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Erkko Autio 2003 Influences on Entrepreneurship – Influences of Entrepreneurship Congress on Enterprise Creation, Innovative Culture, and Change in the.

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Presentation on theme: "Erkko Autio 2003 Influences on Entrepreneurship – Influences of Entrepreneurship Congress on Enterprise Creation, Innovative Culture, and Change in the."— Presentation transcript:

1 Erkko Autio 2003 Influences on Entrepreneurship – Influences of Entrepreneurship Congress on Enterprise Creation, Innovative Culture, and Change in the University UPC Barcelona, March Erkko Autio, Professor Institute of Strategy and International Business Helsinki University of Technology

2 Erkko Autio 2003 Take-Home Messages v It is not entrepreneurship per se that is at issue – it is entrepreneurial growth v Growth-oriented entrepreneurship responds to policy measures v Entrepreneurial decision is not based on perception of skills – it is based on inspiration v High-potential entrepreneurs react to opportunities, life-style entrepreneurs do it anyways

3 Spain: 4,6% Finland: 4,5% Thailand: 18,9% India: 17,9% Chile: 15,7% South Korea: 14,5% … China: 12,3% Iceland: 11,3% USA: 10,5% Ireland: 9,1% Japan: 1,8% France: 3,2% Belgium: 3,0% Total Entrepreneurial Activity 2002 (Source: Global Entrepreneurship Monitor GEM)

4 Spain: 0,64% Iceland: 3,97% New Zealand: 3,15% Chile: 2,93% South Korea: 2,11% Canada: 1,67% … US: 0,81% South Africa: 0% Japan: 0,16% Russia: 0,12% India: 0,04% ’High-Potential’ Activity 2002 (Source: Global Entrepreneurship Monitor GEM) > 20 jobs in 5 years at least some market creation > 1% exports Finland: 0,71%

5 South Korea: 0,97% Israel: 0,73% Canada: 0,41% US: 0,40% Singapore: 0,36% Spain: 0,13% Finland: 0,12% NZ: 0,04% Japan: 0,035% Switzerland: 0,033% … China: 0,01% Classic Domestic VC 2001 Per GDP (Source: Global Entrepreneurship Monitor GEM)

6 Erkko Autio In Spain: Instituto de Empresa, Madrid Alicia Coduras Martinez Rachida Justo Julio DeCastro Joseph Pistrui Alicia Coduras

7 Erkko Autio 2003 Entrepreneurial Growth is Highly Concentrated Our Study of Finnish Gazelles v 5 Gazelles (1%) generated 35% of the employment of the entire population, 44% of sales v Gazelles also appear to be concentrated in few growth agglomerations, notably in the Helsinki region v TBNFs were not over-represented in terms of numbers but were so in terms of sales

8 Erkko Autio 2003 Few Gazelles Generate the Bulk Impact

9 Erkko Autio 2003 What Explains Growth Entrepreneurship? TEA02 Hi-Growth TEA02 NEC TEA02 OPP WCY 2002 Overall Competitiveness 0.36* ** 0.01 WCY 2002 Government Efficiency 0.43** * 0.12 WCY 2002 Business Efficiency 0.40* ** 0.03 GCR 2001 Overall Competitiveness 0.37* -0.35*-0.58** GCR 2001 Technology Index *-0.61** GCR 2001 Public Institutions Index 0.43** -0.37*-0.60** GCR 2001 ICT Index 0.38* -0.47**-0.63** -0.26

10 Erkko Autio 2003 Explaining High-Potential E... Indicators from GEM 2002 National Expert Interviews TEA02HG Finance: Availability of equity funding 0,04 Government regulations favor entrepreneurship 0,31+ Primary and secondary education support for entrepreneurship 0,32+ R&D and technology transfer index 0,20 Market openness for entrepreneurial firms0,50** Physical infrastructure index 0,24 Population entrepreneurial capacity index0,35* Population entrepreneurial motivation index 0,07 IPR protection index0,41* Support for women entrepreneurship 0,33+

11 Erkko Autio 2003 Explaining High-Potential E... Indicators from GEM 2002 Adult Population Survey TEA02HG GEM Business Angel Prevalence Index 20020,56** Respondent’s Job Involves Start-Up Activity 0,39* Respondent Personally Knows an Entrepreneur0,50** Respondent Thinks Possesses Skills for Start-Up 0,36* Respondent Thinks There Will be Good Opportunities for New Start-Up in Next 6 Months 0,26

12 Erkko Autio 2003 Explaining Entrepreneurial Intent v Motivation (prospect) theories JIntent = ƒ(subjective norm, perceived behavioral control, attitude toward behavior) J“entrepreneurship as calculated option” J“I start a firm because I believe that I can succeed” v Cognitive theories Jintent = ƒ(role models, perceived behavioral logic, social norm) J“entrepreneurship as a cool option” J“I start a firm because I will be respected”

13 Erkko Autio 2003 Motivation Approach to E Support v Focus on teaching business skills & theories ¬Business planning ¬Opportunity recognition ¬New venture finance ¬New venture strategy ¬New venture growth ¬Emphasis on lectures and cases v Invest in support facilities ¬Science parks ¬Soft loans, subsidies ¬Venture capital

14 Erkko Autio 2003 Cognition Approach to E Support v Focus on teaching social norms and culture ¬Emphasis on team assignments ¬Emphasis on company assignments and participative, ‘shadowing’ projects ¬Emphasis on realistic and relevant role models ¬Emphasis on ‘non-teaching’ activities –New venture clubs –Business plan competitions v Invest in support software ¬Network building ¬Social activities

15 Erkko Autio 2003 Optimal Mix Balances Cognition and Motivation v Cognition ¬Provision of role models, E culture ¬Enhances individual’s willingness to see and create opportunity ¬Enhances individual’s willingness to jump at opportunity ¬Creates entrepreneurial environment v Motivation ¬Provision of skills and competencies ¬Enhances individual’s ability to evaluate opportunity ¬Enhances individual’s ability to capitalize on opportunity ¬Is important for growth

16 Erkko Autio 2003 Our Philosophy NO: v formal planning emphasis v project-based goals v small business management v understanding small business v focus on product, technology v ”small is beautiful” YES: v enacting the future v time-paced planning v velocity-based metrics v venture management v ”living the rhythm” of the business v focus on market, value potential v “small is ugly”: Growth is Good

17 Erkko Autio 2003 Firms to Which HUT ISIB Has Actively Contributed HUT ISIB helps organize the VentureCup Finland with McKinsey & Company, Helsinki School of Econ- omics, and the Swedish School of Economics in Helsinki Firms started by HUT ISIB students or graduates €0,1Bn + €0,1Bn

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19 Erkko Autio 2003 The Business Plan Pipeline NVD NVF$ EF European Business Plan Competition with LBS, Insead, IESE, Stockholm, Koblenz, Imperial, Cranfield, etc 1 Academic Year Fall Spring

20 Venture Cup is a 3-Stage, Open, Business Plan Competition From an Idea... …to a Firm Stage 1 Business Idea Focus Awards Stage 2 Business Plan Draft Marketing strategy 10*€ 3000 Marketing strategy 10*€ 3000 Stage 3 Full Business Plan Full scale plan Financing € € € Full scale plan Financing € € € September -November September -November February -May February -May November -January November -January Product or service concept Customer benefit 10*€ 1000 Product or service concept Customer benefit 10*€ 1000 Total FIM

21 Erkko Autio 2003 To Repeat... v It is not entrepreneurship per se that is at issue – it is entrepreneurial growth ¬Invest in both skills and motivation v Growth-oriented entrepreneurship responds to policy measures ¬Active, long-term policy should emphasize both support and socialization v Entrepreneurial decision is not based on perception of skills – it is based on inspiration ¬Promote an image of coolness v High-potential entrepreneurs react to opportunities, life-style entrepreneurs do it anyways ¬Demonstrate a path to riches

22 Erkko Autio

23 Erkko Autio 2003 Appendices

24 Erkko Autio 2003 Institute of Strategy and International Business v Leading institute in Finland in Entrepre- neurship, Venturing, Strategy, International Business v Recently, increasing focus on mCommerce v Knowledge-creation initiatives with McKinsey&Company, Durlacher, and others JB2B mCommerce J3G Opportunity Space

25 Erkko Autio 2003 Fostering Entrepreneurial Activity at HUT Education Outreach Research

26 Erkko Autio 2003 Entrepreneurship Teaching at HUT v Enterprise Forum since 1975 v New Business Creation since 1990 J link with the Spinno incubator program v Current courses transplanted from LBS, including content and teacher v Currently New Venture Development, New Venture Finance, Enterprise Forum, Principles of Strategic Management, Strategic Management of Technology and Innovation, Telecommunications Management v Major in Telecommunications Venturing since 1998

27 US: 10695k Hong Kong: 7068k Singapore: 3540k Italy: 3066k Spain: 2319k China: 665k Japan: 627k Finland: 469k South Africa: 442k Iceland: 400k VC Per Receiving Firm 2001 (kUSD) (Source: Global Entrepreneurship Monitor GEM)

28 Iceland: 7% Mexico: 6% Thailand: 5% US: 5% South Korea: 5% Norway: 5% Japan: 1% Russia: 1% France: 1% Micro Angels 2002 (Source: Global Entrepreneurship Monitor GEM) Spain: 3% Finland: 3%


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