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Start Up, Sme's and Entrepreneurial Ecosystem in the International Business

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Table of Contents

  • Introduction
  • Entrepreneurial Ecosystem
  • Finance
  • Culture
  • Professional Support

Introduction

Since the start of the 21st century, business and the economy has been rapidly evolving with technology taking a front seat. The global business world has seen the rise of start-up’s, SME’s and entrepreneurs, with many bright minded individuals taking the leap to start their own business or introduce new inventions. Start-up’s in USA itself have created nearly 40million American jobs. Through research, urban economics and strategies has advanced to bring global markets closer together and enhance cross-border businesses. Many countries have since, established initiatives to promote and assist start-up’s and entrepreneurs like, Startup America, an initiative started by ex-President Obama, The Startup India Action Plan, started by the Indian government, StartUp Britain which is a private sector funded national enterprise campaign, ACE Startups Grant in Singapore that is a government-led organization that supports first time entrepreneurs.

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Entrepreneurial Ecosystem

An Entrepreneurial ecosystem is primarily made up of 3 elements: the business and investment environment around, the interacting actors and the evolving culture and attributes. Entrepreneurship has the potential to address gaps in economic growth, stability, and other measures of well-being in nations around the world. Recent studies and research books done by many famous authors like Feld and Isenberg, has made ‘Entrepreneurship’ a widely known area. There are many journals on the components of an entrepreneurial ecosystem, like Isenberg that states 6 main domains. All entrepreneurial ecosystems are unique, however, all of them have the same key elements that is needed to establish a successful entrepreneurship. To understand what exactly an ‘Entrepreneurial Ecosystem’ is, it is useful to look at the key points that make up the framework for these ecosystems.

Includes educational institutions, technical training centers, etc.Includes educational institutions, technical training centers, etc. Includes legal advisors, accounting and mentors, incubators and accelerators, etc.00Includes legal advisors, accounting and mentors, incubators and accelerators, etc. Includes government agencies, medial agencies, educational institutions, corporations and social organizations. Includes government agencies, medial agencies, educational institutions, corporations and social organizations. Includes public research centers, laboratories, etc.Includes public research centers, laboratories, etc. Includes rates and incentives and the funds to start a business.0Includes rates and incentives and the funds to start a business. Includes electricity providers, transport providers, telecommunication providers, utility providers. Includes electricity providers, transport providers, telecommunication providers, utility providers, etc. Includes the local and global markets, distributions networks, retail and of course consumers. Includes the local and global markets, distributions networks, retail and of course consumers. Includes the local and global markets, angel investors, distributions networks, retail and of course consumers.00Includes the local and global markets, angel investors, distributions networks, retail and of course consumers.

Entrepreneurship paves a way for many interacting actors like individuals, organizations and institutions. The diagram above shows the key components that create an entrepreneurial ecosystem. However, the primary objective of fostering the ecosystem depends on who the actor is, e.g.; for education institutions, donations, knowledge creation, reputation, etc. are the key factors. For investors and entrepreneurs, innovation, acquisitions or products and services, talent procurements, wealth creation and supply development. For public officials, such as government’s, tax revenues and the creation of jobs. For banking institutions, loan portfolios, mainly the size of the portfolios are the main factors.

Thus, depending on the stakeholder at hand, a number of benefits and factors need to be relevant for the ecosystem to be self-sustaining. These key components can be used to describe any ecosystem, even though each entrepreneurial ecosystem is unique. Rules, cultural norms and other formal and informal establishments affect individual behavior and thus influence the productive character of an economy’s entrepreneurial activity and subsequently its economic development. Human Capital: consisting of educational institutions like colleges, universities, training institutes, etc. and access to mentoring, leadership and skills development.

Finance

Investments in the form of angel investing, public government funding, equity capital, venture capitals, debt, etc. are some of the elements that are crucial in setting up a start-up or SME.

Culture

Social and political culture plays a key role for entrepreneurs depending on the country at hand. Culture shapes entrepreneur’s tendency to create business and to drive innovation. Policy and Support: can be divided into 2 key areas; leadership and government. Leadership characteristics include, entrepreneurship strategy, crisis and challenges, social acceptability and support. Government on the other hand includes, educational institutions, investment funds, financial support, research firms, venture-friendly regulations, taxes and intellectual property, etc. Infrastructure: plays a vital role in terms of getting permits for constructions, electricity, registering, paying taxes, labor employments and other regulations that would be necessary to acquire when setting up a business. R&D: research and development are required at all stages offsetting up an entrepreneurial business. Access to research and studies, laboratories, data collection, demographics, etc.

Professional Support

Like any other business, SME’s and start-ups will need the support and advice of financial advisories and mentors in the professional field. Globally, there are many incubators or accelerator’s that have been established by the government and private corporations to guide and assists entrepreneurs. Markets: Entrepreneurs need to have an eye on their local market conditions and that of the international global markets too, to track shares, rise in prices and market trends, that will influence their business conditions.

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