Accelerating Entrepreneurial Ecosystems:
New Lessons from a
Public-Private Stakeholder Approach
Scott Stern, MIT and CBS
Field of Dreams…
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Some Thinkers such as Richard Florida imply
that regions are engaged in a war for talent and
the creative class to be the NEXT Silicon Valley
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With many “Silicon Xs” strategies being
implemented around the world….
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“…we don’t want 50 Silicon Valleys; we want 50 different variations of Silicon Valley, all unique from each other and all focusing on different domains.” Marc Andreesen, 2014
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"The other thing that we would have done differently…is really
made our goals much more explicit."
– Tony Hsieh August 2016, nearing 5 Year Anniversary
Far too often…
• These well-intentioned approaches often end in…a Boulevard of Broken Dreams
• Many regional efforts fail to turn “ideas” into action, or fizzle out after an initial burst of energy and initiative
How can we catalyze our regional entrepreneurial
ecosystems?
#MITREAP 6
A global program designed to help regions accelerate economic growth & social progress through innovation-
driven entrepreneurship (IDE) built upon a region’s unique history, capacity and comparative advantage.
Partner regions form stakeholder teams and commit to a two-year learning engagement working with MIT faculty
and the broader REAP community through a series of action-learning activities to assess, build and implement a
custom regional strategy for enhancing IDE ecosystems.
Mens et Manus
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MIT Regional Entrepreneurial Acceleration Program
(MIT REAP)
MIT REAP Framework Overview
System
Strategy Stakeholders
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The Challenge of Empowering
Stakeholders for Ecosystem Change
Entrepreneur
Risk Capital
Corporate Government
University
Innovation Ecosystem
Stakeholder Model
• IDE Ecosystem-led growth is different from traditional economic development approaches
• Collaboration across key
stakeholders is crucial for collective impact and acceleration at the ecosystem level
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Stakeholders MIT REAP Framework
MIT REAP Framework Overview
System
Strategy Stakeholders
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I-Cap E-Cap
Economic Impact Social Progress
IDE Ecosystem
Foundational Institutions
Cluster Based Comparative Advantage
System MIT REAP Framework
Innovative Capacity & Entrepreneurial
Capacity Are Distinct Regional Assets
E-Capacity
Ability to start and build new to
the world businesses from
inception to maturity.
Strong I-Cap:
Universities, Central R&D,
Network of researchers,
Medical Centers
Strong E-Cap:
Entrepreneurs, Mentors,
Founding Teams
Investors at all stages
I-Capacity
Ability to develop new to the
world innovations from inception
through to the market.
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System
I-Cap versus E-Cap
Innovation Capacity
En
trep
ren
eu
rial C
ap
acit
y
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System
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I-Cap E-Cap
Economic Impact Social Progress
IDE Ecosystem
Foundational Institutions
Cluster Based Comparative Advantage
System MIT REAP Framework
How can we measure high-potential entrepreneurship in a systematic and timely way?
How can we utilize real-time granular measurement of entrepreneurial quality to gain new insights for program evaluation and economic development?
Three Steps to Measuring Entrepreneurial Quality (at or near the time of founding)
Business Registrations
“Digital Signatures” of
Growth Potential
“Success” outcomes can be mapped to initial “digital signatures”
How do the “digital signatures” of companies predict
growth?
(NB: Prediction NOT causal) Change in the Probability of
Growth
Has Short Name 248%
Firm Named after Founder -70%
Corporation (Not Partnership or LLC) 405%
Trademark in First Year 501%
Patent and No Delaware Registration 3,534%
No Patent and Delaware Registration 4,470%
Both Patent and Delaware Reg. 19,640%
Sectoral Controls Included
State Controls Included
Guzman and Stern, 2016.
A New View of the Skew
Entrepreneurial Quality Index
Average estimated quality within a group of start-ups
EQI
Regional Entrepreneurship Cohort Potential
Index
The number of startups within a particular region expected to later achieve a growth outcome
RECPI
Regional Entrepreneurship
Acceleration Index
Estimates the ability of an ecosystem to convert entrepreneurial potential into realized growth events.
REAI
Entrepreneurial Quality Statistics
Stanford University
Twitter/
Dropbox
The Quality of Entrepreneurship in Kendall Square
The State of American Entrepreneurship
RECPI / GDP: The State of American Entrepreneurship Over Time
RECPI / GDP shows
– a sharp raise in potential during the late 1990
–followed by a drop (but NOT a collapse) in 2001
–and more moderate increase after the Great Recession.
Nowcasted Index tracks closely and documents “boom” since 2010
Peak of
dot-com
bubble
Great Recession
Guzman and Stern (2016)
The Quality of Entrepreneurship in Kendall Square
What does your entrepreneurial
ecosystem look like?
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System
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System
Strategy Stakeholders
MIT REAP Framework Overview
Core creators of I-Cap and E-Cap as well as the
actors in the underlying social fabric of regions.
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Stakeholders
Entrepreneur
Risk Capital
Corporate Government
University
Innovation Ecosystem
Stakeholder Model
MIT REAP Framework
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The Theory of Collective Impact
Collective Impact occurs when organizations/actors from different sectors agree
to solve a specific social problem
Beyond the impact of individual
organizations
Works when key
preconditions are in place
Requires common set of
integrated, tailored best
practices
Lays foundation for near-term and sustained
impact
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A Collective Impact Approach Allows Teams
to Accelerate Real-World Meaningful Change
By Leveraging Complementary Resources….
Setting a Common Agenda
Shared Metrics & Evaluation
Stakeholder Engagement & Communication
Backbone Support Organization
Action
IDE
Ecosystem
Acceleration
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Boston: The Risk of a Missing
Stakeholder
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Assessment - Shared Measurement
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Entrepreneurial Quality Index
Average estimated quality within a group of start-ups
EQI
Regional Entrepreneurship Cohort Potential Index
Estimated as the expected # of Growth Events for a Regional Start-Up Cohort
RECPI
Regional Entrepreneurship Acceleration Index
Estimates the ability of an ecosystem to convert entrepreneurial potential into realized growth events.
REAI
REAP Metrics for Shared Measurement
Reminder: Data Session - 7:45-8:15AM tomorrow (Day 2) Please select a team member(s) to attend(anyone is welcome)!
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Entrepreneurial Potential (RECPI) in All Spain Provinces
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System
Stakeholders
Entrepreneur
Risk Capital
Corporate Government
University
Innovation Ecosystem
Stakeholder Model
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MIT REAP Framework
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System
Strategy Stakeholders
MIT REAP Framework Overview
PPIs: Key strategic actions for change
Policies Programs
Durable changes (typically taken by the government)
that shape the overall context in which eco-system
resources are developed and deployed.
Specific time-bound activities – undertaken by
any (group of) stakeholders – that can change the
ecosystem in a specific way & through demonstration.
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Strategy
Accelerators Prizes & Competitions
Early-stage Capital
Approaches
Mentoring Networks
Select Your REAP
Strategic Interventions
Choosing an Innovator-Based Entrepreneur-
Led Value Proposition for Your Region
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Strategy MIT REAP Framework
Choosing and Winning
Your REAP Must-Win Battle
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Strategy
Team Scotland
REAP Cohort 1 (2012 – 2014)
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Strategy
Team Scotland – IMPACT
“We don’t see the solution as a series of small interventions, but rather a repositioning of the pieces of the ecosystem so that they all work more effectively and the linkages are continuous. Transformational change doesn’t happen overnight; you need to understand the system very well and how to facilitate mindset change and create societal role models. REAP is playing an important role in influencing the direction that we want to take to this end.”
-Scotland’s REAP Champion Donna Chisholm
REAP Cohort 1 (2012 – 2014)
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Engaging more than 30 regions around the world…
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IT_
RE
AP
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Team Singapore
Team Morocco Team London
Team Scotland
http://www.cando.scot/scale/
http://www.phoshackathon.com/ http://growth-builder.com/
http://sginnovate.sg/
http://sginnovate.sg/
What is your regional strategy?
How are you leveraging a stakeholder approach to
catalyze change?
Shared Metrics and Evaluation Enable Stakeholder-Led Accleration!
Setting a Common Agenda
Shared Metrics & Evaluation
Stakeholder Engagement & Communication
Backbone Support Organization
Action
IDE Ecosystem
Acceleration
ACCELERATING INNOVATION AND ENTREPRENEURHSIP AT SCALE…
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System
Strategy Stakeholders
Thank you!!
www.scott-stern.com
