Introduction to the Entrepreneurship Ecosystem
The entrepreneurship ecosystem is defined as the conducive assembling of interdependent actors and factors which are coordinated in such a way that they enable productive entrepreneurship within a particular territory(Dorji, 2022). Isenberg (2014) states that “an ecosystem is a dynamic, self-regulating network of many different types of actors. In every entrepreneurship hotspot, there are important connectors and influencers who may not be entrepreneurs themselves.”
The definition explicitly includes actors and factors other than the entrepreneurs themselves and their nature of interdependency.
The domains of entrepreneurship ecosystem developed by Daniel Isenberg
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Isenberg (2011) stated that the entrepreneurship ecosystem consists of a dozen or so elements that, although they are distinctive (idiosyncratic) as they interact in very complex ways however they are always present wherever the entrepreneurship is self-sustaining and their combinations are unique with conducive policy, markets, capital, human skills, culture, and supports.
The following are the domains of entrepreneurship as devised by Daniel Isenberg
- Policy
- Market
- Capital
- Human Skills
- Culture
- Supports
- Policy
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The policy domain in the entrepreneurship ecosystem refers to the legal and regulatory framework that impacts the creation, growth, and sustainability of entrepreneurial ventures. These policies can be developed at different levels of government and can significantly affect the success or failure of entrepreneurial initiatives. The policy domain is critical in shaping the entrepreneurship ecosystem by providing financial incentives and support, streamlining regulatory procedures, and fostering a supportive environment for entrepreneurial activities. It influences the types of entrepreneurship that may emerge in a particular ecosystem, making it crucial to be considered while the policy is formulated.
In our country, there is an increasing inclination towards creating a policy environment that fosters entrepreneurship. The 2016 Economic Development Policy and the 2019 Cottage and Small Industry Policy have been formulated to support and promote entrepreneurship. Furthermore, the 12th Five Year Plan of Bhutan has placed significant emphasis on entrepreneurship development, indicating a favourable scenario for startups and small businesses in the country.
- Market
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The market domain is a critical aspect of the entrepreneurship ecosystem that encompasses the complex interplay between supply and demand for products and services and the resources and opportunities available to entrepreneurs. To achieve success, entrepreneurial ventures must navigate the market landscape by conducting extensive research, developing a unique value proposition, and implementing effective marketing and sales strategies. A vibrant market ecosystem can support entrepreneurship by providing access to crucial resources such as funding, mentorship, and networking opportunities, contributing to overall economic growth and job creation.
To promote entrepreneurship, facilitating market access to startups and businesses looking to expand internationally is crucial. Although the domestic market has become more accessible in recent years, there are still challenges in accessing international markets.
- Capital
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The capital domain in the entrepreneurship ecosystem refers to the availability and accessibility of financial resources required for the creation, growth, and sustainability of entrepreneurial ventures. This domain encompasses various forms of capital, including venture capital, angel investments, crowdfunding, and government grants. A robust capital ecosystem can support entrepreneurship by providing access to funding, mentorship, and networking opportunities that entrepreneurs need to launch and grow their ventures. In contrast, a weak capital ecosystem can limit entrepreneurship’s potential by creating barriers to entry, reducing the availability of resources, and stifling innovation.
Access to finance is a crucial component of the entrepreneurship ecosystem. Bank loans were traditionally the primary funding source for Bhutanese startups, but several alternative funding options have emerged in recent years. These include angel investment through JABCHOR, Priority Sector Lending by the Royal Monetary Authority (RMA), crowdfunding initiatives by the RMA and the Royal Securities Exchange of Bhutan Limited, interest-free loans by the Loden Entrepreneurship Programme and SEED fund for students, soft loans by National CSI Bank Limited, and BizAP funding by Druk Holdings and Investment.
- Human Skills
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The human skills domain in the entrepreneurship ecosystem refers to the knowledge, competencies, and characteristics that entrepreneurs and their teams possess, which are crucial for the creation, growth, and sustainability of entrepreneurial ventures. This domain encompasses a wide range of skills, including technical expertise, creativity, innovation, leadership, and problem-solving abilities. A robust human skills ecosystem can support entrepreneurship by providing access to education, training, mentorship, and other resources that entrepreneurs and their teams require to develop and enhance their skills.
To foster entrepreneurship, it is essential to have skilled individuals with expertise in various aspects of business establishment and management. Bhutan currently lacks a national institution solely dedicated to entrepreneurship development, and there are only a few individuals with adequate knowledge and competence in promoting entrepreneurship.
- Culture
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The culture domain in the entrepreneurship ecosystem refers to the social norms, values, and beliefs that shape the attitudes and behaviours of individuals and institutions towards entrepreneurship. A strong culture of entrepreneurship can foster a supportive environment that encourages risk-taking, innovation, and creativity while providing a safety net for entrepreneurial failure. A vibrant culture of entrepreneurship can also generate positive externalities such as job creation, economic growth, and enhanced social welfare. In contrast, a weak culture of entrepreneurship can limit the potential for entrepreneurship by creating a negative perception of entrepreneurship, stigmatizing failure, and reducing social and financial support.
The country’s culture of cooperation and community support provides an excellent foundation for entrepreneurship. To foster a culture of entrepreneurship, it is crucial to cultivate entrepreneurial thinking and mindset. Various ministries and organizations in Bhutan offer training, educational programs, and events to promote entrepreneurship, including the Ministry of Labour and Human Resources, the Department of Cottage and Small Industries, the Loden Foundation, Thimphu TechPark, the Department of Information Technology and Telecom, and the Royal University of Bhutan.
- Supports
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The domain of support in the entrepreneurship ecosystem encompasses the various resources and services that are available to entrepreneurs to help them start and grow their businesses. These resources can include access to funding, mentorship, incubators, accelerators, training programs, and networking opportunities. Effective support systems can play a crucial role in facilitating the success of entrepreneurs, particularly in developing countries where access to capital and other resources can be limited.
A crucial aspect of promoting entrepreneurship is providing support services, such as business incubation, mentoring, coaching, accounting, legal, marketing, and taxation. Bhutan has established several business incubation centers, including Thimphu TechPark, i-Hub, and the Startup Centre. The government has also begun setting up incubation centers in colleges and dzongkhags across the country. Moreover, the Bhutan Association of Entrepreneurs (BAEyul) offers various training programs, workshops, events, and mentoring support services to assist aspiring entrepreneurs.
Reference
ChatGPT. (2023, May 11). Explanation of six domains of entrepreneurship ecosystem developed by Daniel Isenburge [Msg 1234579]. Retrieved from https://github.com/openai/gpt-3#examples-of-outputs
Dorji, T. C. (2022, April 20). State of Bhutan’s Entrepreneurship Ecosystem and How to Revive It in the Post-Covid Era. Tshering Cigay Dorji. Retrieved May 10, 2023, from https://tcdorji.wordpress.com/2022/04/20/state-of-bhutans-entrepreneurship-ecosystem-and-how-to-revive-it-in-the-post-covid-era/
Isenberg, D. (2010). How to start an entrepreneurial revolution. Harvard Business Review, 88(6), 40–50.
Isenberg, D. (2011). The entrepreneurship ecosystem strategy as a new paradigm for economic policy: Principles for cultivating entrepreneurship, invited presentation at the Institute of International and European Affairs, Dublin, Ireland, May 12.
Ministry of Education. (2022). Business and Entrepreneurship. Retrieved from https://rec.gov.bt/textbooks-and-manuals/#683-951-wpfd-business-and-entrepreneurship
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