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Entrepreneurial discovery process


The entrepreneurial discovery process is a learning process to select R&D;+I as well as non-technological activities in which a region can hope to excel, in other words: it's a vision about opportunities in existing or emerging sectors.

Written by Christian Saublens

Reviewed by David Walburn

 

The concept

How to implement it?

Step in the RIS process

What can be expected?

A quote

References

Experts' comments

 

The concept


The concept suggests that entrepreneurs and public stakeholders are exploring, experimenting and learning what an industry or even better players in a market niche should do in the field of R&D+I and non-technological innovation in order to build unique competitive advantage.

This concept can be applied in all regions. For instance, traditional regions can modernize their agro-food or tourism sectors by investing in ICT, design, marketing, new distribution channels, … whilst regions in industrial transition can stimulate cooperation on the frontiers of two sectors/clusters, such as health and ICT, design and furniture, optronics in machinery and equipment, or can support the diversification of SMEs, i.e. from automotive to mobility, …

This requires that regions are collecting and analyzing data regarding markets, technologies, skills, knowledge transfer, capabilities, institutional agility, business models, global competition by sectors and by groups of regional enterprises and investing accordingly, instead of scattering their support.

 

How to implement it?


To cross data and knowledge emerging from macro-analysis (SWOT), with the best available knowledge at the level at the level of enterprises operating in existing sectorial strengths and emerging activities, in order to identify a reasonable number of priorities. This approach should also be outward looking. Remember that most of the regions will draw a similar list of key strategic sectors (bio, nano, ICT, automotive, alternative energies, …). In this case, how will regions be able to differentiate themselves? Maybe neighbourhood regions have R&D infrastructrures that can be shared to create critical mass to address the global economy. Clusters and enterprises are not confined to regional administrative borders.

At micro-level, the entrepreneurial discovery process can be explored on the basis of the following observations:

  1. Check how enterprises invest in
  • offering next generation of technology products/services/solutions (e.g. robotics, nano, bio, advanced ICT, …)
  • enhancing their competitiveness in traditional sectors (use of KETs, outsourcing, nearshoring, …)
  • enhancing productivity in non-tradeable services
  1. Look at how enterprises are
  • accessing specialised professional services (seed capital, IPR, …)
  • rewarding innovative staff members
  • purchasing non-technology innovative support services.

 

Step in the RIS process


Step 4: Identification of priorities

 

What can be expected?


  • Local ownership of the vision
  • Leveraging the unique regional potential
  • Better choice of priorities
  • Sorting out where opportunities lie
  • Better exploitation of regional strengths
  • Identification of emerging domains of growth
  • Focusing public funding on regional competitive advantage

 

A quote


"The more I am involved in discussions with regions, the more I think that the concept of entrepreneurial discovery is absolutely central. Not only because of the word entrepreneurial, which is about forcing regions to design an efficient and modern governance mechanism (bottom-up; not replicating the soviet plan: entrepreneurial knowledge is the critical input), but also because of the word discovery.

Entrepreneurial discovery occurs one step earlier than (precedes) innovation:

  • This is what will increase the likelihood of many innovations in the near future;
  • Because it is one step earlier, the appropriability issue is different than what is usually, considered in the case of innovation (IPR, patent, secrecy): here the goal is to maximizing the informational spillovers about the value of a new domain; the exploration/discovery process can be and actually should be collective (to maximize complementaries, synergies, critical networks).
  • Finally, (in contrast with innovation as new product/process) the word discovery means that it is about transforming the economic fundamentals of a sector or between sectors to build new competitive advantages. Discoveries inform where the next specializations should occur!" - Dominique Foray

 

References


 

Mr Christian Saublens


 

Christian Saublens has more than 30 years of working experience in European trade organizations. Since 1992 he is the Executive Manager of EURADA, the European Association of Development Agencies, a network of 145 organisations. Christian has been involved in the organization of numerous conferences and meetings dealing with all matters related to regional development. He wrote several papers and working documents on business support schemes for SMEs. He played an important role for the dissemination in European regions of concepts such as benchmarking, business angels, investment readiness, proof of concept, clusters, open innovation, financial engineering, crowdfunding, … Several times Christian has been appointed as an expert by the European Commission and the Committee of the Regions.

christian.saublens@eurada.org

 

Experts' comments


The aspiration of public policy to improve regional economic performance through innovation and boosting entrepreneurial activity are easy to understand. What region would not want more of a process which has the potential to improve its economy, and also both create new jobs and, just as important, better jobs.

The problems arise when officials try to convert aspiration into effective programmes of intervention to bring about change. Why should there be problems?:

  1. Public and private sectors often find it hard to work together, neither understanding the methods and priorities of the other.
  2. How can programmes of intervention identify and prioritise those firms most likely to benefit from support?
  3. Does the public sector have access to the necessary tools to produce the desired response from target firms? Is there a sufficient knowledge of what works?

A first step in overcoming these problems is for policy-makers to be aware of their existence. Too often in economic development programmes are devised without sufficient regard to experience elsewhere, by officials who do not appreciate how difficult it often is to achieve desired outcomes in the local economy.

The Entrepreneurial Discovery Process as described in these notes is about achieving innovation and improved performance across the regional economy, involving whole sectors, rather the seeking out and supporting individual entrepreneurs. This requires policy-makers to have a comprehensive knowledge of the main sectors in their regional  economies, obtaining detailed information about the leading firms in those sectors, developing working relationships with their senior managements, and having a clear understanding of the role of other stakeholder organisations which can affect the performance of local businesses.

The policy makers need a vision of what they wants to achieve, and through leadership on their own behalf, or in partnership with others, lever in resources and commitment from a wide range of regional players to achieve progress. This approach will help to address the problems set out above.

 

Mr David Walburn


After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission.  He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.

davidwalburn@london.com

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