33], TT is known to hamper
technical development and limit the rate of growth inside businesses. It may also damage the
connections between an entrepreneurial ecosystem's two primary determinants, inventive
capability (INC) and digital knowledge capacity (DKC) . Enterprises must adopt a more flexible
and adaptive strategy in order to overcome the obstacles given by the instability in the technology
industry. Technological turbulence is a phenomenon brought on by rapid technological
development and frequent changes in the technology environment. The importance and potency
of developing technologies must first be understood by employees in businesses that use them.
They must then comprehend and internalize the complexities of these technologies before
successfully implementing them. The concepts of absorptive capacity theory are aligned when this
sequence is accomplished, which reduces the influence of technological turbulence on the rate of
development [34].
According to observations, technological turbulence has a substantial impact on how quickly new
goods evolve and is often linked to unpredictability. This upheaval includes the quickening speed
of technical advancement, modifications to manufacturing techniques, and changing use patterns
for technological applications. Enterprises aim to reach the pinnacle of success while strengthening
their inventive capability (INC) and digital knowledge capability (DKC). However, it is thought
that the link between market orientation and enterprise performance is significantly impacted by
the existence of technological turbulence. It may be difficult for staff members to adjust to quick
technical changes or cope with technological turbulence, which might obstruct the intended
progress. To combat the negative consequences of technological turbulence, workers' preparedness
to learn the skills required for efficiently exploiting fast-expanding technology, absorbing new
functions, and implementing them completely. According to [35], this idea is consistent with its
tenets.

Considering these considerations, we posit the following hypotheses:

Hypothesis 4a (H4a): Technology turbulence (TT) moderates the relationship between digital
knowledge capability (DKC) and the Entrepreneurial Ecosystem (EEC).
Hypothesis 4b (H4b): Technology turbulence (TT) moderates the relationship between innovative
capability (INC) and the Entrepreneurial Ecosystem (EEC).
6 Methodology

Figure 6.1The conceptual model

Measurement instruments
To verify our model and investigate the connections between its constituent parts, our research
made use of a survey-based methodology. We reviewed the literature, the relevant theories, and
the established scales to create a complete collection of questions to assess the constructs' content
validity and validate our theoretical framework. At first, 32 objects were meticulously made using
what was already known from the literature. The questionnaire was pretested to make sure it was
easy to understand and would provide accurate results. Pretest responses helped shape the final
survey's phrasing and structure, ensuring that questions were clear and easy to answer for everyone
involved. To ensure that respondents had a firm grasp of human capital and entrepreneurial
ecosystems, the questions were crafted with this end in mind (Mellahi and Harris, 2016). We
enlisted the help of five subject-matter experts to make our measuring tools more thorough and
rigorous. The 32 questions of the survey were greatly improved thanks to their input. Eliminating
possibly biased leading or confusing questions was a top priority (Harzing et al., 2012). A total of
32 statement-style questions made up the final poll. All responses were recorded on a five-point
Likert scale, with 1 indicating "strongly disagree" (SD) and 5 indicating "strongly agree" (SA).
We were able to get a quantitative read on how people felt about the different investigated concepts
thanks to this scale. The survey tool also provided respondents with guarantees of privacy and
anonymity in addition to the Likert scale questions. Participants were also given explicit
instructions to follow in order to complete the survey correctly. The security and confidentiality
of the survey responses were protected by these procedures.

Collection of data
This research study used Google Forms to administer an online survey as part of its data-
gathering procedure. The principal objective of the study was to investigate the viewpoints and
analyses of 104 participants about human resources, technology, innovation, and entrepreneurial
ecosystems, with a specific focus on developing countries.

Survey Participants
The survey was completed by 104 people from a broad range of backgrounds, which added to the
sample's diversity in terms of gender, age, education, and subject matter. This variety was
necessary to get a variety of perspectives on the topics being studied.
Survey Questionnaire

The survey questionnaire was divided into two main sections. The first part focused on gathering
demographic information about the respondents. This section included questions regarding:

• Gender
• Age Group
• Educational Institution
• Field of Study
The second part of the questionnaire consisted of a series of statements relating to key research
themes, encompassing:

• Human Capital Resource

• Technology Turbulence
• Digital Knowledge
• Innovation Capability
• Entrepreneurial Ecosystem
Participants were asked to express their level of agreement with each statement using a 5-point
Likert scale, ranging from "Strongly Disagree" (1) to "Strongly Agree" (5). This approach
facilitated the measurement of respondents' agreement or disagreement with the provided
statements, thereby offering valuable insights into their perceptions.
Tabel 1 Question's Morgan Table

1 5
Question Strongly 2 3 4 Strongly
Disagree Agree
I believe that knowledge management is a 3.9% 5.9% 14.7% 42.2% 33.3%
critical part of an enterprise
Knowledge based human resource 2% 8.8% 9.8% 51% 28.4%
management is important for an enterprise
Superior knowledge management system 3.9% 2.9% 11.8% 48% 33.3%
helps improving performance of an
organization
Knowledge based human resource 4% 6.9% 18.8% 45.5% 24.8%
management helps to develop human capital
Technical ability of an enterprise helps to 1% 4.9% 12.7% 48% 33.3%
improve its performance
I believe that enterprise should adequately 1.9% 6.8% 14.6% 46.6% 30.1%
invest in developing technical capability
 I think that readiness is an important 2.9% 7.8% 23.3% 32% 34%
component for improving technical ability of
employees
I believe that digital knowledge transformation 1.9% 5.8% 19.4% 40.8% 32%
has affected several enterprises
Digital human resource is concerned with 2.9% 3.9% 16.5% 46.6% 30.1%
usage of technology to solve the problems
I believe that digital knowledge capability 1% 4.9% 18.4% 42.7% 33%
helps an enterprise to achieve its goal
Innovative capability of an enterprise helps in 3.9% 1% 20.6% 44.1% 30.4%
improving competitiveness
I believe that innovation ability could impact 2.9% 3.9% 20.6% 48% 24.5%
the overall enterprise business ecosystem
Entrepreneurial ecosystem is a combination of 4.9% 5.9% 24.5% 39.3% 25.5%
several capabilities of an enterprise
All the enterprises are facing entangled 1% 7.8% 22.5% 46.1% 22.5%
challenges to manage rapid adaptation of new
technology
I believe that turbulence in technology can 4.9% 7.8% 26.5% 31.4% 29.4%
badly impact the entrepreneurial ecosystem

The Morgan Table 1 presented in this research provides a valuable window into the overall
opinions of our survey respondents about important topics related to technology, innovation,
knowledge management, and entrepreneurial ecosystems in developing nations. The range of
answers to the survey's thought-provoking questions, each classified using a five-point Likert scale
ranging from "1 Strongly Disagree" to "5 Strongly Agree," is summarized in this table. Every
percentage statistic in the table indicates the percentage of participants who have shifted towards
particular levels of agreement or disagreement with the claims. Especially, this thorough portrayal
illustrates the wide range of viewpoints that respondents to the study expressed. For example, a
substantial 42.2% of respondents resoundingly concurred that knowledge management constitutes
an indispensable facet of an enterprise, while 14.7% remained impartial. Conversely, other
statements, such as "Technical ability of an enterprise helps to improve its performance," enjoyed
a pronounced consensus, with 48% of respondents endorsing the highest level of agreement. These
findings, etched within the Morgan Table, are pivotal in illuminating the nuanced perspectives of
our respondents, paving the path for deeper exploration in the forthcoming sections of our research.
Analysis of results and discussion
Discussion