Have you heard of Daniel Isenberg?

Daniel Isenberg was the first credible proponents of the concept of the entrepreneurial ecosystem. His influential 2010 Harvard Business Review article, "How to start and entrepreneurial revolution", laid the ground for the widespread adoption of the model and the term. The model remains a critical analytic, strategy development and delivery planning tool - although the term 'entrepreneurial ecosystem' (aka 'the ecosystem') has become greatly over- and mis-used.

Main Components of the 'Ideal' Ecosystem

Isenberg said that a thriving entrepreneurial ecosystem required six dimensions, or sectors, to be active and effective. Here they are:

1. Policy: Government policies that promote entrepreneurship, reduce bureaucratic barriers, and provide incentives.
2. Finance: Availability of funding sources such as venture capital, angel investors, and banks.
3. Culture: Societal attitudes that value innovation, risk-taking, and learning from failure.
4. Supports: Resources and services like incubators, accelerators, and professional services.
5. Human Capital: Skilled workers, experienced entrepreneurs, and high-quality educational institutions.
6. Markets: Access to customers, suppliers, and partners, both locally and internationally.

Of course this can be labelled a one-dimensional Utopia that makes sense in countries like America, Canada, the UK and most of Europe. But there is an inherent logic that is hard to fault. I believe the framework still has real 'lighthouse' value even in LDCs and countries with scant entrepreneurship activity.

Main critique

The main critique of Isenberg’s theory is its apparent generality and the challenge of applying it uniformly across different regions. Many academics say it is overly simplistic and unable to capture the many complex inter-dependencies, economic realities and cultural dynamics of some regions and countries. But, even at his current age of 74, he has continued to defend and refine the model and contribute to its practical use around the world.

The model itself seems quite simple. But in the same way that one deck of cards can deliver an untold number of shuffles, games and outcomes, each of the six dimensions unfolds into a formidable and rich latticework of possibilities that can assist and guide any policy-writer, strategist or implementer working in the economic and entrepreneurship development space.

Isenberg in Cape Town

Many years ago I brought Isenberg to speak at the City of Cape Town and Telkom-sponsored Cape Town Entrepreneurship Week. I was part of a project to adapt and implement Barcelona's amazing Activa ecosystem framework - then a leader in the field - in Cape Town. Isenberg wowed the audience and helped to build a deeper understanding of ecosystem thinking in the City. And he did it virtually for free - apart from the airfare, all he wanted was a one-day wine route tour in Stellenbosch. One throw-away remark I remember: "Entrepreneurs are not risk takers. They are risk managers."

The bottom line

The Isenberg model is relevant, useful and flexible. It is a valuable analytic and policy-making tool. Any entrepreneurship ecosystem that is seriously deficient in any one of the six dimensions will not operate as closely as it could to its maximum potential, as it will negatively impact on all five other factors.

By the way

Both “entrepreneurship ecosystem” and “entrepreneurial ecosystem” are grammatically correct, but they have different connotations.

• Entrepreneurship ecosystem: This term emphasizes the broader system or environment that supports the practice of entrepreneurship. It includes all the elements that contribute to the creation and growth of new businesses, such as policies, institutions, and cultural attitudes.
• Entrepreneurial ecosystem: This term focuses more on the characteristics or qualities of the ecosystem itself, highlighting that it is conducive to entrepreneurial activities. It implies that the ecosystem itself possesses entrepreneurial traits or qualities.

In essence, “entrepreneurship ecosystem” is more about the system supporting entrepreneurship, while “entrepreneurial ecosystem” describes the nature of the ecosystem as being supportive of entrepreneurship. Both are used in different contexts depending on what aspect you want to emphasize.

Until next time ... peace / love / and sales.