Entrepreneurial Ecosystem

What is an Entrepreneurial Ecosystem?

All of us are endowed with skills, abilities, and capabilities. However, the reason why some of us are so successful whereas others languish is mainly due to the way in which these traits are nurtured, encouraged, and enabled. For instance, we need to go to the right schools, have supportive families, and be mentored at all stages of our lives so that we do not make any missteps or commit blunders and mistakes that would prove detrimental to our progress.

In other words, talent has to be nurtured if it has to flourish. In the same manner in which this happens in our individual lives, entrepreneurs too need enabling and empowering environments which not only ensure that their game changing ideas are translated into actionable pursuits but also ensure that these entrepreneurs have the necessary ecosystem in which they can thrive and prosper.

In short, the entrepreneurial ecosystem comprises of the all the stakeholders including government, bureaucracy, funders, and consumers.

The Example of Bangalore

To start with, let us take the example of Bangalore, the Indian IT (Information Technology) hub, which is often referred to as the Silicon Valley of India. The reason why Bangalore became a hotspot for innovation and global corporations is that it offered a serene and salubrious environment (including the weather) in terms of readily available pool of talent, an unobtrusive government which unlike the Indian way of interfering in business did its best to keep out of the Indian IT industry and its growth, enabling laws and tax breaks that encouraged companies to reap the benefits, and most importantly, a thriving culture of innovation that was long the characteristic of the city before the IT industry made it its home.

Indeed, all these factors ensured that Indian entrepreneurs such as the founders of now global brands like Infosys, Wipro, TCS, and other companies have an enabling and empowering entrepreneurial ecosystem which made them thrive and prosper.

The Original Silicon Valley

Of course, the blueprint for this ecosystem originated in the Silicon Valley of California in the United States wherein global behemoths such as Apple, Google, and Microsoft in addition to Facebook and thousands of other startups found that the entrepreneurial ecosystem there was eminently suitable for them to start their companies and prosper.

Indeed, the fact that Silicon Valley is thriving despite the recession is an indicator of how the region has moved beyond the vicissitudes of the market and carved its own niche as a place where entrepreneurs can thrive.

Further, China that has emerged in recent years as an entrepreneurs dream come true has followed the footsteps of Silicon Valley and has indeed, done better than it on many counts such as minimal governmental interference and maximum benefits which prove to be the right nourishment for businesses and entrepreneurs to thrive.

Components of an Entrepreneurial Ecosystem

Business Ecosystem

Thus, for the actualization of an enabling and empowering entrepreneurial ecosystem, there need to be venture capitalists who would fund the startups and angel investors who persist with the ventures despite initial hiccups.

Next, the government has to have laws and policies that would encourage entrepreneurs by giving them tax breaks, benefits, and land and facilities including roads, infrastructure such as international airports and the like so that global investors flock to these ecosystems.

Further, the bureaucracy should not throw spanners in the works of the entrepreneurs through meaningless rules and regulations and instead, must speed up the decision making process as well as implement single window clearances. Moreover, there must be a talent pool of skilled and employable workers who would staff the startups and ensure that when they take off, the ventures have the necessary people to drive their businesses.

Why the Chinese are racing ahead?

Therefore, after considering the factors which go into making an enabling and empowering entrepreneurial ecosystem, it is clear that unless these aspects are taken care of, the inventors, and the entrepreneurs would take their business elsewhere. Indeed, if the example of China is anything to go by, it is that it has stolen a march over India on many of these aspects as not only does it offer the right ecosystem, it also ensures that the entrepreneurs are treated as heroes and heroic figures who are no less important than the politicians and other personalities who are regularly feted by society.

In short, the lesson for any country is that global capital is country-blind and region-blind and just as the early bird catches the worm, the regions and the countries that are at the forefront of the race to attract global capital would win in the end.


Before concluding this article, it would be pertinent to note that some of the aspects which ensure an enabling entrepreneurial ecosystem such as land and water and infrastructure seem mundane in the light of the other aspects such as access to funding and laws and regulations. However, if recent events in India and other parts of Asia where the ecosystems for entrepreneurs are being built are any indication, these factors are as important to the entrepreneur as is the aspect that he or she needs to have a game changing idea and be ready to take it to the next level.

Indeed, the fact that many global corporations are now flocking to India after moving elsewhere for much of the last few years is mainly due to the change in priorities in the Indian policymakers who desperately need investments and jobs as otherwise, they would not only be left behind but also would risk the dropping out of the race altogether which in the globalized world economy is a surefire recipe for disaster.

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