Startup Compete Goes Global

The Startup Compete platform for competition management has had a wild year – from increasing the number of participants to finding a new home within the Global Entrepreneurship Network.

In 2015 alone, Startup Compete powered more than 140 competitions. GEN has used the platform since 2009 to setup, manage and judge its Startup Open competition to recognize some of the world’s most promising new startups. It acquired the platform just ahead of Global Entrepreneurship Week in November 2015, with plans to expand its reach to the more than 160 countries covered by GEN.

Startup Compete competitions include Rice University’s Rice Business Plan Competition, that the university has held for the past 16 years — with seven years on the platform. This year 42 teams from around the world will compete on campus in April for more than $1.5 million in cash and prizes. There are more than 300 judges, primarily angel investors, venture capitalists and other investors. Rice is one example of the reach and scope of the Startup Compete competition platform. Three of the ten competitions held in 2016 are part of the Princeton Review’s top six ranking graduate schools for entrepreneurship this year. The platform is made up of 667 competitions, 30,206 business ideas and 3,481 connections made.

Startup Compete will also be at the Global Entrepreneurship Congress in Medellín, Colombia, this March. Startup Communities Manager Steven Rodriguez will lead a session talking bout the competition platform and what’s next for startup communities in 2016.

From competitions hosted in California to Texas, and all the way to Africa, change-makers are coming up with innovative ideas and preparing to share them with their communities.

One university, 30,200 startups

Just how much impact can one university have on the global economy. Apparently, quite a bit. A new December 2015 study from the Massachusetts Institute of Technology reports that MIT’s alumni entrepreneurs generate annual revenues of roughly $1.9 trillion.

Entrepreneurship & Innovation at MIT: Continuing Global Growth and Impact updates earlier studies and shows that MIT alumni are “engaged in entrepreneurship and innovation at ever increasing rates, and at earlier and earlier stages in their lives.”

The report estimates that MIT alumni have launched 30,200 active companies, employing roughly 4.6 million people, and generating roughly $1.9 trillion in annual revenues. That revenue total falls between the world’s ninth-largest GDP, Russia ($2.097 trillion), and the 10th-largest, India ($1.877 trillion), according to 2013 data on those and other countries from the International Monetary Fund.

While data from the Kauffman Foundation indicates that the share of new entrepreneurs between the ages of 20-34 is on the decline in the U.S., the average age of MIT alumni founders is heading in the opposite direction. The MIT report shows the median age of first-time alumni entrepreneurs decreasing steadily over the last eight decades. The age dropped from 39 for alumni who graduated in the 1940s to 30 in the 2000s, with today’s median age for entrepreneurs being 27.

Other key findings include:

  • 25 percent of alumni have founded companies, with more than 40 percent of these labeled as “serial entrepreneurs” (founding two or more companies)
  • 38 percent of early-stage employees eventually launched their own companies
  • 11 percent of alumni who have graduated in the 2010s have already founded companies, compared with 8 percent who founded companies within five years of graduating in the 1990s, and 4 percent in the 1960s
  • 80 percent of alumni-founded companies have survived five or more years, while 70 percent have survived 10 years
  • 31 percent of alumni hold one or more patents

The report was co-authored by Edward Robert, Fiona Murray and J. Daniel Kim of the MIT Sloan School of Management.

China embraces entrepreneurship across 123 cities

This year’s Global Entrepreneurship Week China aimed to break three records across the country. The first record was to achieve the closest distance to angels with the “Talks with Angels” session, involving more than 50 investors. The second goal was to organize the highest number of large-scale activities, and GEW China achieved this by organizing 75 large-scale activities, more than 30 of which involved roadshows. The third aim was to create the most concrete and valuable content and thus the organizing committee focused on a problem-solving week for entrepreneurs. The week also gave Chinese people the chance to network and see more than 30 roadshows showcasing a wide range of opportunities from the Internet to gaming, hi-tech to healthcare, and even new media entrepreneurship. The Entrepreneur Charging Station, the Entrepreneurship Forum for Graduates and the Eaglets Awards were some of the highlights of the week.

China kicked-off GEW with Shen Xiaoming, a member of Shanghai Party Standing Committee, director of the China (Shanghai) Pilot Free Trade Zone Administrative Committee and Party Secretary of Pudong New Area, presided over the opening ceremony and gave the commencement announcement. The ceremony had the involvement of nearly 60 institutions and approximately 113 enterprises. Shen Xiaoming pointed out during this speech that the future success of Chinese entrepreneurs depends on institutional innovation; an equal, efficient and transparent business environment in accordance with international standards and the successful investments in entrepreneurs.

The winners of the Eaglet Prize – an influential award aimed at creating an ecological environment for startups and encouraging the growth of excellent entrepreneurial enterprises – were announced at the opening ceremony. This year, the evaluation committee assessed the startups applying for the prize based on their speed of growth, technological breakthrough and innovation model. They selected 11 winners. At the ceremony, the 2015 list of “TOP30 angel investors” was also announced. Pang Xiaowei, CEO of tisiwi.com, delivered a speech representing angel investors at the ceremony.

At the Entrepreneur Charging Station, a signature event of the week, 90 entrepreneurial institutions offered entrepreneurs services regarding site selection, financing, recruitment, media promotion and policy consultation. The financing area of the station, “Talks with Angels,” focused on different stages of support. The first experience of financing was where entrepreneurs talked face to face with investors providing for them. Then there was the diagnostic consulting service, to obtain a “PASS” card; then Face the Investor, where entrepreneurs with a “PASS” card talked with investors to obtain a “BOSS” card; and Meet with the Partner, where entrepreneurs with a “BOSS” card could meet a potential partner. If an entrepreneur was favored by many investors and received many “BOSS” cards, it enabled the entrepreneur to flip through the cards of investors and pick one.

The Entrepreneurship Forum for Graduates “‘Chuang’ Out Your Future – Be Pioneering Entrepreneurs!” was themed after the currently popular roadshow model of live commenting by audience on stage. The aim was to ignite the passion and entrepreneurial spirit among future innovators, and promote communication among experienced and future entrepreneurs.

At the New Media Trend Entrepreneurship Incubation Forum, the first forum designed to analyze the development trends of new media, distinguished guests from the sector shared their ideas and emerging new media projects.

A great variety of activities during GEW were “entrepreneurship classes,” which worked to educate entrepreneurs about winning the heart of investors, circumventing legal risks related to entrepreneurship, and learning how to apply the right marketing strategies. The classes also focused on hot to become a good manager, embrace science, technology and media, as well as take advantage of the entrepreneurial environment and new trends from financing, marketing, management, legal and media. Entrepreneurship courses throughout the week included STEP Growth Camp, taught by three industry heavyweights Jin Cuodao, Zha Li and Yang Ning, and a course on how small and micro-businesses can save on the workforce with EAP.

The 2015 global innovative product launch event featured innovative products from eight enterprises through keynote speeches and on-spot roadshows. This year’s event partnered with chaodianjie.uz.taobao, where some of the products were simultaneously sold online.

As of last year, GEW China expanded beyond the week, as programs will continue throughout the year, with the Global Entrepreneurship Week Campus Center (GCC), which brings together entrepreneurial societies, associations and clubs with college students across China. So far, GCC has admitted nearly 200 entrepreneurial societies, conducted 444 activities in 223 colleges and universities, with the participation of more than 280,0000 college students in 28 cities across China – at campuses including Tsinghua University, the Chinese University of Hong Kong, Fudan University and Zhejiang University.

 

Global Entrepreneurship Week this November – 10 million people, 160 countries

The 2015 Global Entrepreneurship Week (GEW) will be its largest celebration of entrepreneurship yet, with events in 160 countries. From November 16-22, roughly 10 million people will take part in the eighth annual celebration, recognizing and supporting entrepreneurs from around the world.

This year’s Global Entrepreneurship Week features several themes meant to provide innovators the tools, resources and advice to launch new businesses. Throughout the week, GEW partnersaround the world will help entrepreneurs of all levels start and scale new ventures through events, activities and competitions that introduce participants to potential collaborators, mentors and even investors. While the activities will vary greatly in size and scope, many will touch on trends in the following areas:

  • Investors: On Nov. 17, GEW will highlight the role that early-stage investors play in developing robust entrepreneurial ecosystems through partner events that enhance the connections between business angels, venture capitalists and individual investors with entrepreneurs and policymakers.
  • Youth: On Nov. 19, GEW will spotlight partner activities, such as the DECA Idea Challenge, to inspire the next generation of entrepreneurs and help them acquire and sharpen the skills needed to launch and grow a startup. .
  • Cities: On Nov. 20, GEW will explore the efforts by policymakers around the world to support the development of local entrepreneurs, ensuring they have access to the resources necessary to help them launch startups. The first-ever Startup Nations Awards will recognize local and national policymakers alike, as well as ground-breaking intellectual work in the field.

“As more and more countries turn to their entrepreneurs to drive innovation and economic growth, they need to focus on developing their local and national startup ecosystems,” said Jonathan Ortmans, president of Global Entrepreneurship Week. “GEW provides a jolt of energy that strengthens those connections and helps foster an entrepreneurial culture necessary for sustained growth.”

Featured events in 2015 include:

  • Startup Open, a global competition to identify and recognize new and promising startups. It is open to any entrepreneur who has just started or is about to start a new venture.
  • Startup Nations Summit: Startup-savvy policymakers and program leaders gather in Monterrey, Mexico to explore policy ideas and programs to help accelerate new and young firm formation.
  • One in a Million: The Kauffman Foundation’s inaugural pitch competition, providing startup owners who have previously presented at a 1 Million Cups program around the country, the chance to pitch their ideas to seasoned entrepreneurs. Five finalists will compete in a live-streamed event on Nov. 18 for a grand prize of $10,000.

Launched in 2008 by the Kauffman Foundation, Global Entrepreneurship Week has quickly grown to include more than 25,000 events, activities and competitions. To learn more about all of the Global Entrepreneurship Week events and see a list of participating countries and supporting organizations, visit www.gew.co.

UN agenda may support entrepreneurs

As the world prepares to create 600 million new jobs by a deadline of 2020, Dell entrepreneur in residence Elizabeth Gore is trying to put entrepreneur support on the UN’s official agenda for the next 15 years.

She says almost all of those new jobs will be generated by entrepreneurs instead of existing corporations or government agencies. In fact, 70% of job creation in the U.S. comes from entrepreneurs and new businesses, and 90% of new jobs come from the same source globally, according to Gore, who also chairs the UN Foundation’s Global Entrepreneurs Council.

But Gore says necessary resources are lacking to help entrepreneurs grow their businesses and add jobs. “We looked at the fact that there was really no global roadmap for policy makers on entrepreneurship,” she says. “What do they need to scale?” So Gore helped develop the Entrepreneurs UNite initiative with Dell and the UN Foundation to generate buzz around the idea of fostering entrepreneurship and getting it on the global agenda.

Her efforts have started to pay off. The UN has added entrepreneur support to its Sustainable Development Goals agenda for September in the form of SDG8. The General Assembly will vote on Sept. 25 whether to include SDG8 and 16 other goal proposals in its next round of SDGs, which are updated every 15 years. Nancy Pelosi, Aaron Levie, and Sean Parker are among those supporting Sustainable Development Goal 8 to foster entrepreneurial growth worldwide.

Since the UN acts as a global recommendation for countries on which laws and initiatives to pass, Gore hopes SDG8 makes supporting entrepreneurs a global initiative. And executive supporters of the goal include entrepreneurs like Aaron Levie, Sean Parker, Alison Pincus, Brian Chesky, Joe Gebbia, Ted Turner, and more.

Through her work liaising with entrepreneurs and organizations like the UN and now Dell, Gore says she noticed overregulation and ambivalence were common problems hindering new business owners. They’d either rub against restrictive policies and fail, or they’d experience total lack of support from their communities. Furthermore, conversations about entrepreneurs’ needs tend to erupt only in emergency situations.

“There is an intimidation or even a lack of understanding of how to engage with policymakers, how to communicate which policies and laws are a positive-negative, until there’s something bad happening. You’re bumping up against something, and your business is not going to scale because of it. There are extreme examples like an Uber or a Lyft, but there are examples every single day of entrepreneurs all over the world who are having trouble here,” Gore says.

Companies like Uber and Lyft have long been at the forefront of policy fights for their businesses, hiring policy heads to liaise with government agencies. Airbnb made headlines this week for hiring its first policy head, Chris Lehane, a former Clinton aide.

Gore wants to create ecosystems that foster entrepreneurial growth everywhere and says that if passed, SDG8 will challenge governments at all levels to push for new business with federal appropriations, tax incentives, immigration suggestions, and more. So far, the Entrepreneurs UNite campaign has reached about 74 million people through social media and garnered 27,000 signatures for its petition.

“This is something that we think is critical, and it’s going to be the first roadmap that will help entrepreneurs scale,” Gore says. “We are very happy that we have a White House here that really understands us and is going to support it. But this is a global policy, so we need as many folks from as many countries to be looking at it.”

GES call to entrepreneurs to ignite economic growth for Africa

Since 2010, when President Barack Obama presided over the first Global Entrepreneurship Summit (GES) in Washington, D.C., it has expanded to a global event, subsequently hosted by the governments of Muslim majority nations, Turkey, the United Arab Emirates, Malaysia and Morocco. This past weekend, the focus shifted to Africa as the U.S. president travelled to Nairobi where he joined Kenyan President Uhuru Kenyatta on stage for GES 2015.

The promise of high-growth entrepreneurs is just as high in Kenya as in more advanced entrepreneurial ecosystems. The Global Entrepreneurship Index (GEI) offered a preview of its 2016 report to be released this November, showing that Kenya’s performance in tech transfer is far above the regional average. Kenya is also a top country in the region for R&D expenditure as a percentage of GDP. Another Global Entrepreneurship Research Network (GERN) member Endeavor Insight also recently put the spotlight on Kenya, showing that scale-ups have created 72 percent of new jobs in the past three years, despite representing only five percent of Kenyan firms. However, given the country’s projected population growth of 3.4 million additional people by 2020, Kenya will need to create over 3.9 million new jobs for young people. Several other countries share this is enormous challenge.

In order for Kenya and the Sub-Saharan region to grow and add more jobs, economies will need a new wave entrepreneurship. Experts at the GES this weekend argued women and youth are in the best position to create a strong current that can drive new wave of high-potential startups.

The Female Entrepreneurship Index (FEI) is keeping track of improvements in this regard across 77 countries, but data for Sub-Saharan countries is scarce. Of the nine countries included in the report, South Africa leads the way in the region, and ranked 36th globally.

The Summit kicked off with the GES Youth + Women event, featuring opening remarks by Akon, a Grammy-nominated R&B and hip-hop artist and entrepreneur. Born in St. Louis but raised in West Africa, he founded the Akon Light Africa project, an initiative to bring solar power to streets and households across 14 African countries. He was joined by Julie Hanna, Executive Chair of Kiva, the microfinance platform that has lending teams focused on youth and women.

Catherine Russell, U.S. Ambassador for Global Women’s Issues, announced a new exchange program to help young female founders in Africa grow their startups and reach new markets, the Women’s Venture Xchange—Africa. The pilot program – starting in Nairobi and Kampala – will serve as an exchange and mentorship program for high-potential women entrepreneurs, tapping the partners and programs of the Global Entrepreneurship Network, the Case Foundation, Mara Foundation and the U.S. State Department.

President Obama announced that the Administration’s goal to generate over a billion dollars in private investment for emerging entrepreneurs around the world by the end of 2017 has already been exceeded. Half of this goal will be specifically for women and young entrepreneurs.

Other programs focused on women and the young highlighted at the GES included:

African Women’s Entrepreneurship Program (AWEP), an outreach, education, and engagement initiative that targets women entrepreneurs in sub-Saharan Africa to promote business growth, increase trade both regionally and to U.S. markets through the African Growth and Opportunity Act (AGOA), create better business environments, and empower African women entrepreneurs to become voices of change in their communities.

Young African Leaders Initiative (YALI), which is creating four regional leadership centers in Ghana, Kenya, Senegal, and South Africa to improve the availability and quality of leadership training programs and professional development opportunities for young African leaders. In addition to in-person training and opportunities, the YALI Network provides more than 130,000 members with virtual resources and vibrant physical spaces that equip young African leaders with the skills and connections they need to improve their businesses, communities and their countries.

The focus on youth and women wasn’t confined to Kenya and the GES. The WiSci STEAM Camp opened on the same day as the GES and will continue through August 15 at the Gashora Girls Academy in Rwanda. The camp brings together 120 high school students from across Africa and the United States who have demonstrated interest in the STEAM fields — science, technology, engineering, arts and math — and have leadership abilities. The program is part of LIONS@FRICA, an initiative founded by the U.S. Department of State and Global Entrepreneurship Network with Microsoft, Nokia, DEMO Africa, VC4Africa and other partners to help entrepreneurs start and scale new businesses throughout Africa.

GES organizers brought mentors to Kenya to help the selected promising growth-oriented startups from across the world and instill a mentorship culture among this cohort of entrepreneurs. In addition to Airbnb’s Chesky, three additional rockstar entrepreneurs were in Nairobi to demonstrate their commitment to serving as mentors and global ambassadors: Steve Case, Chairman and CEO, Revolution, LLC; Julie Hanna, Executive Chair of the Board, Kiva; and Daymond John, Founder, FUBU and CEO, Shark Branding. The four serve as part of the Presidential Ambassadors for Global Entrepreneurship, a group of America’s most respected business creators who have committed to sharing their time, energy, ideas, and experience to help develop the next generation of entrepreneurs around the world.

African leaders will meet again in the next two years, culminating in the convening of the Global Entrepreneurship Congress in March 2017 in Johannesburg. Expect many lessons to be shared as Africa positions itself as ground for policy and program experimentation. As Steve Case, Co-Founder of AOL said, “Historically, Africa has been viewed by many as a problem to solve – but now there is a growing recognition it is in fact an opportunity to seize and entrepreneurs are leading the way.”

Kenya prepares for the Global Entrepreneurship Summit

All eyes are on Kenya this month as it prepares to host the Global Entrepreneurship Summit. John Wali, executive director of GEW Kenya host organization Junior Achievement Kenya, will be attending the conference to announce the upcoming launch of GEN Kenya. Before heading to the conference, Wali shared his thoughts on GEW, the startup ecosystem in Kenya and the importance of supporting youth entrepreneurship.

Why is Global Entrepreneurship Week important – overall and to Kenya specifically?

Junior Achievement first got involved with GEW in 2008. One of the critical pillars of our programs is the promotion of entrepreneurship culture especially among young people and involvement in GEW was a perfect fit. The alignment of purpose between Junior Achievement Kenya and GEW provided a platform to continue to grow and expand the drive of entrepreneurship in the country.

GEW is important because it provides an opportunity every year where all sectors; that is, the private sector, public sector and social sector, to come together to inspire, motivate and support people around the country. It encourages people to embrace the spirit of entrepreneurship as a key ingredient in driving Kenya’s economic growth towards realizing the Kenya Vision 2030.

Through GEW, we have been able to map out and develop the entrepreneurial ecosystem within Kenya that is important in sparking and nurturing emerging entrepreneurs. GEW provides a unique opportunity to seek and pursue continued engagement with all stakeholders in the development of entrepreneurship culture.

What makes your GEW campaign unique?

GEW Kenya engages various partners who run different events that are aimed at promoting and developing entrepreneurship. What makes our campaign unique is the focus on the promotion of the entrepreneurship culture among Kenyan youth, especially at-risk youth.

For example, we have successfully run SlumFest – an event aimed at promoting the entrepreneurship among youth in Kenyan slums and recently we launched the National Innovation Challenge, aimed at unlocking youth innovation and creativity.

How would you characterize the entrepreneurial environment in Kenya?

Of late, the entrepreneurial environment has improved considerably in Kenya. Most notably, progress has been made in supporting emerging entrepreneurs and facilitating success.

One thing I would change however is the access to affordable credit by youth entrepreneurs and startups. Products being offered by the financial sector are still prohibitive and are not responsive to the needs and requirements of young people.

What methods are you using to encourage entrepreneurship? What have been most effective and popular?

In partnership with the Ministry of Education, Science and Technology and the private sector, we have been implementing hands-on experiential entrepreneurship programs that are aimed at equipping young people with critical entrepreneurship and financial literacy skills.

The program is currently being implemented in 300 secondary schools nationwide reaching at least 24,000 students directly. The program is being scaled up to at least 1,000 secondary schools this year while leveraging technology to support the classroom delivery.

This popular program is modeled around a national competition that starts at the local level and aims to celebrate the most outstanding student-led enterprise. Over the years, the program graduated successful entrepreneurs and employers who are contributing to the Kenya economy.

Additionally, Junior Achievement Kenya has just commissioned a study on entrepreneurship with a focus on which teaching approach is best in the development of an entrepreneurship culture.

What are the key differences in entrepreneurship in a developed nation and entrepreneurship in a developing country?

In developed nations, the entrepreneurship ecosystem tends to be more sophisticated, while that of a developing nation is still in its infancy. Given that entrepreneurship is still growing in developing nations, there is an opportunity for them to leap frog by learning from developed nations’ experiences.

Of course, there is still room for government in developing the appropriate policy framework that supports youth and women entrepreneurs as well as the private sector, especially the stakeholders in the financial sector space to develop innovative products that can support and drive entrepreneurship.

The government has made efforts to ensure that the information on the topic of business is available to everyone in the ecosystem. Most recently, this has been done through the Huduma Centers that serve as a central tool for information and registration.

However, there is still an opportunity for government to coordinate and provide more relevant support especially to youth and women entrepreneurs. This can be done through appropriate training and seminars that can build their capability on how to do business with government.

Which public sector effort has had the most success at unleashing entrepreneurship?

There are a number of efforts that have been fairly successful in unlocking entrepreneurship. Beyond the creation and expansion of funds such as the Youth Enterprise Fund, Women Enterprise Fund and the Uwezo Fund, the Government reserved at least 30 percent of its procurement for youth, women and persons with disability as a way to promote business between government, youth and women.

Further, through the Micro Small and Enterprise Authority, the public sector has provided infrastructure that allows for dialogue and engagement between entrepreneurs and the government. Currently, the government is working towards special economic and free trade zones.

How has GEW grown in Kenya? What are you doing to build on its momentum?

Since 2008 when we held our inaugural GEW with one partner, we have grown to work with more than 50 partners each year and engage more than 30,000 participants.

We have since been recognized as a Kenya Vision 2030 partner as a leader in the promotion of the entrepreneurship culture in the country. The Kenya Vision 2030 which is the county’s development blueprint recognizes the significant role of entrepreneurship in driving the development of both Kenya and the region.

Startup Nations drive smart startup policy

Many of the policymakers and program leaders focused on exploring different policy ideas and government programs to help accelerate new and young firm formation participated in this year’s Global Entrepreneurship Congress. It might have surprised some that they looked much more similar to “untucked”-shirt-entrepreneurs than some may have imagined.

In 2012, these important ecosystem players formed a network called Startup Nations (SN), which now counts over 50 member organizations. Early players in the field of nation-wide initiatives to help inform policy included the Startup Canada and Startup Britain, which co-founded the network.

Soon joined by Startup Malaysia and Start-Up Chile, the network began sharing their roadmaps and blueprints.

The structures, goals and strategies of its members vary, accurately reflecting the diversity of entrepreneur types and culture, but they all maintain the following three principles:

  1. Smarter policymaking: At its core, Startup Nations is a network of policymakers and leaders of public-sector supported programs. Critical to SN member interactions is the recognition that policymakers can be open to experimentation to improve the impact of their efforts.
  2. Knowledge- and experience-sharing: Members share what they have learned about interventions (policy, programmatic, evaluation methods, or otherwise) that support their entrepreneurship communities. They embrace openness and candid experience sharing about program successes and failures.
  3. Fostering evidence-based impact evaluation: Startup Nations are committed to assessing whether programs in various startup ecosystems are performing or not,
  4. and believe they will be more effective when informed and armed by efforts such as the Global Entrepreneurship Research Network (GERN).

Over the past three years, SN has expanded to include new members, such as Start Up Indonesia, Startup Denmark, Startup Maroc, Startup South Africa, StartUp Australia and Startup Delta.

Startup Korea hosted the annual Startup Nations Summit (SNS) last November at the tail end of Global Entrepreneurship Week (GEW). SNS 2015 will once again provide a grand finale for GEW celebrations this year, but this time in Monterrey, Mexico.

Startup Nations network prepares for new round of policy discussions that promises to unveil new angles and policy perspectives to spur new firm formation and growth. SNS 2015 co-host, the National Institute of the Entrepreneur of Mexico’s the Economy Secretariat, will also provide SN members with opportunities to deep-dive the Mexican ecosystem and see first-hand the gaps they are closing through smart programs and policy.

GEN partners with Compass to rank startup eco-systems

Global Entrepreneurship Network is joining forces with Compass, creator of extensive benchmark data for startup performance, to help rank the world’s top startup ecosystems.

The ranking is based in part on a short survey of entrepreneurs and ecosystem players around the world.

Compass is offering a Startup Accelerator package of eight apps for those who complete the survey — providing free or discounted access to some of the greatest tools for startups: Zendesk, Close.io, Foundersuite, Iron.io, Olark, Wix, Pipedrive and Clara. Plus a 50% discount to the Ultimate Startup Sales Guides: Inbound and Outbound.

The original report in 2012 (download) provided a “deep dive into selected top ecosystems.” It found that while Silicon Valley remained the largest and most influential, other startup hubs had begun to close the gap with Tel Aviv, London, Toronto and Vancouver in the top 10.

Through Global Entrepreneurship Week since 2008—and other more recent initiatives—GEN has been working on building and strengthening entrepreneurial ecosystems.

 

Taking the Pulse of an Entrepreneurial Ecosystem

“If you can’t measure it, it doesn’t exist,” iconic entrepreneur Bill Gates has famously said.

But, when it comes to creating the conditions that allow entrepreneurs to thrive — that is, well-functioning entrepreneurial ecosystems — policymakers often wonder whether what they are seeking can be quantified.

While there is a growing consensus among policymakers, from heads of state to local mayors, about the need to support entrepreneurs, there remains a dearth of data and analysis around what works and what does not in creating vital and vibrant entrepreneurial environments. Beyond not achieving the desired results fast enough, this is important because public resources are, at the end of the day, finite, and misallocation is costly in terms of waste and opportunity cost.

When talking with policymakers in this field, they usually seek a framework for understanding the most critical areas on which to focus attention and resources and evidence-based systems for evaluating whether their efforts are having the impact they seek.

Many very serious and even scholarly attempts exist to identify the elements within a community that support firm formation and growth, how they are interconnected, and where bottlenecks threaten to extinguish individual creativity and initiative. However, entrepreneurship is still a messy field and there is not one agreed-upon standard.

Asking a policymaker to read through and synthesize such panoply is obviously a long stretch. Many end up taking one or two approaches to assessing their entrepreneurship ecosystems: focusing narrowly on a limited number of input metrics that fail to quantify outcomes, or taking a “kitchen sink” approach that, because it considers all aspects of the ecosystem equally important, tracks every result while failing to focus adequately on key components.

A new Kauffman Foundation report is intended to offer policymakers across the country, and perhaps the world, a solution. Authored by Dane Stangler and Jordan Bell-Masterson, the report recommends that policymakers look to four baseline indicators — density, fluidity, connectivity, and diversity — as a starting point for evaluating and measuring entrepreneurial vitality. It addresses measurement by providing state and local leaders with sources of data that can be used to track and evaluate over time whether new policies and programs are achieving their objectives.

For policymakers, looking at the density of new and young companies in a given location, be it a city or a region, will tell them how well the local economy is fostering entrepreneurial activity. To gain a deeper understanding, they can then look at the share of employment in new and young firms, and within the sectors that are most important to that local economy.

One of the key reasons entrepreneurship is so vital to human welfare is because of how it facilitates smart use of resources. The idea behind fluidity is to see whether or not regulations allow for or restrict the reallocation of resources so that they can be more efficiently deployed. This can be measured by looking at things like the number of high-growth firms and the level in which people move between cities or regions, providing a constant remixing of talent — which fosters idea generation.

The third indicator Stangler and Bell-Masterson present, connectivity, measures how entrepreneurs interact with each other, mentors, investors, and other ecosystem actors. To ascertain whether or not policies and programs foster such linkages, the authors suggest looking at spinoff rates, which indicate the extent to which successive waves of new companies are created.

It is for policymakers to avoid a startup monoculture mindset. In this context, similarly, to ensure that a city or region is not overly reliant on a particular industry, and to ensure a continual flow of new ideas, policymakers should foster economic and demographic diversity.

By measuring and tracking how well their city or state diversifies economic opportunity, such as through income mobility, and how well their city or region welcomes new immigrants, policymakers can better understand what adjustments are needed.

Tracked over time, “these four baseline gauges will provide a clear picture of an entrepreneurial ecosystem’s health and effectiveness,” replied Stangler when asked how the four indicators were selected. “They also serve to inform entrepreneurs and regional leaders about actions that will make the ecosystem stronger.”

Google’s CEO, Eric Schmidt recounted how in every meeting with city, state and national leaders he was asked for advice about how to propel entrepreneurial activity. “Well,” he said, “they all have human capital to do so, people everywhere are endlessly creative, what they need is to fix the environment. And, ultimately, this is a most urgent conversation because this is about growth, it’s about generating jobs. The way you create jobs is by creating new companies, new entrepreneurs, new ideas. The vital point is that every leader needs this because they all have to solve the problem with joblessness.”

Evangelists for entrepreneurship around the world have succeeded in getting the significant attention of a wide range of leaders to this mission Schmidt describes. The challenge ahead now shifts to giving them the most accurate and relevant information from which to act in pursuit of the cause. Stangler and Bell-Masterson’s work, along with parallel contributions it will undoubtedly prompt, is vital in this effort.

This new framework provides a terrific place for policymakers to begin making sense of what matters in their communities and markets.