234Finance: Building Entrepreneurial Ecosystems for Recession Recovery
Creating a sound entrepreneurial ecosystem is imperative to the growth of any economy. It is also important to sustain that healthy entrepreneurial habitat by ensuring that the basic components of an entrepreneurial ecosystem including ambition, skill and capital exist in equal proportions. This would ensure the success for the entrepreneurs and eventually lead to development.
Ambition is the dogged mindset to see a business advance from being a startup to a full growth stage organization, and ultimately create more jobs. Skill comprises of all expertise required for the successful execution of business operations; while capital is the funding and other resources such as fixed or current assets, required for business operations.
Here are three economic scenarios out of seven possible scenarios, where ambition, skill-set and capital play significant roles in an entrepreneurial ecosystem:
The Ambition-Only scenario is one where there is neither skill nor capital, only art and political drama. It is the home of artists and activists. No sustainable business empire is built but a subsistence economy with the vision to drive political and social revolutions. Those with skills migrate to more favorable climes, while investors take their capital elsewhere. It is a deficient economy, occupied with needy individuals who are struggling to survive.
In the Ambition+Capital scenario, there is the absence of skills; however, individuals with a strong will to succeed put in resources to build businesses and eventually become successful in their ventures. This economy is financially buoyant with the bulk of the wealth revolving around a few powerful individuals who worked their way up without partnering with experts who would have expanded their myopic business ideas. In this scenario, there are no large business institutions that can create massive change and employment.
Finally, the Ambition+Capital+Skill scenario, shows a healthy mix of all three components of an entrepreneurial ecosystem in equal proportions. Here, skilled experts partner with passionate individuals with high entrepreneurial spirits and access capital sourced from different investors. The groups come together to build sustainable and successful ventures. The combination of these three components birth a robust entrepreneurial economy and eventually leads to a country’s development.