UNDERSTAND | April 27, 2018

Startup Nations Ministerial 2018: The role of entrepreneurship ecosystems

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Leading into the Global Entrepreneurship Congress, Startup Nations hosted the fourth annual Startup Nations Ministerial on Sunday 15 April 2018 in Istanbul. It gathered 35 countries, and was facilitated by the World Bank and a steering committee (Argentina, European Union, Saudi Arabia, Thailand, South Africa), and chaired by Mr. Jonathan Ortmans, President of the Global Entrepreneurship Network. 

Authorities reviewed a recent study introduced by the World Bank that analyzed the productivity gaps within countries and industries.  For example, in the US the top 10% of firms produce twice as much output with the same inputs as the bottom 10%; in China and India the relation is 5:1. With regards to job creation, 6-10% of the high growth firms accounts for most job creation in the US.  Firm dynamics in developing countries are lacking and resources seem to be trapped in firms that are sub-scale, low efficiency and slow growth in jobs and productivity.  With data on 11 economies, the World Bank shows that high growth firms are more productive, innovative, integrated more tightly with global markets, and attract higher-quality workers and managers.  In terms of policy implications, the study recommends for governments to adopt better regulations of products and markets, to rationalize the use of SME policies eliminating obstacles to efficient exit, to improve data collection and impact of policies, improve managerial skills for firm capabilities enhancement in the growth stage.

Ministers welcomed the study presented by the World Bank.  However, several delegations raised the issues of inclusiveness and the need for governments to create an enabling environment for all entrepreneurs, and for disadvantaged groups such women, youth and minorities (Argentina, Ethiopia, The Gambia). They further discussed topics related to how to govern with facilitating dynamic, growth-oriented businesses in mind, the role of government in entrepreneurship ecosystems and how countries can better harness the potential of digital technologies. 

A declaration stemming from the session has been signed by 18 Ministers.  The declaration has a focus on high growth firms and the need for governments to strengthen entrepreneurs and firm capabilities to explore new business opportunities, tapping emerging technologies, and encouraging knowledge exchanges and promoting evidence based policy by collecting firm-level data.

Report of the Working Group discussion on "the role of entrepreneurship ecosystems"

UNCTAD moderated the Working Group on the entrepreneurship ecosystem.  Ministers stressed the need to focus on implementation, and the role government does – and should – play in providing technical support for entrepreneurs.   

Inviting African countries to share best practices, the Minister of South Africa appreciated the impact of convening the GEC for the first time on African soil in the previous year.  As a concrete outcome of the Congress in South Africa, was GEN Africa and the establishment of 22 on Sloane – the largest incubator and accelerator aiming to engage entrepreneurs with growth potential from the region. The campus aims to encourage African interconnectedness through residency exchange programmes, and meet-ups.  Similar initiatives should be brought to the rural areas, to bring inclusion, and empower target groups such as women and youth.  The Government of South Africa and Nigeria shared their experience in successfully employing incentives to secure public procurement from disadvantaged groups. 

Based on this experience, the Ministers confirmed that quota alone do not work if there should be accompanying capacity building and technical assistance for target groups.  The discussion also turned on how government plays a role in supporting economic development across all levels of government – not just at the federal level, but within the city and provincial levels of government as well. 

Fiorina is an Economist with an MBA in International Trade. She has 20 years’ experience in international organizations, where she has led more… About the author