CELEBRATE | November 14, 2018

Opening the Black Box of Ecosystem Diversity Around the Globe: The Index of Dynamic Entrepreneurship

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Read this prologue from Hugo Kantis, director of PRODEM. The Index of Dynamic Entrepreneurship was released at the start of Global Entrepreneurship Week 2018. 

With great joy and pride, today (Nov. 12) we present the first global report of the Index of Dynamic Entrepreneurship (IDE). This effort is the result of a new partnership between PRODEM and the Global Entrepreneurship Network (GEN) to scale up to the global level the analysis of the existing Index of Systemic Conditions for Dynamic Entrepreneurship (ICSEd) elaborated by PRODEM five years ago and which has become a widely-used analytical tool, mainly in Latin American countries.

The ICSEd, renamed as IDE in the context of this collaboration, is the result conclusion of the research and development efforts started over ten years ago by PRODEM, conceptually based on the pioneering studies we made with the Inter-American Development Bank (IDB) since the end of the 90s. At that time, we had already acknowledged the complex nature of the phenomenon of starting new ventures and the need of adopting a systemic approach. Such a claim today seems somehow unnecessary, given not only the general agreement about the fact that entrepreneurship is a systemic phenomenon, but also the widespread adoption of the ecosystem concept.

At that time, we also defined our primary focus on dynamic entrepreneurship, i.e., those projects and new firms that not only manage to survive their first years but also grow significantly to become, at least, competitive small and medium-sized enterprises (SMEs) with the potential for further growth. This definition embraces the widely used expression of gazelles or high impact entrepreneurship but also includes those growth-oriented firms that, without such an exponential growth, make a significant contribution to their local economies.

Much has changed since then, and now entrepreneurship and innovation promotion constitutes a must in any policy agenda around the world. A clear proof of that is the growing interest of the Startup Nations Summit and the increasing number of activities around the globe in the Global Entrepreneurship Week. Governments, in particular, are keen to look for new data that help them to measure the entrepreneurial conditions in their countries and, based on common information, compare their ecosystems with those of others. So, this IDE comes at the right moment since it provides global information to identify the main strengths and weaknesses at the national level, but also to assess its evolution in the past few years.

The main topic of this 2018 IDE global report is the heterogeneous nature of entrepreneurial ecosystems and the gaps between the best systemic conditions throughout the past five years. This year, we also include a novel concept: the systemic equilibrium. That is, the degree of symmetry in the level of development of the different components of the IDE, which would express the balance among them. Building on the analysis of the systemic conditions and the systemic equilibrium, we identify 6 different configurations, i.e., country profiles, as regards the systemic conditions. By doing so, we start to open the black box of ecosystem diversity.

Together with our partners at GEN, we hope this new index will be helpful to anyone who is committed to entrepreneurial development in the world, opening interesting questions and dialogues not only regionally but also at the national level. Our expectation is that this product will serve as a compass and a navigation chart in our journey to achieving better ecosystems, in the vast sea of entrepreneurship and innovation.

Dr. Kantis is the co-author of Developing Entrepreneurship: Experience in Latin America and Worldwide. He has devoted his career to narrowing the… About the author