I just came across in my LinkedIn network a great article on what makes up an entrepreneurial ecosystem and I asked myself if Switzerland has one?
What Makes an Entrepreneurial Ecosystem?
TheFamily Papers #000
Our model is relatively simple, based on the idea that the entrepreneurial ecosystem has three characteristic ingredients. They are as follows:
- capital—by definition, no new business can be launched without money and relevant infrastructures (which consist of capital tied up in tangible assets);
- know-how—you need engineers, developers, designers, salespeople: all those whose skills are necessary for launching and growing innovative businesses;
- rebellion—an entrepreneur always challenges the status quo. If they wanted to play by the book, they would innovate within big, established companies, where they would be better paid and would have access to more resources.
All three ingredients are present, in variable proportions, in every country. But the most important thing is not simply their relative presence or absence in a certain place. Rather, it’s the degree to which they mix within the entrepreneurial part of the economy. That is to say, is there a place where all three ingredients come together, where capitalists, engineers, and rebels get to know one another and do great work together?
So does Switzerland has one?
The article mentions seven combinations of the three ingredients and Switzerland falls into this category:
Capital + know-how = efficiency economy. When capital meets know-how in the absence of rebellion, innovation tends to be concentrated in established companies, which have only two goals: renew their products and improve the efficiency of their operations. As noted by Clayton Christensen, these kinds of innovation destroy jobs and free up capital (rather than empowering innovation which ties up capital and creates lots of jobs). Freed capital is then invested elsewhere, often sustaining the rent-seeking part of the economy. Above all, as noted by William Janeway, efficiency is the enemy of innovation: you can’t expect radical, Silicon Valley-style innovation from an economy without rebellion.