What is an entrepreneurial ecosystem? This refers to the surrounding social and economic factors of entrepreneurship. It is within this ecosystem that entrepreneurship exists. For businesses or entrepreneurial ventures to be successful, it is essential that they put into consideration the different elements of the entrepreneurial ecosystem.
What makes an entrepreneurial ecosystem?
When you talk about economics, you are highlighting access to venture capital, investors and so on. Note that entrepreneurship starts with an idea. For the concept to be activated, it needs to be financed. It is for this reason that entrepreneurs determine how easy access to loans for their ventures is, the microfinance institutions available and how friendly the capital markets are.
Finance is essential to entrepreneurship as it is what mostly determines whether or not entrepreneurship will graduate from being an idea to becoming a start-up.
2. Technology and infrastructure
Entrepreneurial ventures today rely on technology. An entrepreneur must know how to share VPN connection over wifi for him to be able to work remotely, have access to data and also provide security for data. Technology is vital in data management. What that means is that for an entrepreneurial venture to thrive, integration of technology in the different processes is paramount. It is through this that free flow of communication is facilitated within the various departments of a business.
Technology also avails the information that the entrepreneur needs to provide solutions to customers. This has been made possible for social media platforms among others. Infrastructure also covers utility and transport providers.
3. Government policies
For one presence of systems that support entrepreneurship are essential for the success of entrepreneurial ventures. Policymakers are a vital element of the entrepreneurial ecosystem as the power to make it easy or difficult for entrepreneurs to thrive lies in their hands.
Some of the policies that endorse the growth of entrepreneurs include intellectual property rights, reduced barriers to entry and tax laws to mention a few. Intellectual property right, for instance, see to it that entrepreneurs get rewarded for their ideas and no external parties get to appropriate them. Reduced barriers to entry promote the growth of entrepreneurs by eliminating steep requirements that get in the way of businesses to operate.
Reforming tax laws, on the other hand, looks to promote the growth of entrepreneurial enterprises.
4. Research and development
Research and development as a player in the entrepreneurial ecosystem looks to drive creativity and innovation. The availability of research centers and laboratories provides the incentive for the development of fresh ideas which in turn cause a ripple in entrepreneurial growth.
Culture as an element of the entrepreneurial ecosystem may also determine the growth of the entrepreneurial venture. An entrepreneur is more likely to thrive if he exists within a culture that supports the whole idea of entrepreneurship.
Human capital, markets, and business support are the other elements that also make the entrepreneurial ecosystem. For an entrepreneur to experience success, he or she needs to understand his/her entrepreneurial ecosystem fully.