The IUP Journal of Entrepreneurship Development
Investigating the Role of Entrepreneurship Ecosystem in Iran's Economic Growth

Article Details
Pub. Date : Dec, 2018
Product Name : The IUP Journal of Entrepreneurship Development
Product Type : Article
Product Code : IJED11812
Author Name : Mohsen Mohammadi Khyareh and Hossein Torabi
Availability : YES
Subject/Domain : Management Studies
Download Format : PDF Format
No. of Pages : 19

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Abstract

Entrepreneurship development requires a network of different elements, and this network is known as the entrepreneurial ecosystem. Entrepreneurship ecosystem refers to the elements—individuals, organizations or institutions—outside of the entrepreneur that motivate or impede a person's decision to become an entrepreneur. Entrepreneurship ecosystems include the financial environment, government tax and support policies, government programs, infrastructure, dynamics and market capacities, basic and excellent education, Research and Development (R&D), and cultural and social norms. Improving the entrepreneurship ecosystem can boost economic growth through increased incentives for entrepreneurship and the development of small and medium-sized businesses. In this paper, the effect of elements of Iran's entrepreneurship ecosystem has been studied. The study is based on the data obtained from Global Entrepreneurship Monitor (GEM) reports, academic publications, reports, and publications of government agencies and other stakeholders in the field of entrepreneurship in Iran and outside. To this end, according to the 2007-2017 Global Entrepreneurship Survey on Entrepreneurship and the World Bank's Report on GDP, the problems of the Iranian entrepreneurship ecosystem, which hampered the economic growth, were examined. Based on the problems identified, it is suggested that existence of an organization with well-defined and transparent rules for financing entrepreneurs can save from the turbulent financial environment. Further, creating dynamic communication centers for linking industries and universities can improve the R&D transfer.


Introduction

The relationship between entrepreneurship and economic growth cannot be overlooked, while the relationship between the ecosystem of entrepreneurship and economic growth needs to be further explored. Entrepreneurship development requires a network of different elements and this network is known as the entrepreneurial ecosystem. The stronger the ecosystem of entrepreneurship, the more productive will be the technology, and hence the impact of entrepreneurship on economic growth will be stronger. In this way, entrepreneurs act as factors that by commercializing innovation, provide the mechanism for advanced knowledge that leads to economic growth. However, even if entrepreneurship is dynamic, the knowledge transfer process may be weakened or facilitated by the corporate environment (Baumol and Strom, 2007). The term 'ecosystem' means the environment is close to the complex relationships between living organisms and its environment and the human activities impact these relationships (Christian, 2003). Putting these two words together creates a new term called the 'entrepreneurship ecosystem' (Hechavarría and Ingram, 2018). An entrepreneurial ecosystem refers to elements, individuals, organizations or institutions that can act as an incentive or an obstacle to entrepreneurship. Such an ecosystem encompasses hundreds of elements that can be grouped into six major realms of market, politics, finance, culture, support, and human capital (Isenberg, 2010). According to Forfas (2009), entrepreneurship ecosystem refers to the elements—individuals, organizations or institutions—outside of the entrepreneur that motivate or impede a person's decision to become entrepreneurial or likely to succeed in the setting up business.


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