10 principles that will help you build your university's entrepreneurial ecosystem

Entrepreneur ecosystem

 “Entrepreneurial ecosystems drive local economic vibrancy and national economic growth by building fertile environments for new and growing companies to thrive …. an interconnected network of support players – people who work to give entrepreneurs the access, tools and information they need to be successful.”


 Kauffman Foundation

This article briefly discusses the benefits of developing and growing an entrepreneurial ecosystem  around a university, as a segway to discussing 10 principles that a University should consider adopting to improve their own entrepreneurial ecosystem. It is based on an analysis of international case studies and research; and enhanced by our own personal experience and that of some of our customers.

The document is laid out under the following headings

  • Introduction to entrepreneurial ecosystems
  • The benefits of building an entrepreneurial ecosystem
  • Why should universities play such a key role
  • 10 key principles that Universities should adopt
  • Conclusions
  • Appendices
  • Specific examples of university initiatives
  • Bibliography

Introduction to ecoystems

The purpose is not to spend time on defining what is an entrepreneurial ecosystem as it is anticipated that the reader will have an understanding of this already. However, it is worth describing two groupings that are useful to consider: ecosystem domains and ecosystem actors. 

Below we offer Babson’s view of the domains and actors as being critical to an entrepreneurial ecosystem; each one followed by a diagram that zooms into each area (domain/actor) and gives more details of each.

In both cases an absence or weakness in one of the groups will have a negative impact on the overall performance; and on a positive note: positive linkages between different areas can produce a virtuous cycle.

Domains

  • Markets
  • Human capital
  • Finance
  • Support
  • Policy
  • Culture

Actors

  • Policy makers and public leaders
  • Financial actors
  • Cultural impactors
  • Support organisations
  • Educators & developers of human capital
  • Corporations

The benefits of building an entrepreneurial ecosystem

Before considering the how, we should think about why we should put in the effort to build and grow such an ecosystem. As mentioned in the beginning of this article, entrepreneurial ecosystems drive local economic vibrancy and national economic growth. If we get a little more granular, fundamentally, a strong entrepreneurial ecosystem will significantly enhance the number, and success rate, of new ventures – and each actor has their own perspective as to why they would like to see these benefits..

Drilling down to a university perspective, the following are benefits frequently mentioned:

  • Potential students will recognise the advantages of studying at a university that is embedded and supportive of entrepreneurship.
  • Facilitating the entrepreneur “value chain” from idea to spin-off supports student founders throughout their journey
  • Assisting the technology transfer office in developing ties with organisations that will support research and spinoffs.
  • A strong entrepreneurial ecosystem converts into a virtuous circle: where strength in one element attracts other elements e.g. talent and research attracts both corporates and investors; which in turn will facilitate new venture development – further creating jobs and new talent into the region.
  • Alumni who have had success in their entrepreneurial venture are frequent donors to their historic alma mater (although you may not receive anything like the $500 million Mark Zuckerberg donated to Harvard last year)
University students

Why should Universities play such a lead role?

As part of the European Institute of Innovation and Technology, we recently attended a conference in Barcelona where there was discussion around why a University should play a key role in building and maintaining an entrepreneurial ecosystem. The university play a number of roles in the entrepreneurial ecosystem:

  • Acting as a key hub in innovation and research and the development of intellectual property; and through Technology Transfer Offices and the likes, in making this research available for value creation.
  • Creating academic programs within the university that focuses on the entrepreneurship development of students.
  • Undertaking a range of activities that stimulate an entrepreneurial mindset in their graduates. This can take the shape of incubators, accelerators, competitions, mentors, hackathons and similar programs.

Beyond being a major contributor and recipient, there are a few other reasons why Universities should play a key role:

  • They are more independent than many of the other actors with more open agendas.
  • Universities have traditionally been the hub of knowledge production, but the role has moved beyond this to one of orchestrating multi-actor innovation networks – and so the university becomes a natural to play a leading role in this ecosystem.
    •  For more input here, see the EUA report: “the role of universities in regional innovation ecosystems.”
  • Universities are frequently positioned as the institution which is a  centre of innovation,  provider of research and human capital to the region and wider.
  • They are a long-term player (history and future) and this consistency offers a longer-term perspective and more of a sense of permanence.
  • It should be easier for the university to play an “ecocentric” role rather than an “egocentric” role than other players due to their broader perspective and centrality in the ecosystem.
  • All of these elements lead to a greater level of trust in Universities which also emphasises why they should have this key role.
Trusted partner
How does Mashauri help you in building your entrepreneurial ecosystem?

One of the most important areas where Universities contribute to the entrepreneurial ecosystem is in producing graduates with an entrepreneurial mindset.

Mashauri have a range of programs that Universities use to engage their students in experiential entrepreneurial education. We partner with you in designing and running these courses.

Would you like to find out more? Click the button below and we will send you a brochure and offer you a demonstration.

10 key principles that universities should adopt

An absolute core principle in Universities playing a role in the ecosystem is that they need to be fully committed to the development of entrepreneurship within (and beyond) the institution. Entrepreneurship should be one of the most important core values of the institution. 

Given that entrepreneurship is core, how should universities play a leading role in the ecosystem? We analysed some critical  literature on the topic, combined it with our experience in working with university clients and came up with 10 key principles. (Note: in the appendix, there are some examples of “best practices” taken from the literature and our experience).

  1. Make entrepreneurship a core value of the institution (as discussed above).
  2. Keep focussed on founders (especially student founders); they are the key beneficiaries of the system and they are the key drivers of the value being created
  3. Be ecocentric not egocentric: do not try to control the system, but facilitate connections and fully support other player’s initiatives. It is a good idea to allocate responsibility for managing these relationships.
  4. Coordinate your entrepreneurial initiatives inside the institution as best you can (although historically this has proven tough to do, USaF’s Economic Activation Office initiative is a good example)
  5. Operate like an entrepreneur: opportunity seeking; tendency to action; experimentation; use what resources you have available; etc. This is also hard to do as universities tend to be conservative and slow to act. The best advice here is “ it’s easier to apologise than ask permission.”
  6. Think: self-sustaining. In particular, do not be afraid to charge for or pay for valuable services in this area. If innovation is the fuel to entrepreneurship; money could be the grease!
  7. Hold a long-term perspective. Develop and support initiatives that repeat year after year; they will improve, attract more players and spawn similar initiatives. Tip: do not call it “The ABC Innovation Centre Hackathon”, call it “The ABC Innovation Centre Annual Hackathon”.
  8. Be aware of what your institution can contribute and actively promote these things (graduates, research, laboratories, incubators, etc) to the ecosystem. That way you demonstrate your value (and facilitates a return of benefit).
  9. Stay focussed on how you can create impact through the role you play in research, innovation and the provision of ideas and intellectual property. IP sitting on a dusty bookshelf (or the digital version of this), creates no value!
  10. Actively manage your entrepreneurial resources and seek to increase them. For instance: bring alumni back as mentors, make your IP easy to access (open or low cost), build entrepreneurial competence in your students in all faculties and stages.

Would you like a free infographic summarising the 10 principles (see example to the left)?

Complete the form alongside and we will email you one immediately. 

Conclusions

Universities should play a key role in developing entrepreneurial ecosystems within their sphere of influence and beyond. The rationale is that not only are they major benefactors of, and contributors to, the ecosystem; but they are also well-placed from the position of their independence and long-term perspective.

However, ecosystems are not organisations and so the approach to developing one must be considered differently. This article suggests 10 principles that Universities should adapt to best play their role in the ecosystem.

Appendices

Appendix 1: Some examples of entrepreneurial ecosystem best practices from the literature and our experience

Many top universities include entrepreneurship in their vision. Here is a list of the top 30 Universities for entrepreneurship in Europe. 

  • The University of California has the technology transfer offices in its campuses, the speed to conclude contracts and the constant  strengthening of the brand through coordinated marketing endeavours in the  academic community for society and the companies. 
  • Aalto University senior management: Strong university leadership, actively promoting  a clear Entrepreneurship & Innovation  agenda that is  understood by staff, students and the regional community. Priority is given to  establishing a market for the university’s innovative output, developing an approach that is responsive to  opportunities. 
  • Tomsk State University of Control Systems and Radioelectronics (TUSUR) has a Student Business Incubator (SBI): the hub of student-led entrepreneurship activity at  TUSUR, Introduction to Entrepreneurship: a course of undergraduate study and Group project-based learning.  
  • The University of Twente has made a total of 50 innovation vouchers available for small and  medium-sized companies (SMEs). Each voucher represents a value of €10,000. It can also be  used for accessing laboratory facilities as well as for acquiring supervision and training from  the research centres.  
  • University of São Paulo produces  dozens of academic spin-offs every year through a   variety of support mechanisms [incubators, technology transfer office (TTO),  student-led movements, laboratories focused on the production of firms. 
  • Many universities have established intermediary institutions -Technology Transfer  Offices (TTOS)- and this includes The University of Bristol, University of  Strathclyde, University of Cambridge, University of Georgia. 
  • The University of Johannesburg TTO, together with Mashauri, is working to bring unused intellectual property together with entrepreneurial students to develop ideas on how it may be used; and then bring these ideas to life via an incubator with the intention of creating spin-offs or at least licensing opportunities.
  • University of Auckland established UniServices, the first university-based technology  transfer function in Australasia that currently employs over 700 researchers to  support delivery of industry-funded research – but also allows it to strategically invest in university IP as well as programme to “seek out new sources of corporate  research”. 
  • Imperial College has a Technology transfer office which is focused on acting as a  business partner to the inventor and  protecting the idea, working with the inventor to  find proof of concept funding and then carry out an evaluation.
  • Babson College was a founder of three multi-country research initiatives. The Global  Entrepreneurship Monitor (GEM) was founded in 1999 by Babson College. GEM is the  only global research source that collects data on entrepreneurship directly from  individual  entrepreneurs.  
  • Harvard University established the Harvard Business School where the first MBA  project in the world originated from.  
  • Imperial College established the Imperial College  Business School which is  committed  to knowledge transfer, including within its mission the application of its  work to industry and commerce.
  • The organisation Universities South Africa, has a division called Entrepreneurship Development in Higher Education (EDHE). Under the leadership of Dr. Norak Clark , EDHE has established a pilot scheme of Economic Activation Offices to coordinate entrepreneurial activities within a university. “​​The EAO is really a central point within the university ecosystem. Everything and anything that is related to entrepreneurship should have a link to the economic activation office”.  
  • Universities can assist start-ups by offering simple intellectual property rights either by offering a percent of equity for a given funding amount or the university supporting the start-up.
  • The University should form various collaborations with other institutions in order to provide convenience for students in opening a business. This  cooperation is carried out with the local government and banks. The  government makes it easy to administer business licences established by students, and the bank  provides credit facilities for students who have businesses. This is because students  are restricted  by the complexity of arranging permits and providing business capital.
  • Creation of  a transparent framework for business partnerships and this includes assigning a dedicated partnership facilitator to help entrepreneurial leaders and fosters collaboration in the university.

Appendix 2: Bibliography

  • Reichert S..(2019). The role of Universities in Regional Innovation Ecosystems
  • Agustina, T.S. (2011). The role of university business incubators in minimising the risk of failure for new entrepreneurs in the early stages (start-up). Journal of Economics and Business Airlangga, 21(1)
  • Fetters, M., Greene, P. G., Rice, M. P., & Butler, J. S. (Eds.). (2010). The Development of University-Based Entrepreneurship Ecosystems. Global Practices. Cheltenham, U. Κ.: Edward Elgar.
  • Benneworth, P., Hospers, G.-J., & Jongbloed, B. (2006). New economic impulses in old industrial regions: the role of the University of Twente in regional renewal Innovation : technical, economic and institutional aspects. Berlin: Lit Verlag.
  • Bosma,  N.  and  Kelley,  D.  2019. The  Global  Entrepreneurship  Monitor  2018/2019  Global  Report Wellesley, MA: Babson College.
    • Ács, Z.J., Szerb, L. and Autio, E. (2016) Global Entrepreneurship and Development Index 2015, p.1, Springer. 
  • Benneworth, P., Pinheiro, R. and Karlsen, J. (2017) Strategic agency and institutional change: investigating the role of universities in regional innovation systems (RISs). Regional Studies, 51(2), 235-248. 
  • Graham, R. (2014) Creating university-based entrepreneurial ecosystems: Evidence from emerging world leaders. Cambridge, MA: MIT Skoltech Initiative.
  • Edward B. Roberts, Fiona Murray, and J. Daniel Kim. Entrepreneurship and Innovation at MIT: Continuing Global Growth and Impact[R]. Boston: Massachusetts Institute of Technology, 2015. 
  • Brush, C., Greene, P. and Welter, F. 2020. The Diana Project: A legacy for research on gender in entrepreneurship.International Journal of Gender and Entrepreneurship, 12(1), 7–25.

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