Fostering Scale-Up Ecosystems for Regional Economic Growth
Innovations Case Narrative: Manizales-Mas and Scale-Up Milwaukee
by Daniel Isenberg and Vincent Onyemah
The search for reliable and replicable strategies to stimulate regional economic prosperity is as old as the field of economic development itself. These strategies have included encouraging direct investment, attracting and retaining business, and developing sector-based cluster strategies. More recently, the role of entrepreneurship has been explicitly recognized, descriptively and prescriptively. Glaeser et al. and others have shown that one essential element sustained in regional growth is significant concentrations of small and growing indigenous businesses. On the surface, these empirical findings are consistent with the popularization of the entrepreneurship ecosystem metaphor and the subsequent launching by governments and civic organizations of a plethora of startup encouragement programs (e.g., the Startup America Partnership, Startup Chile) as a lead economic development strategy. The startup movement has drawn support from the recurrent observation that startups (i.e., young firms) have produced a disproportionate number of new jobs, despite the fact that research has raised questions about the meaning of these findings and their extrapolation to startup policies.
Despite the amount of investment in and the public visibility of the startup movement, little evidence links the encouragement of startups to indices of economic growth.
Despite the amount of investment in and the public visibility of the startup movement, little evidence links the encouragement of startups to indices of economic growth. On the contrary, some indications are that the return on investment for startup encouragement is poor (e.g., Startup New York, Skolkovo Foundation, Startup Chile). Furthermore, there is empirical evidence that can be interpreted as indicating that startup activity is negatively correlated with firm survival, negatively correlated with national competitiveness, and negatively correlated with the proximity of midmarket firms.
In 2010, one of the authors (Isenberg) created the intervention-oriented Babson Entrepreneurship Ecosystem Platform (BEEP), which launches and operates regional economic development projects…[click here to read the full case narrative in MIT Press Innovations journal for free.]
Daniel Isenberg is a Professor of Entrepreneurship Practice at Babson Executive Education, an Associate at the Growth Lab, Harvard Kennedy School, and an Adjunct Professor at Columbia Business School. He is the author of Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value, and an entrepreneurship policy advisor in over a dozen countries.
Vincent Onyemah is an Associate Professor of Marketing and Sales at Babson College; he previously taught at Boston University and the Lagos Business School. His articles have appeared in the Harvard Business Review, Journal of International Business Studies, and European Journal of Marketing, and he has worked in sales at both large companies and startups.
