-Economy Manufacturing Cluster Theresia Gunawan1, Jojo Jacob2 and Geert Duysters3 August 2013 Â The authors, 2013
capacity of professionals and organizations in and for emerging economies and developing countries with the objective to substantially contribute to the
Innovative Performance of SMES in an Emerging-Economy Manufacturing Cluster Theresia Gunawan a Jojo Jacob
confront a high degree of competition, as SMES in emerging economies do. Next to network ties
entrepreneurial orientation (EO) is another significant resource for achieving competitive advantage in general (Covin & Miles, 1999;
highly competitive and turbulent environments in emerging economies (Covin and Slevin 1989 In line with RBV, EO,
and to proactively uncover new opportunities (Covin & Miles, 1999). A firm with a high EO is
investments. In a departure from extant research (Kreiser, 2011; Lee, et al. 2001; Stam & Elfring, 2008;
and anticipate changes in their environments is an eminent trait of entrepreneurial firms. Linkage within its own geographic areas (ICTS) constitutes an
In spite of these risks, a firm that nurtures its ties through the necessary investments in relationship building and knowledge sharing might stand to benefit more from its linkages than a
firm that makes little investments in its ECTS. While both ICTS and ECTS carry risks, the risks
entrepreneurship, on innovative performance have been conducted in developed countries particularly in the context of high-tech industries (Stam & Elfring, 2008), our study is carried out
They benefit from the economies of agglomeration and joint action giving them collective efficiency and therefore a competitive advantage over firms that are not
successful, in terms of both innovation and profit, compared to similar firms that are not part of a
Studies in the context of emerging economies are far fewer, but they too suggest that clusters enhance the competitive advantage of SMES (Caniels & Romijn, 2003
and ECT development should be treated as an investment that enhances innovation While research on clusters have focused traditionally on ICTS,
opportunity to combine and recombine diverse knowledge elements, thereby increasing the chances for successful innovative outcomes.
to take business-related risks and seek opportunity in anticipation of future demand (Covin &
) Proactiveness refers to the active search for new opportunities identifying them, assessing their potentials, and devising strategies to exploiting these potentials
reflects the commitment to high-risk investment or the willingness to invest resources into unpredictable opportunities, after they have been identified by proactive-oriented firms.
Studies affirm that a successful entrepreneur makes calculated risks for potentially rewarding future benefits (Low & Abrahanson, 1997.
economies, it is important to understand the interplay between EO and a firm†s network ties
social capital its network creates (Stam & Elfring, 2008) exerts a contingent effect on the link
specific context of an emerging-economy, low-tech manufacturing cluster. While proactiveness and risk-taking orientation both contribute to innovation and enhanced firm performance, we
the firm†s ICTS and ECTS because firms with high levels of proactiveness find opportunities
opportunities. The resulting ICTS and ECTS therefore represent an important resource for the firm (Eisenhardt & Schoonhoven, 1996), with more such ties providing access to potentially
partnerships in response to changes in external environments faster than firms lacking such abilities. Therefore, we propose that proactive orientation enhances innovative performance
degree of risk taking though investment of time, money, and effort, the rate of innovation will
contribute to innovation, right from the discovery of an opportunity or the conception of an idea
in emerging economies there only exists limited information about footwear producers in this cluster; the official database of company addresses is at best incomplete.
resources, and opportunities. We also included the education level of owner/manager to control 14
means they have a greater ability to adapt to changing environments, they may be constrained by limited access to facilities and financial resources
the variance inflation factor was below three, and the tolerance values were close to 1 Barrow, 2009.
manufacturing cluster in an emerging economy, Indonesia. Our analysis, based on primary data collected through interviews
opportunities, and therefore may engage actively in search of new ideas outside of their cluster
economies should actively develop inter-organizational networks that go beyond the confines of the region in which they are located.
but also provides new opportunities for future research First, the data we used, although original and derived from field research, is cross-sectional.
Collecting longitudinal data in the emerging economy context is particularly challenging, given the lack of governmental level initiatives to this end
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Procedia Economics and Finance 16 (2014) 512 †520 2212-5671  2014 The Authors.
Published by Elsevier B. V. This is an open access article under the CC BY-NC-ND license
http://creativecommons. org/licenses/by-nc-nd/3. 0 /Selection and/or peer review under responsibility of Scientific Committe of IECS 2014
Entrepreneurship and SMES Innovation in Romania Nelu Eugen Popescu a *alucian Blaga University of Sibiu, Faculty of Economic sciences, 17 Dumbrä vii Avenue, Sibiu 550324, Romania
The aim of this article is to present some theoretical connections between entrepreneurship, innovation and small and medium
medium-sized enterprises highlighting the role of these business for the economic recovery. It will provide a brief overview of
enterprises. Some recommendations for public policies are presented at the end of the paper  2014 The Authors. Published by Elsevier B. V
Entrepreneurship, Innovation, SMES (Small and medium enterprises 1. Introduction Entrepreneurship is a term that does not have accepted an general definition,
the concept evolved over time from Cantillon (1775), to whom the first academic mention are attributed, to Schumpeter and its creative destruction
specific instrument of entrepreneurship. He defined entrepreneurship as â€oean act of innovation that involves endowing
existing resources with new wealth-producing capacity†(Drucker, 1985 Innovation is associated usually with doing something new or different (Garcia & Calantone, 2002.
513 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 The starting point for most theories of innovation is the firm (Audretsch & Thurik, 2001.
small and medium firms represent the vast majority of enterprises in most developed and developing country
economies Both entrepreneurship and innovation are 2 broad concepts without a unanimously accepted definition and are
regarded as overlapping concepts (Stam, 2008. The connections between these 2 concepts dates back to the first
Schumpeterian theory about entrepreneurship were the entrepreneur was seen as the personification of the innovation (Hagedoorn, 1996),
and through innovation and creative destruction the economy evolved. The connections between entrepreneurship, innovation and small firms has been studied over time by various scholars
and some even defined entrepreneurship as follows â€oeinnovation by newly formed independent firms (Kirchhoff 1994 The recent economic downturn is regarded as one of the worst
since the 1930s crisis and its effects are still evident all over the globe and parts of the world still struggle to recover
After a period of few years marked by economic incertitude at EU level, economic indicators show a slight
increase and the past year (2013) could represent a turning point for the EU economies if the positive upwards
contribution of SMES to job creation and value added constitute a large share of both EU and Romanian economy
enterprises are SMES, around 20 million SMES, most of them are micro-enterprises, and in 2012 employed over 86
million people providing for 66,5%of jobs from the total employment and contribute more than half of the total
and job creation by SMES issues generated an interest in the study of entrepreneurship (Wennekers & Thurik, 1999
Usually the attention and actions of policymakers and the business environment focused on large companies and
of the economy and a decrease in unemployment (Koellinger & Thurik 2012) so a more analytic approach toward
considered to be the backbone of the economic system, ensuring an important part of employment and innovation
Early theories regarded the small enterprises as being â€oeoutside of the domain of innovative activity and
enterprises were as important as the large companies for innovation and for technological change In the actual economic environment due to globalization and ICT evolution products are outdated more quickly
nowadays in comparison with some years ago because â€oewe are entering the era of the young firm. †(Jovanovic
Private Mici Å i Mijlocii din Romã¢nia †National Council of Small and Medium Sized Private Enterprises
514 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 3. Innovation and ICT use in Romanian SMES (some facts and figures
3. 2 Innovation investments In terms of share of investments allocated to innovation from the total enterprises investments almost half of
SMES (44,93%)have not directed funds to innovation (see table 1 The lack of funds assigned to innovation investments combined with the fact that considerable part of the SMES are
not involved in innovation activities may present a serious problem for a healthy evolution of these enterprises
Table 1: SMES by share of investments allocated to innovation SMES 44.93%25.84%16.77%6. 85%4. 21%1. 19%0. 22
%Share of investments Allocated to innovation 0%1-5%6-10%11-20%21-50%51-75%>75
%Source: CNIPMMR, White Charter of Romanian SMES †11th Edition, Sigma Publishing house, 2013 A bit more than a quarter of enterprises (25,84%)have allocated 1 to 5%to innovation and only 16.77%of the
37.65 37.21 19.51 16.45 7. 6 4. 75 35.72 31.76 11.6 16.26 11.83 9. 27
515 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 enterprises allocated between 6 and 10%to innovation.
Very few companies allocated over 51%(1, 19%)and under 0. 5 percentage of companies allocated over 75%to innovation
Investments in innovation may lead to competitive advantage so the lack of funds or insufficient funds allocated to innovation is a real problem
SMES by share from the turnover generated by new products/services SMES 46.39 21.47 16.83 9. 33 4. 37 1. 46 0. 16
by new products/services 0%1-5%6-10%11-20%21-50%51-75%>75
Taking into consideration the share from the company turnover generated by new products/services or renewed
products/services introduced to market in the last year, almost half of the Romanian SMES (46,39%)did not
generated any revenue from new products/services (see table 2 21,47%of the enterprises generated 1-5%form their turnover figures by new products and services, 16,83%from
SMES generated 6 to 10 per cent but a very small amount of companies (1,
products/services between 51 and 75%of their sales figure and under 1 per cent accomplished more than 75%of
their sales by new products/services The figures also show that over 54%of the SMES in Romania undertook some kind of activities to bring new
products and services to the market or to renew their products and services, which is an encouraging fact the more
than half of the Romanian SMES work to improve their products and services 3. 3 Main approaches to innovation for Romanian SMES
organization and enterprises followed by integral absorption (â€oepoachingâ€) of innovation developed by others 21.95%.%Only few enterprises (7. 48%)think that cooperation with others is a viable approach to undertake R&d
activities. (see figure 2 Figure 2: SMES approaches to innovation Source: CNIPMMR, White Charter of Romanian SMES †11th Edition, Sigma Publishing house, 2013
According to FPP report there is a direct correlation between innovation in enterprises and their economic 40.52 30.05
516 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 performances, especially during the last years of economic downturn.
Germania and Austria are the countries with the highest rate of innovative SMES (around 80%)and at the bottom of these classification there are countries from
A number of obstacles may limit entrepreneurship, the creation and development of innovative start-ups and
so it interferes with economic growth. Knowing and understating the obstacles to innovation for SMES is important both to entrepreneurs/owners/managers but also to the government.
suite policies at national level in order to contribute to economic growth Figure 3: Barriers for R&d activities in Romanian SMES
demand for new and innovative products. Least mentioned was the lack of adequate human resources (8. 49%)(see
Incertitude connected to the demand for inovative products Difficult acces to relevant market information Lack of medium and long term economic
517 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 Figure 4:
companies†information technology is used for a better communication with customers and suppliers (see figure 5 A significant percentage of SMES use the Internet for gathering information about the business environment in
which they operate (67,17%.%Over 50 percentage of SME use the Internet for online transactions, 45,71%use it for
promoting their products and services and 39,50%for better communication inside their enterprises 0. 39
518 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 Figure 5:
48,44%),fast access to the enterprise data form anywhere and at anytime (38.21%)and regulatory compliance
To communicate with customers and suppliers To obtain information about the business enviroment For on-line transcation/payments
To promote products/services To facilitate communication in the entreprise Other 48.44 38.21 35.84 29.49
25.46 18.84 9. 58 9. 42 4. 74 4. 2 2. 31 Data security Access to company data anytime, anywhere
519 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 SMES have recognised gradually the advantages that the use of IT can have over their activities.
at firm level IT may provide a faster communication, a more efficient resource management and customer management.
The economic downturn affected the SMES in the whole world and through globalization the negative effects
and implicitly the Romanian economy was marked by the crisis In the last period signs for economic recovery start to appear at European level and some contributors for these trend
are the share of investments allocated to innovation and the share of turnover generated by new products and
services. A large number of enterprises did allocated not funds for investments in innovation (44.93%.%Taking into
consideration the share from the company turnover generated by new products/services introduced to market in the
last year, almost half of the Romanian SMES (46,39%)did generated not any revenue from these products/services
The main obstacles in the way of innovation at SMES level were: the cost of R&d activities, lack of funds (or
insufficient funds) and incertitude about the evolution of demand for new and innovative goods Most SMES use computers, Internet and the e-mail in their business activities and some of them even developed
Usually enterprises use the IT application for communicating with customers and suppliers, to obtain information and for on-line transaction and
payments. SMES use IT application and find them useful, the benefits most mentioned where: data security, data
Under these circumstances in which the SMES sector is a potential key factor for future economic growth and
new start-ups being more adaptable to the changing business environment the government efforts should sustain the
creation and development of new innovative enterprises. Support should focus on collaborative R&d and easy access for all enterprise to research results and creation of new technology driven SMES
The Romanian national policy should take into consideration and implement the measures suggested by the
Efforts should focus on entrepreneurship and small to medium enterprises, innovation and competitiveness growth in order to attain a sustainable and healthy economic recovery in the long run
Entrepreneurs usually embrace innovation an this may have positive impact on a countries economy by generating new jobs, creation of wealth and improving quality of life.
for economic growth, job creation and innovation can come from SMES (Wennekers & Thurik, 1999) so ensuring a
proper economic environment in which SMES can develop and entrepreneurial initiatives could thrive is a condition
520 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520 References Acs, Z,
Entrepreneurship Research †An Interdisciplinary Survey and Introduction 2nd Edition Audretsch, D. B. and Thurik R. 2001)" Linking Entrepreneurship to Growth",OECD Science, Technology and Industry Working papers, No
2001/02, OECD Publishing. doi: 10.1787/736170038056 CNIPMMR (2013)( coord. Nicolescu O.),Carta Albä a IMM-urilor din Romã¢nia †ediå£ia a XI-a, White Charter of Romanian SMES †11th
Medium Enterprises, IZA Discussion Paper No. 3962 Drucker, P. F. 1985) Innovation and Entrepreneurship; Practice and Principles, New york:
Harpercollins Publishers Inc.,NY 10022 European commission (2013) ANNUAL REPORT ON EUROPEAN SMES 2012/2013: A recovery on the Horizon?
European commission, DG Enterprise and Industry FPP (2013) Barta P.,Modreanu I.,Spirea N.,Piti M.,Raportul Fundaã iei Post Privatizare privind sectorul IMM din Romã¢nia
Entrepreneurship, SMES and Local Development in Andalusia, Spain A REVIEW BY THE LOCAL ECONOMIC AND
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ANDALUSIA, SPAIN A review by the Local Economic and Employment Development (LEED) of the Organisation for
This case study on †Entrepreneurship, SMES and Local Development†in Andalusia, Spain, has been undertaken by the Local Economic and Employment Development (LEED) Programme of the
economy, this report draws on a week-long study visit that took place in Seville and Malaga from 12
and provided invaluable insights on the Andalusia entrepreneurship and SME development system: the Andalusia Technology Park (PTA) of Malaga;
regional Ministry of Economy, Innovation and Science (MEIS; the General Secretariat for †Telecommunications and Information Society†of the MEIS;
Entrepreneurship Agency (ANDALUCIA EMPRENDE; the Andalusia Entrepreneur Confederation CEA); ) the Andalusia Innovation and Development Agency (IDEA;
the Investment Promotion Agency (EXTENDA; the Andalusia Institute of Technology (IAT; the Andalusia Technological Corporation (CTA;
The review team was informed initially about the main features of Andalusia†s economy and entrepreneurship support system by a diagnostic report prepared by Prof.
Vicente Granados-Cabezas of the University of Malaga CONTRIBUTORS TO THE CHAPTERS ï Introduction, by Jay Mitra
Human capital and the labour market, by Karen Chapple and Sergio Montero -Muã oz ï Chapter III:
Entrepreneurship and start-ups, by Ricardo Pinto ï Chapter V: SME development, by Andrew Cumbers ï Conclusions, by Marco Marchese and Jay Mitra
Dr Jonathan Potter, senior economist, OECD LEED Programme, jonathan. potter@oecd. org Mr. Marco Marchese, policy analyst, OECD LEED Programme, marco. marchese@oecd. org
Human capital and the labour market...6 Contribution of research organisations...7 Entrepreneurship...9 SME development...
10 RETA...12 Policy recommendations...13 INTRODUCTION...15 CHAPTER I: ECONOMIC AND INSTITUTIONAL OVERVIEW OF ANDALUSIA...
HUMAN CAPITAL AND THE LABOUR MARKET...32 Introduction...32 Policy issues...32 Assessment of the region...
ENTREPRENEURSHIP AND START-UPS...83 Introduction...83 Policy issues...83 Assessment of the region...86 Policy recommendations...
Human capital and labour market...128 Contribution of research organisations...128 Entrepreneurship and start-ups...130 SME development...
131 RETA...132 Policy recommendations...135 EXECUTIVE SUMMARY The OECD Local Economic and Employment Development Programme (LEED) has undertaken
a review on entrepreneurship, SMES and local development in Andalusia, Spain, working in collaboration with RETA (Red de Espacios Tecnolã gicos de Andalucã a †Andalusia Technology
entrepreneurship and SME development and how such capacity is affected by regional and local policies. Further specific objectives were to:
organisations to support entrepreneurship and SME development; iii) assess how to fill policy gaps and improve existing policies
entrepreneurship and SME development, and how its impact can be enhanced The study was carried out by an international review panel consisting of 6 international experts
i) the impact of human capital and the labour market on entrepreneurship and SME development; ii
the contribution of research organisations to entrepreneurship and SME development; iii) direct policies for entrepreneurship and start-ups;
iv) direct policies for SME development. The key findings for each theme are summarised below, together with the main observations on the role of RETA in
entrepreneurship and SME development Human capital and the labour market The Andalusia labour market is affected by structural weaknesses
High levels of unemployment, large numbers of temporary workers and low productivity undermine the performance of Andalusia†s labour market.
EU average), the quality of human capital has improved not proportionally. The region has actually experienced a reduction in post-compulsory school and university attendance,
Human capital needs to be upgraded so as to compete with the rest of Spain and the EU
depends on the Regional Ministry of Economy, Innovation and Science, and this has created greater pressure for industry-university collaboration.
prepared by the Ministry of Education, seeks to adapt vocational training to the new economy and new
demand of jobs and occupations. This will involve expanding online training; cooperating more closely with businesses, unions and others through advisory councils;
with entrepreneurship, education, and employment; and the lack of a workforce strategy tied to business cluster strategies
The OTRIS are responsible for channelling external research demands to the appropriate research groups within their own institutions
within the Andalusian economy. It is important for universities and regional coordinating bodies to recognize that R&d activities, especially the commercialization and exploitation of intellectual
enterprises from across Spain and attracting them to establish themselves in Andalusia. The Campus Programme supports spinoffs from Andalusian universities by providing them with loans of up to
surrounding environment †firms, technology parks, technology centres, foundations, etc. †with a view to creating knowledge ecosystems that support local development, employment and social
communications, energy and environment, transport, and tourism. The active participation of technology parks (Cartuja 93 in Seville and PTA-Malaga) and technology centres, assets of the two
and investment (national and foreign Entrepreneurship Entrepreneurial culture is improving in the region There is a low but growing level of entrepreneurial culture in the region.
The density of enterprises is approaching the national level and the population of the region has a fairly high level of
interest in entrepreneurial activity. Although young people have seen traditionally the public sector as the natural route to the labour market, the sharp economic downturn in Andalusia may stimulate a
greater willingness to embrace self employment and other forms of entrepreneurship. This is clearly something to build on in the region via a greater focus on developing a culture of entrepreneurship at
all levels of the education system: primary, secondary, vocational and tertiary Immigration is an entrepreneurial resource that should be exploited better
The growing levels of diversity, including the large influx of migrants to the region, can be
which the region, its institutions and its enterprises benefit from financial and nonfinancial subsidies directly emanating from the EU,
enterprise policy combined with a more sustainable system of support for regional and enterprise development.
but it is also an opportunity: it would necessitate more efficient use of resources in the time available, such as minimising overlaps
The current extensive entrepreneurship support framework results in institutional overlaps An extensive network of institutions, policies, programmes and projects exists that supports
entrepreneurship in the region. This can lead to confusion for the business sector (multiplicity of organisations, programmes, etc.
services, etc. and inefficiency (resources not necessarily deployed in a manner which maximises impact). ) The consequence of this level of public subsidy is that much of the regional economy is
cushioned to some degree from general competition SME development The Andalusian business structure lacks medium-sized firms
The Andalusia economy is dominated by SMES with over 99%of firms having less than 500 employees.
This places it well below both the Spanish and the EU averages. Of even greater
employing less than 10 people †accounting for over 95%of enterprises. While the region experienced
growth from the mid 1990s up until the present economic downturn, the continued lack of medium
local enterprises to a level that can contribute more significantly to employment creation and regional growth
proportion of the total activity in the regional economy over the decade 1995-2005, rising from 20.8
Technology Park for example, has 530 enterprises employing more than 10 000 people. The focus upon particular sectors and clusters is appropriate
infrastructure for high tech SMES with a sophisticated approach to support services that address the different needs of firms at different stages of maturity
the ones that are able to capitalise on both the local support environment and to access non-local
larger customers into international markets. Existing policies that seek to strengthen the linkages between SMES and local large companies, both locally-and foreign-owned, should be encouraged and
entrepreneurship and SME development. Firstly, it has connected coordinated and the policy support to entrepreneurship and SME development provided by all the actors of the Andalusian innovation
system, including technology parks, technology centres and universities, and ensured that their support is coherent,
and offer adequate services to firms that have shown an innovative potential. The needs of traditional firms will be targeted by other organisations,
institutional overlaps that have characterised the entrepreneurship and SME support system in the past The experience of RETA should be capitalised on
policy recommendations to strengthen the entrepreneurship and SME development system of Andalusia Box 1. Main policy recommendations
Human capital and labour market ï Link training programmes more effectively with sectors in order to improve firm productivity and
ï Refocus entrepreneurship education along the models of the best business schools, trying to attract immigrants and to exploit the advantage of Andalusia†s geographical location
Entrepreneurship and start-ups ï Further develop entrepreneurial culture in the region, including by targeting the new unemployed
Andalusia incubators against EU current benchmarks ï Think of promoting corporate spin-offs as an alternative to university spinoffs with stronger industry and
their activities by †piggybacking†on the backs of large customers RETA ï Continue to coordinate policy actors in the Andalusian SME and entrepreneurship support system and
ensure coherence in policy design and delivery. Ensure that best-practice policy principles are applied in local technology parks, including by strengthening the relationships of the latter with local
economies in a globally connected environment. Spatial variations within countries suggest that not all geographical parts of a country achieve similar levels of employment, skills development, business
formation, economic growth and infrastructure development. This is as true of Spain as it is of other economies round the world.
Structural, spatial and temporal variations occur across regions because of differences in the human capital base, the industrial structure, relevant research and development
productive and entrepreneurial economy The local background Andalusia is populated the most Spanish region. Located in the South of Spain, it ranks in size
investment flows) in Spain post-1959 and the Stabilisation Plan ending two decades of autarchy and
relatively backward economy was the outflow of human capital to Spanish growth poles, especially to
Relatively low levels of investment in the region accompanied this exodus of 1. 6 million people over 30 years between 1955 and 1985.
period, partly because of the impact of the volatility of the Spanish economy and of the global
economic crisis which hit Spain disproportionately, the regional economy of Andalusia has faltered badly with sharp drops in both gross domestic product (GDP) and employment
Andalusia†s European economic identity mirrored that of Spain just before the economic crisis as the nation began an impressive catch up race with its more prosperous European counterparts
However, major structural differences could be found in the macroeconomic indicators with high levels of household, public sector,
) Only the construction and services sector showed growth rates but they were far too low to
protection together with the services sector. Against a backdrop of high financial leverage and low private deposits coupled with relatively low levels of exposure to the dynamics of competition in other
sectors it is difficult to see anything beyond a highly vulnerable and fragile economic environment for
these firms. The rapid growth in the real estate component of Gross Capital Formation during 2000 to
2005 reinforces this notion of fragility as the collapse of those economies dependent on property price
inflation has been the worst among others across Europe The reliance on the temporary growth areas of construction and tourism also point to a major
problem in the labour market. Temporary, low skilled jobs cannot find shelter in the storms of
necessitating new forms of economic activity, there is a greater push for new types of skills businesses and governance.
It is against this background of the Andalusian economy that a review on Entrepreneurship SMES and Local Development has been carried by the OECD Local Economic and Employment
The review focuses attention on entrepreneurship, SMES and local development. In examining these components of the regional economy and the extent to which entrepreneurship and SMES
contribute to innovation, the review aims to investigate the capacity of the region to support new firm
capacity in an innovation-friendly environment. To help achieve this aim, the main objectives of the
knowledge-based global economy with specific reference to human capital; its capacity for research and development; and soft infrastructure issues such as governance
creation and innovative growth of SMES are human capital, R&d and institutional capability Appropriate framework conditions ensure their availability and effective use.
entrepreneurship constitute individual chapters for this report, while the aspect of governance is mainstreamed in all four thematic chapters
make an effective contribution to the Andalusia economy Figure 1. A Schemata for Reviewing the Andalusia Economy
Human Capital and the Labour market It is recognised now well that the set of technical, cognitive, facilitative and operational skills
competencies and knowledge, often referred to as †human capital†play a key role in the formation of a
labour market and more generally in the development of an economy. This fact has acquired a particular poignancy in recent times in our so-called knowledge economy where †brain power†and the
ensuing set of †knowledge-based†skills have gained a higher profile than the offering of traditional
The higher the level of human capital the greater is the return for both the firm (in terms of
of the literature on the subject of human capital. The importance attached to education provision and
educational attainment acquires a premium in relation to the economy. Its importance has gained momentum with the advent of the knowledge economy.
The overall premium to higher education has increased sharply as the main drivers of these economies, the knowledge-based industries, demand
higher levels of skills in the workforce with which to manage technological change productively. It is
also argued that higher levels of human capital help to generate new, high impact firms and it is this
Capital and the Labour Market Research and Development Institutions Framework and Governance Start -Ups/New
Entrepreneurship and Economic Development Networks Input Factors for Framework Conditions Key Drivers of Innovation and
More recently it has been noted that human capital also plays a key role in promoting or affecting
The formation of human capital in this context is a function of both formal skills development and experiential forms of learning by
entrepreneurship. Experience also generates other intangible assets, such as social capital and networks vital to both the creation and growth of firms in regions dominated by a high concentration
of firms. As more closely discussed in the thematic chapter on human capital, there are four labour
market-related factors most critical to entrepreneurship in all its forms:(1) higher education;(2 extensive work experience;(
3) interaction with a variety of actors in the regional innovation system and (4) openness to immigration
stakeholders of knowledge creation and commercialisation together at all points in the process of making new goods and services and generating economic growth.
Universities now engage in industrial innovation through a variety of channels, including learning by researching, learning by
way of generating talent in the local economy. Attracting talent to a local economy is enabled by making an environment and the quality of local life conducive to entrepreneurial economic activity
The emphasis a region puts on any one of the two approaches is to some extent dependent on their
capacity to pursue each approach, depending on local institutional capacity, the value of human capital, the structure of the local industry, national immigration policy, local framework conditions
Entrepreneurship and SME development Entrepreneurship covers a huge territory of theory and practice concerned with opportunity
identification and realisation, innovation in the form of new products and services, as well as new forms of organisation to realise opportunities,
new firm formation to help organise innovation, and value creation for the economy and for society.
Entrepreneurship is evident in both small and medium -sized enterprises (SMES), as well as large ones, in the formal and informal economy;
in legal and illegal activities, in innovative and traditional firms; in high and low-risk ventures, and in pretty much
all sectors and sub-sectors of the economy (OECD, 2001. This spectrum of involvement can lead to
both productive and unproductive or even destructive entrepreneurship (Baumol, 2006 Entrepreneurship is local in the sense that new firms are formed in specific locations.
It is national and global in that new firms make new products and services in these markets and often
source technologies and other resources from across a country and sometimes globally. The ability of
regions to create new firms in their territories is an attractive option for sustainable economic
development because it uses local resources and talent to make it happen, thereby energising local economic activity.
Increasingly even economically less prosperous regions such as Andalusia are being exhorted to court entrepreneurship as part of an effective economic development strategy
According to the revised Lisbon Strategy, this is possible through a focus on making a place attractive for living and working, facilitating
or increasing knowledge flows in the region through human capital development, R&d, innovation and new business creation,
and generating policies that enable better forms of sustainable job creation Methodology This report provides advice from an international perspective on how to strengthen SME and
entrepreneurship policies in Andalusia. It identifies the major considerations for policy development in this field, assesses the current performance of Andalusia,
and advances recommendations to improve policies and programmes in the region. Each chapter also describes'learning model'programmes from
other countries with the aim of helping to illustrate how other places have addressed similar challenges
i) human capital and labour market issues affecting entrepreneurship and SME development ii) the contribution of research organisations to entrepreneurship and SME development;
iii) policies for entrepreneurship and start ups; and iv) policies for SME development. The governance aspect is
embedded in each of the four thematic chapters. The report is based on observations, discussions and
provide an initial analysis of the key facts about the Andalusia economic system and the entrepreneurship and SME policy context.
This report has contributed to chapter 1, outlining the main economic and institutional aspects of Andalusia
policy makers and other relevant actors in the entrepreneurship and SME development system, and obtained their views on issues to entrepreneurship and SME development.
A wide range of issues were discussed with stakeholders, providing a variety of perspectives on the region and its policies
Draft report A draft report was prepared, drawing on the results of the diagnostic report, the panel review
exercise, and additional literature and material about the Andalusia economy. The draft report was submitted for comments and approval to the local partner, the Andalusia Technology Network
i) human capital and the labour market; ii) contribution of research organisations; iii entrepreneurship and new start ups;
iv) SME development. Each thematic chapter contains a description of general policy issues; an assessment of the current situation in Andalusia;
A final chapter summarises main conclusions and policy messages on entrepreneurship promotion and SME development for the region of Andalusia
Acs Z.,2008, †Foundations Of high Impact Entrepreneurshipâ€, Jena Economics Research Papers, n 2008-60
Baumol W.,†Entrepreneurship: Productive, Unproductive, and Destructiveâ€, Journal of Political Economy, n. 98, pp. 893-921
Florida R.,2002, The Rise of the Creative Class, Basic books, New york OECD, 2001, Fostering Entrepreneurship, OECD, Paris
CHAPTER I: ECONOMIC AND INSTITUTIONAL OVERVIEW OF ANDALUSIA Table 1. Key statistics of Andalusia Indicators Spain Andalusia
Knowledge-intensive services as%of employment (2008) 28.9 26.9 Active population (thousands)( 2008) 31 143 5 562
People and human capital Andalusia is populated the most region of Spain with 8. 4 million of inhabitants,
knowledge-based economy Labour utilisation and labour productivity The recent economic crisis has struck Spain severely, and Andalusia has been no exception
Whilst between 1997 and 2007 regional employment had increased at an annual rate of 6. 6%,higher
the economy in the booming period, has also been one of those hit hardest by the recession,
Today, Andalusia†s economy has approximately 510 000 firms, corresponding to 15.9%of the national total against a population that is 17.8%of the total
Micro firms (less than 10 employees) dominate the economy, representing over 90%of the total. This
peripheral economies which generally find it difficult to penetrate international markets. Indeed only 1. 4%of regional firms are engaged in foreign trade,
1970s agriculture was still playing an important role in the Andalusian economy, but its contribution
Andalusia†s industry structure resembles much more closely that of any modern economy, though the
very low contribution of manufacturing (11%)and the disproportionate impact of services (71%)on regional GVA flag an imbalance that can undermine the competitiveness of the region due to lower
capital investments and lower internationalisation that are both typical of economies overly reliant on services Figure 4. Andalusia's GVA trends by sector, 2001-2009
Construction Services Industry Source: Banco bilbao vizcaya Argentaria (BBVA), 2009 Key sectors Since the 1980s the regional government of Andalusia has bolstered the development of sectors
considered strategic for the future development of the region. Originally, the emphasis was on traditional low added-value sectors such as marble quarrying, leather,
activities, engineering and consulting services. EADS-CASA and Airbus are the main actors in the
IT & communications Nearly 1 400 companies comprise this sector, with a turnover of EUR 4. 6 million and a
The food industry has traditionally been one of the linchpins of the Andalusia economy. Over
beyond R&d investment, poor progress in this field jeopardises the future development of the region Trends in R&d expenditure (Fig. 4) show that over the last twenty years Andalusia has converged not
In particular, private investments in R&d are still too low and marginal (0. 38%of regional GDP, compared to 0. 71%nationally),
In addition, the sectors that have driven the Andalusian economy over the last decades †mainly construction and tourism †are known not for being R&d-intensive and
involving between 15%-25%of the surveyed enterprises Between 5%-15%of the firms contracted R&d projects, use university facilities or exchanged staff
this study being the Ministry of Economy, Innovation and Science (MEIS. This is the result of the
recent merger between the Ministry of Economy and the Ministry of Innovation, Science and Enterprise (MISE.
This decision signals the decision of the regional government to better coordinate its economic policies as well as the importance given to business innovation and entrepreneurship as
the main drivers of local development Within the remit of the MEIS, and more specifically of the Department of Science and
EXTENDA, the entrepreneurship agency ANDALUCIA EMPRENDE, the R&d-oriented CTA Corporaciã n Tecnolã gica de Andalucã a) and RETA (Red de Espacios Tecnologicos de Andalucã a
the entrepreneurship and innovation system. The table below provides a glimpse on the main activities
attraction of domestic and international investments; support of business innovation and enterprise development; protection of regional intellectual property through advice on IPRS
improvement of productive land and infrastructure; assistance to large firms undergoing industrial restructuring enhancement of high-growth companies through direct aid and an enabling framework.
and services), which enclose several subsectors ANDALUCIA EMPRENDE: The mission of this foundation is to fuel the entrepreneurial culture of the region
Business services include training, business plan assessment, incubation, and sourcing funding. The Foundation keeps quite a targeted approach, unfolding
entrepreneurship programmes aimed at specific social groups (e g. women, youth, university graduates disadvantaged people, etc. emerging and strategic industries (e g. technology-based firms, creative industries
and the social economy sector. EMPRENDE also maintains a network of 37 Corporate Development Support Centres (CADES) providing a decentralised BDS support across the region
areas with similar technology development opportunities of those provided within technology parks. The first objective
These three different institutions are important players in the entrepreneurship and innovation system of Andalusia.
parks also host business incubators, which only accept firms that are innovative, environmental friendly, and in the case of firms in traditional sectors are willing to collaborate with universities for at
Despite their name, they provide a wide range of business development services that go beyond mere
They provide partly subsidised and partly fee-based services, which include business consulting, training, and business incubation.
to the whole new theme of entrepreneurship and innovation, and the 2003 Second Modernisation Plan
The four most relevant to entrepreneurship and SME development are listed those below which, with the exception of PIMA (2005-2010), cover the period
%iv) environment, rural development water sources and land risk prevention: 12.4%;%v) food and fisheries:
8. 9%,viii) business development and enterprise innovation: 6. 3%.Based on these figures, the regional government directly devotes EUR 3. 5
billion to entrepreneurship and SME development over six years, with other complementary areas such as †knowledge society†and †human capital†that also benefit local firms
with the most competitive economies. It establishes the framework for the region†s research and innovation agenda and encourages universities to cooperate more intensively with the
entrepreneurship and innovation system, which are garnered in four categories: i) technology and knowledge spaces (e g. technology parks;
are the modernisation and competitiveness of the regional economy. However, the emphasis is here on entrepreneurship,
including reduced barriers to business creation (administrative burdens, start-up finance, etc. technology-intensive firms, business survival, and the
Policy, Economic growth and Convergenceâ€, Springer, Heidelberg CHAPTER II: HUMAN CAPITAL AND THE LABOUR MARKET Introduction Human capital development and labour market dynamics play a key role in a knowledge-based
global economy. Yet, one of the greatest challenges in regional economic development is developing a coherent set of policies and programmes that link a region†s complex educational and training
system effectively with its driving economic sectors This chapter describes the state-of-the-art in academic research on human capital, with a
particular focus on the labour market characteristics of successful regional innovation systems. It then outlines the complex landscape of education and training,
and entrepreneurship training specifically, in Andalusia. Though the system is hampered by many redundancies in training programmes,
it also is experiencing gaps among different types of institutions, and most importantly, between these institutions and Andalusia†s strategic sectors.
opportunities the region confronts, the chapter concludes with recommendations illustrated by three international learning models
fostering entrepreneurship and innovation. The following sections examine these debates, with particular focus on the role of education and labour policy in regional innovation.
debates about human capital generally, then turning to the debates about labour market preparation for entrepreneurship.
A final section describes the Spanish context Role of human capital in the knowledge economy:
Debates in the literature Higher levels of human capital create returns not only in terms of worker productivity but also of
higher wages (Becker, 1965. With the advent of the knowledge economy, the overall premium to
higher education has increased sharply (Carnoy, 1994. Knowledge-intensive industries are now the key drivers of international competitiveness,
expertise, resulting in rising demand for college-educated workers relative to their supply (Katz &
bid up for those workers who possess high levels of human capital while, due to falling demand
One path to competing in the global knowledge economy is through using local universities to
Role of human capital in entrepreneurship and innovation Although research has confirmed long the importance of human capital to business productivity
less is known about the role of human capital in fostering entrepreneurship. From the few studies that
exist, it is clear that successful entrepreneurship stems from a relatively broad conception of human
capital as not just education and training, but also skills developed through experience and understanding that comes with age,
Not surprisingly, then, investment by firms in their employees†human capital has been shown to encourage innovation and entrepreneurship (Sevilier, 2006
Human capital that combines education and experience gives employees the adaptiveness so key to entrepreneurship (Wright, Hmieleski, Siegel and Ensley, 2007.
The more prior business ownership experience an entrepreneur brings, the more likely the new ventures will be initiated and expanded
Team experience is particularly important to the long-term performance of high-tech start-ups Madsen, Neergaard and Ulhã¸i, 2003;
Shrader and Siegel, 2007 Work experience is important to innovation in part because a long career path brings broader
with a greater variety of actors and across diverse institutional environments, are more likely to
California†s clean energy economy, in which the most innovative firms interact more with nonprofits
To wrap up, the four labour market-related factors most critical to entrepreneurship appear to be 1) higher education;
competitive knowledge-based economy in the world by 2010. Accordingly, INTERREG IV, the EU regional development programme for 2007-2013, was redesigned to bring the Lisbon Strategy onto the
innovation and the knowledge economy, on the one hand, and the environment and risk prevention on the other
The Spanish labour market differs somewhat from that of most European countries. Immigration to Spain from Latin american and EU15 countries has increased rapidly in the last decade.
instance, the regional government of Madrid produced a business plan supportive of immigrants called †New Madrileã os, Future Entrepreneurs†after they realized that one out of four applicants for
rest of the Spanish economy, namely: the high level of unemployment, large reliance on temporary
increased, this is not employed appropriately enough to contribute significantly to economic growth Cuadrado-Roura, 2010 At present, Andalusia is experiencing an unemployment rate above 26.5%(as compared to 18
During the recent economic crisis, Andalusian universities have seen enrolment increase by over two percent In addition, the changing demographic structure in the region has affected labour market
sectors in the regional economy, it is not surprising that Andalusia has in recent decades switched
opportunities for RETA and the region The local landscape of education and training related to entrepreneurship and SMES
The educational system in Andalusia is currently experiencing a restructuring that will affect not only the future of education and human capital in the region but also the entire Andalusian system of
Ministries involved in human capital development in Andalusia: The Ministry of Education; the Ministry of Employment;
and the Ministry of Economy, Innovation and Science In the mid 1980s, after education policies were transferred to Andalusia, the Regional Ministry of
research, technology transfer and entrepreneurship culture as engines of growth and economic development. This new economic development paradigm is reflected also in the 2007 Andalusia Plan
In 2004, the Ministry of Innovation, Science and Enterprise assumed responsibility for universities, university research and technology transfer in Andalusia
as innovation and economic development tools and facilitate a shift towards an economy based on knowledge
On March 22, 2010, the Regional Ministry of Economy merged with the Ministry of Innovation, Science and Enterprise
4 The newly created Ministry of Economy, Innovation and Science confirmed the commitment of the regional government to make technology transfer between the 10
Andalusia public universities and Andalusia companies the key regional economic development strategy. Accordingly, the regional government put Andalusia public universities at the centre of the
unemployed and employed workers (Formacã on Profesional por el Empleo †FPL), entrepreneurship education (partly),
Ministry of Economy, Innovation and Science. This has created greater pressure for industry -university collaboration Traditionally, student mobility was very weak in Spain and geographic proximity rather than
to bring more competition for student recruiting and make Andalusia universities more specialized than generalist.
by the Ministry of Education, seeks to adapt vocational training to the new economy and new demand
Opportunities in the landscape This overview of the landscape of education and training in Andalusia suggests several
opportunities to build upon. First, the reorganization of the system into three ministries presents an opportunity particularly for high-tech innovation.
However, the risk in this restructuring is that it does not address the innovation needs of traditional sectors.
Changes in the university system present another opportunity. Increasing specialization particularly in the flagship universities of Granada and Seville, should help attract even more foreign
RETA and other regional stakeholders might work to encourage potential entrepreneurs among them to stay in the region,
over university training to obtain skills that will improve entrepreneurship. The II Andalusia Plan for
better to innovation and entrepreneurship †for instance, offering expanded on-line and foreign language training Entrepreneurship education
The EU generally lags in entrepreneurship education, and Andalusia is no exception Twaalfhoven and Wilson, 2004.
Different public and private actors in Andalusia from across the regional innovation system promote entrepreneurship education in the region (see Annex 1). While
the university offerings focus mostly on connecting high-tech workers and start-ups to entrepreneurship skills, a variety of other programs help traditional businesses and low-skilled workers
gain the capabilities they need to innovate more effectively. Below is a description of what some main
regional actors do in the field of entrepreneurship education and training Public universities Universities support entrepreneurship in four ways:(
1) providing workshops on starting a business for free or at very low rates;(2) at seven of the ten universities, supporting the Bancaja
opportunities;( (3) offering entrepreneurship fairs to connect different stakeholders; and (4) conducting research on promoting entrepreneurship in higher education (Laurent, Periã¡
à ez, and Petit de Gabriel 2010). ) Each university has created also specific initiatives and courses to promote entrepreneurship
For instance, the Economics department at the University of Malaga (UMA) started offering a course on entrepreneurship in 2009.
This is an elective course that all university students can take, although only 200 students took and most of them came from the Economics department.
This figure is small compared to the approximately 33 000 UMA students. UMA recognizes the poor participation rates in
quality education in business and entrepreneurship and even more so at the graduate level. Economics and business administration departments in public universities are disconnected often from the local
business community and, in response, business associations and chambers of commerce have created their own small private business schools in different cities.
Most of them offer courses on entrepreneurship and business leadership, but not official degree programmes 8
sciences, Environment, Renewable Energies and Agriculture, Cultural and Creative Industries ANDALUCIA EMPRENDE ANDALUCIA EMPRENDE has a network of 1 000 people to assist, advance, mentor, and train
It is the main provider of entrepreneurship training in the region. The main target is the entrepreneur,
ANDALUCIA EMPRENDE has more than 200 business incubators Centros de Apoyo al Desarrollo Empresarial, or CADE) around the Andalusia region, including rural
They also have a very extensive catalogue of entrepreneurship education. For youth, their training programs promote entrepreneurship culture in primary schools, high schools, baccalaureate
programs, and vocational training schools, teaching students how to create and manage cooperative firms. For the highest level of vocational training students, ANDALUCIA EMPRENDE offers a
business plan competition in which the winners spend three days training in the business incubators. In
abroad in strategic sectors for the Andalusia economy (aeronautics, biotechnology, ICT, culture industries, renewable energies;
which promotes entrepreneurship in vocational training schools and secondary schools. Their training is based on improving the skills of
entrepreneurship, held at all public universities in Andalusia. They also host gatherings called †Let†s
to promote entrepreneurship and the creation of innovative companies in the region Corporaciã n Tecnolã gica de Andalucã a (CTA
the Regional Ministry of Economy, Innovation and Science. CTA recently began a new program to
Opportunities in entrepreneurship education Andalusia has a significant infrastructure for entrepreneurship training in place, providing a
foundation upon which the region and RETA can build. Many of the region†s public universities are
already engaged in entrepreneurship education, from special workshops to support for MBA PROGRAMS to internship programs at the technology parks.
might develop more is FUNDACION EMPRENDE€ s extensive entrepreneurship training programmes, including its collaborations with the Talentia programme and the agency EXTENDA to
stakeholders describe the many different organizational disconnects in the region as issues as well Yet, such disconnects may hinder communication, foster more redundancy,
and prevent training programs from adopting appropriate curricula †thus constituting a key weakness in training provision
entrepreneurship, education, and employment; and the lack of a workforce strategy tied to †clusterâ€
As described above, entrepreneurship training in Andalusia takes place in multiple venues. But most commonly emphasized by stakeholders in the Andalusian regional innovation system is the
training available at the universities. Focusing nearly exclusively on university R&d and technology transfer, regional actors seem to have missed the more modest but important contribution of vocational
Ministry of Economy, Innovation and Science, there is only one vocational training diploma in Andalusia included under the Energy and Water professional family.
training strategies will allow the expansion of the local market for these services and products †a
Limited coordination amongst the Ministry of Economy, Innovation and Science and the Ministry of Employment
and the Ministry of Economy merging with Innovation and Science in 2010. The Ministry of Employment remains separate.
Education and the Economy, 2007 Limited synergies between cluster strategies and workforce strategies Finally, in part because of this agency balkanization, the region†s cluster strategy lacks strong
coordinated with sectors, for instance The english and entrepreneurship education available at technology centres like the Andalusian Stone Technology Centre.
that offer different types of entrepreneurship training do not target the region†s 25 clusters, or even the
receive some training in entrepreneurship from RETA. Yet, given the breadth of agent involvement in
the Andalusian economy, as well as the rotation of agents between clients, it was not possible to give
Thus, they worked with many different types of industries, each with different entrepreneurship opportunities and constraints.
Likewise, RETA offered basic IT training to its firms. RETA focused mostly on basic IT services, teaching its firms how to use electronic signatures and anti-virus software
rather than, for instance, how to develop e-commerce capabilities Opportunities for RETA Despite the challenges †the redundancy in overall education and training system, the lack of
university savvy about technology and entrepreneurship, and the many disconnects in the system †there are opportunities for RETA to assume a new role in the region.
RETA could help fill the clear vacuum in terms of coordinating the various training systems and linking them to the cluster strategy
At present, although many individual agencies work to coordinate their own educational and training programs with relevant actors, the siloed agency structure means that no one agency oversees the
multiple existing strengths in the region, including the commitment of regional stakeholders to improving the innovation system, the enthusiasm of foreign students for the region, and the existing
it has the opportunity to help coordinate training programs across agencies, universities and schools and advocate for more
There is an opportunity to coordinate more university activity regionally and link it better to regional needs.
Vocational training, which will link training better to the new economy, also presents an opportunity for RETA to provide input
and help coordinate training along the entire production chain. In particular, opening the regional centers of excellence gives RETA an opportunity to help link such
training better with the regional innovation system. With several agencies offering different forms of entrepreneurship training in the region,
there is a real need for an intermediary to assist with strategic planning that links the training better with the region†s other flagship programs, such as the innovation
As the literature on entrepreneurship and human capital indicates, RETA is suited particularly well for this role because of the breadth of its
networks, which span beyond the university system to include business associations and government There is also considerable existing energy, enthusiasm,
entrepreneurship. While most effort of the regional government to promote entrepreneurship and talent seem to be focused in improving sending Andalusian students to top universities abroad (as in
the Talentia program), there is also a remarkable opportunity to retain the large number of foreign
students that are attracted to Andalusian universities every year. The Universities of Granada and Sevilla alone received over 3 000 exchange students in 2007-08, placing Andalucia ahead even of
for these students, by helping them obtain legal residency and connecting them to entrepreneurship resources (for instance in the technology parks
In the area of human capital and the labour market, the most important contribution RETA can
offering small-scale entrepreneurship and IT training programs typically in collaboration with other agencies. RETA need not conduct training itself,
about human capital development related to entrepreneurship. In particular it can play a pivotal role by helping to link vocational training to the many other efforts.
FUNDACION EMPRENDE, already the leader in regional entrepreneurship training, to promote innovation and IT training in low-tech SMES.
for the region†s entrepreneurship training system. Ultimately, however, better information and planning will not lead to results
Fostering entrepreneurship alone does not guarantee that Andalusia can capture the benefits for its distressed labour market.
During economic crisis, it is particularly important to stimulate business to create more jobs. RETA might help the regional
Refocus entrepreneurship training Refocus entrepreneurship training along the models of the best business schools, with a particular
focus on attracting immigrant exchange students (though retaining immigrant entrepreneurs remains out of the region†s purview.
regional green economy The East Bay Green Corridor Partnership in the San francisco bay Area provides an example of
coordination around one emerging sector †in this case, the clean energy economy Workforce development and economic development goals,
such as regional economic growth and competitiveness, can be contradictory. Job training seeks to help economically or educationally
development more systematically, in part to create jobs in a stagnant economy. In the U s.,cities and
regional economy, and thus able to facilitate economic development In late 2007, the mayors of Oakland, Berkeley, Richmond,
and promote the green economy in the region. The so-called East Bay Green Corridor Partnership (EBGCP) has expanded
One major impetus was the USD 500 million investment by British petroleum in biofuels research by a consortium including UC-Berkeley, LBL,
opportunity for coordination and sectoral targeting. Generous grants are available for households of all income levels to conduct energy audits
This in essence creates a new market for energy efficiency services †an approach which the regional government is already fostering
The new market demand for energy efficiency will foster job creation in different ways. First initial energy audits
local stakeholders argue that the Partnership has created a friendlier business climate for green businesses
it provides an example of how to stimulate the economy during a downturn by creating a new
it targets green economy businesses, also a strength for Andalusia; it links workforce 11 This 52 million Euro program includes integral energy efficiency retrofit of existing residential units
coordination in this model, RETA might find a niche as a convener of the various stakeholders in each
Entrepreneurship training in Gothenburg, Sweden As described above, the Andalusian public universities offer a few entrepreneurship training
programs, and have plans for entrepreneurship chairs, but in general the offerings are undersubscribed Given the region†s interest in entrepreneurship,
as well as the concentration of foreign students and immigrant entrepreneurs, there may be potential to expand the offerings at the university level
Developing an entrepreneurial university takes time, and with limited resources, it may be best to focus on just one of the public universities.
as it invested in technology-based entrepreneurship at the University of Gothenburg and the nearby Chalmers University of Technology (Jacob, Lundqvist, and Hellmark
contribute to economic growth not just by producing own products but also input to other firms allowing them to innovate in their processes or markets.
The Gothenburg model of entrepreneurship training is based an action entrepreneurship education program, i e.,, the project-based learning model (Rasmussen & Sørheim, 2006.
A small class of students engage in the entrepreneurship process from idea development, team building,
and venture capital attraction, to actual firm setup. Local business entrepreneurs serve on the start-up firm†s board of directors.
teach entrepreneurship at the higher education level in the region, with the support of the Swedish
government, creating the Institute for Innovation and Entrepreneurship (IIE http://www. hgu. gu. se/item. aspx?
entrepreneurship schools under the project G4e (Gothenburg for Entrepreneurship space and access to a network of mentors.
region that has struggled to launch entrepreneurship programs at the universities. RETA might play a role in targeting entrepreneurship training resources,
specifically a new learning-by-doing program as has been so successful in Gothenburg, at one of the biggest universities.
would require significant regional and national investment, likely diverting funding from other university-based innovation programs
Chalmers School of Entrepreneurship, http://www. entrepreneur. chalmers. se/cse /School of economics and Commercial law at Gothenburg University
Although entrepreneurship programs have offered training in e-commerce for many years experience with global markets has shown that many websites are not appropriate to attract consumers
training programs exist, leading to a human capital deficit in this area. Certificate programs in the U s.,Ireland, Germany, the U k,
translation, and intercultural communication Although no systematic evaluation of localization programs exists, localization, and global e
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Cuadrado-Roura, J. R. & Garcia-Tabuenca, A. Innovative and Creative Entrepreneurship in Spain International Journal of Foresight and Innovation Policy 5, 1-3: 113-135
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WASHINGTON DC: Aspen Institute CHAPTER III: THE CONTRIBUTION OF RESEARCH ORGANISATIONS Introduction Universities and public and private research organizations play a crucial role in regional
economies that rely upon growth-oriented entrepreneurship and business innovation. The funding infrastructure and commercialization activities of research organizations within these economies are
increasingly important as they make the transition to a knowledge-intensive form of production. In
regional economy. It documents the policy context for the regional economy and the role played by
both the Andalusia university system and RETA within that context. The role of RETA in supporting
and the importance of building relationships and social capital between key actors and institutions The success of this approach depends on strengthening the interfaces between key actors in the
to innovation in the Andalusian economy, it must do so on the basis of a more effective way to
augment knowledge flows between research organizations and firms in the regional economy The preceding discussion suggests that the task of transferring knowledge from universities to
outlined above, frequently treat knowledge itself as a universally available commodity, virtually as a free public good,
in the local economy, as well as to the †thickness†of the local labour market (Gertler and Vinodrai, 2005
†communities†within the broader economy (Lundvall, 2006 These distinctions between the different types of knowledge bases and different modes of
enterprises in the regional economy, especially in terms of the concentration of the industrial structure of the region in small and medium-sized enterprises.
It draws on an important distinction that was made to members of the OECD-LEED Study Mission between the role of the largest universities in
economies in the world by 2010, although it is recognized now widely that the EU has failed to
economic powers in Asia and the changing international terms of competition that have led to a
growing concern with the overall innovativeness and competitiveness of the European economy. The second is the accession to membership of ten new countries from Eastern europe, all of
unlocking the business potential of small and medium-sized enterprises improving employability through flexicurity; and the better management of energy resources
as research, technological development and innovation, support to firms†investments and information society objectives (Manzella and Mendez, 2009, p. 19;
knowledge economy; ii) entrepreneurial development and innovation. Total expenditures on these two objectives are authorized at EUR 2. 38 billion over the life of the program
actively contributing to the creation of an environment of innovation capable of reducing the gap with
notes that there has been a significant investment in the system over the past ten years
research enterprise. These goals are to be operational through the financing of joint university-business
March, 2010 the Ministry of Enterprise, Innovation and Science was merged with the Ministry of Economy, further reinforcing the key role of technology transfer and collaboration between the public
universities and private companies as the central element of the regional government†s economic development strategy in Andalusia.
participation of research centres and enterprises in EU R&d funding programs, as well as a number of
industrial structure of the regional economy. Public universities have thus been the primary source of
geared to favouring economic growth first and thus to give priority to the pro industry approach. â€
production technologies, nanotechnology and advanced materials and information and communication technologies government, although they rely on the regional government for their financing and the overall
research universities also develop their own strategies to meet regional demands, especially the needs of the SMES through their association with other research organizations such as the Higher National
external research demands to the appropriate research groups within their own institutions, as well as promoting the transfer of research results into the private sector through patenting,
toward identifying newly formed enterprises from across Spain and attracting them to set up in Andalusia.
Andalusia universities by providing them with loans of up to EUR 100 000 through the public venture
efforts in strategic directions related to areas of industrial strength in the regional economy acquiescing to pressure from their researchers to afford all areas of research endeavour equal treatment
Technology Park (PTA) that the firms can move to the incubator in the Park. The university also has
economy. They assess the needs of companies and then try to match their needs with the existing skills
RETA has of firms on the ground in different parts of the Andalusia economy and RETA€ s ability to
With respect to the question of how the university views the †demand pull†approach to technology transfer, the representatives did not seem to place a great deal of emphasis on coordinating
technology consulting services for private firms. However, there will be facilities for firms to locate their research efforts on the new campus that will be jointly run with the PTA,
as providing support services to facilitate work experience for its students in enterprises and the
groups that use facilities and 80 external companies that use their services The Office for Technology Transfer has twelve people on staff with strong technical
research projects and the application process and one for entrepreneurship in the University of Seville.
characterize the regional economy. The staff limitations of the technology transfer offices make it difficult for universities to work with small firms and,
This suggests that there exists a critical opportunity for RETA to use its intermediary position between the small coterie of firms that have been identified as innovative and the universities
characteristics of the companies in the part of the regional economy where the universities are located This supports the idea that knowledge creation and application †and therefore innovation †are
major role in most of the firms that are designated as †innovative†within the regional economy.
economy and the other organizations which play an innovation support role; and 2) to facilitate the
second tier innovative firms that it services are in a position to engage with the universities in
provide complementary services that meet the needs of the tier of innovative SMES it is mandated to
students in the small and medium-sized enterprises that RETA services. The principle obstacle to
human capital working in the firms by providing them with technically trained university students; it could provide students with more real life work experience as part of their formal education;
enterprises back into the teaching activities of the university faculty. There is also some evidence from
the North american experience that coop students can create a demand-pull mechanism to pull technical knowledge out of universities to provide assistance to firms (Bramwell and Wolfe, 2008
are to expand the presence of incubators in the technology parks as a way of providing more space for
create a demand for emulating the approach in other firms and universities across the region
of enterprises across Canada. IRAP provides SMES with four main services, including technological advice, financial assistance for R&d activities, networking and partnerships.
Its services are delivered by a network of about 260 Industrial Technology Advisors (ITAS), who are housed in universities
community colleges and other technology transfer organizations across the country. In this respect IRAP performs a networking and coordinating role between firms and other key organizational units
A general feature of the Canadian economy, especially in the high technology sectors, is the predominance of small and medium-sized enterprises, especially when compared to other leading
industrial countries in the OECD. More than three quarters of Canadian firms have less than 10 employees.
small and medium-sized enterprises to business expenditures on R&d in Canada is significantly higher.
As a consequence, government programs targeted at promoting entrepreneurship and innovation among Canadian SMES takes on greater significance than it does in many other OECD
enterprises in communities across the country. The program has been in existence for almost 60 years and delivers comprehensive innovation assistance to technology-based SMES in almost every
small and medium-sized enterprises to help them develop technologies for competitive advantage NRC-IRAP operates on a shared-risk model,
more recent study by Niosi (2008), comparing the effectiveness of IRAP with venture capital funding found that the receipt of IRAP funding was correlated more often with an increase in the rate of the
firm†s growth than the receipt of venture capital funding. He strongly favoured an increase in the
demand for the services provided by IRAP€ s national network of ITAS and the subsidies they can
At Sybase, an enterprise software company that spun-off from the original WATCOM Corporation, with over 250 employees in its Waterloo
of the University of Waterloo in the regional economy. First and foremost, it acts as a steady source of
and they get an opportunity to evaluate their performance in the workplace before hiring them.
and supported by the Enterprise Co-op Program, which enables students to start their own venture in lieu of doing a co-op placement with an
established firm, and focuses on creating a local network of contacts and mentors to support it
The key lesson to be drawn from this experience is that the patient investment of resources in a
program such as this can pay incredible dividends to the local economy over a long period of time. It
network of technology-based firms in the local economy, as well as serving to enhance the region†s
Innovation centres and technology incubators became more common, as did support for entrepreneurs and start-up companies
changing with the parks placing greater emphasis on supporting incubation and entrepreneurship to grow their future tenant base;
environment for frequent exchanges between academic researchers and industry counterparts; and international partnerships are becoming more important as research parks seek to attract more
series of shifts in the global economy, as well as changing understanding of the nature of the innovation process.
Economies: Andalusia, Spain. Diagnostic Report Prepared for the OECD-LEED Study Mission to Andalusia. Malaga
Regional Ministry for Enterprise, Science and Innovation Koschatzky, Knut, and Thomas Stahlecker. 2010. †A New Challenge for Regional Policy
Paper Manufacturing. †In Microfoundations of Economic growth: A Schumpeterian Perspective, eds Gunnar Eliasson and et al.
Social Capital, Innovation and Regional Development. Nowy Sacz: Wyzsza Szkola Biznesu†National-Louis University Laurent, Julia, Inmaculada Perianez Forte,
Technology, Regional Ministry for Innovation, Science and Enterprise, Junta de Andalusia Lundvall, Bengt-à ke. 2006. †One Knowledge base or Many Knowledge Pools?
The Paradox of Cluster Development in an Open Economy, eds David A Wolfe and Matthew Lucas. Montreal and Kingston:
ENTREPRENEURSHIP AND START-UPS Introduction This chapter focuses on two interrelated issues: entrepreneurship and start-ups. It starts with a
general policy analysis of the importance of entrepreneurship at national and regional levels. The next section focuses directly on the current situation in the Andalusia region,
concentrating on the stiff challenges that it is currently facing, as well as the opportunities that can be utilised more effectively
The third section highlights a series of policy recommendations. The chapter concludes with a set of
face up to the entrepreneurship and start-up challenges, as a means of reinforcing the preceding policy
Developing a culture of entrepreneurship, including start-ups, continues to be the focus of policy debate.
This section concentrates on the reasons why a culture of entrepreneurship combined with the development of new enterprises are important.
The section goes on to address the importance of EU structural funds in stimulating entrepreneurial development in lagging regions experiencing economic
Entrepreneurship policy It is acknowledged widely that entrepreneurship plays a key role in relation to economic development and that entrepreneurs are key agents of change in market economies.
It has also become apparent that what constitutes entrepreneurship is pinned not easily-down: it is evident in both small
and medium-sized enterprises (SMES), as well as large ones; in the formal and informal economy; in
legal and illegal activities; in innovative and traditional firms; in high and low-risk ventures; and in
pretty much all sectors and sub-sectors of the economy (OECD, 2001, p. 35. If Governments were
increasingly emphasising the importance of the development of a †culture of entrepreneurshipâ€, the challenges presented by the current economic
and financial crises are likely to reinforce this trend The European Commission†s (EC) main policy document, the Entrepreneurship in Europe Green
Book (2003) associates entrepreneurship with certain types of behaviour, such as a willingness to engage in risk-taking,
desire to achieve independence, and self-fulfilment of the entrepreneur. At the level of local, regional, national and supernational economies, the EC highlights the importance of
entrepreneurship in terms of its contribution to job creation and growth, competitiveness, unlocking individual potential and wider benefits to society as a whole
Not surprisingly, given the above policy conclusions, the EC has committed itself to stimulating entrepreneurship across all EU nations and regions:
entrepreneurship is considered to be a major driver of innovation, competitiveness and growth. Consequently, entrepreneurship is promoted and supported
by the EC via a plethora of strategies, policies, programmes and funding regimes, not the least of
which are the structural and cohesion funds, which focus on improving the entrepreneurial environment for start-ups and SMES
Because a broad policy agenda can be addressed through an emphasis on entrepreneurship national, regional and local policy-makers increasingly recognise that the task of stimulating a culture
of entrepreneurship is driven a politically one. At the same time, there is general acknowledgment that there are no ready-made models for this.
Each nation, region and city must experiment in order to identify the right formula to reap the benefits of stimulating a culture of entrepreneurship in their
locality. However, the key elements are likely to include its particular historical, cultural, social economic and political heritage (OECD, 2009
EU Strategies affecting entrepreneurship and regions The EU meeting in Lisbon (2000) to respond to the challenges of globalisation and technologic
knowledge-based economy in the world, capable of sustainable growth with more and better jobs and
employment, innovation, economy, social cohesion, and environment. However, by 2005 it was apparent that the goal was overly ambitious.
The goals required investment in research, education transportation, renewable energies, and employability The renewed Lisbon Strategy was based on a set of 10 interventions
5. Increase and improve investment in R&d 6. Facilitate innovation, the uptake of ICT and the sustainable use of resources
9. Improve the adaptability of workers and enterprises, and the flexibility of labour markets 10. Invest more in human capital through better education and skills
The recent global crisis has however called for another major rethink of the Lisbon Strategy. The
a 10-year strategy designed to revive the European economy through †smart sustainable and inclusive growth, †with greater coordination of national and European policy.
%ï Invest 3%of GDP in R&d by improving the conditions for R&d investment by private
which in turn, requires greater levels of entrepreneurship, improved business environments, and development of a strong and sustainable economic base.
focus on innovation includes an entrepreneurship and start-up element: †For Andalusia encouragement of an entrepreneurial culture, spirit and activity is a basic strategy for its business
and economic growth. There is a relationship between the entrepreneurial spirit and economic results in terms of growth, consolidation of the business framework, innovation, job creation, technological
Knowledge economy (4. 6%of total expenditure: promote research, technological development, innovation and the information society
Andalusia committed to the growth and globalisation of the regional economy ï Priority 3: Environment, natural surroundings, water resources and risk prevention (29.7%of
total expenditure ï Priority 4: Transport and energy (31%of total expenditure ï Priority 5:
amount of funding for its activities, including entrepreneurship and start-ups. At this point it is
resources, therefore, represent a unique window of opportunity to get the regional economy in shape
This section examines the nature of entrepreneurship in the Andalusia region, such as the number of births and deaths of firms,
as well as other factors such as the density of enterprises. This is followed by a brief analysis of the key institutions responsible for stimulating entrepreneurship and
start-ups. It terminates with an analysis of the key challenges and opportunities facing the region
Entrepreneurial profile There are a number of aspects of the Andalusian economy that are relevant from the viewpoint of
entrepreneurship and start-ups. Firstly, Andalusia has traditionally been underdeveloped an region of Spain, although in recent decades there has been a remarkable catch up effect,
driven primarily by the performance of the construction and tourism sectors. Secondly, by 2008, Spanish GDP per capita
above synopsis indicates that the rapid economic growth and other gains experienced in recent decades, which have resulted in the region approaching national averages,
enterprises has risen year-on-year since 1999, peaking at 522 815 in 2007. However, the global
recession has caught up with the region, resulting in a decline to 510 072 enterprises in 2008, a
In 2008 Andalusia had 15.2 percent of all national enterprises, a reduction of 2. 4 percent on the
Number of enterprises in Andalusia, 1999-2008 376,646 384,086 398,302 417,006 441,623 464,179 486,674 511,728
That said, a large number of the new enterprises created in the region were connected with the
other services (major increase Table 4. Firm distribution by sector in Andalusia, 2001-2008 Andalusia
Other services 193,235 48.51 275,508 52.70 275,676 54.05 0. 06 Total 398,302 100.00 522,815 100.00 510,072 100.00-2. 44
The number of new enterprises (birth rate) stated declining in 2006/7, a process which accelerated dramatically in Spain(-27.46 percent) in 2007/8;
Andalusia†s entrepreneurship level was assessed by the Global Entrepreneurship Monitor (GEM in 2006. The GEM highlights some of the most pertinent entrepreneurship features of the region
ï Highest scoring aspects: access to physical infrastructure, promotion of growth, government programmes, and commercial/services infrastructure
ï Lowest scoring aspects: absence of entrepreneurship in universities and in primary and secondary education, technology transfer,
and the role of the universities ï Key obstacles for start-ups: social and cultural issues, lack of financial support, and limited
A key issue addressed in the GEM is the entrepreneurship potential or, more specifically, whether
and the number of enterprises and employment has gone also up. At the same time, the analysis illustrates that the region has been hit severely by the crisis,
Start-ups, stock of enterprises and unemployment, notably youth unemployment, are being impacted severely. Moreover, the region has a
relatively low levels of human capital in the region. The analysis suggests that there is an urgent need
to further diversify the regional economy; given the education levels and other limitations, there is a need for broader support to entrepreneurship and job creation
Institutions and policies for entrepreneurship Prior to assessing the challenges and opportunities facing Andalusia, it is helpful to recall the
main actors in the entrepreneurship support framework in the region Ministry of Economy, Innovation and Science
The regional Ministry of Innovation, Science and Enterprise merged in 2010 with the Regional Ministry of Economy, to result in the Ministry of Economy, Innovation and Science (MEIS.
The MEIS is a powerful institution with a commensurate annual budget of some EUR 3 billion.
Its activities determine the contours of the entrepreneurial and start-up landscape in Andalusia The Secretary general for Innovation is the main policymaker for numerous issues subsumed
within the innovation banner. The new Ministry is, in itself, a response to the massive economic
challenges facing the Andalusia region as regional politicians sought to integrate the key economic levers in one institution.
does seek to promote entrepreneurship and start-ups in its development model. This political commitment springs from awareness that a culture of entrepreneurship is the driving force for
innovation, competitiveness and economic growth in all regions, including Andalusia The region has deployed numerous public instruments
and resources to boost the competitiveness and innovative capacity of enterprises. This has resulted in the creation of one of the largest networks
supporting economic development through innovation in Europe, underpinned by very substantial EU and national subsidies.
ï€ Attraction of the best technology-based firms to the regional business incubators ï Multiplication of Renewable Resources
ï€ Train and counsel 5 000 SMES to add innovation to products and services ï€ Commit resources, instruments and public programmes on clean technologies and
and entrepreneurship centre as a cross-industry catalyst to accelerate the innovation rate and the creation of high-tech start-ups in the
entrepreneurship is the ANDALUCIA EMPRENDE Foundation, which is discussed below ANDALUCIA EMPRENDE Since 1999 ANDALUCIA EMPRENDE has been responsible for creating and consolidating
enterprises and promoting entrepreneurship throughout the region. It has two main goals ï Promote a culture of entrepreneurial activity through awareness-raising,
ï Create and consolidate enterprises and employment through advice and support to firms business training,
facilitate access by enterprises to public funds; improve the qualifications and professional development of young Andalusians at different educational levels and
design and implementation of entrepreneurship-related projects. To accomplish its extensive remit EMPRENDE has a network of:
CADE alone includes approximately 1 000 specialists, providing services to entrepreneurs in the creation and management of companies, including information, training
services, 6. 9 percent in construction, 4. 4 percent in industry and 1. 3 percent in agriculture
ï Generate investment: through the above companies, EUR 168 million were engendered ï Provide incubator accommodation:
for 500 firms ï Provide services: to nearly 12 400 entrepreneurs that applied for start-ups funds
ï Support the creation of business plans: approximately 2 500 of such them were supported ï Deliver basic business management:
4 435 hours of training delivered This chapter does not assess the impact that can be directly
which has an extensive range of policies and tools to support entrepreneurship, there does not appear
Entrepreneurship support: two main issues Two main points are worth reiterating to conclude this section
ï Firstly, Andalusia does recognise the importance of entrepreneurship and start-ups However, there is a strong emphasis on research and development and innovation (R+D+I
which amounts to a technological biased view of entrepreneurship. The problems connected with current recession, not least the steep rise in general
need for a wider focus on entrepreneurship, including education, vocational educational training, self employment, assistance to all forms of start-ups,
Ministry of Economy, Innovation and Science) and implementation. While the main actor with regard to the implementation of entrepreneurship programmes is certainly
ANDALUCIA EMPRENDE, there are some overlaps with other institutions, this being a common feature of the regional support framework for entrepreneurship and SME
development. The significant levels of resources currently available appear to have spawned a multiplicity of institutions and networks to support enterprise development.
From a public policy perspective most issues seem to be covered with the possible exception of a few, such
This section summarises the main strengths, weaknesses, challenges, and opportunities facing Andalusia with regard to entrepreneurship and start-ups.
The analysis conducted so far has already implicitly dwelled on the main strengths and weaknesses, so the focus is here especially on future
challenges and opportunities Strengths and Weaknesses One of the region†s most significant strengths is the level of EU, national and regional funds
The institutional environment in the region is incredibly dense: an extensive network of institutions, policies, programmes and projects now exists,
delivery of services, etc. and inefficiency (resources not necessarily deployed in a manner which maximises impact.
which its entrepreneurship support activities are achieving the desired policy objectives; this would enhance the targeting of activities and resources
levels of unemployment require the region to support all forms of entrepreneurship and start-ups in all
utilise the growing pool of idle human capital in the medium to long term Secondly, the level of local human capital,
whether or not in employment, needs to be upgraded Despite the recent catch up effect driven by higher levels of business activity (e g. construction and
Human capital needs upgrading so as to compete with the rest of Spain, the EU and further afield
primarily on investment in infrastructure. The focus of the current programme is on soft measures such
objectives are much harder to absorb funds than infrastructure investment. However, the necessity to put to good use the large flows of funding has contributed to sprawling and potentially overlapping
economy, including entrepreneurs and enterprises being supported, are protected to some degree from general competition Fourthly, although the local economy may be cushioned by EU and national subsidies,
it has certainly not been spared from the economic crisis. The construction and real estate sectors have been severely affected,
and so as has agriculture and, to a lesser extent, tourism. The consequence is high levels of youth unemployment, a slow down in the number of migrants, emigration by EU ex-pats, etc
A connected issue is the levels of demand for goods and services. The regional economy in not
strongly export-oriented, companies refrain from placing orders, and the general public is nervous about possible layoffs and responds by increasing savings at the expense of consumption.
In this context, demand for local products and services is affected. In addition, the level of Spain†s public
indebtedness has resulted already in austerity packages that have an impact on aggregate demand Finally, with the eastward enlargement of the EU, the region is likely to lose its Objective 1 status
and, in consequence, EU structural funds will decline markedly beyond 2014. Given the extent to
which the region benefits from financial and nonfinancial subsidies directly emanating from the EU it should initiate as soon as possible a process of transitioning to a more market-oriented and
sustainable entrepreneurship and SME development policy. It is extremely unlikely that the current extensive and dense institutional network of enterprise support will continue in the new emerging
financial environment Opportunities Firstly there is a low but growing level of entrepreneurial culture in the region.
Based on the 2006 Global Entrepreneurship Monitor (GEM) data, the density of enterprises was approaching the national
level. The same report also suggested that the population of the region has a fairly high level of
interest in entrepreneurial activity. Anecdotal evidence suggests that although young people have traditionally seen the public sector as the natural route to the labour market, the sharp economic
forms of entrepreneurship. This is clearly something to build on in the region via a greater focus on
developing a culture of entrepreneurship at all levels of the education system: primary, secondary vocational and tertiary
but it is also an opportunity. It would necessitate more efficient use of resources by minimising institutional overlaps and improving the targeting of support.
This presents the region and its enterprises with new opportunities. The commissioning of a detailed study and transition plan to assess the current situation
and recommend possible mechanism for adjustment in the medium term could assist the region Finally, the growing levels of diversity, including the large influx of migrants can be utilised by
The Andalusia government does recognise the need to promote entrepreneurship as the basis for the development of the economic model being pursued by the region.
PAIDI) include a set of actions designed to encourage entrepreneurship in universities. The above is a
and yet there is a need to develop a stronger culture of entrepreneurship in a region which
entrepreneurship. The high and rising levels of general and youth unemployment necessitate the harnessing of all ideas, talents, sectors, etc. for the future of the region
Moreover, the focus on entrepreneurship should not be restricted to future labour market entrants The region could promote the establishment of dedicated (re) training programmes for existing
business people (in employment and/or recently made unemployed), focusing on new business models and approaches, combining elements of local skills and strengths,
All such training must be demand-rather than supply-driven Turning to the institutions in Andalusia, a Working group is in the process of being established
by the new Ministry of Economy, Innovation and Science and the Ministry of Education to develop
approach to developing a culture of entrepreneurship in the region, including through awareness raising campaign, high profile public events, entrepreneurship competitions, entrepreneurship awards
support (financial and nonfinancial) for start-ups, etc Promote self employment to tackle unemployment and diversify the economy
The rising levels of unemployment, the need to diversify the economy (e g. away from construction, real estate, etc.
combined with the population†s latent interest to establish a business GEM, 2006) call for a greater focus on providing opportunities for people to establish their own
businesses though self employment or creation of firms. Such an approach should not be driven solely by R&d&i considerations:
The current economic situation means that entrepreneurship should be promoted widely Most people, including Andalusians, recognise the benefits of being their own boss.
bureaucracy involved, start-up capital is low, and record-keeping, accounting and taxation are straightforward. By contrast, setting-up a legal entity is a more demanding affair,
specifically focusing on this type of entrepreneurship. ANDALUCIA EMPRENDE is placed well to take responsibility for a more targeted programme of support for self employment.
Set out clear incubation principles and benchmarks A significant part of the current support for start-ups in the region relates to business incubation
Many business incubators have been established by the region; universities and municipalities also implement their own business incubator programmes over and above those supported by the region.
A notable example is Andalusia Technology Park (PTA), which provides funding, support and information for business creation through a five-stage development model involving
ï Incubator stage: open to the pre-incubated firms, as well as others. It offers lower rents and a
intensive support services are provided but there is no constraint on the length of contract ï Containers:
enterprise development stages. However, there are also clear grounds for concern. Firstly, it distorts the market to the extent to which the selected firms benefit from a seemingly endless array of benefits
devices, whereas the European benchmark for incubated businesses is 85%.%Thirdly, it may actually hamper rapid growth and development of the very firms being assisted as the high and continuing
evaluation of its business incubation model and benchmark it with international best practices. The introduction of a monitoring and evaluation system to assess the impact of this form of support would
and incubators to ensure that the system is as efficient as possible Introduce forms of support to corporate spinoffs
economy: here, knowledge and experience is combined into new products, services and process Measures to support corporate spinoffs could have important results:
they contribute to the strengthening of regional markets and of their competitiveness; they can generate synergies offering
of stimulating entrepreneurial activity and diversifying the regional economy. The regional government should therefore undertake a review of the current levels of corporate spin-offs in the
The Entrepreneurship Action Plan for Wales: Developing a culture of entrepreneurship Description of the approach
The Entrepreneurship Action Plan for Wales (EAP) seeks to promote a culture of entrepreneurship in Wales through three key elements:
i) recognising the opportunity: creating a greater awareness of the opportunities and benefits of entrepreneurship in order to encourage more
people to start a business or to grow the business they are in, and to develop a greater entrepreneurial
culture within our institutions, communities and businesses; ii) creating enterprises: creating a greater number of sustainable start-up businesses with potential for further growth, particularly by under
-represented groups of society such as women, the young, ethnic minorities, etc; and iii) going for growth:
increasing the number of businesses in Wales that grow, thereby creating greater wealth employment and opportunity
Rationale for the intervention Although the Andalusia region has recognised the importance of entrepreneurship and has
implemented a range of activities, the approach to developing a culture of entrepreneurship in the
region is not as comprehensive, including close involvement of the private sector and extensive awareness raising campaigns, combined with an integrated set of activities involving schools
The Entrepreneurship Action Plan for Wales offers concepts which are suitable for replication by a large region such as Andalusia, subject to the
i) fostering a culture for entrepreneurship ii) unlocking the potential iii enterprising communities iv) investing in knowledge and experience v) bridging the funding gap and
was guided by a private sector-led Entrepreneurship Implementation Panel; the operational part of the project was managed by a special enterprise team established within the Welsh Development Agency
Their main role was to commission work from a range of different organisations to ensure the delivery
activities, a coherent approach to the development of entrepreneurship across Wales was established A multi-million Euro programme for funding was made available through European structural funds to
for delivering the Entrepreneurship Action Plan. The EAP also requires significant levels of medium term political support, backed up by financial resources such as through the Structural Funds.
approaches to education and training, community enterprise, business start-ups, development funds and the many other areas for action which this strategy has embraced.
Andalusia recognises the importance of developing a stronger enterprise spirit in the region especially in light of:
levels of human capital relatively low compared with elsewhere in Spain; and iii) the traditional
as shown by the Global Entrepreneurship Monitor for Wales, include a noticeable change in the attitudes of the people in Wales towards entrepreneurship and a public sector
that increasingly and explicitly supports entrepreneurship across its activities. Its success has resulted in an increase in new business start-ups.
This type of approach would be advantageous in the Andalusia region: entrepreneurship in its widest sense would be supported,
rather than being restricted to an R&d&i focus For further information Department of Enterprise Innovation and Networks
Welsh assembly government Plas Glyndwr, Kingsway Cardiff CF10 3ah Tel:++++44 2920 828821 Web-site: www. wales. gsi. gov. uk
entrepreneurship training, business plan, etc. as well as after initiation of activities (coaching mentoring, consultancy, etc Relevance to Andalusia and considerations for adoption
and investment into establishing incubators already, a relevant issue for the region to consider is a †benchmarking†model that would allow it to
entrepreneurship and start-ups is the establishment of business incubators. International best practice has demonstrated their value.
The European incubator benchmarking study (CSES, 2002) highlights that there are about 900 incubators in the EU generating approximately 40 000 net new jobs annually
and that incubators accelerate the start-up of new businesses and help maximise their growth potential
in a way that is more difficult for alternative SME support structures to achieve However, incubators are not a panacea for entrepreneurship and job creation.
The experience of incubators in the EU has been mixed. Therefore, the contribution of the above EC study was to
prepare benchmarks for what constitutes successful incubators (see table below). It is important for Andalusia, having invested a large amount of time and funding,
to assess the extent to which it is performing according to these benchmarks and, if it falls short of those standards, to consider what
needs to be done to maximise efficiency in future Reasons for success The EC benchmarking study identified a number of critical quantitative and qualitative factors
which should be considered in developing a successful incubator policy. The table below sets out some of the key issues that could be considered by the Andalusia region
Table 6. Summary of key EU business incubator benchmarks Setting Up and Operating Average Range Benchmark
Average capital investment cost â 3. 7 million â 1. 5 to â 22 m NA
Average operating costs â 480,000 p. a. â 50,000 to â 1. 8 m NA Percentage of revenue from public subsidies 37%0%to 100%25
%Incubator space 3, 000 mâ 90mâ-41, 000mâ 2, 000 †4, 000 mâ Number of incubator tenants 27 firms 1-120 firms 20 †30
Incubator Functions Average Range Benchmark Incubator occupancy rates 85%9%†100%85 %Length of tenancy 35 months 6 months-no max 3 years
Number of management staff 2. 3 managers 1 †9 managers 2 managers min Ratio of incubator staff:
tenants 1: 14 1: 2 †1: 64 1: 10-1: 20 Percentage of managers†time advising clients 39%5%†80%50
%Evaluating Services and Impacts Average Range Benchmark Survival rates of tenant firms 85%65%†100%85
%Average growth in client turnover 20%p. a. 2001) 5%to 100%p. a. 25
%Average jobs per tenant company 6. 2 jobs per firm 1 to 120 NA New graduate jobs per incubator p. a. 41 jobs 7 to 197 NA
Cost per job (gross) â 4, 400 â 124 to â 29,600 â 4, 000 to â 8, 000
Box 4. Summary of key EU business incubator qualitative factors Setting Up and Operating ï Business incubators should be designed to support
and be part of a broader strategic framework †either territorially orientated or focused on particular policy priorities (e g. development of clusters), or a
ï Incubators should be promoted by an inclusive partnership of public and private sector stakeholders ï During the development phase, it is important for the market to be tested
and a business plan to be devised that can provide a framework for incubator operations ï There are a number of different set up funding models
but the evidence is that public support for the establishment of incubators will remain critical for the foreseeable future
ï There are different ways in which incubators cover their operating costs and whilst many incubators rely on public subsidies,
there is a strong argument in favour of dependence on this source of revenue funding being minimised
Incubator Functions ï The provision of physical space is central to the incubator model. Standard good practices now exist
with regard to the most appropriate configuration of incubator space ï The value added of incubator operations lies increasingly in the type and quality of business support
services provided to clients and developing this aspect of European incubator operations should be a
key priority in the future ï Business incubators should charge clients for the support services they provide but the level at which
prices are pitched should be designed to minimise the risk of †crowding out†private sector providers
ï With regard to incubator operating procedures, it is essential that there is a clearly defined target market and that this is reflected in the admission criteria
ï Whilst achieving high occupancy rates is important to generate income, this consideration needs to be
balanced against the importance of maintaining selective admission criteria ï Adopting exit criteria that ensure a turnover of client companies is desirable even if the turnover of
firms makes revenue levels from rental income and other services less certain ï Aftercare and networking with firms that have left an incubator should be regarded as just as important
as providing services to incubator tenants ï The quality of the management team, and adoption of a businesslike approach to running incubators
and monitoring clients, is crucial to performance and best practices in this field are becoming standardised
ï The type of activities client companies are pursuing, in particular the technology/knowledge intensity of
one type of incubator from another Evaluating Services and Impacts ï The performance of business incubators should be judged primarily in terms of the results achieved
i e. the impact they have on businesses, wider economic development and other priorities ï In assessing the impact of incubators,
there is a need to obtain feedback directly from client companies ï Likewise, a distinction should be made between gross and net impacts achieved by business
incubators ï Although †new economy†incubators are currently out of favour, there are many lessons to be learnt that
are relevant to the more †traditional†model (and vice versa ï Across Europe, there are a variety of different business incubator models and precise modalities
should reflect local, regional and national circumstances and priorities ï Similarly, although only limited comparisons are possible,
the research confirms significant differences between the way in which European and US incubators operate and therefore scope for a sharing of
experience and know-how ï Overall, business incubators are a very cost-effective instrument for the promotion of public policy
objectives Best Practice and Policy Recommendations ï Business incubators should be encouraged to benchmark themselves against best practice standards
and to take the steps required to achieve them ï Benchmarking and best practice sharing should focus on the four key incubator service areas
entrepreneur training, business support, financing and technology support ï Business incubators should be encouraged to periodically undertake impact assessments
ï A further priority should be for business incubators reduce their dependence on public subsidies
ï There is a need to †professionalize†the occupation of business incubator management Source: CSES, 2002
Relevance to Andalusia and considerations for adoption There is a need to establish a monitoring and evaluation (M&e) mechanism for the incubation
Andalusia, as far as entrepreneurship and start-ups are concerned. The proposed evaluation against quantitative benchmarks would enable the region to assess the current incubator policy and whether
there is a need for refinement, thus increasing policy effectiveness. To illustrate the point, the survival
rate of firms reared in an incubator environment should be significantly higher than the business
) The EC benchmark for the survival rate amongst tenant firms is set at 80-90%.
%suggesting that incubators are not operating as efficiently as might be hoped. Whilst survival rates are only one possible indicator of the performance
of incubators and others might be equally of importance (for example, the extent to which incubators
necessity for an evaluation of the Andalusia incubator practice so far. This would provide a basis for
Centre for Strategy & Evaluation Services LLP Westering House 17 Coombe Road Otford, Kent TN14 5rj
CSES (2002) Benchmarking of Business Incubators, Final report, DG Enterprise, Brussels EC (2003) Green Paper:
Entrepreneurship in Europe, Brussels EU (2010) Europe 2020: A European strategy for smart, sustainable and inclusive growth
Global Entrepreneurship Monitor (2006) Andalusia OECD (2001) Fostering Entrepreneurship, OECD, Paris OECD (2003) Entrepreneurship and Local Economic Development:
Programme and Policy Recommendations, OECD, Paris OECD (2009) Fostering Entrepreneurship in Eastern Germany, OECD, Paris
Granados-Cabezas (2010) Diagnostic Report Chapter, this publication Wolfe, D. 2010) University †Industry Collaboration, this publication
CHAPTER V: SME DEVELOPMENT IN ANDALUSIA Introduction SME development and growth is critical to fostering entrepreneurship, job creation and economic
development in Andalusia as a result of the dominance of SMES in the regional economy. However the region is currently characterised by a small number of innovative and internationally competitive
SMES and a broader mass of firms operating in traditional sectors and supplying local markets.
levels of innovation, internationalisation and the quality of the support environment in the region, and
support environment for the different types of SME before proposing a number of learning models that
Currently, the export performance of the Andalusia economy is dominated by a small number of firms
this relates to the firm size structure of the regional economy (see below) with an over-preponderance
economies, SMES are reluctant internationalists because they lack the capacities of larger firms including the financial means,
SMES in the Andalusia economy The Andalusia economy is dominated by SMES with over 99%of firms having less than 500
employees (see table below. This places it well below both the Spanish and the EU averages (Romero
enterprises. While the region experienced a high rate of new business start-ups and a significant increase in jobs during the period of economic growth from the mid 1990s up until the present
economic downturn in 2007/2008, the continued lack of mittelstand firms, medium-sized firms between 50 and 500 employees, demonstrates an underlying structural problem
As policymakers within the region recognise, an imbalanced economic base and firm structure presents a structural problem and legacy of past development, with a failure to grow indigenous
enterprises to a level that can contribute more significantly to employment creation and regional growth. The imbalances in the regional economy were exacerbated further in the boom period from
the mid 1990s to the 2007 when there was a dramatic growth in small firms in the construction sector
particularly of capital and labour, from the more productive and internationally competitive sectors of the economy.
The global economic downturn has worsened probably this situation: the most recent data available indicate that the larger firm sectors,
including medium sized firms, have been more heavily affected than smaller enterprises seeing much greater percentage falls in their numbers (see
table) with severe implications for loss of jobs Table 7. Size structure of firms in Andalusia, 2008
Size of firm%of total enterprises%change 2007-8 Micro-enterprises 95.06-1. 73 Self employed (no employees) 51.57 0. 38
1-9 employees 43.48-4. 3 Small firms (10-49) 4. 31-13.95 Medium sized firms (50-499) 0. 55-11.68
Large enterprises(+500) 0. 08-37.46 Total 100.00-2. 44 Source: Consejo Economico y Social, 2009
increased as a proportion of the total activity in the regional economy over the decade 1995-2005
Spanish regions in the face of the economic downturn. Broken down by sector, it is apparent that the
information technology and communications. Second, export oriented-firms in more traditional sectors such as the agri-food sector and minerals and metals.
and different potentials of these three different segments of the economy An analysis of the SME development policy environment
Andalusia has established a well state-driven policy environment supporting and advising SMES Discussions with the various agencies also revealed a high degree of consensus regarding the problems
facing SMES in the region and therefore considerable synergies between government agencies and bodies in driving forward policy.
particular mean that there has been a significant level of investment in high technology infrastructure and support, business start-up and venture capital for the more dynamic SMES
In particular, there is a considerable level of public support, at different levels (EU, national, and regional), for the most innovative SMES in Andalusia.
Technology Park (PTA) in Malaga, for example, has 530 enterprises employing more than 10 000 people. The focus upon particular sectors and clusters is appropriate †and chimes with wider recent
be in danger of missing opportunities based on the region†s existing strengths †a wider problem of the
enterprises that are being created ï How to identify ways of supporting the internationalisation of the SME sector by improving
in this sense the ones that are able to capitalise on the local support environment, but also to access
In an environment of shrinking business support, more targeting of SME activity in this direction should be encouraged,
the contraction in global economic demand from the recent downturn may make the penetration of
2003) whereby SMES are able to †piggyback†on the backs of larger customers into international markets.
most important source of both collaboration and innovation tend to be customers or suppliers in their
capacity in what are viewed as knowledge-economy sectors such as IT and biotechnology, Andalusia needs to reassess the competitive prospects of many of the firms in these sectors.
number of customers; geography of markets supplied to and change over time; evidence of collaborative networking;
There are clearly good opportunities in sectors such as renewable energy and aerospace where the region already has established international lead firms,
the often massive amounts of information and knowledge now available with internet communications to meet their specific needs.
the growing economies of the nearby cities of Florence, Siena and Pisa resulted in an outflow of the
which food is produced, the consequences for health and environment, and the subsequent importance of the visibility of the food chain.
between producers and consumers meant that it could meet the demands of the new type of consumer
stakeholder involvement†behind these initiatives so that a bottom-up rather than top-down approach has been pursued that encouraged SMES to become more involved in strategic agendas
municipalities, who want to diversify economic development creating new job opportunities for local people, developing new housing and diversifying agriculture and many of the local consortia (e g
or the growing demand in Spain and elsewhere for organic food products The traditions of cooperative production and distribution in Andalusia†s agri-food sector, allied to the
opportunities for the development of the kind of territorially based strategies that have made the Tuscan model successful.
Group of Agricultural and Environmental Economics, University of Pisa, Via del Borghetto, 80-56124 Pisa, Italy.
large-firm dominated economy. Denmark†s low tech clusters are comprised predominantly of small firms manufacturing in design driven markets with a low minimum efficient scale of production.
in the European union but this is not built on investment in high technology or a high level of R&d
As a small open economy with 50 percent of its economic activity accounted for by international
demand-side economic policies of larger countries. It has developed therefore a series of institutional arrangements over a long time period that underpins its relative economic success. A particular set of
competition to the position of its firms in international markets. Subsequently it developed its Network
Managers of SMES share similar backgrounds and there are regular forums and opportunities for meeting to discuss common problems and issues.
of the business environment †does not force the firms to cooperate if they are inclined not
despite increased competitive pressures on firms from foreign low cost competition (Christensen 2010). ) While most vocational trading is administered outwith the state, through collective agreement
Despite growing international competition from lower cost producers in China and Eastern European, Denmark†s employment remained relatively stable up until 2007 but with the economic
downturn and collapse of global demand in many key markets, unemployment has climbed from 3. 6
operations, so have been reliant in the past on larger multinational customers (e g. IKEA in the furniture industry
autonomy from the state but involve the key stakeholders in different sectors (e g. businesses, labour
unions, social economy organisations. Greater autonomy from the regional government in developing sector specific agendas would allow Andalusia SMES to generate their own strategies with regard to
manufacturing activity, it represents an important boost to Scotland†s knowledge economy and has risen in part due to a successful cluster strategy on the part of the regional development agency
Scottish Enterprise and the devolved Scottish government which was established in 1999 (Leibovitz 2004; Rosiello 2004, Birch and Cumbers, 2009.
agriculture, and environmental services. The cluster is dominated SME, with 60 percent independent firms and 26 percent spin-offs from public research organisations such as universities
modernisation strategies and attracting foreign direct investment, the region†s enterprise development agency, Scottish Enterprise, embarked on a policy of identifying strategic clusters in the 1990s with a
focus upon both identifying potential endogenous growth dynamics alongside the continuation of developing external links to key global commodity chains ad actors.
The region†s history and tradition at the forefront of medical sciences, going back to the eighteenth century Scottish Enlightenment, and
therefore an opportunity for Scottish scientists and technologists to develop new patents, products and processes to supply a growing global market
Scottish Enterprise and the Scottish government have provided substantial support for the cluster through grant funding (e g. a Proof of Concept), co
Co-investment Fund) and other financial schemes (e g. ITI Life sciences. Of particular note is the Intermediate Technology Institute †one of 4 within Scotland (the others being in IT, energy
extent has been successful in its strategy of longer term investment to pick †winners†in scientific areas
programme, funded by Scottish Enterprise, which represents a worldwide network of leading Scots who provide advice, contacts,
well plugged into the commodity chains of the main European and United states pharmaceutical multinationals. The sector can in this sense be said to have been born †global†(Birch and Cumbers
operating in the global economy. Consequently the loss of Scottish graduates to other places need not
availability of venture capital, which is limited in Scotland: in the UK the south east of England tends
The limits of specifically †Scottish†late-stage investment inhibit the achievement of a critical mass of medium and large firms which could provide the stability and market that smaller
in the past by initiatives to attract foreign direct investment. The focus more recently on key knowledge economy sectors and a series of cluster initiatives hold some important policy lessons for
Andalusia which is now pursuing a similar course The successful capitalisation on the region†s educational and scientific assets may also hold
With smaller resources in the future, investment in high tech activities should be directed at the most promising sectors that already display some international capability
http://www. scottish-enterprise. com/your-sector/life-sciences-sector http://www. cppr. ac. uk/centres/cppr/researchthemes/trademobilitygeographicconcentration/lifesciencec
/Irene Johnson, Director of International Networks, Scottish Enterprise, Atrium House, 50 Waterloo St Glasgow, G2 6hq. http://www. globalscot. com/Contactus/Contact. aspx
Small and Medium Enterprises. Edward Elgar, Cheltenham Asheim, B. and Isaksen, A. 2003 SMES and the regional dimension.
Enterprises. Edward Elgar, Cheltenham, pp. 21-48 Bathelt, H. Malmberg, A. and Maskell, P. 2004 Clusters and knowledge:
Christensen, J. L. 2010 Low-tech, High Performing Clusters in Knowledge-based Economies. Paper presented at the DRUID Summer Conference, London, June
Environment and Planning A. 35 9, pp 1689-1706 Isaksen, A. 2003 National and regional contexts for innovation.
C. and Todtling, F. eds) 2003 Regional Innovation Policy for Small and Medium Enterprises Edward Elgar, Cheltenham, pp. 49-778
Enterprises. Edward Elgar, Cheltenham, pp. 78-118 Leibovitz, J. 2004 Embryonic knowledge based clusters and cities:
Maskell, P. 1997 Learning in the village economy of Denmark. In Braczyk, H. J. Cooke, P. and
Economies, London, Routledge Maskell, P. 1998 Successful low-tech industries in a high-cost environments: the case of the Danish
furniture industry. European Urban and Regional Studies 5, 2, pp. 99-118 Massey, D. Quintas, P. and Wield, D 1992 High-tech Fantasies.
Evaluating Scottish Enterprise's Cluster Policy in Life sciences: A Descriptive Analysis. University of Edinburgh: Innogen Working Paper No. 16
Storper, M. 1995 The resurgence of regional economies, ten years later: the region as a nexus of
Evaluating Scottish Enterprise's Cluster Policy in Life sciences: A Descriptive Analysis. University of Edinburgh: Innogen Working Paper No. 16
The recent economic crisis has made things worse, striking Andalusia harder than the rest of Spain, which has been in itself severely hit by recession
and was largely based on investments in infrastructure. The second wave of modernisation builds on the main principles set out in the 2000
EU Lisbon Agenda (i e. the prioritisation of the knowledge-based economy with a view to making
Europe the most competitive economy worldwide; hence, it emphasises the role of public and private
investments in R&d, improved tertiary education, fostered co-operation between industry and university, stronger entrepreneurship, etc
As a result, these themes have assumed top importance in the policy agenda of the regional
economy and for entrepreneurial development and business innovation. To achieve these objectives a number of strategies, programmes,
stresses the importance of business enterprise R&d (BERD) investments, industry-university technology transfer, and intermediate organisations such as technology centres and technology parks â€
i e. the entrepreneurship and SME development support system of Andalusia, focusing on four main areas that are relevant for a thriving knowledge
-based economy: i) human capital and labour market; ii) research organisations; iii) entrepreneurship and start-ups; iv) SME development.
The main conclusions and policy recommendations for each of these themes make up the remainder of this chapter
14. Suffice it to think that between 2007 and the first quarter of 2010, unemployment has soared from
Human capital and labour market Three key issues have emerged in the area of human capital and labour market:
i) today†s knowledge-based economy put a premium on education; as a result, the regional government should
seek to strengthen further participation in higher education; ii) the potential contribution of vocational education and technical skills to entrepreneurship and innovation is appreciated not sufficiently in the
region; iii) entrepreneurship education is still at an incipient stage, in spite of the wide offer of training
programmes for entrepreneurs The number of Andalusia†s people aged between 25 and 34 with university and post-compulsory
-based economy there are greater returns from higher education. College graduates make up 29%of the employed population in the region,
Being the current entrepreneurship and innovation strategies mainly based on the promotion of R&d and industry-university technology transfer, the regional government
actively involved in the design of regional innovation and entrepreneurship strategies, although it is responsible for vocational education, self employment programmes,
Entrepreneurship education is not as strong in the region as it could be expected, given the
emphasis placed by the regional government on entrepreneurship and business innovation. There is indeed a broad supply of entrepreneur training provided by a very heterogeneous array of actors
There is a lack of programmes that tackle entrepreneurship in a more comprehensive and integrated way, looking at the broad set of skills that new entrepreneurs need to
established an elective entrepreneurship course that has, inter alia, poor attendance. The low take-up rate of this course may also flag that Andalusia†s entrepreneurial culture remains feeble, although the
The three key aspects with regard to the role of universities in the regional entrepreneurship and SME development system can be synthesised as follows:
transfer offices will be able to reach out to a wider number of both faculty members and enterprises
Entrepreneurship and start-ups Andalusia innovation and modernisation strategies (i e. PIMA and PAIDI) stress the importance
not only of R&d investments and technology transfer, but also of new business start-ups and entrepreneurial culture as basic pillars of future economic development.
Entrepreneurship promotion is therefore rightly at the top of Andalusia†s concern, and one organisation in the regional institutional
key entrepreneurship indicators, Andalusia has still margins for improvement as regards both business creation and entrepreneurial culture.
ii) considering the large investments of Andalusia in business incubators, the regional government should engage in a more regular evaluation
of this tool against current EU benchmarks; iii) an unexplored area by the Andalusia government
concerns the contribution of corporate spinoffs to innovation and local development, and how they could be favoured by policy
The entrepreneurship performance of Andalusia has improved significantly over the last decade with business density increasing from 51.3%to 63.7%between 1999 and 2007 (Spain:
Total entrepreneurial activity (i e. the entrepreneurship potential measured as the number of people actively engaged in launching a new business) is also still lower in Andalusia than in the whole Spain
employment and the Ministry of Economy, Innovation and Science would be crucial in this domain This is all the more true
Incubators are one of the most favoured tools of business development promotion in Andalusia Only within the Malaga technology park (PTA) there are six of them.
exacerbated by the weight of the construction industry in the regional economy. As of 2008, micro
enterprises (less than 10 employees) accounted for 95, %and small firms (10-50 employees) for 4. 3
%of the whole enterprise population, thus making up altogether over 99%of the total. The paucity of
The task of internationalising the regional economy is made complicated by the very different sectors that have an international potential in the region,
whereas foreign direct investment of local firms (e g through joint ventures with firms overseas) has received much less attention.
SMES are able to piggyback on the backs of larger customers into international markets. Existing
investments by the firms hosted in the parks, corresponding to 24%of the national total.
and from the type of services firms hosted in technology parks generally benefit. This has enabled the regional government to extend the scope and
enterprises in the future. This is a welcome step. As a †slimmer†organisation, RETA needs to rationalise its mission, reducing the scope of work
Key future opportunities Developing entrepreneurship skills to upgrade local industries Universities are being geared up to be conduits for knowledge and innovation in the new
economy but as the OECD study reports, inappropriate class syllabi and the lack of awareness of
business training needs and of the importance of new technology, call into question the effective use
entrepreneurship programme show how entrepreneurship courses in the region tend to go undersubscribed. Balancing generic entrepreneurship development programmes with tailor-made
initiatives aimed at Andalusia†s strategic sectors is imperative. This means creating new entrepreneurship and innovation programmes for Andalusia†s strong tourism industry together with
the need to offer schemes that can help scale up its traditional agricultural industry and its fledging
Blending R&d investment and skills upgrading to broaden the scope of local innovation policies Overall, there appears to be a relatively poor connection between the innovation system and the
renewable energy is one of the main clusters defined by the Ministry of Economy, Innovation and
programmes across the production value chains should help identify opportunities for new products new connections,
greater pool of human capital. But an exclusive focus on such a strategy could be at odds with the
intensively with external enterprises. It is difficult to judge whether this lack of collaboration is
The continued investment in R&d (from EUR 72 million in 1999 to EUR 243 million in 2005
might generate opportunities for which there is a time lag especially in regions with a relatively low
Greater levels of coordination among agencies with a view to connecting human capital development with technological change and management capabilities could be a significant
The attractiveness of such ventures has to be measured by the level and capability of SME participation in international activity.
Harnessing the entrepreneurship potential of the youth and migrant population The need for greater strategic direction becomes more significant
Entrepreneurship works when new firms are formed, when new skills are developed and deployed, and when new talent is able to work with new products and services.
Wasted youth potential can have a profound adverse impact on entrepreneurship and economic development in the future.
Diversity through immigration can also be a positive feature of regions as the success of Silicon Valley†s many
could open up opportunities for new products and markets. Together with a diverse student body and
Human capital and labour market ï Link training programmes more effectively with sectors in order to improve firm productivity and
ï Refocus entrepreneurship education along the models of the best business schools, trying to attract immigrants and to exploit the advantage of Andalusia†s geographical location
Entrepreneurship and start-ups ï Further develop entrepreneurial culture in the region, including by targeting the new unemployed
Andalusia incubators against EU current benchmarks ï Think of promoting corporate spin-offs as an alternative to university spinoffs with stronger industry and
their activities by †piggybacking†on the backs of large customers RETA ï Focus work on innovative firms,
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