Local is lekker and complex in the entrepreneurial ecosystem

Local is lekker and complex in the entrepreneurial ecosystem

If Christmas is “the season to be jolly” then Q1 2015 must have been the season for surveys on SA’s entrepreneurial ecosystem:

1.Seed Academy recently published the results from its first-ever survey of approximately 1,000 South African startup entrepreneurs with the hope that the results create impetus for industry and government to align efforts to create a more successful startup ecosystem

2.In March 2015, the South Africa chapter of the Aspen Network of Development Entrepreneurs (ANDE) released a comprehensive and interactive infographic that details the interdependencies between our government, corporate, non-profit funding and support organisations for resources available for entrepreneurs

A post-mortem is not needed as this is a classic case of death-by-survey you may say. But is it really? That each of the above surveys addressed different, yet interrelated components of our ecosystem, compels us to remain mindful of the complexities that are inherent to our ecosystem.

Seed Academy, for instance, found that despite women accounting for over 50% of the population in South Africa, female entrepreneurs are still in the minority in startup culture. The government’s response to this has been through initiatives like the DTI Women Economic Empowerment programme and IDC Women Entrepreneurial Fund.

As far as support structures within the ecosystem are concerned, ANDE mapped the ecosystem in its entirety and considered, inter alia, the role played by direct finance providers and capacity development providers at each stage of the business life cycle.

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So what are we to make of these varied results and which recommendations ought to be pursued?

Interesting findings from The Kaufmann Foundation may guide our response to these questions. They took the line of questioning even further, asking how entrepreneurial ecosystems are measured and how data about start up communities should be interpreted, when they released a paper on how to measure entrepreneurial ecosystems last month. While this research is from a US-context, it bears relevance to SA.

“In some places, the desired outcome is simply more: more entrepreneurs, more companies, and more jobs. Other communities design their ecosystem efforts around a particular type of company or type of job. Some regions, moreover, see the “entrepreneurial ecosystem” as a marketing effort, and focus on a particular type of individual they hope to attract to their area.”

“At the other end of the spectrum is the kitchen-sink approach—because every part of an entrepreneurial ecosystem is critically important, you must track everything. This approach has the admirable quality of avoiding Campbell’s Law* but provides no sense of prioritization or focus for those community leaders involved in the ecosystem. There must be some middle ground between trying to capture every dimension of an entrepreneurial ecosystem and overly focusing on only one or two indicators.”

In an effort to find the middle ground, the Kaufmann paper looks at two aspects of the entrepreneurial ecosystem, namely outcomes and vibrancy, and decomposes these aspects according to the indicators and corresponding measures given below. 

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Being self-explanatory and intuitively appealing, it’s clear that ongoing dialogue and research, of the kind we’ve seen recently, is key to deepening our appreciation of the symbiotic relationships within our ecosystem – not re-inventing the wheel in different contexts through surveying for the sake of surveying.

Campbell’s Law* states that the more any quantitative social indicator (or even some qualitative indicator) is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.

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