In the latest Harvard Business Review, Daniel Isenberg, professor of management practice at Babson College and executive director of the Babson Entrepreneurship Ecosystem Project, lays out a comprehensive list of action items for government that seek economic growth through creating a thriving "entrepreneurial ecosystem."
Isenberg sets up the opportunity for governments to spark entrepreneurship by taking a trip through Costco, and pointing out the products that come from small countries that he says represent strong business climates:
Rwanda, Chile, Israel, and Iceland all are fertile ground for entrepreneurship—thanks in no small part to the efforts of their governments. Though the companies behind the products on Costco’s shelves were launched by innovative entrepreneurs, those businesses were all aided, either directly or indirectly, by government leaders who helped build environments that nurture and sustain entrepreneurship. These entrepreneurship ecosystems have become a kind of holy grail for governments around the world—in both emerging and developed countries.
Unfortunately, many governments take a misguided approach to building entrepreneurship ecosystems. They pursue some unattainable ideal of an ecosystem and look to economies that are completely unlike theirs for best practices. But increasingly, the most effective practices come from remote corners of the earth, where resources—as well as legal frameworks, transparent governance, and democratic values—may be scarce. In these places entrepreneurship has a completely new face.
For leaders and policymakers that wish to follow these examples, Isenberg provides these rules:
1: Stop Emulating Silicon Valley.
2: Shape the Ecosystem Around Local Conditions.
3: Engage the Private Sector from the Start.
4: Favor the High Potentials.
5: Get a Big Win on the Board.
6: Tackle Cultural Change Head-On.
7: Stress the Roots.
8: Don’t Overengineer Clusters; Help Them Grow Organically.
9: Reform Legal, Bureaucratic, and Regulatory Frameworks.
Read Isenberg's detailed descriptions for these action items in his HBR article, The Big Idea: How to Start an Entrepreneurial Revolution. Click here.
Filed under: entrepreneurship, global business, iceland, Chile, Rwanda, business incubators, Massachusetts, Costco, business ecosystems, governments and small business, Israel, public policy and entrepreneurship, business climate, entrepreneurship ecosystems, daniel isenberg