Entrepreneurial ecosystems can be viewed as geographic hubs that seem conducive for entrepreneurial behaviour. In other words, it represents an area that has above-average levels of entrepreneurial action, a result of a concentration of supporting entities which together deliver “cultural, social, and material value to entrepreneurs”. Africa in particular host three such entrepreneurial ecosystems: Cape town in South Africa, Nairobi in Kenya and Logos in Nigeria.
What does these hubs offer?
These hubs offer a supportive culture as they have a history of successful entrepreneurial activity. They also offer talented individuals as these hubs usually are in close proximity of one or more highly rated universities or colleges. Investment capital follows investment opportunity, and entrepreneurial ecosystems offer a breeding ground for opportunities to develop. Evidence has shown that higher rates of successful ventures emerge from entrepreneurial ecosystems. More startups require more funding, inviting angel investors and venture capitalists into these ecosystems. Incubators and accelerators pop up to support these startups. They provide streamlined guidance, accelerated training programs, general support, working spaces and very often connect new founders with opportunities for funding.
How about opportunities?
Also, these hubs become known for harnessing creativity, which is a vital ingredient to innovation, an ingredient vital for sustainable growth and economic development. Similarly, other service providers emerge offering services such as legal support, insurance, bookkeeping and many more – all relevant for startups. These ecosystems, therefore, create a conducive environment for social networks to form, establishing a link between academia and serial, nascent, novice and potential entrepreneurs.
What support is needed?
Entrepreneurial ecosystems are typically formed in countries whose regulatory systems support entrepreneurship and have the physical infrastructure to support new venture creation and growth. Such countries also do not restrict global market access for new ventures and refrain from imposing excessive restrictions and complex regulations. Rather they stimulate an environment to support opportunity development, new venture creation and venture growth to enable firms to compete in global markets.