Research and Policy Strategy

A decade of work on the Global Entrepreneurship Index has given us a broad and deep understanding of entrepreneurship ecosystems both in country and regional levels. Now we have turned to digital ecosystems and created a new index, the Digital Entrepreneurship Index. Besides creating solid measurements for various ecosystems, we aimed to provide useful public policy suggestions.

Here you can see and have an access to the most important refereed journal publications featuring entrepreneurship and digital ecosystems.

Publications on digital entrepreneurship:

Sussan, F., & Acs, Z. J. (2017). The digital entrepreneurial ecosystem. Small Business Economics, 49(1), 55-73.

A significant gap exists in the conceptualization of entrepreneurship in the digital age. This paper introduces a conceptual framework for studying entrepreneurship in the digital age by integrating two well-established concepts: the digital ecosystem and the entrepreneurial ecosystem. The integration of these two ecosystems helps us better understand the interactions of agents and users that incorporate insights of consumers’ individual and social behavior. The Digital Entrepreneurial Ecosystem framework consists of four concepts: digital infrastructure governance, digital user citizenship, digital entrepreneurship, and digital marketplace. The paper develops propositions for each of the four concepts and provides a theoretical framework of multisided platforms to better understand the digital entrepreneurial ecosystem. Finally, it outlines a new research agenda to fill the gap in our understanding of entrepreneurship in the digital age.

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Song, A. K. (2019). The Digital Entrepreneurial Ecosystem—a critique and reconfiguration. Small Business Economics, 53(3), 569-590.

Sussan and Acs (Small Business Economics, 49(1), 55–73, 2017) proposed the “Digital Entrepreneurial Ecosystem” (DEE), a novel framework to guide our understanding of entrepreneurship in the digital age. By integrating literatures on digital ecosystem and entrepreneurial ecosystem, they brought to attention the importance of examining entrepreneurship as an outcome of interactions between biotic and abiotic entities represented by four concepts: Digital User Citizenship, Digital Entrepreneurship, Digital Infrastructure Governance, and Digital Marketplace. This paper revisits, critiques, and refines the framework through the following reconfigurations: (1) Digital User Citizenship is reintroduced as a heterogeneous group of users differentiated by their primary activity, as either consumers or producers. (2) Digital Technology Entrepreneurship encompasses all agents that build complementary products and services connecting to platforms. (3) Digital Multi-sided Platform is the intermediary for transaction of goods and services, and also a medium of knowledge exchanges that enables and facilitates experimentation, entrepreneurial innovation, and value creation. The main contribution of the paper is in the reconfigurations that clearly lay the ground for a more sustainable DEE—one in which user privacy is protected, platform efficiency enhanced, market competition encouraged, and digital infrastructure secured.

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Publications on country level ecosystem (GEDI/GEI):

Acs, Z. J., Autio, E., & Szerb, L. (2014). National systems of entrepreneurship: Measurement issues and policy implications. Research Policy, 43(3), 476-494.

We introduce a novel concept of National Systems of Entrepreneurship and provide an approach to characterizing them. National Systems of Entrepreneurship are fundamentally resource allocation systems that are driven by individual-level opportunity pursuit, through the creation of new ventures, with this activity and its outcomes regulated by country-specific institutional characteristics. In contrast with the institutional emphasis of the National Systems of Innovation frameworks, where institutions engender and regulate action, National Systems of Entrepreneurship are driven by individuals, with institutions regulating who acts and the outcomes of individual action. Building on these principles, we also introduce a novel index methodology to characterize National Systems of Entrepreneurship. The distinctive features of the methodology are: (1) systemic approach, which allows interactions between components of National Systems of Entrepreneurship; (2) the Penalty for Bottleneck feature, which identifies bottleneck factors that hold back system performance; (3) contextualization, which recognizes that national entrepreneurship processes are always embedded in a given country’s institutional framework.

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Lafuente, E., Szerb, L., & Acs, Z. J. (2016). Country level efficiency and national systems of entrepreneurship: A data envelopment analysis approach. The Journal of Technology Transfer, 41(6), 1260-1283.

This paper tests the efficiency hypothesis of the knowledge spillover theory of entrepreneurship. Using a comprehensive database for 63 countries for 2012, we employ data envelopment analysis to directly test how countries capitalize on their available entrepreneurial resources. Results support the efficiency hypothesis of knowledge spillover entrepreneurship. We find that innovation-driven economies make a more efficient use of their resources, and that the accumulation of market potential by existing incumbent businesses explains country-level inefficiency. Regardless of the stage of development, knowledge formation is a response to market opportunities and a healthy national system of entrepreneurship is associated with knowledge spillovers that are a prerequisite for higher levels of efficiency. Public policies promoting economic growth should consider national systems of entrepreneurship as a critical priority, so that entrepreneurs can effectively allocate resources in the economy.

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Acs, Z. J., Estrin, S., Mickiewicz, T., & Szerb, L. (2018). Entrepreneurship, institutional economics, and economic growth: an ecosystem perspective. Small Business Economics, 51(2), 501-514.

We analyze conceptually and in an empirical counterpart the relationship between economic growth, factor inputs, institutions, and entrepreneurship. In particular, we investigate whether entrepreneurship and institutions, in combination in an ecosystem, can be viewed as a “missing link” in an aggregate production function analysis of cross-country differences in economic growth. To do this, we build on the concept of National Systems of Entrepreneurship (NSE) as resource allocation systems that combine institutions and human agency into an interdependent system of complementarities. We explore the empirical relevance of these ideas using data from a representative global survey and institutional sources for 46 countries over the period 2002–2011. We find support for the role of the entrepreneurial ecosystem in economic growth.

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Lafuente, E., Acs, Z. J., Sanders, M., & Szerb, L. (2019). The global technology frontier: productivity growth and the relevance of Kirznerian and Schumpeterian entrepreneurship. Small business economics, 1-26.

We evaluate how country-level entrepreneurship—measured via the national system of entrepreneurship—triggers total factor productivity (TFP) by increasing the effects of Kirznerian and Schumpeterian entrepreneurship. Using a database for 45 developed and developing countries during 2002–2013, we employ non-parametric techniques to build a world technology frontier and compute TFP estimates. The results of the common factor models reveal that the national system of entrepreneurship is a relevant conduit of TFP, and that this effect is heterogeneous across countries. Policies supporting Kirznerian entrepreneurship—e.g., increased business formation rates—may promote the creation of low value-adding businesses which is not associated with higher TFP rates. Policy interventions targeting Schumpeterian entrepreneurship objectives—e.g., innovative entrepreneurship and the development of new technologies—are conducive to technical change by promoting upward shifts in the countries’ production function and, consequently, productivity growth.

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Publications on regional level ecosystem:

Acs, Z. J., Szerb, L., Ortega-Argilés, R., Aidis, R., & Coduras, A. (2015). The regional application of the global entrepreneurship and development index (GEDI): the case of Spain. Regional Studies, 49(12), 1977-1994.

The regional application of the Global Entrepreneurship and Development Index (GEDI): the case of Spain, Regional Studies. This paper constructs a regional application of the Global Entrepreneurship and Development Index (GEDI) that captures the contextual features of entrepreneurship across regions. Using institutional data and survey data, weaknesses in the incentive structure that affect regional development can be identified. The entrepreneurial disparities among regions are analysed at the country and regional levels using a penalty for bottleneck methodology. The methodology allows public policy action to be coordinated at both national and regional levels. It is found that GEDI provides a valuable tool for understanding regional differences across Spanish regions.

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Szerb, L., Lafuente, E., Horváth, K., & Páger, B. (2019). The relevance of quantity and quality entrepreneurship for regional performance: The moderating role of the entrepreneurial ecosystem. Regional Studies, 53(9), 1308-1320.

This study analyzes how the entrepreneurial ecosystem and different types of entrepreneurship impact regional performance. By analyzing 121 European Union regions between 2012 and 2014, it is found that quantity (Kirznerian) entrepreneurship negatively impacts regional performance, while this effect turns positive in the case of quality (Schumpeterian) entrepreneurship. Also, regions with a healthy entrepreneurial ecosystem have a greater capacity to materialize the effects of high business-formation rates, regardless of their quality (Kirznerian entrepreneurship), while regions with weak entrepreneurial ecosystem may rely on innovative (Schumpeterian) entrepreneurs to compensate for the absence of entrepreneurship support policies and increase their economic outcomes.

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Varga, A., Sebestyén, T., Szabó, N., & Szerb, L. (2020). Estimating the economic impacts of knowledge network and entrepreneurship development in smart specialization policy. Regional Studies, 54(1), 48-59.

An undesirable result of the rapid implementation of smart specialization into the framework of European Union Cohesion Policy was that it left several practical issues unanswered. An important unanswered issue is the implementation of economic impact assessment in a smart specialization policy context. Integrating entrepreneurship and interregional network policies into an economic modelling framework is considered among the most prominent challenges. This paper introduces how these two policies are implemented in the GMR-Europe (geographic, macro and regional) model. The simulations highlight that smart specialization policy targeting the development of entrepreneurship and knowledge networks is not equally successful in all regions.

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Szerb, László, Raquel Ortega-Argilés, Acs, J. Zoltan, and Éva Komlósi (2020) Optimizing Entrepreneurial Development Processes for Smart Specialization in the European Union, accepted for publication in the Papers in Regional Science

This paper demonstrates how the Regional Entrepreneurship and Development Index (REDI) can be used to optimize local entrepreneurial discovery processes, in a manner which can support Smart Specialization Strategies (S3). While S3 industry prioritization is based on the identification of local strengths, regional improvement can be achieved by improving the weakest features of the local entrepreneurial ecosystem.  REDI based suggestions are place-based and offer rationale for tailor-made regional policy interventions. First, we provide the conceptual background at the intersection of S3 and entrepreneurial ecosystem concepts.  Next we measure the strengths and weaknesses of the entrepreneurial discovery processes. Finally, we discuss how REDI could contribute to smart specialization strategies by providing a solution to four S3 policy caveats: (1) measuring the necessary basic conditions for smart specialization in 125 NUTS 1 and NUTS2 European Union regions; (2) identifying the institutional and individual weaknesses in the  local entrepreneurial ecosystem; (3) providing a comprehensive view about the harmonization of the components of entrepreneurial discovery; and (4) presenting some simulations on how additional policy efforts could be optimized. We found that without optimizing the entrepreneurial ecosystem, the industry specialization alone may not be successful because of the inability of the ecosystem to be able to nurture high growth potential ventures.