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Entrepreneurial Ecosystems

Building an Entrepreneurial Ecosystem: Ideas for Indonesia and Beyond

posted May 18, 2012, 7:02 AM by Joseph Hadzima

I recently visited Jakarta, Indonesia as part of the GIST (Global Innovation through Science and Technology) Initiative Startup Bootcamp Program.  The Global Innovation through Science and Technology (GIST) initiative was established in 2010, with funding from the U.S. Department of State, to spur economic advancement through science and technology-based innovation in countries across the Middle East, North Africa, and Asia.

I gave the keynote address to a Leadership Forum organized by the famous Indonesian entrepreneur Dr. Ciputra, whose advocacy for increased support for entrepreneurship in Indonesia has galvanized leaders in government, industry and academia.   Upon my return I commented on the opportunities in Indonesia in a column at Xconomy.com.    As mentioned in my column, Indonesia is a large (240M+ people - 3,000 miles wide) country with a young population (median age 27 vs 37 in the U.S.) seeking opportunity.   Stay tuned to see what Entrepreneurship can do to empower people and ideas.

How to Grow an Entrepreneurial Ecosystem

posted Feb 10, 2011, 8:56 PM by Joseph Hadzima   [ updated Apr 22, 2013, 4:27 PM ]

    Over the past 30+ years I have talked to many groups from around the world that have visited MIT trying to figure out how to duplicate the incredible success of "Entrepreneurial MIT".  For a number of years my approach was to describe to the visitors the various programs and activities that were underway at MIT.  When I followed up with these visitors 4 or 5 years later I typically found (1) that they had carefully copied in their own university or area the specific programs that MIT had and (2) that they had little or no success in generating new entrepreneurial activity.

At first I thought that "it takes a long time to be an overnight success" and that MIT has been working on this for 150 years - so why would I expect results in 4 or 5 years elsewhere?    I slowly came to realize that what MIT has is an Entrepreneurial Ecosystem that evolves, changes and adapts much like a Biological Ecosystem.  Today everyone is using the term Entrepreneurial Ecosystem, which is great because it frames the mission correctly.  Note:  A few years ago someone told me that they were pretty sure I was the inventor of the label "Entrepreneurial Ecosystem" - that could be and if it is true then I grant everyone a royalty free fully paid up perpetual license to use the phrase.

There are three essential ingredients for biological life as we know it to exist:  (1) Food, (2) Water and (3) Oxygen.   What are the equivalent ingredients to create and grow an Entrepreneurial Ecosystem?

1.   Knowledge - How To Do Things. 

There are some basic things that would be entrepreneurs need to know about starting and growing a company.   Many of these apply regardless of where in the world they are starting up (e.g. how to work out issues among founders) while others are very geographic and cultural specific (e.g. legal forms of doing business and legal rules relating to raising capital).   This is the easiest ingredient to supply.

2.  Knowledge That It Can Be Done

Nothing Succeeds Like Success.   Having visible examples (i.e. Role Models) of entrepreneurial success in a given Entrepreneurial Ecosystem helps tip the balance and encourage others to try.   I have been teaching the Nuts and Bolts of Business Plans course at MIT for over 20 years.   In the 5th year of the course an extraordinary thing happened.  I invited back a student who had taken the course and then had started a company.  I introduced him to the class and asked him to talk about his experience.   He started out by walking up the stairs to the tenth row of the auditorium and then he counted in to the 5th seat of the row and told the student siting there "Get Out of My Seat"!   The startled student was totally confused.  Then the speaker said "I took this course 3 years ago, I sat in that seat and I went out and started my company - and you can too".  Role Models - find them and celebrate them.

3. Create Opportunities for Serendipity

In a Biological Ecosystem life forms interact and evolve.  The same is required in an Entrepreneurial Ecosystem.  Call it "Networking".   Throw a Party, invite the key players, create opportunities for interaction, watch what happens and support initiative.  One of my Teaching Assistants in Nuts and Bolts was from Ghana.  Knowing that I was a Founding Judge of the MIT $100K Competition he asked me if I would help him organize a Business Plan Competition in Ghana.  The Ghana New Ventures Competition was a big success in many ways, not the least of which is that it brought together people with entrepreneurial interests who did not know each other.  When the competition was over what was left was a small but focused seed for continued collaboration and growth.  

My Message

Don't just copy programs, focus on creating an Entrepreneurial Ecosystem.  Copying programs alone is the equivalent of taking Penguins from Antarctica and expecting that they will survive in the Rain Forest.  

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