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Entrepreneurship in developing regions: context and implications for policy

When:
Venue: Birkbeck 43 Gordon Square, G04

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In this workshop the focus is on how national and regional contexts are implicated in shaping the possibilities for entrepreneurship. On the plus side these include how institutions the influence on the identification of business opportunities and the aspirations of entrepreneurs. On the negative side these include how inefficient institutions create resource constraints and missing institutions drive entrepreneurs to make use of informal institutions. Thus both institutional and micro level perspectives are needed to understand both the complexities of the formalisation processes of entrepreneurship in different contexts and as well the nature and practice of informal processes. For researchers, a challenge is produce academically and empirically informed analysis that recognises the reality of context and responds to the needs of policy makers. Contexts discussed include a variety of capitalist economies, plus specific cases of Egypt, Columbia, Poland, UK and Thailand

 

 

Timetable, Chair: Ayşe Seyyide

 

3.00-3.30pm Slavo Radosevic, UCL Entrepreneurship in comparative economics perspective

 

3.30pm-4.00pm Dina Mansour, Department of Management, Birkbeck, Divergent Patterns of Institutional Entrepreneurship by Emerging Country Entrepreneurs: Evidence from Egyptian ICT Startups
 

4.00-4.30pm Manto Gotsi, Department of Management, Birkbeck, Informal entrepreneurs and formalisation: Insights from a role identity transition lens

 

4.30-5.00 pm – Jonathan Potter, LEED, OECD & Birkbeck, Applying entrepreneurial ecosystem and industrial path development concepts to regional policy analysis – a critique

 

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Speakers
  • Slavo Radosevic -

    Slavo Radosevic, UCL, Entrepreneurship in comparative economics perspective

    Slavo is Professor of Industry and Innovation Studies, SSEES, UCL. His research is in the area of economics of technological change and innovation studies with special emphasis on countries of central and Eastern Europe. He undertakes research from neo-Schumpeterian perspective in particular exploring issues of growth and structural change through innovation systems, entrepreneurship, international business and innovation policy perspectives. 
     

    Abstract

    From the comparative economics perspective, entrepreneurship is not only the property of individuals but also of countries and their innovation systems. Hence, the issue is not only how different national institutional context affects the individual – opportunity nexus, i.e. how individuals discover and exploit opportunities but what the entrepreneurial propensities of different national contexts are.

    The chapter will explore the issue of entrepreneurial propensities of different capitalist economies. We develop a conceptual approach which enables an analysis of entrepreneurial propensities of different countries by exploring differences in institutional shaping of entrepreneurial opportunities. This approach is developed based on an extensive analysis of alternative approaches and their relationship with our previous results in measuring knowledge- intensive entrepreneurship and knowledge-intensive entrepreneurial opportunities (Radosevic and Yoruk, 2012). 

     

    Based on this perspective, we develop a conceptual approach to explore institutional varieties of capitalism from an entrepreneurial perspective. First, we outline three analytical approaches which are relevant in exploring the relationship between varieties of capitalism and entrepreneurship. These are GEM/GEDI approach, Lazonick/Mazzucato ‘risk-reward nexus’ approach (RRN) and our Entrepreneurial propensity of innovation system approach.  These three perspectives serve as the literature review background for our analysis.

     

    The three perspectives are complementary rather than exclusive. They have different conceptions of entrepreneurship as well as different views on entrepreneurial opportunities. For GEM/GEDI approach individuals are entrepreneurs, and the issue is whether the external environmental context is conducive to individuals’ entrepreneurial aspirations and attitudes. For the RNN approach, the major entrepreneur is an innovative enterprise and its social conditions which have to do with the issue of financial commitment, strategic control and organisational integration. For the EPIS approach, entrepreneurship is a system-level property or capacity to generate knowledge- intensive entrepreneurship (KIE) based on knowledge-intensive entrepreneurial opportunities (KIEO). Empirically, the issue we want to explore is which of the varieties of capitalism is the most conducive for generation of knowledge- intensive entrepreneurship opportunities. The underlying hypothesis is that there are limits of conventional conceptualisation of institutional set-up required for knowledge-intensive entrepreneurship as just liberal markets without considering institutions which affect the involvement of labour force in the entrepreneurial process.

     

  • Ms Dina Mansour -

    Dina Mansour, Divergent Patterns of Institutional Entrepreneurship by Emerging Country Entrepreneurs: Evidence from Egyptian ICT Startups
     

    Dina Mansour is a third year PhD candidate at Birkbeck University of London. She is studying the bilateral relationship between institutions and high-growth entrepreneurs in an emerging country (Egypt) that is undergoing structural transformation. Issues include institutional asymmetry, institutional entrepreneurship of the entrepreneurs as well as policy makers, and the role of institutional intermediation played by support organizations.

     

    Abstract

    Entrepreneurship has been proven to unlock economic development in societies, given conducive formal (rules, laws, government policy) and informal institutions (norms, culture, behaviour and conventions) are at play. This gets particularly complicated in developing countries where institutions are fragile. There, entrepreneurs not only face resource constraints, but they operate in inefficient institutions inundated with institutional voids. Hence, they resort to make-do solutions to fill those voids, such as engaging in creative/innovative uses of informal institutions (family business traditions, personal networks, etc), thus acting as institutional entrepreneurs. Similarly, as economies go through institutional changes institutional intermediaries emerge to promote private-sector entrepreneurship as they help entrepreneurs with less power and legitimacy to access markets.

     

    In this paper, I examine the institutional entrepreneurship patterns of fifteen Egyptian startups in the ICT sector to persist amid institutional voids and changes. Additionally, I explore the role of institutional intermediaries therein. Initial results indicate that despite the extreme conditions, entrepreneurs were able to recognize entrepreneurial opportunities within the voids. However, they engage in informal behaviour which the Author believes is alarming, if more entrepreneurs behave the same way. Moreover, the role of intermediaries is emphasized as they directly and indirectly help the entrepreneurs.

     

  • Dr Manto Gotsi -

    Manto Gotsi, Informal entrepreneurs and formalisation: Insights from a role identity transition lens

    Dr Manto Gotsi is a Senior Lecturer in Marketing at Birkbeck, University of London. Previously she has held academic positions at Westminster, Cardiff, Brunel, Aberdeen and Strathclyde. Manto’s research focuses on the management of paradoxes – how organizational leaders, teams and individuals effectively respond to competing demands and resulting tensions. She studies paradoxes in innovation management, corporate (re)branding, entrepreneurship and other areas. The theoretical lens that she employs varies depending on the study, but she enjoys using an identity lens. Manto’s work has been published in Human Relations, Journal of Product Innovation Management, European Journal of Marketing, Technological Forecasting and Social Change, and International Small Business Journal, among others.

     

    Abstract

    Informal entrepreneurship is ubiquitous.  In emerging economies in particular, informal entrepreneurship activities account for up to 60% of Gross Domestic Product. Not surprisingly, most governments are increasingly keen to transfer those participating in informal entrepreneurship into the formal realm.  To date, researchers have predominantly adopted an institutional focus in understanding how formalisation can be encouraged, for instance, examining the role of taxes, regulation, industry conditions and intermediaries in facilitating successful transition. Yet, we argue that formalisation also requires informal entrepreneurs to integrate a formal entrepreneur role identity into their overall self-concept, as identity helps individuals orient themselves, gives meaning and, can, ultimately, influence their behaviour. Insights from the role identity transition literature can, thus, offer a useful theoretical lens for getting a more nuanced, micro-level understanding of formalisation from the perspective of informal entrepreneurs.  However, studies involving the role identity transition of informal entrepreneurs who formalise are scarce. In response we ask: How do informal entrepreneurs disengage from their informal entrepreneur role identity and develop a viable formal entrepreneur identity following their formalisation? We explore this question in a qualitative study that focuses on the formalisation of wastepickers in Cali, Colombia.

    Our data sources include 48 interviews with wastepickers, 5 interviews with the NGO that has been supporting their formalisation, and extensive archival material covering the period before, during and after their formalisation by the Colombian Constitutional Court. Our findings unveil variation in how informal entrepreneurs assume their new formal role following their formalisation.  This variation is linked to different ‘pathways’: Some wastepickers manage to gradually internalise a formal entrepreneur identity and, thus, sustain formalisation. Others, are less successful in their role identity transition and eventually abandon the formal entrepreneur identity, triggering for some a move away from formalisation and further role identity transition into a ‘renegade’, or for others a move away from their entrepreneurial identity and into becoming a ‘paid worker’.  We, therefore, link different role identity transition processes to sustained or unsustained formalisation.  As such, our study proposes that, contrary to extant literature, formalisation is not a destination, but a journey; a ‘work in progress’. We make relevant recommendations for research, policy and practice.

  • Jonathan Potter -

    Jonathan Potter, Applying entrepreneurial ecosystem and industrial path development concepts to regional policy analysis – a critique

    Dr Potter is Head of the Entrepreneurship Policy and Analysis Unit in the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) and Visiting Professor, Birkbeck, University of London. He has more than 20 years experience as an OECD economist. He manages OECD work on the local dimension of entrepreneurship policy, including an international project on local entrepreneurship ecosystems and emerging industries. He is also responsible for OECD country reviews of SME and entrepreneurship policies (including Ireland, Italy, Israel and Canada); inclusive entrepreneurship policy work (including The Missing Entrepreneurs publications on creating equal opportunities for all in entrepreneurship) and OECD guidance on the monitoring and evaluation of SME and entrepreneurship policies (including the OECD Framework for the Evaluation of SME and Entrepreneurship Policies and Programmes).

    Abstract

    A common concern for regional researchers is to produce analysis that both responds to the needs of policy makers and uses empirical analysis built on academic theory. This paper discusses an attempt to develop policy advice on how to promote entrepreneurship and industrial transition in six regions in Poland, the United Kingdom and Thailand using the entrepreneurial ecosystems framework (Stam, 2015) and the industry path development framework (Grillitsch, Asheim and Trippl, 2018).  

     

    The paper identifies the policy issues that the application of these frameworks highlights in the regions in terms of bottlenecks in entrepreneurial ecosystem dimensions and in following promising industrial path development opportunities through entrepreneurship. 

     

    Based on this assessment, and gaps in coverage of the frameworks with respect to potentially important policy issues, the paper discusses how appropriate the frameworks proved to be for guiding policy advice. It highlights the challenges of finding quantitative indicators to measure the essence of ecosystem dimensions, introducing bottlenecks in SME innovation and regional policy-making capacity to the analysis, and combining the entrepreneurial ecosystem and industry path development concepts.