Entrepreneurship Policy Benchmarking Overview. January 2013. Vibrant entrepreneurship is an important component of a successful advanced economy. Generate high and rising standard of living, by boosting productivity and innovation. The Challenge. The Context. - PowerPoint PPT Presentation
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SAN FRANCISCO SÃO PAULO SEOUL SINGAPORE TOKYO TORONTO ZURICHSHANGHAI
BEIJING CHICAGO HONG KONGCAMBRIDGE DELHI DUBAI JOHANNESBURG
PARISLOS ANGELES MADRID MUMBAI MUNICH NEW YORKMOSCOWLONDON
It is not always clear how to boost entrepreneurship because of the large number of possible actions and initiatives a region could pursue
Source: Monitor Analysis
Financing
Legislation
Skills & Talent
Technology & Infrastructure
Support Services
Administrative Burdens
Mindset
Establish community/regional investment funds; tie to local funding campaigns
Establish minimum small business lending thresholds for banks and lending institutions
Create angel funding networks Allow indirect personal contributions to
seed funding (e.g. pensions) Establish a centralized organization to
advise entrepreneurs on available financing options and strategies
Streamline listing regulations for growing firms seeking to raise public funds
Streamline regulatory barriers to mergers / buy-outs
Establish organizations to facilitate firm buy-outs
Establish government subsidies / loans for new and growing firms
Ensure lending policies are no more stringent for new/growing firms than for established firms
Establish curriculum requirements on entrepreneurship and new firm formation in primary and secondary schools
Establish colleges and university course / program offerings or distance learning partnerships on entrepreneurship and new firm creation and management education
Support / establish business programs for mid-career professionals
Support endowment giving to grow number and size of local colleges and universities
R&D grants & financing for experimentation infrastructure
Set up co-op / internship programs Scholarship/ award / sabbaticals for highly
meritous candidates to create greater access to and affordability of post-secondary schooling
Set up a regular talent scan in schools, colleges and industry for high-potential and serial entrepreneurs
Set up mentorship/ apprenticeship programs for high potential individuals
Support new venture competitions Recruiting targeted talent to a region; offer
relocation assistance
Upgrade physical infrastructure (transportation, utilities, and telecommunications) to support new and growing firms
Offer subsidies such that cost of access to infrastructure is not prohibitive
Increase number and size of specialized R&D facilities
Establish shared R&D facilities / joint university, public sector and industry facilities
Increase number, variety, and quality of business support services to fill needs of new and growing firms
Offer discounts, grants & matching programs to ensure availability of affordable support
Set up a centralized agency to link support services and government programs
Increase number and size of incubators to launch different types of firms
Create business associations
Provide incentives for colleges, government research centers and anchor firms to make their technology available to new / growing firms for commercialization
Establish formal tech transfer mechanisms to capture knowledge spillovers
Subsidize new and growing firms seeking to acquire and/or develop latest technology
Provide incentives for spin-offs from research institutions and anchor firms
Appoint a small business ombudsman to advocate for small business needs (e.g Entrepreneurship Advocacy Office)
Provide tax incentives to increase R&D activities, and to increase commercialization of R&D
Ensure business taxes have a similar effect for new, growing, and established firms
Establish tax policies that do not interfere with launch or growth
Strengthen intellectual property rights
Provide legislative incentives for use of stock options
Ensure stock option laws apply equally to new, growing and established firms
Ensure competition laws treat all firms equally; no unfair blocking of new firms entering the market by established firms
Refine regulations to ensure they do not interfere with start up of new firms and apply to new and existing firms in a predictable way
Refine procurement policies to apply equally to new as to established firms
Ensure labor regulations do not discourage hiring of small or large number of employees
Provide support for business tax filing
Ensure that administrative costs of compliance with government regulations do not unfairly burden new firms
Streamline the number licenses / permits needed to start a firm to reduce time and complexity
Establish a “Small Business Clause” in considering future legislation
Dedicate a regular media column / publication to profiles of successful and high-potential entrepreneurs
Sponsor conferences, workshops and business case competitions; leverage business associations and networking organizations
Establish entrepreneurship awards, research grants and scholarship programs
Create a regional publicity campaign to attract innovative and entrepreneurial individuals
Support regional enhancements and initiatives to attract diverse, young people and families (eg. Parks, entertainment complexes, pre-school education)
Review personal income tax levels to ensure individuals are not discouraged from starting or growing firms
Review the personal effects (financial & reputation-related) from bankruptcy; ensure these are not irreversible
Provide personal tax and health insurance breaks for entrepreneurs
A number of well-known government and private sector partners have been involved in the Initiative
Country/ Region Government Involvement Other Partner(s)
Austria Denmark
Finland New Zealand Norway Singapore South Korea
Sweden
Switzerland UK US Russia China India UAE – MENA Texas/ California
Bay Area Chile Colombia Moscow Jordan Spain +35 countries 6 African
countries
Ministry for Economic Affairs and Labor Ministry of Business and Economic Affairs Agency for Enterprise and Housing Ministry of Trade and Industry Ministry of Economic Development Ministry of Trade and Industry Ministry of Trade and Industry Korea Development Institute
Ministry of Industry Ministry of Industry, Employment and Comm. State Secretariat for Economic Affairs Department of Trade and Industry Federal Reserve Bank The US-Russia Business Council Development Research Center of the State Council
Al-Maktoum Foundation Bay Area Economic Council, various municipalities
Chile National Council of Innovation The five largest chambers of commerce Mayor of the City of Moscow
ENISA Various South Africa Department of Economic
Development, Trade and Industry, National Planning Commission
Austrian Institute of Economic Research Center for Economic & Business Policy OECD
Norwegian Financial Services Association Standard, Productivity & Innovation Board Hangyang University Small and Medium Business Association Int’l Organization for Knowledge Economy &
Enterprise Dev.; Institute for Growth Policy Studies
ART and University of California at Berkeley The US-Russia Center for Entrepreneurship
Business Standard Magazine Various partners throughout MENA Univ. of California, Univ. of Texas, Livermore/
Sandia National Labs, Dallas Chamber of Com. Endeavor Chile Endeavor Colombia
ConfidentialA dynamic Entrepreneurship Model was developed to measure high-impact entrepreneur attitudes towards key aspects of entrepreneurship policy
Source: Monitor Group, FORA, A.R.T. analysis
Policy Drivers
Entrepreneur-ship Assets
Business Assistance
Policy Accelerators Motivations
Financing Skills and Talent Legislation Admin.
Burdens MindsetInfrastructure Support Services
Debt Financ-
ing
Equity Financing
Entrepre. Mngt.
Capacity
Business Advisory Services
Tech Commer-cialization
Taxes / Incentives
Competi-tion
Transac-tion Costs
Culture & Attitudes
Training and
Education
Supply of Equity Capital
Access to Equity Capital
Financing Strategies
Exit Strategies
Supply of Debt
Capital
Access to Debt
Capital
Skills Develop-
ment
Compe-tency /
Experien.
Supply of Business Services
Afforda-bility of
Bus. Svcs.
Govt. Programs
Network-ing Orga-nizations
Access to Tech.
Afforda-bility of Tech.
Corporate/ Business
Taxes
Credits / Incentives
Govt. Regula-
tions
Govt. Impact
Individual-ist Culture
Attitudes towards
Bankruptcy
Attitudes towards
Stock Opt.
Stock Option Rules
Market Openness
Second-Level Composite Indicator
Third-Level Composite Indicator
Fourth-Level Composite Indicator
Sixth-Level Composite Indicator
Fifth-Level Composite Indicator
First-Level Composite Indicator
IncubatorsQuality of Bus. Svcs.
Entrepre. Develop. Programs
Infra-structure
Physical Infra.
Prepara-tion
Spin-outs
Legitimacy
Attitudes towards
Income Tax
Each Sixth-level composite indicator has an average of 3-5 questions that measure various aspects of entrepreneurship assigned to it
A Entrepreneurship Benchmarking Survey was launched in multiple countries to measure differences in entrepreneur attitudes towards various policies
Dear [First Name]:
We are writing to ask for your help in completing a short Monitor Group survey on the competitiveness of the Massachusetts economy. This is part of an effort to gain a better understanding of the economic and innovation performance, composition, and strengths and weaknesses of a number of industry clusters in the Commonwealth. Ultimately, this work will inform policy makers in the public and private sectors as they work to improve the competitive position of Massachusetts.
Your insights will enable us to develop a deeper understanding of the Massachusetts economy, identify the sources of our current success, and help us build for our future.
Thank you in advance for your participation in this important initiative. If you have any questions, or if we can be of help in any way, please contact Pedro Arboleda at Monitor Group (617-252-2668; email [email protected] ).
Sincerely yours,
Mitchell Adams Michael E Porter Lawrence Summers Charles Vest
Mass Tech Collab Harvard University Harvard University MIT
Example: Question 116 – It is common for people who have failed in business to try again
…as well as for regional rankings on up to 120 specific questions relating to entrepreneurship policies
How would your region compare in
specific questions relating to
entrepreneur-ship policy?
?
?
?
16%
31%
32%
32%
48%
51%
56%
60%
62%
63%
63%
66%
75%
83%
86%
87%
89%
96%
30%
54%
38%
23%
26%
27%
29%
27%
23%
23%
21%
19%
14%
6%
3%
9%
5%
2%
53%
15%
31%
45%
26%
22%
15%
13%
15%
14%
16%
15%
12%
11%
10%
4%
5%
2%
43
13
72
62
63
59
116
234
56
447
52
29
551
50
50+
118+
35+
95+
0% 25% 50% 75% 100%
Austria
SwedenDenmark
FinlandDubai
Singapore
NorwayChile
IndiaSouth Korea
ChinaShanghai
SF Bay AreaBangalore
United Kingdom
TexasAustin
United StatesN
*
*
Agree Neither Agree / Disagree Disagree
Overview 67% 19% 14%
Note: *Respondent counts below 30 are too low to be statistically significant and are considered indicative results, + Results represent a regional or city-level subset of a larger survey and are thus excluded from totals
A more detailed look at key indicators would allow us to reveal the variance between your region and survey leaders on a number of key dimensions
How far behind is your region
compared to survey leaders in specific areas relating to
entrepreneur-ship policy?
Credits / Incentives
Financing Strategies
Attitudes Towards Income TaxLegitimacy
Skills Development
China / India
China
Singapore
China
USA
China
Survey LeaderLowest Performer
Note: Percentage refers to country mean as compared to highest possible score; shown in order of importance starting with financing strategies Source: Monitor Entrepreneurship Benchmarking Survey, 2003–2010; Monitor Analysis
Strategically targeted policy interventions have strengthened entrepreneurship in countries where Monitor has worked (1 of 2)
Key Challenges Identified Difficulties in sourcing capital in early stages of business
– State-owned banks were averse to lending to businesses that had not yet shown viability
Oppressive tax laws and deficiencies in bankruptcy law
Subsequent Steps Provision of targeted incentives to enhance entrepreneurial
momentum in each of the benchmarked regions– Renminbi funds established– Changes to tax laws in order to provide incentives to
entrepreneurs and SMEs– Changes to the bankruptcy law to address deficiencies
that previously existed
Impact In 2009 SMEs in China contributed to 59% of GDP, a
significant increase from the 40% contribution in 2005– They also accounted for 50% of tax revenues, 68% of
exports, and 75% of new employment
Entrepreneurship needed reform in China, given the dominance of state-owned enterprises
Benchmarking initiative was carried out in eight regions
Monitor began the work in 2005 and updated the study in 2007, cataloging the impact of reforms
Key partners: Chamber of Commerce, Development Research Centre of the State
China Entrepreneurship Benchmarking Initiative
Context
Source: 'Paths to Prosperity', Monitor Group, 2009; Zhou ‘Chinese Entrepreneurs Go Global’, Technology Information Review, 2012; T Kanamori ‘China’s SME Development Strategies in the Context of a National Innovation System’, World Bank, October 2007
New administration laser-focused on reforms to increase Mexico’s competitiveness, including in entrepreneurship
Multi-agency initiative – el Instituto Emprendedor – has been launched to consolidate, review, and reform policies and programs on entrepreneurship in Mexico
Manager of institute and Sub-Secretary Enrique Jacob has committed to using this study as the basis of his new entrepreneurship policy agenda and to repeating the study periodically to evaluate progress
• Also committed to provide financial support – skin in the game Sub-secretary and team under pressure to develop new policy platform by this
fall – time is of the essence Genuine opportunity to influence and strengthen policy environment for high-