(Kansas City, Mo.) Oct. 1, 2015 – A research paper released today by the Ewing Marion Kauffman Foundation calls into question the effectiveness of strategies by governments and private grantmaking focused narrowly on financing or training entrepreneurs, without regard to the broad context of entrepreneurship.
In contrast with such an approach, the report, “Enabling Entrepreneurial Ecosystems” by Philip Auerswald, associate professor at George Mason University, supports the view that entrepreneurs perform best in environments that are connected, dense and diverse.
This approach is especially apt to bear fruit amid economic disruptions, and even during recessions, when entrepreneurial activity actually intensifies.
“The paper raises questions and provides practical advice about the best way to encourage entrepreneurship, which is crucial to the growth of our economy,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. “It encourages proponents of entrepreneurship to take a step back and envision a more holistic approach toward accomplishing their goals.”
The most significant impediments to entrepreneurship are the everyday struggles entrepreneurs face in communicating ideas, building trust and making deals, the report argues. The prescription is for an entrepreneurial ecosystem to remove, or at least minimize, the roadblocks to those goals.
The paper recommends six strategies to create strong entrepreneurial ecosystems:
The paper says establishing an entrepreneurial ecosystem requires a practical approach toward entrepreneurs’ everyday needs. Policymakers should ask relevant questions and map out a broad framework that minimizes barriers to success. Once the results are evaluated, policymakers should use that data to make necessary adjustments.