Synopsis: Entrepreneurship: Entrepreneurship:

Strategy and Entrepreneurship: Born global, London Business school. http://bsr. london. edu/lbs-article/166/index. html Date of downloading:

offering a cluster for academia, business and entrepreneurship. Development of a range of skills and innovation capacity.

This campus will accommodate the knowledge economy by linking academia with entrepreneurship and foreign direct investment.

offering a cluster for academia business and entrepreneurship. Strong cities and towns are needed to support a competitive business environment,

A strong third and fourth-level education sector in the region will be a strong driver of innovation and entrepreneurship.

there are important initiatives being undertaken within the region in support of increased levels of entrepreneurship, for example, the collaborative regional‘Spirit of Enterprise'initiative.

stimulating entrepreneurship and enabling companies based in Ireland to grow and target international markets. The sectors considered for the Southeast are:

Entrepreneurship 17. Provide clarity on the availability of business supports to potential entrepreneurs, the role of each regionally based agency and key contacts

B. Supporting Knowledge Transfer from academia, Foreign Direct Investment and Entrepreneurship throughout the region by the development of the Waterford Knowledge Campus and outreach third and fourth-level education to key centres throughout the region

in education, training and projects and networks to support innovation, creative entrepreneurship and research, and provide role models for elderpreneurship,

tax, and economic policy is necessary to move further to develop European regulation in such a way as to stimulate innovation and entrepreneurship.

technology and entrepreneurship will stimulate long-term growth and thereby change our economy and society. The Panel has worked with the notion that innovation will create a new future,

in recognition that business is also about innovation, entrepreneurship and creative destruction and not just about competitive regulation and investor behaviour.

Innovation and entrepreneurship continue to disrupt the economy, thereby sometimes fundamentally changing activities and moving the economy in new directions.

This implies that public policy has a key role in stimulating innovation and entrepreneurship through the direction or governance of the overall system.

Similarly, OECD countries are working to stimulate entrepreneurship. Measures include tax breaks for companies, initiatives intended to bridge liquidity gaps (e g. ensure banks keep lending to business,

or loans for small fi rms, export credit guarantees), the simplifi cation and speeding up of administrative procedures, the promotion of startups and entrepreneurship,

(and targets) like R&d and fi nancing of SMES but also include new ones like stimulating youth entrepreneurship, public procurement for innovations,

and for knowledge intensive entrepreneurship that embraces a far wider and more diverse set of people across the EU. 11 Smits and Kuhlman (2004) identify fi ve types of policy instruments:

internationalisation and entrepreneurship Pillar 2 Pillar 3 Pillar 4 Leading sectors Emerging activities Crosscutting enabling technologies Innovation environment Strategic objectives Pillars Pillar

públiques Digital agenda Entrepreneurship Eco-innovation (green economy) Non-technological innovation Training and talent Tools Leading sectors Emerging activities Crosscutting enabling technologies

internationalisation and entrepreneurship. Each of these objectives corresponds to a pillar of action. 2. 3. Pillars of Action RIS3CAT is structured into four pillars of action,

internationalisation and entrepreneurship Pillar 2 Pillar 3 Pillar 4 Leading sectors Emerging activities Crosscutting enabling technologies Innovation environment Strategic objectives Pillars Figure

Government of Catalonia, State, European funds and other public/private sources of finance. 3. Tools and Policies 48 P. 2. Entrepreneurship The establishment and growth of new

Measures to support entrepreneurship are varied many and. P. 2. 1. Culture, training and talent Measures to promote entrepreneurship

and attract international entrepreneurial talent. For example: -To bring the world of business and entrepreneurship to secondary and tertiary education in order to encourage entrepreneurial vocations amongst young people.

-To improve the training received by entrepreneurs. -To raise awareness about the value of business and entrepreneurship as a source for the generation of wealth and employment.

P. 2. 2. Legal and Regulatory Framework The difficulties in establishing companies and obtaining, within a reasonable timeframe and without additional costs,

create a barrier to entrepreneurship. Moreover, certain regulations (on safety, labour, etc. whose requirements increase as companies become larger,

P. 2. 3. Entrepreneurial and Financial Ecosystem Entrepreneurship and business growth are complex functions that require knowledge and skills both inside and outside companies.

To decrease legal barriers to entrepreneurship. To simplify legal and contractual procedures for entrepreneurship in knowledge centres.

To increase connections within the entrepreneurial ecosystem. To improve the opportunities for newly established companies to obtain financing.

internationalisation and entrepreneurship Pillar 2 Pillar 3 Pillar 4 Leading sectors Emerging activities Crosscutting enabling technologies Innovation environment Strategic objectives Pillars Pillar

públiques Digital agenda Entrepreneurship Eco-innovation (green economy) Non-technological innovation Training and talent Tools Leading sectors Emerging activities Crosscutting enabling technologies

internationalisation and entrepreneurship. Each of these objectives corresponds to a pillar of action. 2. 3. Pillars of Action RIS3CAT is structured into four pillars of action,

internationalisation and entrepreneurship Pillar 2 Pillar 3 Pillar 4 Leading sectors Emerging activities Crosscutting enabling technologies Innovation environment Strategic objectives Pillars Figure

Government of Catalonia, State, European funds and other public/private sources of finance. 3. Tools and Policies 48 P. 2. Entrepreneurship The establishment and growth of new

Measures to support entrepreneurship are varied many and. P. 2. 1. Culture, training and talent Measures to promote entrepreneurship

and attract international entrepreneurial talent. For example: -To bring the world of business and entrepreneurship to secondary and tertiary education in order to encourage entrepreneurial vocations amongst young people.

-To improve the training received by entrepreneurs. -To raise awareness about the value of business and entrepreneurship as a source for the generation of wealth and employment.

P. 2. 2. Legal and Regulatory Framework The difficulties in establishing companies and obtaining, within a reasonable timeframe and without additional costs,

create a barrier to entrepreneurship. Moreover, certain regulations (on safety, labour, etc. whose requirements increase as companies become larger,

P. 2. 3. Entrepreneurial and Financial Ecosystem Entrepreneurship and business growth are complex functions that require knowledge and skills both inside and outside companies.

To decrease legal barriers to entrepreneurship. To simplify legal and contractual procedures for entrepreneurship in knowledge centres.

To increase connections within the entrepreneurial ecosystem. To improve the opportunities for newly established companies to obtain financing.

There is a strong focus on intensifying promotion of entrepreneurship and the scaling of Irish owned firms

Entrepreneurship is associated typically with innovative new firms competing with, and ultimately displacing, obsolete existing firms

Evidence demonstrates a positive correlation between entrepreneurship and economic performance in terms of growth, firm survival, innovation, employment creation, technological change,

The categorisation 5 Action Plan The European Agenda for Entrepreneurship, European commission, COM (2004) 6 acknowledges the importance of both services and manufacturing activities to Ireland's future economic growth,

There is a strong focus on intensifying promotion of entrepreneurship and the scaling of Irish owned firms

Entrepreneurship is associated typically with innovative new firms competing with, and ultimately displacing, obsolete existing firms

Evidence demonstrates a positive correlation between entrepreneurship and economic performance in terms of growth, firm survival, innovation, employment creation, technological change,

The categorisation 5 Action Plan The European Agenda for Entrepreneurship, European commission, COM (2004) 6 acknowledges the importance of both services and manufacturing activities to Ireland's future economic growth,

of existing assets through novel entrepreneurship: 1. Education: learning to be entrepreneurial 2. Raising awareness:

Support for bio-entrepreneurship with Genomaespaña. R&d firms with a high technological level on the international scene.

innovation and entrepreneurship is at the heart of Europe 2020 and a crucial part of Europe's response to the economic crisis.

and one to encourage entrepreneurship. On the contrary, these two policies are mutually reinforcing; without strong entrepreneurship, the strategy of smart specialisation will fail because of a deficit in the entrepreneurial knowledge needed to feed

and nurture this strategy. How: Setting in motion regional change Smart specialisation strategies will usually require some sort of structural change,

Entrepreneurship: Favourable conditions for equity investment, business angels and venture capitalists; business environment favourable to the creation of new SMES;

existence and coverage of training on entrepreneurship and creative problem-solving; autonomy and transparency of education and research organisations;

stimulation of entrepreneurship/management of risk and uncertainty; market formation; mobilisation of resources; and legitimation.

incubators Entrepreneurship stimulation packages Global talent attraction in targeted new sectors Promotion of participation of public and private actors in international technology networks Lobby national government

and competitiveness poles relevant for regional industry Entrepreneurship and spin-off support (business plans competitions, regional venture capital funds) Incentives for regionally-relevant public research Entrepreneurship support (networks of individuals, training courses,

and entrepreneurship culture promotion Supply-chain management initiatives to reduce fragmentation Innovation-oriented public procurement Redefinition of programmes for regional technical schools Innovation awareness-raising,

entrepreneurship promotion events Develop latent demand for innovation (innovation vouchers, placement of students in SMES) Orient polytechnics centres to new qualifications Training for low-skilled and unemployed

and Innovation Policy IRE-RIS Guide Directory No-nonsense to build S3 Diagnostic Systèmes d'Innovation (Praguer) Entrepreneurship and incubation Internationalisationcompetitive

Entrepreneurship is necessary to make sure that innovation ideas are turned into sustained growth and quality jobs.

facilitating innovation and promoting entrepreneurship. Cohesion Policy in fact provides the largest financial Community support to SMES through financial engineering instruments such as JEREMIE. 45 For the period 2014-2020,

supporting entrepreneurship spirit and enterprise creation and development; enhancing innovation support for existing SMES; building capacities in innovation agencies and SMES by spreading information on new tools to support innovation in SMES

o promote entrepreneurship including specific target groups, o improve access to finance for SMES in the form of equity and debt,

design, public services, e-education, e-inclusion, e-skills, entrepreneurship, digital literacy, econtent, creativity, culture, living labs, smart buildings and neighbourhoods, smart

'Promoting entrepreneurship, ''Developing new business models for SMES','Improving the urban environment','Developing Business incubators,'Supporting the physical and economic regeneration of urban and rural areas and communities',etc. 104 http://creativebusiness. org

the development and use of new information technologies (for example to promote the digitisation of cultural heritage), strengthening of entrepreneurship in CCIS,

Innovative financial instruments form part of the Entrepreneurship and Innovation Programme (EIP), one of the three specific programmes under the CIP.

There is a risk of it being hampered by insufficient knowledge, limited support of grass roots, social enterprise and social entrepreneurship activities

Early December, the Commission proposed the Regulation on European Social Entrepreneurship Funds. 169 DG Enterprise has mobilised CIP funds for social innovation.

entrepreneurship and the innovation capabilities of SMES, for instance by facilitating the diffusion and adoption of technologies, incl.

3) Low technology transfer rates and a weak culture of entrepreneurship Main opportunities for future regional development:(

the latter focused primarily on enabling innovation-driven entrepreneurship (e g.,, through fiscal and financial mechanisms, support for firm-initiated RDI projects.

Entrepreneurship has favorable premises for development, as there is a growing diversity of human resources that are involved in constructing complex products.

and adequate public policies for supporting entrepreneurship and SMES, there is high probability that the Romanian business ecosystem will become one of the most competitive and dynamic in the EU. The accumulation

and on facilitating the development of new economic activities through entrepreneurship and experimentation. 1 II. Romania's West Region is developing a smart specialization strategy

Focusing school, vocational and higher education curricula on transversal competences like creativity, entrepreneurship and initiative will help young people to develop their full potential for innovation. d) Attractive regional research infrastructure

Gazelles, firms with at least a 25%turnover growth for 3 or more years, are of particular interest both because of their contribution to employment and as an additional indicator of entrepreneurship.

the lack of a tradition of entrepreneurship and SMES during the communist period has been a hindrance to bottom-up economic development.

which support entrepreneurship and experimentation, the current chapter proposes areas for policy action both on a horizontal level (common to all sectors),

and could promote key EU objectives such as entrepreneurship, growth, innovation, research and development, as well employment. This regional fund could support public-private infrastructure investments and guide the available funding towards innovative projects.

This poses the challenge of innovation and entrepreneurship (start-ups) as the two major challenges for the region's economic future,

entrepreneurship and the innovation capabilities of SMES and other strategic actions should be defined. The University has identified consistent contracts with 374 companies as partners of the University.

entrepreneurship and the innovation capabilities of SMES should be defined. j) The University has identified consistent contracts with 374 companies as partners of the University,

Harris and Albury, 2009), social entrepreneurship and social enterprises (Murray, et al, 2010; OECD, 2010; Price and Morgan, 2011;

‘social enterprise'and‘social entrepreneurship'are used in multiple ways to describe different entities. Noya (2009) distinguishes between the ways that social enterprises are understood in the US and in Europe.

Morgan and Price (2011) argue that social enterprises bring new value and practice sets, such as mutualism, collective entrepreneurship and consensual approaches to innovation and development.

which have a‘social mission'and support diversified innovative activities, such as firm or organization development, knowledge transfer, social technology progress, educational and training programs and entrepreneurship services (Lundström

OECD (2010) SMES, Entrepreneurship and Innovation. Paris: OECD OECD (2011) Fostering Innovation to Address Social Challenges, Workshop Proceedings, http://www. oecd. org/sti/inno/47861327. pdf Oeij, P

Ronen, J. Ed.),Entrepreneurship. Lexingtonbooks, Lexington, pp. 15 28. Beedles, W. L.,1992. Small firm equitycost:

Venturecapital, entrepreneurship, andeconomic growth. Rev. Econ. Stat. 93,338 349. Shane, S.,2002. Sellinguniversitytechnology: patternsfrommit. Manag.

OECD Studies on SMES and Entrepreneurship SMES, ENTREPRENEURSHIP AND INNOVATION OECD Studies on SMES and Entrepreneurship SMES, Entrepreneurship and Innovation ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD

OECD Studies on SMES and Entrepreneurship ISSN 2078-0982 (print) ISSN 2078-0990 (PDF)) Photo credits:

THE CONTRIBUTORS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 3 The Contributors This publication has been prepared under the leadership of Pier Carlo Padoan (Deputy Secretary-general and Chief Economist, OECD) and the management of Sergio

Arzeni (Director, Centre for Entrepreneurship, SMES and Local Development, OECD), with support from Jonathan Potter (Senior Economist at the Centre) and Mariarosa Lunati (Senior Economist at the Centre, currently responsible for

Entrepreneurship Indicators and Business Statistics in the Statistics Directorate OECD). The text was written by members of the Secretariat of the OECD Centre for Entrepreneurship, SMES and Local Development:

specifically, Jonathan Potter (front and back material and Chapter 1), Mariarosa Lunati and Marco Marchese (Chapter 2), Marco Marchese and Jonathan Potter (Chapter 3), Cristina

FOREWORD SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 5 Foreword The combined forces of globalisation, technological progress and growing market demand have created a new type of innovation:

Many areas are ripe for SME and entrepreneurship policy action, and fresh innovation policy is emerging in this field in OECD countries and other global economies.

and entrepreneurship are supported as part of broad national innovation strategies. Some countries are supporting clusters. New ways are being developed to help firms overcome the finance gap.

And the quality of their local entrepreneurship environments the strength of local technology partners, the quality of local science-industry linkages, and so on is critical to generating local knowledge spillovers that FOREWORD SMES

A second course of policy action is to develop skills and capabilities for entrepreneurship and innovation in new firms and existing SMES.

Universities are increasingly providing entrepreneurship training, and this book establishes core principles in this area. The efforts of vocational training institutions and schools are also central to meeting the challenge.

But entrepreneurship education is confined not to the classroom or formal structures for learning. Employees also acquire entrepreneurship skills through interactions with their co-workers, suppliers,

clients and consultants on projects such as those to improve quality control methods or products. These interactions often take place through interactions between SMES and providers of

social entrepreneurship and social innovation. These fit well with the broader notion of innovation that governments are now beginning to adopt,

and entrepreneurship to innovation in the 21st century and the role of policy in responding to the challenges they face,

One of the main planks of their efforts must be the promotion of innovation in SMES and of innovative new entrepreneurship,

The book is a flagship publication of the Centre for Entrepreneurship, SMES and Local Development of the OECD. It is intended to be part of a regular OECD series,

It draws in particular on the expertise and analysis of the OECD's Working Party on SMES and Entrepreneurship and the Directing Committee of the Local Economic and Employment Development Programme.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 7 Acknowledgements The following experts comprised the Scientific Advisory Group that helped guide preparation of this publication:

Professor Franco Malerba, Director of KITES (Centre on Knowledge, Internationalisation and Technology Studies), University of Bocconi, Italy Professor Jay Mitra, Director of the Centre for Entrepreneurship Research

, Essex Business school, University of Essex, United kingdom and Scientific Advisor on Entrepreneurship to the OECD Centre for Entrepreneurship, SMES and Local Development Professor Juan Roure, Professor of Entrepreneurship,

and Juan Luis Segurado, Senior Researcher on entrepreneurship and SME financing, at IESE Business school, University of Navarra, Barcelona, Spain Professor Luc Soete, Director of UNU-MERIT (the United nations

Hungary Lena Tsipouri, University of Athens, Greece Arnold Verbeek, Ideaconsult, Belgium Charles Wessner, National Academy of Science, Technology, Entrepreneurship and Innovation, USA David

Entrepreneurship and Innovation held in Udine on 22-23 october 2009, organised by the OECD Centre for Entrepreneurship, SMES and ACKNOWLEDGEMENTS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 9 Local Development and the Udine Chamber of commerce.

The contributions of the participants are acknowledged gratefully as are the contributions of those who prepared background papers for the conference:

and accepted by the delegates to the OECD's Working Party on SMES and Entrepreneurship and the Directing Committee of the Local Economic and Employment Development Programme.

TABLE OF CONTENTS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 11 Table of contents Executive Summary...15 Chapter 1. Introduction...

25 What is the role of SMES and entrepreneurship in innovation?..32 Policy implications...38 Plan of the book...

41 Chapter 2. SMES, Entrepreneurship and Innovation: An Overview by Country...45 Introduction...46 Australia...

132 How knowledge affects entrepreneurship...132 The systemic approach to innovation...134 The geographical clustering of knowledge-intensive activities...

161 Chapter 4. Entrepreneurship Skills...163 The importance of entrepreneurship skills for SMES and start-ups...

164 Skills for entrepreneurship...165 How are acquired entrepreneurship skills?..167 Local skills ecosystems...180 Policy recommendations...

181 Notes...183 Bibliography...183 Chapter 5. Social Entrepreneurship and Social Innovation...185 Introduction...186 Social entrepreneurship...

188 Social innovation...195 Preliminary recommendations...205 Notes...207 Bibliography...208 Annex 5. A1. Definitions...

212 Annex A. Policy Recommendations: Strengthening Innovation through SMES and Entrepreneurship...216 TABLE OF CONTENTS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 13 Glossary...

219 Tables 3. 1. Business birth rate in HTM clusters...142 3. 2. Ranking of HTM clusters based on the composite indicator...

143 3. 3. Business birth rate in KISA clusters...143 3. 4. Ranking of KISA clusters based on the composite indicator...

143 3. 5. KTOS at a glance in Europe and the United states...146 3. 6. Activities, responsibilities and expected results of knowledge-transfer actors 148 4. 1. Classification of skills at work...

Definitions of social entrepreneurship...212 5. A2. Definitions of social innovation...214 Figures 3. 1. Distribution of HTM firms in the European union (Quantiles based on LQS) 137 3. 2. Distribution of KISA firms in the European union (Quantiles based on

148 SMES, Entrepreneurship and Innovation OECD 2010 15 Executive Summary Innovation is one of the most fundamental processes underpinning economic growth, the driver of growth in output per unit of labour

and entrepreneurship in new ventures is itself an important development. Whereas in the past innovation policy worked through investments in research and development,

In this framework, new firm creation through entrepreneurship (which typically generates new SME entities but occasionally also born large firms)

Sets out the role of SMES and entrepreneurship in innovation and the drivers of and influences on innovation performance.

Presents a set of country-level data on SMES, entrepreneurship and innovation performance, and a review of major policies and new policy developments in the field.

Examines three novel but also critical aspects of policies for SME innovation and innovative entrepreneurship: The participation of new and small firms within global and local knowledge flows,

In addition, the knowledge economy, more open and distributed innovation, globalisation, a shift to non-technological innovation, the emergence of the Silicon valley Business model and a new imperative for social innovation and social entrepreneurship have given all

ENTREPRENEURSHIP AND INNOVATION OECD 2010 17 shares of total activity accounted for by each of the sub-categories of micro,

Higher education institutions are increasingly providing entrepreneurship education. This works best when entrepreneurship support is embedded within teaching,

entrepreneurship is seen as a strategic objective and ambition of the institutions, clear incentives and rewards are applied for academic staff engaged in entrepreneurship promotion,

support is provided for financial and human resources, and entrepreneurship-dedicated structures are in place such as chairs, centres and incubation facilities.

Start-up assistance and evaluations of support approaches should also be put in place surrounding the entrepreneurship courses.

Entrepreneurship is provided also increasingly in vocational education and training and schools. For example, apprenticeship programmes are good vehicles for developing entrepreneurship skills,

but SME participation in apprenticeship and other vocational training is limited relatively, potentially reflecting inappropriate training supply.

Shifts are also occurring in school curriculums aimed at fostering in students the ability and desire to act entrepreneurially.

As well as gaps in external provision of entrepreneurship training, in-house training of employees by SMES is much less common than for large firms.

Despite the general importance of vocational education and training (VET) to skills development in firms, enterprises with less than 50 employees provide significantly less employee training than larger firms.

One of the problems is provided that externally entrepreneurship training approaches for managers and workers are geared not sufficiently to the how to nature of competences that firms require.

nevertheless provide a significant boost to the entrepreneurship skills of SME employees. This involves SMES bringing in outside firms

The final thematic chapter concerns social entrepreneurship and social innovation. Defining social entrepreneurship is given both challenging

the newness of the concept and differences in how it is conceived across countries, and important for the provision of appropriate legal and administrative environments.

The key characteristic of social EXECUTIVE SUMMARY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 19 entrepreneurship is that it aims to provide innovative solutions to unsolved social problems through some form of business.

Social entrepreneurship is thought in fact best of as a vehicle and agent of social innovation, although it is not the only one.

Like social entrepreneurship social innovation has blurred boundaries. In global terms, however, social innovation is about social change in response to social needs and challenges.

Recommendations The main recommendation of the book is that policies to strengthen entrepreneurship and increase the innovation capabilities of SMES should be one of the main planks of government innovation strategies.

Furthermore, governments should target SMES and entrepreneurship as a major potential source of new jobs in the recovery from recession.

governments should introduce an innovation strategy for SMES and entrepreneurship. It should stress actions in four main areas (see Annex A,

pp. 216-217): 1. Promoting conducive entrepreneurship cultures and framework conditions. 2. Increasing the participation of new firms and SMES in knowledge flows. 3. Strengthening entrepreneurial human capital. 4. Improving the environment for social entrepreneurship and social

innovation. Favourable entrepreneurship cultures and framework conditions are the foundation of innovative entrepreneurship and social innovation.

This covers a range of issues and fields including securing stable macroeconomic policies, well-designed mainstream policies, enabling regulatory frameworks and tax regimes and positive attitudes to entrepreneurs and entrepreneurship.

The following key actions are recommended in this area: Foster positive attitudes in society to business start up and growth, including through education and the media.

and conditions of entrepreneurship and SME activity are taken into account in framework conditions and regulations affecting business.

Strengthen knowledge-based entrepreneurship by providing advice and training to start-up entrepreneurs who have strong technological knowledge

and supporting SMES in EXECUTIVE SUMMARY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 21 their efforts to upgrade their R&d,

Learning processes are at the core of entrepreneurship and SME innovation. Yet many emerging and potential business creators are lacking entrepreneurship skills such as in risk assessment,

strategic thinking, networking, and motivating. These skills are also critical to innovation by employees in existing SMES.

Build up entrepreneurship education in universities and higher education institutions by smartly scaling-up, shifting the emphasis from business management to growth-oriented entrepreneurship,

introducing interactive teaching methods that incorporate practical experience and linking into wider networks including alumni networks and external economic development organisations.

Embed teaching of an entrepreneurship mindset in school curricula and accompany this with relevant teacher training

and teaching materials designed for entrepreneurship Reinforce training in SMES by launching in-company projects and increasing SME apprenticeships and developing the training function of small business support programmes,

Encouraging social entrepreneurship and social innovation will help in this respect. The key recommendations are to:

and seed funding programmes for individuals in EXECUTIVE SUMMARY SMES, E 22 NTREPRENEURSHIP AND INNOVATION OECD 2010 the early phases of social entrepreneurship projects.

Undertake research into social entrepreneurship and social innovation and their main components in order to assess the needs of the various entities belonging to the sector.

Evaluate the impacts of social entrepreneurship and social innovation, using appropriate methods such as Social Return on Investment measures and balanced scorecards.

and include social entrepreneurship in school and university curricula. Introduce social clauses in public procurement procedures to encourage involvement of social enterprises in provision of social goods and services.

SMES, Entrepreneurship and Innovation OECD 2010 23 Chapter 1 Introduction The introduction examines what is new about innovation in the 21st century

and the role played by SMES and entrepreneurship. An important shift has occurred from the managed to the entrepreneurial economy,

open innovation, global connections, non-technological innovation, the Silicon valley Business model and social entrepreneurship and social innovation.

Ensuring they reach their full potential requires a new innovation policy approach that facilitates entrepreneurship and SME innovation.

Priorities include inserting new and small firms in knowledge transfer networks, strengthening entrepreneurship skills, and improving institutional environments for social entrepreneurship. 1. INTRODUCTION SMES, E 24 NTREPRENEURSHIP AND INNOVATION OECD 2010 The creation of new business ventures and innovation in existing

small and medium-sized enterprises (SMES) are critical parts of today's innovation process, and should take a central place in government strategies to promote innovation.

however, SME and entrepreneurship support is embedded not yet fully in innovation policy, and the requirements for effective policies in this area are still not well enough understood.

But their numbers from the Entrepreneurship Indicators Project should not be exaggerated. They make up only a small minority of all SMES.

2009). 2 The Global Entrepreneurship Monitor survey in 53 countries suggests that only 6. 5%of new entrepreneurs are highexpectation entrepreneurs,

Many empirical studies have shown the aggregate relationships between entrepreneurship and SME activity and economic growth and job creation.

while in 1. INTRODUCTION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 25 2007 two-thirds of the entire pool of new jobs were created by firms aged between one and five years

This job creation function of entrepreneurship and SME development is of great relevance to the recovery from the global financial

In the short to medium term there is a real opportunity for governments to use policies for entrepreneurship

recognition that entrepreneurship and small firm development promotes innovation and in so doing meets fundamental economic and social objectives.

and Entrepreneurship, aimed at policy makers and their advisors with direct responsibility for entrepreneurship and SME policy or working in other policy domains such as education,

innovation and social policy who could better realise their goals by adopting strategies that are more aware of and sensitive to the needs and opportunities of SMES and entrepreneurship.

This chapter sets the context. It focuses on two key questions and draws out the policy implications of each:

which relies much more strongly than in the past on entrepreneurship and SMES, but institutions and policies have yet to fully adapt to this new reality.

developing entrepreneurial human capital and bringing about social entrepreneurship and social innovation. The chapter starts by examining how global trends towards the knowledge economy, open innovation,

global connections and non-technological innovation and the emergence of national and regional economic models and new types of social innovation have increased the importance of SMES and entrepreneurship to innovation.

and entrepreneurship contribute to innovation by driving processes of creative destruction, commercialising research, making break through

In the latter, entrepreneurship is one of the foundations of innovation. 1. INTRODUCTION SMES, E 26 NTREPRENEURSHIP AND INNOVATION OECD 2010 New and small firms have become critical innovation players because of their ability to recognise

Thurik (2009) distinguishes between three major historical phases of innovation and contrasts the importance of SMES and entrepreneurship in each. 1. The Schumpeter Mark I regime.

and entrepreneurship in today's economy is reduced the importance of economies of scale and scope in production,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 27 reducing the transaction costs associated with managing different parts of the production process,

which entrepreneurship and SMES have moved up the agenda. A number of further associated trends have changed the way that innovation is carried out in the 21st century,

and social innovation and social entrepreneurship. These are discussed in turn. The knowledge economy One of the features of the transition from the 20th to the 21st century has been the emergence of the knowledge economy,

and entrepreneurship that have made them essential drivers of innovation, growth and employment creation. The major feature of the knowledge economy is increased the importance of knowledge as a factor of production.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 29 make a major difference, such as changes in product design or packaging, product placement, product promotion or pricing.

The Silicon valley Business model There have been changes in the entrepreneurship environment in some very dynamic national

significantly increasing the prospects of major innovation in small firms. 1. INTRODUCTION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 31 Social entrepreneurship and social innovation So far,

Social entrepreneurship is defined by its paramount logic of providing entrepreneurial business solutions to social challenges.

Social entrepreneurship and social innovation are of fundamental importance today because welfare states are changing. New social needs are emerging as people live longer,

social entrepreneurship is also now usefully entering fields where there is some public or private sector provision,

and social innovation and entrepreneurship represent an important change in the environment in which innovation takes place.

which SMES and entrepreneurship are now critical players in a broader, more distributed innovation process.

and entrepreneurship now play in innovation, before we examine the implications for policy. 1. INTRODUCTION SMES,

E 32 NTREPRENEURSHIP AND INNOVATION OECD 2010 What is the role of SMES and entrepreneurship in innovation?

The major function of SMES and entrepreneurship in innovation is the introduction of advances in products, processes, organisational methods and marketing techniques into the economy.

Another function of SMES and entrepreneurship in innovation is to provide ideas and inputs to ideas generation that are exploited by large firms, universities/research organisations and other small firms.

It is useful to start by considering how a number of seminal authors have seen the connection between entrepreneurship and innovation (see also Ahmad and Seymour

Like Schumpeter, Baumol (2002) adopts a dynamic framework examining the relationship between entrepreneurship, innovation and economic growth.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 33 ties to existing technologies. Large firms are seen to undertake more incremental innovation, based on systematic research in their existing development channels.

All of these authors identify essential roles for entrepreneurship in innovation: in both static and dynamic frameworks;

But in which settings is entrepreneurship to be found? There are many competing views and some degree of confusion in this area.

Entrepreneurship is associated the phenomenon with entrepreneurial activity. The definition of entrepreneurship is therefore not synonymous with either SMES or business start-up,

but reflects instead the human action behind innovation. Entrepreneurial activity may occur in start-up enterprises SMES, large firms or public sector organisations.

Our focus in both cases is on entrepreneurship and innovation i e. the generation of value from the identification and exploitation of new products, processes and markets.

but with innovation-oriented entrepreneurship within new firms and SMES. It is oriented this innovation activity that promotes economic growth

knowledge spillovers and entrepreneurship; large and small firm roles in breakthrough and incremental innovation; distributed and open innovation;

and a range of entrepreneurship boot camps, mentoring programmes, entrepreneurship resource centres and entrepreneurship courses for researchers have been introduced (Mcnaughton, 2008).

ENTREPRENEURSHIP AND INNOVATION OECD 2010 35 offs high-growth firms on average, while they also tend to grow slowly (Lindholm-Dahlstrand,

and the University of Waterloo in Canada are key drivers of entrepreneurship in their areas through spin-offs (84 spin-offs in Madison;

Considering entrepreneurship as all venture start-ups, Audretsch et al. 2006) and Acs et al. 2004,2005, 2009) suggest that commercialisation of knowledge by new start-ups explains part of the link between entrepreneurship

and economic growth through their role in promoting knowledge spillovers. The relationship may involve not just the role of new start-ups in exploiting knowledge themselves but also the role of new enterprises and SMES as participants in knowledge exchange networks within innovation systems, stimulating knowledge transfers from universities and other

with entrepreneurship acting to convert knowledge into growth by exploiting spillover originating in a country's R&d stock (Acs et al.,

Within any innovation system, a close articulation is needed 1. INTRODUCTION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 37 between

Modes of innovation A key distinction needs to be made between the role of SMES and entrepreneurship in the Science,

SMES and entrepreneurship are fundamental to the modern innovation process. Yet their place is established not fully in today's innovation policies.

innovation policy in the entrepreneurial economy must expand to include new types of actions for entrepreneurship and SMES.

Entrepreneurship cultures. With entrepreneurship at a premium, it is important for policy to engender conducive cultures and attitudes where possible.

For example, education systems, the media and business support organisations can help foster entrepreneurial motivations (Potter et al.

SME and entrepreneurship framework conditions. There should not be unnecessary obstacles to SMES and entrepreneurship in the institutions of the economy such as taxation, social security, bankruptcy legislation, competition policy,

product market regulation, labour market regulation, finance markets and intellectual property protection. OECD research shows for example how unbalanced taxes on company profits

and losses and high average tax rates on SMES relative to large firms can diminish SME and entrepreneurship activity (OECD, 2009).

ENTREPRENEURSHIP AND INNOVATION OECD 2010 39 experiencing today. As the incumbent firm stock is contracted, room is created for innovative firms to enter

One of the key drivers of SME innovation and innovative entrepreneurship is knowledge exchange between and among explorers and exploiters, particularly for the exploitation of new, science-based knowledge.

Entrepreneurship skills. Another often overlooked factor affecting the propensity for successful business start-up is the degree to

which motivated people possess adequate entrepreneurship skills. This includes small business management skills (such as business planning and accounting), strategic skills (such as decision-making and opportunity recognition),

Social entrepreneurship and social innovation. Entrepreneurship is not only about profitmaking. Social entrepreneurship and social innovation are important features of a broader vision of innovation

and are expanding at a rapid pace. Institutional arrangements, however, are often not well adapted to the needs and modus operandi of these organisations and approaches.

National legal, financial and fiscal frameworks for social enterprises therefore need to be reviewed and adjusted and accompanied by capacity building, skills development and network creation for social entrepreneurs.

This is not a comprehensive account of all areas of policy intervention for SMES, entrepreneurship and innovation

and entrepreneurship, recognising both the potential of SMES and entrepreneurship in innovation and the barriers that policy needs to overcome (see Annex A). The next chapters will examine the major issues in more detail.

Evidence is presented on what can be measured in this new area. Three themes are explored then which are of major importance but merit more attention than traditionally received:

and facilitating social entrepreneurship and social innovation. Chapter 2 provides data on SME innovation performance

ENTREPRENEURSHIP AND INNOVATION OECD 2010 41 example through embedding of foreign direct investment, attraction of highly-skilled labour from overseas and building cross-national SME alliances.

while entrepreneurship skills are needed to start successful firms, they are understood not well or supported. They may be imparted through school education, universities and vocational training colleges.

Finally, Chapter 5 examines social innovation and social entrepreneurship. While there is a growing interest in the area

and gives some telling examples of social entrepreneurship and social innovation that offer inspiration for wider adoption.

with average annualised growth in employees greater than 20%a year over a three-year period and with ten or more employees at the beginning of the period. 2. See also NESTA (2009). 3. The OECD/Eurostat Entrepreneurship

Indicator Programme is developing internationallycomparable indicators of entrepreneurship based on this definition. Bibliography Acs, Z. and D. Audretsch (1990), Innovation and Small Firms, MIT Press, Cambridge MA.

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Ahmad, N. and A. Hoffman (2008), A Framework for Addressing and Measuring Entrepreneurship, OECD Statistics Working papers, 2008/2, OECD Publishing, Paris, doi:

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Audretsch, D.,M. Keilbach and E. Lehmann (2006), Entrepreneurship and Economic growth, Oxford university Press, Oxford. Audretsch D. and R. Thurik (2001), Linking Entrepreneurship to Growth, OECD Science, Technology and Industry Working papers, 2001/2, OECD, Paris. Audretsch, D. and R. Thurik (2004

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Practice and Principles, Harper Business, New york. 1. INTRODUCTION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 43 Erken, H p. Donselaar and R. Thurik (2008), Total

Factor Productivity and the Role of Entrepreneurship, Jena Economic Research Papers 2008-19, Friedrich Schiller University and the Max Planck Institute of Economics, Jena.

Etzkowitz, H.,L. Leydesdorff (2000), The Dynamics of Innovation: from National Systems and Mode 2 to a Triple Helix of University-Industry-Government Relation, Research Policy, Vol. 29, pp. 109 123.

Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy, Cambridge university Press, Cambridge. Henrekson, M. and D. Johansson (2008), Gazelles as Job Creators A Survey and Interpretation of the Evidence, IFN Working Paper 733, Research Institute of Industrial Economics, Stockholm.

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Analysis and Antitrust Implications, Free Press, New york. SMES, Entrepreneurship and Innovation OECD 2010 45 Chapter 2 SMES, Entrepreneurship and Innovation:

or to a major policy in the field of entrepreneurship, SMES and innovation. Examples are given of recent policy innovations that are of interest because of their novelty or proved effectiveness.

and burdens on creating a start-up. 2. SMES, ENTREPRENEURSHIP AND INNOVATION: AN OVERVIEW BY COUNTRY SMES, E 46 NTREPRENEURSHIP AND INNOVATION OECD 2010 Introduction The following chapter presents key figures on the SME sector and the innovation performance of small

Each country section also illustrates the main policy initiatives to promote innovative entrepreneurship and innovation activities in SMES.

Information was collected by national experts and delegates to the OECD Working Party on SMES and Entrepreneurship and OECD Local Economic and Employment Development Committee.

as indicated below. 2. SMES, ENTREPRENEURSHIP AND INNOVATION: AN OVERVIEW BY COUNTRY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 47 Box 2. 2. Firm size classifications by country Innovation activities of enterprises The OECD Oslo

Manual, Third Edition, defines innovation as the implementation of a new or significantly improved product (good or service),

state control, barriers to entrepreneurship, and barriers to trade and investment. The indicator Barriers to entrepreneurship measures different regulations in the domain of entrepreneurship and is composed of three sub-indicators:

Administrative burdens to the creation of new firms (low-level indicators are: administrative burdens for corporations, administrative burdens for sole proprietor firms, sector-specific administrative burdens;

to provide a referral service linking firms to experts within industries. 2. AUSTRALIA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 49 Australia Notes:

35.1 48.9 33.6 40.1 2. AUSTRIA SMES, E 50 NTREPRENEURSHIP AND INNOVATION OECD 2010 Austria In Austria, a number of linked policies work in unison to foster entrepreneurship

and business and to enhance the potential for start-ups by anchoring entrepreneurship as an interesting academic exit option.

2. AUSTRIA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 51 Austria A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment Value added

E 52 NTREPRENEURSHIP AND INNOVATION OECD 2010 Belgium Belgian policy to promote innovative entrepreneurship or innovation activities is designed largely

At the regional level, initial support for incubators and business innovation centres and financial measures have in the past few years shifted towards a more strategic emphasis on fostering commercialisation of the academic research base, on supporting entrepreneurship

(regional entrepreneurship action plans) and on providing access to finance (business angel networks. In Flanders, the Participation Company Flanders works to boost the innovativeness of regional SMES, by leveraging additional risk capital for new ventures (Vinnof:

In comparison, the projects that have not been supported by the scheme have achieved a creation rate of 11%.2. BELGIUM SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 53 Belgium A. Structural indicators on enterprise population

supporting the innovative capabilities of SMES in Canada by helping them develop clean technologies. 2. CANADA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 55 Canada A. Structural indicators on enterprise

AND INNOVATION OECD 2010 Czech republic Entrepreneurship and enterprise innovation policy in the Czech republic is anchored institutionally within the Ministry of Industry and Trade.

The OPEI can be characterised as a complementary set of sub-programmes rather than one general entrepreneurship policy.

CZECH REPUBLIC SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 57 Czech republic A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment Value added (factor

contains 350 specific initiatives that introduce reforms in key areas such as education and training, innovation, research and entrepreneurship.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 59 Denmark A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment Value added (factor costs) Industry

support for innovative entrepreneurship and the innovation activities of SMES is based on a systemic policy approach.

and the Economy (TEM) is building a modern growth entrepreneurship policy that seeks to create first-rate conditions for Finnish growth ventures.

which will target innovative start-ups in the clean tech, energy, services and welfare areas. 2. FINLAND SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 61 Finland A. Structural indicators on enterprise

Pôles de compétitivité In late 2004 The french government introduced pôles de compétitivité (competitiveness poles) to encourage entrepreneurship and SME innovation in the country.

and share the risk of R&d and innovation investments with other local partners. 2. FRANCE SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 63 France A. Structural indicators on enterprise population

and further improved the overall policy environment to foster high-tech entrepreneurship and SME development. To do so the government joined together with the Kfw banking group and the industrial corporations BASF

The first, Culture of Entrepreneurship, aims at promoting entrepreneurship among university employees and students. Projects at universities and non-university research institutes can apply for financial support in the form of a non-repayable grant over a three-year period.

The total amount of grants in 2008 was EUR 9. 7 million. 2. GERMANY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 65 Germany A. Structural indicators on enterprise population

The Operational Programme Competitiveness and Entrepreneurship (OPCE) and five Regional Operational Programmes are the main tools for improving competitiveness and entrepreneurship and fostering innovation.

Improvement of the entrepreneurial environment) as well as to threads of the five regional operational programmes related to entrepreneurship and digital convergence.

of which the most relevant for entrepreneurship includes support of a broad range of infrastructures (clusters, large-scale research and innovation platforms,

and networks in advanced research sectors), the creation of intermediary organisations and the set up of incentives for venture capital funds and of grant schemes for special categories of entrepreneurs (e g. the youth and women's entrepreneurship).

who can cash it from the funding authorities. 2. GREECE SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 67 Greece A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment

and Technology (NKTH) and will operate for a period of three years with a total fund of HUF 12 billion. 2. HUNGARY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 69 Hungary A. Structural

or grants in the start-up, early or developing stages of SMES, in return for approximately 20-25%ownership equity. 2. ICELAND SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 71 Iceland A. Structural indicators

To date 1 623 vouchers have been issued. 2. IRELAND SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 73 Ireland A. Structural indicators on enterprise population

and new distributive formats and logistic systems (45). 2. ITALY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 75 Italy A. Structural indicators on enterprise population, 2007

and it funds around a quarter of the number of projects awarded in the United states. Support for Development of Networks between Upstream and Downstream Companies Japan resembles other OECD countries in the types of policies it implements to promote innovative entrepreneurship and innovation

particularly SMES, appears relatively unique to Japan. 2. JAPAN SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 77 Japan A. Structural indicators on enterprise population, 2007 Number of establishments Total

the Small and Medium Business Administration (SMBA) operates numerous schemes that are targeted all at assisting SMES in the areas of entrepreneurship, human resources, financing, marketing and innovation.

across many industries and by 2008 more than 180 888 evaluations had been made. 2. KOREA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 79 Korea A. Structural indicators on enterprise population, 2006

including the entrepreneurship network 1, 2, 3, Go, which helps link entrepreneurs together to encourage the dissemination of best practices;

and also to promote the creation of enterprises based on technological innovation. 2. LUXEMBOURG SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 81 Luxembourg A. Structural indicators on enterprise population, 2007 Number

Business schools, to advance the entrepreneurship culture of the country through formal education; Strategic Alliances and Innovation Networks for Competitiveness, to support the collaboration of industry and academia for innovative projects;

and thereby increase Mexico's competitiveness. 2. MEXICO SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 83 Mexico A. Structural indicators on enterprise population, 2003 Number of establishments Total employment

which starters operate, particularly in the universities. 2. THE NETHERLANDS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 85 The netherlands A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment

and external costs associated with prototyping. 2. NEW ZEALAND SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 87 New zealand A. Structural indicators on enterprise population, 2008 Number of enterprises Number

which play important roles in supplier networks. 2. NORWAY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 89 Norway A. Structural indicators on enterprise population, 2006 Number of enterprises

ENTREPRENEURSHIP AND INNOVATION OECD 2010 91 Poland A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment Value added (factor costs) Industry

and supply of venture capital, seeks to encourage innovation and entrepreneurship, and contributes to facilitating technology transfer.

and manager of support schemes to promote innovation in companies under the National Strategic Reference Framework. 2. PORTUGAL SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 93 Portugal A. Structural indicators

these schemes collectively provided 773 loans to SMES totalling over SKK 3. 8 billion. 2. SLOVAK REPUBLIC SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 95 Slovak Republic A. Structural

and Competitiveness Plan 2000-06 and was included in 2006 as part of both the Spanish National Reform programme and the Entrepreneurship Programme.

From 2002 to 2007, NEOTEC approved 257 projects, for which EUR 171 million were invested and EUR 81 million committed. 2. SPAIN SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010

E 98 NTREPRENEURSHIP AND INNOVATION OECD 2010 Sweden National policy addressing innovative entrepreneurship and/or innovation activities of SMES is based on mix of direct support programmes,

Tillväxtverket, which includes ALMI Sweden's SME and Entrepreneurship Agency; VINNOVA (Swedish Governmental Agency for Innovation Systems;

The newly established Swedish Agency for Economic and Regional Growth Tillväxtverket supports entrepreneurship and SMES.

A third important government agency addressing innovative entrepreneurship is the Innovationsbron. The main task is to increase the commercialisation of research results and ideas.

and almost 50%of the firms have applied for patents. 2. SWEDEN SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 99 Sweden A. Structural indicators on enterprise population, 2007 Number of enterprises Total

Among its main tasks is the promotion of entrepreneurship in The swiss economy. The most important entrepreneurship programmes are the CTI Start-up programme and Venturelab.

The overall budget for the entrepreneurship promotion programme of the CTI amounts to about CHF 11 million in 2008;

CHF 3. 7 million of this amount is used for funding Venturelab and about CHF 7. 3 million for the Start-up programme.

and to inspire students for entrepreneurship. Services for students include semester courses to orient the students for entrepreneurship

and workshops where important tools for prospective entrepreneurs are taught. For existing start-ups Venturelab gives five-day intensive courses and advisory services.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 101 Switzerland A. Structural indicators on enterprise population Number of enterprises, 2005 Total employment, 2001 Industry Services Total Industry

E 102 NTREPRENEURSHIP AND INNOVATION OECD 2010 Turkey Young Entrepreneur Development Programme The Young Entrepreneur Development Programme was designed to help increase awareness of entrepreneurship,

Another policy measure for promoting technology-based entrepreneurship began in 2008 under the R&d Support Law No. 5746.

and Technological Innovation The pioneering programme in the field of innovative entrepreneurship/SME innovation is the Support Programme for R&d and Technological Innovation of KOSGEB, the Small and Medium Sized Industry Development Organisation.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 103 Turkey A. Structural indicators on enterprise population, 2006 Number of enterprises Total employment Value added (factor costs) Industry

ENTREPRENEURSHIP AND INNOVATION OECD 2010 105 United kingdom A. Structural indicators on enterprise population, 2007 Number of enterprises Total employment Value added (factor costs) Industry

In a recent USD 5 million assessment of the programme, the US National Academies found that the SBIR programme encourages new entrepreneurship needed to bring innovative ideas from the laboratory to the market by providing scarce pre

and cost sharing. 2. UNITED STATES SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 107 United states A. Structural indicators on enterprise population Number of enterprises, 2005 Number of employees, 2004

technology-based entrepreneurship; incubators and technological parks; hiring of academic researchers by the private sector.

It is now being operated by local agents in nine states of the country. 2. BRAZIL SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 109 Brazil Notes:

OECD, Indicators of Product Market Regulation. statlink2 http://dx. doi. org/10.1787/812752261347 A. Barriers to entrepreneurship, 2008 Index scale of 0-6 from least to most

This fund supports numerous programmes, including the promotion of entrepreneurship and innovation among private companies.

In order to specifically target SMES, the government launched in 2007 an ambitious entrepreneurship agenda, Chile Emprende Contigo (Chile undertakes with you).

entrepreneurship; innovation and training; and support to indebted entrepreneurs. The total resources committed for the period 2007-2010 amounts to USD 620 million.

Two important innovation and entrepreneurship programmes are targeted specifically to SMES. One is Innova Chile, hosted by the Production Promotion Corporation (CORFO).

The third line is Innovative Entrepreneurship, which supports potential businesses. Specific products are the provision of seed capital, support to business incubators and spin-off projects, technology promotion organisations and development of professional training centres.

The execution of specific projects is made through consultancy firms and technical training organisations. 2. CHILE SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 111 Chile Notes:

OECD, Indicators of Product Market Regulation. statlink2 http://dx. doi. org/10.1787/812782022743 A. Barriers to entrepreneurship, 2008 Index scale of 0-6 from least to most

The Torch Programme played an indispensable role in promoting entrepreneurship and start-up companies through its administrative arm and the university science parks and incubators.

In total, more than 500 organisations at the provincial and local level are engaged in managing these innovation funds. 2. CHINA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 113 China Notes:

OECD, Indicators of Product Market Regulation. statlink2 http://dx. doi. org/10.1787/812783644886 B. Barriers to entrepreneurship, 2008 Index scale of 0-6

and entrepreneurship has been launched in Estonia. Innovative, growth-oriented companies can now receive higher support grants/loans from Enterprise Estonia,

Estonian policy has given a great deal of attention to entrepreneurship awareness raising among key stakeholders, including entrepreneurs themselves, the general public, policy makers and even school children.

ESTONIA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 115 Estonia A. Structural indicators on enterprise population

The development of a robust legal framework conducive to the establishment of a highquality technology environment reflects the strength of the role of government and rule of law in India's innovation and entrepreneurship.

and support innovation and entrepreneurship in this sector. In 1998 the Indian Parliament passed legislation by way of an Electronic commerce Act,

biotechnology and nanotechnology. 2. INDIA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 117 India Notes: 1. Czech republic, Hungary, Korea, Mexico, Poland, Slovak Republic, Turkey. 2. Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands

OECD, Indicators of Product Market Regulation. statlink2 http://dx. doi. org/10.1787/813210106531 A. Barriers to entrepreneurship, India 2007 and OECD 2008 Index scale

and programmes as a result of sharing ideas in the meetings regularly facilitated by the Innovation Centre. 2. INDONESIA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 119 Indonesia Notes:

OECD, Indicators of Product Market Regulation. statlink2 http://dx. doi. org/10.1787/813210634131 A. Barriers to entrepreneurship, Indonesia 2007 and OECD 2008 Index scale

E 120 NTREPRENEURSHIP AND INNOVATION OECD 2010 Israel Incubator programme The main Israeli programme promoting innovative entrepreneurship is the Incubator programme,

which allowed the fledgling Israeli venture capitalists to make companies public at a size that would be impossible today. 2. ISRAEL SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 121 Israel Notes:

Israel 2009. statlink2 http://dx. doi. org/10.1787/813271727207 A. Barriers to entrepreneurship, 2008 Index scale of 0-6 from least to most restrictive B. Administrative

2010 Russian Federation Since mid-1990s the Russian government has taken initiatives to stimulate innovative activities of SMES and innovative entrepreneurship.

Russia does not yet have a comprehensive policy on innovative entrepreneurship and SME development, but nevertheless several policy initiatives are being realised, among which:

Moreover, RUSNANO participates in financing of infrastructure projects for innovative entrepreneurship. Venture Funds In 2006 the Ministry for Economic Development launched a programme for regional venture funds in 19 Russian regions.

RVC plays the role of the Federal Fund of venture fund (fund-of-funds model), stimulating venture investment and financial support of the high-tech sector. 2. RUSSIAN FEDERATION SMES, ENTREPRENEURSHIP

. Growth in the number of employees in SMES, 2001-2007 Thousands of people D. Barriers to entrepreneurship, 2008 Index scale of 0-6 from least to most restrictive E. Administrative

Besides the traditional programmes to support young researchers and young researchers from the business sector, the Public Agency of the Republic of Slovenia for Entrepreneurship and Foreign Investments (PAEFI) has two main programmes:

Other smaller programmes focus on the entrepreneurial education of different target groups. 2. SLOVENIA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 125 Slovenia A. Structural indicators on enterprise population

from ZAR 21.3 million (2006/07) to ZAR 75.8 million (USD 10.8 million) in 2007/08. 2. SOUTH AFRICA SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 127 South africa Notes:

OECD, Indicators of Product Market Regulation. statlink2 http://dx. doi. org/10.1787/813570382740 A. Barriers to entrepreneurship, South africa 2007 and OECD 2008 Index scale

ENTREPRENEURSHIP AND INNOVATION: AN OVERVIEW BY COUNTRY SMES, E 128 NTREPRENEURSHIP AND INNOVATION OECD 2010 ANNEX 2. A1 Notes on the Country Data The structural data on businesses presented in the chapter

and F. Services includes ISIC Rev. 3 categories G h i and K. 2. SMES, ENTREPRENEURSHIP AND INNOVATION:

AN OVERVIEW BY COUNTRY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 129 Austria: In Table A, for Number of enterprises, Industry includes NACE categories C, D,

and D. Services is not available. 2. SMES, ENTREPRENEURSHIP AND INNOVATION: AN OVERVIEW BY COUNTRY SMES, E 130 NTREPRENEURSHIP AND INNOVATION OECD 2010 Luxembourg:

Entrepreneurship and Innovation OECD 2010 131 Chapter 3 Knowledge Flows Knowledge affects the market entry,

The contribution of knowledge to entrepreneurship is understood best through a systemic approach to innovation, which differs from the linear approach by taking innovation as a process that does not occur solely within corporate boundaries,

How knowledge affects entrepreneurship Studies investigating the determinants of the entrepreneurial process have focused traditionally on either personal traits or external constraints.

Another strand of the entrepreneurship literature, however, looks at the role of knowledge in facilitating business entry and performance.

Adragna and Lusardi (2008), on the other hand, single out gender and age as the key determinants of entrepreneurship;

As to external constraints the second strand of the literature heavy labour market regulations and market entry requirements are deemed traditionally to discourage entrepreneurship,

Liquidity constraints and credit rationing undermine entrepreneurship, pushing wealthy people towards an entrepreneurial career and deterring those without the necessary financial resources (Evans and Jovanovic, 1989).

But for entrepreneurship to happen the values that 3. KNOWLEDGE FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 133 economic agents give to opportunities must necessarily be different.

Were everyone to assign the same value to an entrepreneurial opportunity, any and all would try to harness it,

Entrepreneurship can therefore be regarded as a process that finds new relationships between inputs and outputs by dealing with missing or incomplete information.

The systemic approach to innovation Knowledge is crucial for entrepreneurship and triggers the business innovation process.

The main consequence of a systemic approach to innovation is that the entrepreneurship and innovation performance of a locality,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 135 capacity to codify and implement new knowledge into their business operations.

The success of these clusters in entrepreneurship and innovation has in large part stemmed from strong local knowledge generation, diffusion and absorption capacities in the form of leading universities and research organisations, strong concentrations

and compare their performance based on indicators of their entrepreneurship vitality. However, they remain preliminary and exploratory

ENTREPRENEURSHIP AND INNOVATION OECD 2010 137 European union The first two maps show the agglomeration of HTM

FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 139 cluster around large metropolitan areas, including London, Paris, Milan, Stockholm, Brussels, and Dublin.

High-High low-Low Low-High High-low 3. KNOWLEDGE FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 141 Figure 3. 6, based on the same methodology

ENTREPRENEURSHIP AND INNOVATION OECD 2010 143 Table 3. 2. Ranking of HTM clusters based on the composite indicator Source:

when knowledge spillovers take 3. KNOWLEDGE FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 145 place between sectors that share competences, rather than within one specific sector.

which makes entrepreneurship a process that strongly hinges on knowledge spillovers (Acs et al.,2006). ) A form of knowledge flows:

3. KNOWLEDGE FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 147 the United kingdom or Denmark, where there is a more consolidated licensing tradition (average licensing revenues are at approximately EUR 300 000),

The role of global knowledge flows for local innovation systems Local knowledge flows are crucial to entrepreneurship

support university entrepreneurship. Participate in transfer activities; identify criteria for risk sharing; support investments in R&d.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 149 The reference is the priority date, which corresponds to the first filing worldwide

thus increasing technological development and entrepreneurship in terms of potentially exploitable new products, services and organisational methods.

and delivery of effective support instruments as a recent OECD review of entrepreneurship and SME support systems in various OECD regions shows (Potter,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 151 that foreign multinationals are often less reluctant to allow spin-offs than normally thought,

The attraction of foreign skilled workers Renowned examples of attractive local economies, such as Silicon valley and Austin in the United states or Dublin in Europe, are witness to the importance of attracting foreign highskilled workers to stimulate entrepreneurship.

and technological knowledge acquired in their source organisations for their success. The innovation system concept is helpful in understanding how policy can promote innovative entrepreneurship

and entrepreneurship performance and help open new growth trajectories and fend off lock ins and other systemic failures.

Similarly, investment readiness 3. KNOWLEDGE FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 153 programmes are appropriate for later stages of business development in which equity finance is involved.

Emphasis also needs to be placed on a new set of entrepreneurship skills that move away from traditional business management competences

Universities and 3. KNOWLEDGE FLOWS SMES, E 154 NTREPRENEURSHIP AND INNOVATION OECD 2010 other research institutes can foster entrepreneurship by generating and diffusing innovations and supplying highly skilled

ENTREPRENEURSHIP AND INNOVATION OECD 2010 155 fertilising technologies, through a comprehensive approach in which two key programmes are the Small Business Innovation Research (SBIR) and the Technology Innovation Programme (TIP.

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working document, Centre for Entrepreneurship, SMES and Local Development, OECD, Paris. OECD (forthcoming 2010a), High-Growth Enterprises:

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2009), Clusters, Innovation and Entrepreneurship, OECD, Paris. Piccaluga, A. and R. Pietrabissa (2009), International Dynamics of University-Industry Knowledge Transfer paper presented at the OECD Conference SMES, Entrepreneurship

Shane, S. and S. Venkataraman (2000), The Promise of Entrepreneurship as a Field of Research, Academy of Management Review, Vol. 25, No. 1, pp. 217-226.

A wide range of entrepreneurship, economic performance and financial indicators can be calculated at the local level from the ORBIS database:

ENTREPRENEURSHIP AND INNOVATION OECD 2010 159 necessarily imply the effective establishment of the company as an active economic unit,

these types of indicators should be favoured. 3. KNOWLEDGE FLOWS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 161 ANNEX 3. A2 The LISA Methodology The LISA (Local Indicator of Spatial

SMES, Entrepreneurship and Innovation OECD 2010 163 Chapter 4 Entrepreneurship Skills This chapter describes the role of entrepreneurship skills in driving successful new venture creation

vocational training and the use of knowledge-intensive service activities and small business support in the provision of entrepreneurship skills.

Policy recommendations are provided. 4. ENTREPRENEURSHIP SKILLS SMES E 164 NTREPRENEURSHIP AND INNOVATION OECD 2010 The importance of entrepreneurship skills for SMES and start-ups Learning processes are at the core of entrepreneurship and SME development.

They are essential for the formation of a new business, its survival and growth as well as for the upgrading of existing SMES.

The OECD defines entrepreneurship as human action in pursuit of the generation of value by identifying and exploiting new products, processes or markets.

So a process of transforming opportunities into value is at the heart of entrepreneurship and applies to all of new firm founders, small business managers and SME workforces supporting introduction of innovations.

and this comes from entrepreneurship skills. Three key questions guide the debate on entrepreneurship and SME learning and the role of public policy:

What skills are needed? How is the necessary learning and preparedness acquired? How can entrepreneurship skills be fostered through government intervention?

Entrepreneurship often appears to be spontaneous; there are numerous examples of successful entrepreneurs who did not undergo any special training

or are selftaught. Yet people with viable business ideas can also be hindered in their steps into entrepreneurship by a lack of appropriate skills and behaviours.

The evidence suggests that new entrepreneurs often face problems, for instance in presenting their business case to potential investors

Entrepreneurship skills will also be at a premium. These are not basic skills; they are sophisticated more,

Second, such skill is brought not usually out in the industry training 4. ENTREPRENEURSHIP SKILLS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 165 system.

it is time to give entrepreneurship skills greater attention. Skills for entrepreneurship1 Skills refers to the abilities

Converging skills require several of the other skills plus skills specific to entrepreneurship, or for adjusting to the green transformation of jobs or indeed new green jobs.

Entrepreneurship skills as defined in Table 4. 1, are specific skills that are required for creating

Entrepreneurship skills, which are part of this broad group, include two components related to innovation: an active component comprising the entrepreneur's propensity to drive innovation,

) Entrepreneurship involves both the impulse to create and innovate and the recognition of innovation from others

The requirements for successful entrepreneurship can be further unbundled into the three elements set out in Box 4. 1:

knowledge, skills and attitudes. 4. ENTREPRENEURSHIP SKILLS SMES, E 166 NTREPRENEURSHIP AND INNOVATION OECD 2010 Table 4. 1. Classification of skills at work Source:

CONVERGING SKILLS Entrepreneurship Specific skills for creating and running new business ventures and innovative projects in existing firms,

ENTREPRENEURSHIP SKILLS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 167 Entrepreneurship skills are considered here as converging,

Indeed, with respect to the latter, firms are now more aware of the need to train their workforce in entrepreneurship skills.

a recent survey of SMES in New zealand shows that entrepreneurship activities in the firm are the activities most linked with firms'skills upgrading initiatives (OECD, 2010b, forthcoming.

How are acquired entrepreneurship skills? Entrepreneurship skills are understood best in relation to lifelong learning, where the individual acquires skills through their life history.

In formal education, entrepreneurship training can be provided at different levels, from primary and secondary schools, to vocational colleges and tertiary and university education.

The focus and objectives may of course vary. Entrepreneurship education in schools tends to be about embedding an entrepreneurial mindset.

The aim is to foster more positive attitudes to this career road that students may carry with them into their later careers,

Entrepreneurship teaching in higher education also seeks to do this but may in addition seek to impart more technical-related skills such as in management and business planning.

This section therefore explores entrepreneurship skills provision both in the formal education system (focusing on higher education,

vocational education and schools) and in work environments (focusing on informal entrepreneurship learning at work through the involvement of workers in knowledge-intensive service activities

and entrepreneurship training by SME support organisations). Universities and higher education institutions Entrepreneurship teaching OECD work shows that third-level (higher education) entrepreneurship teaching activities are increasing (Potter, 2008.

Until recently, entrepreneurship education was provided very rarely. Now, however, it is a rapidly evolving field with emerging new approaches that meet increased demand from students and the need for tailored teaching.

More universities, faculties and students are becoming involved and the variety of content and pedagogies is increasing.

There are nonetheless some international differences in the extent and nature of entrepreneurship teaching provision, with North american universities leading the way in introducing

Survey work reported in Solomon (2008) examined the types of entrepreneurship teaching offered in the United states. This showed that the most common courses in the broad field of entrepreneurship were in entrepreneurship

Structures 4. ENTREPRENEURSHIP SKILLS SMES, E 168 NTREPRENEURSHIP AND INNOVATION OECD 2010 for entrepreneurship teaching are also often in place,

with approximately one-third of colleges and universities having an entrepreneurship centre, and one-third having an entrepreneurship professor or chair.

Management of entrepreneurship courses tended to be housed in existing academic departments (41%)or business schools (31%;%although entrepreneurship centres or departments of small business and entrepreneurship were managing 23%of entrepreneurship courses.

Research comparing entrepreneurship education across universities from the United states, Canada and Denmark suggests that entrepreneurship education provision in US universities is advanced relatively (Hoffman et al.

2008). ) Entrepreneurship education was compared among selected universities in the three countries, on five important dimensions of teaching activities:

educational scope (the breadth of programmes offered, how courses are spread across undergraduate and postgraduate levels, etc.);

educational setup (the extent to which guest lecturers, practical experiences, private businesses, and experimental teaching activities are involved, etc.);

institutional characteristics (interaction between faculties, prioritisation of entrepreneurship, allocation of funding, incentives to students and teachers, etc.;

outreach (scope of university networks co-operation with incubators, alumni networks, access to experienced practitioners, access to venture capital) and evaluation (degree of monitoring and assessment of entrepreneurship activities.

For example, at Stanford university and Cornell University in the United states, student participation in entrepreneurship programmes was 15%and 20%respectively.

%while none of the Danish universities reported participation rates above 2. 5%.Despite the rapid growth in entrepreneurship teaching in higher education, there are a number of issues that need to be addressed in adapting universities to the needs of a more entrepreneurial economy (Potter,

and shifting towards more interactive and experiential teaching methods in the entrepreneurship domain. In terms of provision, while many universities now offer entrepreneurship teaching, the numbers of students participating remains a small share.

This is associated with two barriers. Firstly, entrepreneurship teaching is confined often to certain departments and centres, in particular business and engineering schools and new university centres of entrepreneurship,

whereas potential entrepreneurs come from a wide variety of disciplines. Secondly, entrepreneurship teaching is often not well rewarded

either for students or for staff. Courses are offered often to students as optional complementary modules with no credits for their degrees.

Teaching approaches must also evolve to accommodate how entrepreneurship skills are learned best rather than be tethered to traditional classroom forms.

These methods are placed better than classroom lectures to develop 4. ENTREPRENEURSHIP SKILLS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 169 entrepreneurial behaviours.

Inappropriate constraints to the participation of entrepreneurs in entrepreneurship teaching programmes are another challenge. Entrepreneurship support frameworks A recent OECD study in eastern Germany revealed that higher education institutions in the six eastern German regions (länder) are engaged actively in supporting entrepreneurship not just through entrepreneurship teaching but also through support for enterprise

start-ups by students and staff. Indeed entrepreneurship teaching can have a greater positive impact on the rate of new firm creation

if closely linked to start-up support. The eastern German universities either use government schemes, private sector funding

or are about to establish an entrepreneurship chair or a professorship. More than two-thirds have established dedicated start-up support services,

in the form of entrepreneurship centres and technology transfer units, which offer would-be entrepreneurs and those already in the start-up process consultation and access to networks and premises.

and university staff with a clear interest in entrepreneurship support. All of these developments demonstrate the importance given to the creation of new growth potential ventures out of universities.

and enhancing entrepreneurship support in universities across the following six areas. Strategy: There is clear role for public policy in opening up universities towards their third mission,

Public policy can facilitate their introduction by adding entrepreneurship support to the list of performance criteria on

Public kickoff funding for entrepreneurship support infrastructure is common to many OECD countries. Yet, it is the balance between a minimum long-term financing for staff costs and overheads and the openness to private sector involvement in the financing of entrepreneurship chairs and incubation facilities

which proves to be successful. Support infrastructure: Universities will need to find their place in existing start-up and entrepreneurship support systems.

Networking and incentives for clear referral systems can be useful to increase the effectiveness and efficiency of start-up support and to reduce duplication, confusion and waste of resources.

Entrepreneurship education: The exchange of good practice in creative teaching methods allows for improvement and innovation.

Another important area for public policy intervention is curricula development and the integration of entrepreneurship courses, such as creativity classes.

A key success factor for university entrepreneurship support lies in private sector collaboration. Universities can create a protected environment for nascent entrepreneurship.

This can be an important stimulus for students and researchers to make a first step towards the creation of a venture.

early exposure to market conditions is advisable. 4. ENTREPRENEURSHIP SKILLS SMES, E 170 NTREPRENEURSHIP AND INNOVATION OECD 2010 Evaluation:

which demonstrates the socioeconomic impact of university entrepreneurship support and reveals needs for changes. The work has developed also a criteria list of good practice across the six dimensions from an assessment of existing literature and case studies of university entrepreneurship support.

Policy makers and university management can use these criteria to self-assess and reorient their current approaches (Box 4. 2). Box 4. 2. Entrepreneurship support in universities:

Criteria for good practice Strategy 1. A broad understanding of entrepreneurship is a strategic objective of the university,

and there is top-down support for it. 2. Objectives of entrepreneurship education and start-up support include generating entrepreneurial attitudes, behaviour and skills,

as well as enhancing growth entrepreneurship (both high-tech and low-tech). 3. There are clear incentives and rewards for entrepreneurship educators, professors and researchers,

who actively support graduate entrepreneurship (mentoring, sharing of research results, etc.).4. Recruitment and career development of academic staff take into account entrepreneurial attitudes,

behaviour and experience as well as entrepreneurship support activities. Resources 1. A minimum long-term financing of staff costs and overheads for graduate entrepreneurship is agreed as part of the university's budget. 2. Self-sufficiency of university internal entrepreneurship support is a goal. 3

. Human resource development for entrepreneurship educators and staff involved in entrepreneurship start-up support is in place.

Support infrastructure 1. An entrepreneurship-dedicated structure within the university (chair, department, support centre) is in place,

which closely collaborates, coordinates and integrates facultyinternal entrepreneurship support and ensures viable cross-faculty collaboration. 2. Facilities for business incubation either exist on the campus

or assistance is offered to gain access to external facilities. 3. There is close co-operation and referral between university-internal and external business start-up and entrepreneurship support organisations;

roles are defined clearly. Entrepreneurship education 1. Entrepreneurship education is integrated progressively in curricula and the use of entrepreneurial pedagogies is advocated across faculties. 2. The entrepreneurship education offer is communicated widely,

and measures are undertaken to increase the rate and capacity of take-up. 3. A suite of courses exists,

which uses creative teaching methods and is tailored to the needs of undergraduate, graduate and postgraduate students. 4. ENTREPRENEURSHIP SKILLS SMES,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 171 Vocational education and training Vocational education and training (VET) is a type of task-oriented technical education widely used to prepare future self-employed entrepreneurs and SME employees.

Vocational training colleges have had traditionally a craft focus. Many of the craft occupations are pursued in practice by the self-employed

and people working in micro businesses, for example plumbers, painters, electricians and information technology specialists. Other people go on to work in larger SMES

and may benefit from training provided before employment or in lifelong learning activities whilst in employment.

In addition to courses entirely taught in vocational education institutions, an important element of the system is apprenticeships,

As a third example, Box 4. 2. Entrepreneurship support in universities: Criteria for good practice (cont.

business support organisations and firms are a key component of entrepreneurship education. 6. Results of entrepreneurship research are integrated into entrepreneurship education messages.

Start-up support 1. Entrepreneurship education activities and start-up support are integrated closely. 2. Team building is facilitated actively by university staff. 3. Access to private financing is facilitated through networking

and dedicated events. 4. Mentoring by professors and entrepreneurs is offered. 5. Entrepreneurship support in universities is integrated closely into external business support partnerships and networks,

Evaluation 1. Regular stocktaking and performance checking of entrepreneurship activities is undertaken. 2. Evaluation of entrepreneurship activities is formalised

and long-term (alumni and post-start-up) monitoring of the impact. 4. ENTREPRENEURSHIP SKILLS SMES, E 172 NTREPRENEURSHIP AND INNOVATION OECD 2010 the Australian Apprenticeships, bring together the traditional apprenticeship and the traineeship systems.

and for this reason the apprenticeship could be seen as a vehicle to promote entrepreneurship skills.

Traditional apprenticeship programmes aim to train skilled employees and do not explicitly train entrepreneurship skills,

however, and would need to be expanded to impart entrepreneurship skills in a wider sense. Interaction with vocational training institutions tends to be more important for skills development in small firms than in larger ones,

However, improving entrepreneurship skills in SMES through vocational education and training is challenging due to obstacles to SMES in accessing formal training.

Meeting the challenge of providing more relevant entrepreneurship teaching in vocational education therefore requires changes in programmes

venture capital finance, product life cycles and so on. 4. ENTREPRENEURSHIP SKILLS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 173 And more experiential learning methods should be developed for example drawing on the entrepreneurship skills created in drama,

or seminar-based workshops to jumpstart innovation, entrepreneurship and creativity in an SME. Owner-managers do not see themselves as having time to participate in long academic styled programmes

) Schools The need for people to have new skills for entrepreneurship is accompanied by a need for shifts in school curriculums

As Cooney (2009) points out, this is not just about business start-up or positive attitudes to entrepreneurs and entrepreneurship.

It is also based on the view that students who receive entrepreneurship education as part of their schooling show improved school attendance

Introduce entrepreneurship as a key competence in school curricula. Ensure that the importance of entrepreneurship is reflected in teacher training.

Step up co-operation with the business community for entrepreneurship education at all levels. The emphasis is therefore at three levels:

introducing entrepreneurship into the curriculum, developing teaching methods appropriate to the subject (such as virtual business creation games)

and drawing on entrepreneurs in the business community as resources for teaching. Furthermore, entrepreneurship teaching should not be separated from the study of other disciplines,

but incorporated into a wide range of teaching activities. 4. ENTREPRENEURSHIP SKILLS SMES, E 174 NTREPRENEURSHIP AND INNOVATION OECD 2010 A number of European countries have recognised already the benefits of an entrepreneurship education

and implemented policies to ensure that school students receive it (Cooney, 2009). In Finland for example, entrepreneurship education is a thematic entity, not a subject.

In 2004 the Finnish Ministry of Education produced an Action Plan for Entrepreneurship Education that covered all levels of the education system,

and working together with the Ministry of Trade and Industry appointed a working group entitled From Higher education Institutes to Entrepreneur.

The Ministry of Education also appointed an Entrepreneurship Steering Group to ensure that the agreed programme of action was implemented properly.

In Norway, entrepreneurship is included in the curricula at all levels, and three government departments are involved in its delivery (Ministry of Education and Research,

Ministry of Trade and Industry and Ministry of Local government and Regional Development. In addition to co-operation between ministries and directorates, there are also partnership agreements with businesses as part of the action plan.

and foster a culture for entrepreneurship. Scotland has launched also an entrepreneurship education called Determined to Succeed (Box 4. 3). Box 4. 3. Scotland's Determined to Succeed entrepreneurship education strategy Scotland's Determined to Succeed entrepreneurship education strategy

details the actions that needed to be taken by the Scottish government to embed entrepreneurship into the national schooling system.

The strategy is part of a long-term drive to build an enterprise culture in Scotland that will give young people a better chance of realising their full potential

4. ENTREPRENEURSHIP SKILLS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 175 Box 4. 3. Scotland's Determined to Succeed entrepreneurship education strategy (cont.

4) Effective contributors have an understanding and appreciation of the world of work, the value of different occupations and entrepreneurship and their contributions to the economy and to society;

In examining the different entrepreneurship education policies currently being pursued by different governments, it can be argued that the Scottish strategy is among the clearest in terms of

Further details of the Scottish strategy on entrepreneurship education can be found at www. ltscotland. org. uk/enterpriseineducation/index. asp.

Cooney (2009). 4. ENTREPRENEURSHIP SKILLS SMES, E 176 NTREPRENEURSHIP AND INNOVATION OECD 2010 The European commission has assessed recently the degree to

which entrepreneurship has been included as a key competence in national curricula for secondary education in various European countries in line with the Oslo Agenda for Entrepreneurship Education in Europe (European commission, 2007).

Poland and the UK) entrepreneurship is recognised already a objective and is embedded explicitly in national curricula,

but that despite an increasing spread of elements of entrepreneurship in secondary teaching, only a small minority of countries have established well entrepreneurship education in the curriculum.

Embedding entrepreneurship further into school teaching will require in addition incentives and support to teachers involved in entrepreneurship activities as well as support to nonprofit organisations that are active in this area.

Training in SMES Studies of training outcomes have shown clearly the positive effect of general training by SMES.

Such an emphasis on employee-driven learning and trial-and-error behaviour can obviously be detrimental to both the firm and the employee. 4. ENTREPRENEURSHIP SKILLS SMES

ENTREPRENEURSHIP AND INNOVATION OECD 2010 177 SMES, however, can be highly innovative, despite limited investment in formal training and strategic planning of training (Muller and Zenker, 2001).

Many entrepreneurship skills are acquired in the process of knowledge co-production; they range from analytical and problem-solving skills to creative thinking to integration of technical knowledge.

although it includes a greater component of knowledge intensity and interactive skills. 4. ENTREPRENEURSHIP SKILLS SMES,

Until now the attention of policy makers has tended to be on the contribution of knowledge workers to entrepreneurship and innovation.

and where the component of knowledge production is high are an example of the sophisticated entrepreneurship skills that can be learned at work

and new entrepreneurship skills through formal (contractual) and informal (networking) activities, where professionals interact with their embedded knowledge in pursuit of new or improved solutions to current needs of the firm;

Entrepreneurship policies should pay more attention to this way of developing entrepreneurship skills, however, so that measures can better correspond to how SMES actually upgrade skills that are relevant to their production,

operations and entrepreneurship processes. One way of encouraging this would be to introduce innovation vouchers,

Similar schemes are reported in Chapter 2 for Greece, The netherlands, Portugal, the United kingdom and Slovenia. 4. ENTREPRENEURSHIP SKILLS SMES

ENTREPRENEURSHIP AND INNOVATION OECD 2010 179 Small business support There is a number of small-business-specific support programmes aimed at developing entrepreneurship skills in SMES

SMES tend 4. ENTREPRENEURSHIP SKILLS SMES, E 180 NTREPRENEURSHIP AND INNOVATION OECD 2010 to participate in these activities on an informal basis and through interactions with companies and organisations in their network.

even if critical for the entrepreneurship and innovation process of the firm and to upgrade professionals'skills,

Effective entrepreneurship skill formation policy also demands an appreciation of workforce development as an alternative to traditional approaches centred on the provision of training in discrete competencies.

The role of local networks and skills ecosystems in encouraging SMES to participate more fully in entrepreneurship training activities has received little attention in policy design.

suggests that a local policy orientation might be useful in promoting greater entrepreneurship training cultures in SMES. 4. ENTREPRENEURSHIP SKILLS SMES,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 181 An example of an organisation providing entrepreneurship training in a local skills ecosystem is provided in Box 4. 4 below.

Policy recommendations Build up entrepreneurship education in universities and higher education institutions. Scale up, smartly. Increase the number of entrepreneurship courses

and participating students where there is evidence of success. Make sure that the entrepreneurship teaching fulfils high quality standards

and is extended across subjects to reach a wide range of potential entrepreneurs. Provide training, encouragement and support for staff embarking on entrepreneurship teaching activities.

Facilitate teaching activities for existing and former entrepreneurs. Encourage growth-oriented entrepreneurship. Shift emphasis from business management to enterprise growth challenges,

including finance and internationalisation. Teach the skills required for growth including opportunity identification, risk taking, strategy making,

and functions that need to be applied in entrepreneurship situations, rather than breaking up teaching into separate business functions as in traditional management courses.

Involve entrepreneurs in the design and teaching of entrepreneurship courses. Expose students to entrepreneur role models,

and entrepreneurship development training programmes for owners, managers and consultants in business planning, financial services, ICT and marketing.

Public administration. 4. ENTREPRENEURSHIP SKILLS SMES, E 182 NTREPRENEURSHIP AND INNOVATION OECD 2010 placements and consulting projects.

Tap into the resources of alumni networks to help fund and support entrepreneurship programmes for example by asking alumni to get involved in teaching,

and teachers and providing support for the interinstitution mobility of entrepreneurship teachers. Strengthen VET programmes for business founders, SME managers and SME workforces.

Embed an entrepreneurship mindset through the school education system. Develop the training function of small business support programmes including programmes for business succession,

Include entrepreneurship activities in school curricula; develop interactive materials and activities and involve entrepreneurs and businesses;

incentives and support to teachers involved in entrepreneurship activities. Reinforce training in SMES Use these

launch projects to impart entrepreneurship skills across all occupations around product and process development initiatives;

broaden the focus of entrepreneurship skills development projects to encompass all occupations and not just management;

since they are ideal for entrepreneurship skills development. Increase the use of informal learning sources.

Tap into knowledge-intensive service activities (KISA) processes to increase the entrepreneurship skills acquisition of SME workforces.

such as in programme design and management. 4. ENTREPRENEURSHIP SKILLS SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 183 Create integrated training strategies combining training located in higher education, vocational education and training,

Note 1. Skills for entrepreneurship refer to those capabilities involved in firm creation or in realising a new product, service or activity.

What Entrepreneurship Skills are Important to Innovation in SMES and How Should They Be promoted Through Policy?,

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Council Conclusions, Directorate General for Enterprise and Industry, Brussels. Gibb, A. 2002), In Pursuit of a New‘Enterprise'and‘Entrepreneurship'Paradigm for Learning:

Gibb, A. 2009), The Small Business and Entrepreneurship Challenge to Vocational education: Revolution or Evolution? Paper presented at the OECD Conference on SMES, Entrepreneurship and Innovation, Udine, Italy, 22-23 october 2009, OECD LEED Programme, Paris. Gibb Dyer, W. Jr.

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Green, L.,B. Jones and I. Miles (2007), Global Review of Innovation Intelligence and Policy Studies:

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, Paris, Ch. 6, pp. 139-164. Itkonen, K. 2009), Developing Entrepreneurship in Small Enterprises The Succession Process Supported by Apprenticeship Training as a Context for Learning in M.-L. Stenström and P. Tynjälä (eds.

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SMES, Entrepreneurship and Innovation OECD 2010 185 Chapter 5 Social Entrepreneurship and Social Innovation The chapter outlines social entrepreneurship and social innovation before going on to provide concrete examples.

and have an important role to play in the provision of tailored support to aid their development. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

E 186 NTREPRENEURSHIP AND INNOVATION OECD 2010 Introduction Social entrepreneurship and social innovation have garnered, in the past decade particular attention from policy makers, academics, practitioners,

and in entrepreneurship, both commercial (for-profit businesses pursuing as a primary objective economic value and its appropriation) and social (primarily aiming at addressing and satisfying unmet social needs,

Social entrepreneurship and social innovation are part of the solution, as they both explicitly aim to provide innovative solutions to unsolved social problems,

Even if social entrepreneurship as an activity is developing quickly around the world (Box 5. 1) and social innovations are appearing everywhere

A term like social entrepreneurship tends to overlap with terms such as social economy, third sector, nonprofit sector, social enterprise and social entrepreneur, some

social entrepreneurship and social enterprise do not have the same meaning in the United states as in Europe for example,

The same confusion exists over social innovation. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 187 There is,

therefore, a need for greater conceptual clarity to be developed around these areas. This chapter examines social entrepreneurship

and social innovation and explores their meaning, as well as considering concrete examples of both. It is divided into two sections:

the first focuses on social entrepreneurship and the second on social innovation. It also provides recommendations as to how to most effectively support social entrepreneurship

and promote social innovation. Box 5. 1. The growth of social entrepreneurship While empirical evidence shows that social entrepreneurship is growing in many countries,

measuring it like measuring the social economy, the third sector and the nonprofit sector is difficult.

This is due not only to the variety of the entities belonging to the field, but also to the fact that these entities vary according to the geographical context

and that countries recognise social entrepreneurship differently. The Social Entrepreneurship Monitor is a special report of the Global Entrepreneurship Monitor (GEM) UK project to estimate the percentage of social entrepreneurs in UK society using population survey data.

The GEM report found that 1. 2 million people, which corresponds to 3. 2%of the working-age UK population,

As the comparable number for commercial entrepreneurship is 6. 2%,this points to the importance of social entrepreneurship.

the number of social entrepreneurship entities developed from 1 176 in 1999 to 30 000 in 2008,

When referring explicitly to social enterprises, undoubtedly a major expression of social entrepreneurship, recent UK data released by the Third Sector in July 2009 (www. cabinetoffice. gov. uk/media/231495/factoids. pdf) refer to an estimated average (2005-07) of 61

The report presents the main figures for the social economy in the European union, by 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

E 188 NTREPRENEURSHIP AND INNOVATION OECD 2010 Social entrepreneurship The concept of social entrepreneurship is defined still poorly

it could also be seen as a unique opportunity for researchers from different fields and disciplines, such as entrepreneurship, sociology and organisational theory,

What is social entrepreneurship? Social entrepreneurship can be defined as entrepreneurship that aims to provide innovative solutions to unsolved social problems.

Therefore it often goes hand in hand with social innovation processes, aimed at improving people's lives by promoting social changes.

Social entrepreneurship is, therefore, about solving social problems rather than exploiting market opportunities. Social currency is the motivation of social entrepreneurs who all have one thing in common:

the innovative use of resources Box 5. 1. The growth of social entrepreneurship (cont. country and globally, differentiating three groups of organisations:

the Global 300 is the 10th largest economy in the world (ICA, Annual Report, 2006). 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 189 to pursue opportunities to catalyze social change (Mair and Ganly, 2010).

Social entrepreneurs are in pursuit of sustainable solutions to problems of neglected positive externalities (Santos, 2009, p. 1). 2 The challenge of defining social entrepreneurship Defining

what social entrepreneurship is poses important challenges and the growing interest in social entrepreneurship by policy makers as well as social investors means that it cannot be undefined left.

Policy makers and investors need clarity: unclear landscapes and boundaries can limit their support, which is critical to the smooth development of these fields.

or analysing the landscape of social entrepreneurship, or to adopt a more inclusive or more exclusive definition of it, remains an important discussion in the field:

Given that social entrepreneurship is still an evolving field of practices, it might be best to avoid narrowly defining it,

so as to avoid excluding initiatives that may be entitled to be considered social entrepreneurship even if they have not met all of the essential characteristics.

A great variety of definitions of social entrepreneurship and social entrepreneurs has been provided since the early 1980s (see Annex 5. A1 for a noncomprehensive list of definitions).

But according to some authors the theoretical underpinnings of social entrepreneurship have not yet been explored adequately (see for e g.

Authors such as Neck, Brush and Allen (2009, p. 15) suggest that a lack of agreement on what defines social entrepreneurship

Careful analysis of the growing literature reveals a perceived risk that the term social entrepreneurship could become very inclusive and,

instead on the landscape of social entrepreneurship to suggest a typology of entrepreneurial ventures in order to identify those that could be included in the social entrepreneurship field (Neck et al.,

2009), 4 or have identified sets of primary and secondary characteristics of social entrepreneurship (Brouard and Larivet,

2009). 5 Social entrepreneurship theories It appears that a consensus over the boundaries of social entrepreneurship remains elusive (Nicholls, 2006, p. 7),

but also that a certain clarity has begun to emerge in recent years. Arguably, a good balance between the need to include some concepts

when referring to social 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 190 NTREPRENEURSHIP AND INNOVATION OECD 2010 entrepreneurship:

social value, social mission, social wealth, social change, social impact, social innovation, sustainability, creativity and a business approach.

1. Is social entrepreneurship an individual or a collective phenomenon? That is, should one focus on individual social entrepreneurs rather than on collective social entrepreneurship initiatives?

It appears that social entrepreneurship can be both an individual and a collective phenomenon. The reality,

as some concrete examples will demonstrate later on, presents us with a few outstanding individual social entrepreneurs, many lesser-known ones,

2006). 2. is shaped social entrepreneurship by social value rather than economic value? The answer would be that,

in order to pursue the social mission of social entrepreneurship initiatives, the creation of social value is the essential feature of the initiatives,

and social entrepreneurship is that the economic value serves social objectives. In this sense, social entrepreneurship creates blended value that consists of economic, social and environmental value components (Emerson,

2003). 3. is located social entrepreneurship only in the nonprofit sector, or can it also be found in the for-profit and public sectors?

While many social entrepreneurship initiatives can be found in the nonprofit sector, some social entrepreneurship attitudes also concern other sectors:

the for-profit sector (for-profit business reaching outstanding, concrete levels of social responsibility and a high level of creation of social value) and the public sector6 (central and local authorities engaging in

or promoting socially innovative programmes and measures in partnership with the other sectors). 4. Does social entrepreneurship aim to achieve incremental social impacts,

or is meant it to produce radical social transformations only? While the debate here is an ongoing one,

if social entrepreneurship is a way to improve the quality of life of individuals and communities through social value creation and innovative paths,

Social entrepreneurship aims therefore, at pursuing both radical and incremental social changes. 5. Is social entrepreneurship a local phenomenon or a global one?

While many initiatives happen at the local level, their impact and the repercussions that flow from that impact cannot be isolated,

North american and Japan to support local social entrepreneurship initiatives (Mair and Garley, 2010). 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 191

What distinguishes social entrepreneurship from commercial entrepreneurship is the predominant focus on value creation rather than on value appropriation.

Box 5. 2. Social entrepreneurship attitudes in the for-profit sector Corporate social responsibility (CSR) is a concept distinct from that of social entrepreneurship;

Still, some commercial business can have significant CSR initiatives in the social entrepreneurship field, most especially if they support the development of this sector.

servicing over 8 000 3-year-olds and employing over 2 000 women. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

E 192 NTREPRENEURSHIP AND INNOVATION OECD 2010 Social entrepreneurship practices Having considered the theoretical approach to social entrepreneurship,

Box 5. 2. Social entrepreneurship attitudes in the for-profit sector (cont. A project for setting up residences to host mentally disabled people who have outlived their parents.

5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 193 Health-related problems are at the core of the initiative of pharmaceutical scientist Victoria G. Hale,

/5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 194 NTREPRENEURSHIP AND INNOVATION OECD 2010 a deprived area.

www. silai. org. uk/index. htm. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 195 and because of the quality of the services offered by SIEL Bleu,

www. sielbleu. org. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 196 NTREPRENEURSHIP AND INNOVATION OECD 2010 objective of facilitating international dissemination

as social innovation finally aims to provide social change for improving people's quality of life. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 197 Many of the elements presented in the OECD definition have been taken into account by other definitions at a later stage.

Like social entrepreneurship social innovation has blurred boundaries. Nevertheless, the term has been used widely to refer to different ideas

As with social entrepreneurship, a balance between inclusive and exclusive definitions has to be found.

While in the past emphasis was placed on the nonprofit sector as the homeland of social innovation, the private and the public 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

(which has been identified as the new wave of social entrepreneurship, as underlined by the GEM symposium in September 2009).

and is a social innovation worth underlining. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 199 Social Impact Bonds will be piloted in 2010 in the United kingdom in the context of reducing re-offending by ex-offenders.

The field of social innovation is an evolving one: social innovations keep appearing. Here we give a sense of the variety of initiatives,

5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 200 NTREPRENEURSHIP AND INNOVATION OECD 2010 Box 5. 8. Bank Palmas (Brazil) In 1998 the first

www. banquepalmas. fr. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 201 Bank Palmas represents a powerful example of a social innovation

www. iledefrance. fr. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 202 NTREPRENEURSHIP AND INNOVATION OECD 2010 The following provides an outstanding example of how social media

5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 203 Box 5. 11. ammado:

www. ammado. com/.5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 204 NTREPRENEURSHIP AND INNOVATION OECD 2010 The discussion now turns to the increased interest in social innovation

Challenge Lab looks at the contribution innovation can make to services, with an initial 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES,

ENTREPRENEURSHIP AND INNOVATION OECD 2010 205 focus on ageing, health and climate change; Methods Lab examines how public service innovation can be fostered;

and entrepreneurship are considered also critical factors for economic development in Portugal, a view reflected in the recently approved Portuguese Government Programme.

The Large Loan facility will create a fund of EUR 100 million to support social entrepreneurship

Preliminary recommendations Social entrepreneurship and social innovation aim to meet unsatisfied social needs and to respond to social challenges.

Social entrepreneurship is a vehicle and agent, though not the only one, of social innovation;

social innovation very often originates inside the social entrepreneurship sector and can be taken up by other sectors later on.

Social entrepreneurship Build enabling environments and implement supporting policies Specific enabling environments (legal, fiscal, regulatory) might be needed for social entrepreneurs

Seed 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 206 NTREPRENEURSHIP AND INNOVATION OECD 2010 funding is critical in the early phases of a project as it covers the costs linked to a startup and also the costs of capital investments.

Support further research Governments should support further research into the field of social entrepreneurship and its main components (social enterprises, social economy organisations, social venture business, nonprofit organisations, etc.

and include social entrepreneurship in school and university curricula Social entrepreneurs might need special training to help them hone

At the same time a culture of inclusive entrepreneurship needs to be nurtured to encourage role models of successful businesses

and to include social entrepreneurship in school and university curricula. Support market development for social enterprise

Evaluate the impact of social entrepreneurship in selected areas This will require the identification of quantitative and qualitative measurement tools

5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 207 provide a space to experiment

social entrepreneurship and social enterprise were used in an interchangeable way until recently and that social entrepreneurship was seen as the process through which social entrepreneurs created social enterprises.

More recently though, the notions have been differentiated: social entrepreneurs in the United states are individuals launching activities dedicated to a social mission,

As far as the notion of social entrepreneurship is concerned, while the Americans tend to stress the blurred boundaries among institutional and legal forms,

Europeans tend to stress the fact that social entrepreneurship is located inside the third sector. With reference to the notion of social enterprises,

Here social entrepreneurship gives its full contribution. An example of this is the Unis-Cité initiative in France:

and then influence governments to act in the field. 3. In 2006 Light identified four components of social entrepreneurship:

were formed based on the analysis of the 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 208 NTREPRENEURSHIP AND INNOVATION OECD 2010 existing literature at that time,

which had led him to a very inclusive definition of social entrepreneurship. Thus he suggested that it is an effort by an individual, group, network,

This resulted in a more exclusive (that is narrow) definition of social entrepreneurship based on the idea that there are special sets of attitudes,

2009) focus on the landscape of social entrepreneurship rather than on defining it. In order to do so, they analyse four types of entrepreneurial forms;

and enterprising nonprofits belong to the landscape of social entrepreneurship. Regardless of profit orientation, social entrepreneurs identify opportunities to solve social problems:

both people and planet problems (p. 18). 5. Brouard and Larivet (2009) analyse most of the existing definitions of social entrepreneurship

social entrepreneurship represents a variety of activities and processes; it wants to create and sustain social value;

Building on these characteristics, the authors define social entrepreneurship as follows: Social entrepreneurship is a concept

which represents a variety of activities and processes to create and sustain social value by using more entrepreneurial and innovative approaches

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Mair, J. and I. Marti (2006), Social Entrepreneurship Research: A Source of Explanation, Prediction, and Delight, Journal of World Business, Vol. 41, No. 1, pp. 36-44.

Martin, R. and S. Osberg (2007), Social Entrepreneurship: The Case for Definitions, Social Innovation Review, Vol. 5, No. 2, pp. 28-39.

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The Concept of Social Entrepreneurship, University of Aukland Business Review, Vol. 11, No. 1, pp. 45-51.

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2007), Entrepreneurship in the Social Sector, Sage Publications, Los angeles. Westall, A. 2007), How Can Innovation in Social Enterprise Be understood,

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Domain, Contributions and Ethical Dilemmas, University of Minnesota Conference on Ethics and Entrepreneurship. Zhara, S.,E. Gedajlovic, D. Neubaum and J. Shulman (2008), Typology of Entrepreneurs:

SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 212 NTREPRENEURSHIP AND INNOVATION OECD 2010 ANNEX 5. A1 Definitions Table 5a. 1. Definitions of social

entrepreneurship Author (s) Year Definition Fowler 2000 Social entrepreneurship is the creation of viable (socioeconomic structures, relations, institutions,

p. 649) CCSE 2001 Defines‘social entrepreneurship'broadly to encompass a variety of initiatives which fall into two broad categories.

First, in the for-profit sector, social entrepreneurship encompasses activities emphasising the importance of a socially engaged private sector,

p. 1) Dees, Emerson and Economy 2002 Social entrepreneurship is not about starting a business

p. 326) Hibbert, Hogg and Quinn 2002 Social entrepreneurship can be defined loosely as the use of entrepreneurial behaviour for social ends rather than for-profits objectives,

p. 288) Institute for Social Entrepreneurs 2002 Social entrepreneurship is the art of simultaneously pursuing both a financial and a social return on investment (the‘double bottom line'.(

'p. 1) Thompson 2002 Although social entrepreneurship is in evidence in many profit-seeking businesses sometimes in their strategies and activities, sometimes through donations of money and time.

p. 413) Lasprogata and Cotton 2003 Social entrepreneurship means nonprofit organisations that apply entrepreneurial strategies to sustain themselves financially

'p. 69) Mair and Noboa 2003 SE Social entrepreneurship is seen as the innovative use of resource combinations to pursue opportunities aiming at the creation of organisations

p. 5) Pomerantz 2003 Social entrepreneurship can be defined as the development of innovative, mission-supporting, earned income,

p. 25) Sullivan Mort, Weerawardena and Carnegie 2003 Social entrepreneurship, the entrepreneurship leading to the establishment of new social enterprise,

p. 76) Conceptualises social entrepreneurship as a multidimensional construct involving the expression of entrepreneurially virtuous behaviour to achieve the social mission, a coherent unity of purpose and action in the face of moral complexity,

p. 3) Haugh 2005 Social entrepreneurship is the process of creating social enterprise. p. 3) Roberts and Woods 2005 Social entrepreneurship is the construction,

evaluation and pursuit of opportunities for transformative social change carried out by visionary, passionately dedicated individuals.

p. 49) Seelos and Mair 2005 Social entrepreneurship creates new models for the provision of products

pp. 243-244) 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 213 Table 5a. 1. Definitions of social entrepreneurship (cont.

Author (s) Year Definition GEM 2006 Social entrepreneurship is any attempt at new social enterprise activity or new enterprise creation such as self employment, a new enterprise,

p. 5) Leadbeater 2006 One way to define social entrepreneurship would be through what motivates the actors,

and put higher value on their social mission than financial One another way to define social entrepreneurship would be through outcomes:

p. 241) Mair and Marti 2006 First, we view social entrepreneurship as a process of creating value by combining resources in new ways.

social entrepreneurship involves the offering of services and products but can also refer to the creation of new organisations.

p. 23) Peredo and Mclean 2006 Social entrepreneurship is exercised where some person or group: 1) aim (s) at creating social value,

p. 247) Weerawardena and Mort 2006 Social entrepreneurship strives to achieve social value creation and this requires the display of innovativeness, proactiveness and risk management behaviour.

p. 32) Zhara, Gedajlovic, Neubaum and Shulman 2006 Social entrepreneurship concerns the processes related to the discovery of opportunities to create social wealth

p. 12) Cochran 2007 Social entrepreneurship is the process of applying the principles of business and entrepreneurship to social problems.

p. 451) Haugh 2007 Social entrepreneurship, the simultaneous pursuit of economic, social, and environmental goals by enterprising ventures Social entrepreneurship is first and foremost a practical response to unmet individual and societal needs.

p. 743) Martin and Osberg 2007 We define social entrepreneurship as having the following three components:

1) identifying a stable but inherently unjust equilibrium that causes the exclusion, marginalisation, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on its own;

p. 35) Wei-Skillern, et al. 2007 We define social entrepreneurship as an innovative, social value creating activity that can occur within or across the nonprofit, business, or government sector.

p. 4) Brock and Ashoka's Global Academy for Social Entrepreneurship 2008 Innovative approaches to social change or using business concepts

p. 1) Zhara, Gedajlovic, Neubaum, Shulman 2008 Social entrepreneurship encompasses the activities and processes undertaken to discover,

p. 118) 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 214 NTREPRENEURSHIP AND INNOVATION OECD 2010 Table 5a. 2. Definitions of social innovation

Skoll World Forum on Social Entrepreneurship and Social Innovation 2007 Social innovation can simply be understood as‘new ideas that work which address social or environmental needs'.

Skoll, in Westall, 2007) EMES 2007 According to the EMES, social innovation can be seen As arising from a new kind of entrepreneurship focused on social goals, new products or new qualities of products,

either spread throughout a profession or sector like education or healthcare or geographically from one place to another. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 215 Table

Phills, Deiglmeier and Miller, 2008) EMES 2007 According to the EMES, social innovation can be seen as arising from a new kind of entrepreneurship focused on social goals, new products of new qualities of products,

because they do not directly address major social challenges. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, E 216 NTREPRENEURSHIP AND INNOVATION OECD 2010 ANNEX A Policy Recommendations:

Strengthening Innovation through SMES and Entrepreneurship A summary of the policy recommendations of the report is presented in the Box below.

Summary of Policy Recommendations Policies to strengthen entrepreneurship and increase the innovation capabilities of SMES should be one of the main planks of government innovation strategies.

1. Promote conducive entrepreneurship cultures and framework conditions Foster positive attitudes in society to business start up

and conditions of entrepreneurship and SME activity are taken into account in framework conditions and regulations affecting business.

and SMES in knowledge flows Strengthen knowledge-based entrepreneurship by providing advice and training to start-up entrepreneurs with strong technological knowledge and developing programmes for corporate and university spin-offs, including proof-of-concept,

promoting the local entrepreneurship engagement aspects of university third missions, developing technology bridging institutions, strengthening the innovation absorption capacity of SMES

and knowledge bases in order to facilitate the emergence of new cross-sectoral combinations of products, services and technologies with growth potential. 5. SOCIAL ENTREPRENEURSHIP AND SOCIAL INNOVATION SMES, ENTREPRENEURSHIP AND INNOVATION OECD

and foreign direct investment ventures and attracting highly-skilled labour from abroad. 3. Strengthen entrepreneurial human capital Build up entrepreneurship education in universities

and higher education institutions by smartly scalingup, shifting the teaching emphasis from business management to growth-oriented entrepreneurship,

and introduction of relevant teacher training and teaching materials designed for entrepreneurship. Reinforce training in SMES by launching in-company projects, increasing SME apprenticeships and developing the training function of small business support programmes,

Strengthen the contribution of local skills ecosystems to entrepreneurship and SME development through greater engagement of employers,

vocational education and training and formal and informal training. 4. Improve the environment for social entrepreneurship and social innovation Build financial, fiscal,

Undertake research into social entrepreneurship and social innovation and their main components in order to create clear definitions

Evaluate the impacts of social entrepreneurship and social innovation policies and programmes using appropriate methods such as Social Return on Investment measures and balanced scorecards.

and include social entrepreneurship in school and university curricula. Introduce social clauses in public procurement procedures to encourage involvement of social enterprises in provision of social goods and services.

SMES, Entrepreneurship and Innovation OECD 2010 219 Glossary Absorptive capacity The knowledge base that small firms need to interact with

For example, entrepreneurship skills combine generic skills related to communication, numeracy and general IT use, some advanced skills on business management and human resources and some specific skills related to risk assessment and warranting,

GLOSSARY SMES, E 220 NTREPRENEURSHIP AND INNOVATION OECD 2010 Entrepreneurship The phenomenon associated with entrepreneurial activity,

Entrepreneurship skills The skills that an entrepreneur needs to start and operate successfully a new firm.

Innovation systems can take a GLOSSARY SMES, ENTREPRENEURSHIP AND INNOVATION OECD 2010 221 national, regional or local dimension.

ENTREPRENEURSHIP AND INNOVATION OECD 2010 223 bring innovative solutions to problems such as social exclusion and unemployment through the production of goods and services.

Social entrepreneurship A type of entrepreneurship that aims to provide innovative solutions to unsolved social problems and challenges.

Social entrepreneurship is therefore about solving social problems rather than exploiting market opportunities in order to maximise profits.

-64-08031-7 No. 57299 2010 www. oecd. org/publishing OECD Studies on SMES and Entrepreneurship SMES, Entrepreneurship and Innovation Welcome to the entrepreneurial economy:

This book explores how government policy can boost innovation by improving the environment for entrepreneurship and small fi rm development,

developing entrepreneurship skills; and social entrepreneurship. In addition, country notes present statistics and policy data on SMES, entrepreneurship and innovation for 40 economies, including OECD countries, Brazil, China, Estonia, Indonesia, Israel, the Russian Federation

, Slovenia and South africa. SMES, Entrepreneurship and Innovation is part of the OECD Innovation Strategy, a comprehensive policy strategy to harness innovation for stronger and more sustainable growth and development,

and to address the key global challenges of the 21st century. For more information about the OECD Innovation Strategy, see www. oecd. org/innovation/strategy.

Related reading SMES and Entrepreneurship in Poland (2010) Clusters Innovation and Entrepreneurship (2009) OECD Framework for the Evaluation of SME and Entrepreneurship Policies and Programmes (2007) ISBN 978

-92-64-08031-7 85 2010 02 1 P: -HSTCQE=U UXV: The full text of this book is available on line via these links:

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