“Entrepreneurship is neither a science nor an art. It is practice.” - Peter Drucker.
Entrepreneurs are the lifeblood of a growing nation. They are the ones who provide jobs and help with economic growth around the world. Even according to the reports by the Kauffman Foundation, “ New businesses account for a disproportionate amount of new job growth, creating nearly all net new jobs and almost 20% of gross job creation.”
Many countries are evolving towards an entrepreneurial society. It has increased its importance. However, it is not easy to be an entrepreneur. It needs a lot of dedication, hard work, grit, and consistency.
Moreover, the aspiring entrepreneurs and entrepreneurs are not supported by the communities and government officials. The economic developers continue to underestimate the importance of entrepreneurial communities in contributing to the nation’s development.
That is where the entrepreneurial ecosystem enters. It plays a major role in the growth and failure of business firms and startups. So, today we are here to understand the basics and importance of the entrepreneurial ecosystem. What are you waiting for? Here we go!
What is an Entrepreneurial Ecosystem?
There are many definitions and opinions about the entrepreneur ecosystem and how to make it successful. The term was first coined in a Harvard Business Review in the early 1990s but wasn’t used until more than a decade.
It can be defined as a blend of social, economic, cultural, and political components coordinated in a way that enables productive entrepreneurship within a particular territory or a region. It is created to support the businesses and startups that are being commenced.
According to the Kauffman Foundation, “Entrepreneurial ecosystems drive local economic vibrancy and national economic growth by building fertile environments for new and growing companies to thrive.”
What are the Key Elements of an Entrepreneurial Ecosystem?
“Entrepreneurs are not born, they are made. Entrepreneurial ecosystems play an essential role in facilitating and fostering entrepreneurship.” Here are a few key elements of an entrepreneurial ecosystem.
They are the ones who set up a new business with their idea and the people who accompany them on their journey. Every entrepreneur has different skills and different fields of work. With their mission and vision, they work tirelessly to grow their organization and add value to the field.
Talent is a natural aptitude or skill. It helps organizations grow better. Organizations will grow only if the right talent is brought into the business at the right time.
3. New Knowledge
Knowledge is the key to success! People with knowledge and resources can be assets to the organization. It is required at every growing step of the organization and especially at the beginning.
Networking is the essential prerequisite for running a successful business. It is a good way to gain knowledge about the business world and entrepreneurship. Networks help with the ecosystem, venture capital, technologies, and new markets.
“A leader is one who knows the way, goes the way, and shows the way.” Leader helps you to grow your startup quickly. Leading any organization or a team is not easy, but it is the most important one of the important skills of an entrepreneurial journey. A leader is responsible for the company's growth and its team’s growth simultaneously.
Every small business decision has an impact on the company's financial health, either directly or indirectly. Not every investor will finance your company. Risks are often considered too large, and this is the biggest barrier to business development.
7. Intermediary Services
To make big business decisions, you need a piece of advice from field experts, coaches, and support organizations. An ecosystem cannot run without intermediary services. It is the most crucial yet vital part of the entrepreneurial ecosystem.
Added Value of an Entrepreneurial Ecosystem
The ecosystem must work well, for the growth and development of entrepreneurs. Apart from the competence elements, it should also have additional entrepreneurship values.
The element of the owner-manager.
Non-toxic working culture.
Formal support organizations.
Stories that people tell about themselves and their ecosystems.
Questions to Ask Yourself
Many companies, including small business groups, universities, and co-working spaces, help entrepreneurs in some form or another.
If you are thinking of building an entrepreneurial ecosystem to support your entrepreneurs and drive real growth in your community, take an assessment of yourself.
Who are your entrepreneurs?
What are the needs?
How many jobs do your entrepreneurs create?
After they get help, what’s next?
Do they really need help?
Can you help with financing?
What is the inspiration behind the idea?
Are they keen learners?
If the answers to most of them are positive, then congratulations, you may be ready to build an entrepreneurial ecosystem in your community. Make sure that it is worth it for the development of everyone around you!
Entrepreneurial ecosystems are essential parts of the communities to foster entrepreneurial growth, country growth, and self-growth. It helps entrepreneurs quickly find what they need. As Jack Ma once said, “Alibaba is an ecosystem that helps small businesses grow.” This is what every entrepreneurial ecosystem must do. Work on creating a community taking into concern the basic need of entrepreneurs.
We at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.