Improving the Effectiveness of Entrepreneurship Policy Through Rigorous, Relevant Research
In the past five years, policymakers have shown ever-greater interest in finding ways to enable entrepreneurs as economic value creators. In parallel, academic communities around the world have demonstrated a growing commitment to supporting smarter decision making through rigorous and relevant research. The Global Entrepreneurship Research Network (GERN) is one community of organizations that fund and conduct entrepreneurship research – aligning research agendas and promoting shared methodologies to encourage rigorous, relevant research aimed at improving outcomes from entrepreneurship policy and programs.
Since U.S. Vice President Joe Biden announced the formation of the network in Kuala Lumpur in October 2013, GERN members from the United States, Sub-Sahara Africa, North and South East Asia, Europe, the Middle East and Latin America have begun working on the first round of research questions identified by policymakers as short on data. Below are five current collaborative projects illustrative of the lines of questioning being taken by a new cadre of researchers in the field.
Better, Comparable Ecosystem Maps
Mapping startup ecosystems is not new, but the first GERN project has been figuring out how to do this using a standardized methodology. A visualization tool now allows researchers and practitioners to discover large-scale patterns, identify interactions among specific actors, such as entrepreneurs, investors and mentors, and examine the data along multiple analytical dimensions. Three GERN members – Endeavor Insight, MaRS and Nesta – have developed the project, which has yielded comprehensive maps for test cities Cairo and New York City. Now, the Inter-American Development Bank, Mercy Corps, and the World Bank are in the processes of mapping eight more cities across Latin American and European cities. A GERN open methodology guide will help map up to 100 cities over the next five years.
The Entrepreneurial Mindset
The South Africa-based Allan Gray Orbis Foundation is leading a collaborative project that will delve into key questions around the entrepreneurial mindset and how to strengthen a country’s culture of entrepreneurship. Responding to the number of practitioners currently launching new large-scale initiatives to support entrepreneurs, the objective of the project will be to add value by providing research-based strategies. To start, GERN members are working on a white paper that surveys individual assessment methodologies. They are also exploring gathering baseline data from selected program participants as well as program candidates who were not selected. This would increase the value of future knowledge gained from such nascent, large-scale efforts.
Bringing more academic vigor to this will invaluable. I have visited with many government leaders – especially those from post socialist economies or newly opening societies – who are envious of other nations where the entrepreneurial mindset and culture is more naturally prevalent. Providing them more than a series of qualitative narratives often developed by those advocating the merits of their own programs will be essential in economies where government investment still drives grassroots education and activity.
Better Data Infrastructure
With a vision of improving the state of global entrepreneurship data, the Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD), and the Kauffman Foundation are currently collaborating on a working paper that will identify how governments around the world are most effectively gathering and sharing data aimed at gauging entrepreneurial growth and informing effective entrepreneurship policies.
The OECD has long established itself as a leader in developing common standards shared among member countries for gathering data at the national level to track the evolution of the economy across multiple dimensions of relevance to evolving Twenty-First Century economies. UNCTAD has similarly established a leadership role in identifying and promoting policies favorable to inclusive and sustainable development around the world. With leadership from these two international organizations and technical input from Kauffman Foundation staff, this GERN-prompted collaborative effort will help governments establish norms for data collection and sharing and, in so doing, better assess outcomes from policy interventions.
While we in the research community have generally succeeded in communicating to entrepreneurship policymakers the important difference that exists between incubators and accelerators, we have been less effective in systematically gathering data relating to the actually effectiveness of accelerators in generating new high-growth firms or new value in terms of innovative products and services. A group of GERN members is working to change that by undertaking an in-depth examination into the key determinates of successful startup accelerators. On July 25, 2015, the Aspen Network for Development Entrepreneurs and Emory University’s Social Enterprise at Goizueta launched a new alliance to examine global accelerators. Called the Global Accelerator Learning Initiative (GALI), this project is a first-time comprehensive market assessment and analysis of accelerators. This public-private partnership was created by the U.S. Global Development Lab at the U.S. Agency for International Development, Omidyar Network, Lemelson Foundation and Argidius Foundation to analyze the efficacy of accelerator programs.
With more organizations like the Global Accelerator Network (GAN) gathering data, local policy makers can expect to see better evidence around what types of programs and hubs to support in their cities.
Randomized Control Trials
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GERN is supporting Nesta’s Innovation Growth Lab (IGL) initiative which involves experimentation, particularly randomized trials on innovation, entrepreneurship and growth to find out what works and what doesn’t (and when), learning from the successful experience in other fields, such as development economics, health or education. This experimental approach to innovation and growth policy is already using new instruments on a trial basis to evaluate them more rigorously.
These early projects offer some signposts around how researchers are trying to improve the quality and quantity of rigorous research in these areas to help policy makers develop the most effective strategies for supporting entrepreneurial growth. While the Kauffman Foundation has led in this field in the United States for some time, it is refreshing to see new entrants and new alignments. With so many similarities across types of economies and cultures in the dynamics of entrepreneurial value creation, policymakers across the globe can be optimistic that such cross-border collaboration will produce results bigger than the sum of the parts. Given there are no silver bullets, deconstructing what we know and do not know about entrepreneurial capitalism remains of utmost importance to decision makers combatting the likes of extremism, poverty and unemployment through entrepreneurship.