The Innovation Collaborative’s first Strategic Priority is to help inspire a culture of entrepreneurship. Our process in doing so is to develop a supportive, inclusive, and collaborative culture among participants in Erie’s Entrepreneurial Ecosystem (entrepreneurs, resource providers, elected officials, etc.).
It is important to ask what a culture of entrepreneurship is and how it is valuable to Erie’s entrepreneurial based economic development.
What is a Culture of Entrepreneurship?
In recent decades, researchers in entrepreneurship have explored how a region’s culture impacts the rate of entrepreneurship. There are four ways culture can play an important role:
- Aggregate Psychological Traits: If there are more people with entrepreneurial values in the country, there will be an increased number of people displaying entrepreneurial behaviors.
- Social Legitimization / Moral Approval: Greater rates of entrepreneurship are found in societies where the entrepreneur is endowed with higher social status, attention paid to entrepreneurship within the educational system, and more tax incentives exist to encourage business start-ups.
- Social Capital and Cooperation: Rates of entrepreneurial activity are higher in cultures that value friendship and cooperation as opposed to performance based cultures.
- Dissatisfaction: If people are dissatisfied with their surrounding (i.e. personal economic condition, lack of opportunity, etc.) they might be more inclined to seek and act upon entrepreneurial opportunities.
The first three demonstrate the approach of the Innovation Collaborative and provide some initial empirical evidence that confirms culture’s impact on entrepreneurship. We aim to inspire more entrepreneurial values (i.e. taking risks to start or grow businesses) and celebrate those who do take these risks. We also believe that social capital and cooperation are a key element to Erie’s entrepreneurial mindset.
Social Capital, Culture, and Entrepreneurship
Collaboration and cooperation are new logics for the fields of business and management, which has been traditionally concerned with the rationalization (efficiency at all costs) of business processes. In the innovation based economy, technical knowledge workers and creatives earn competitive advantages with new ideas or the reinvention of business processes.
“By contrast our findings suggest that social capital, as evidenced by the friendliness and cooperativeness of a culture, may play a far more decisive role for entrepreneurship [than a performance based culture] (also Fukuyama, 1995, 2001). More specifically, our study is the first to find empirical evidence on the national-level that social capital as captured by socially supportive culture (SSC) has a consistent positive effect on both the level of entrepreneurship (new and established business owner rates) as well as on the quality of national entrepreneurship (independent and innovative new business owner rates). These findings are furthermore consistent with the positive effects of social capital on the individual- or firm-level (Aldrich et al., 1987; Uzzi, 1997).”
In the above paragraph, social capital as friendliness and cooperation, are evidenced empirically as key drivers of rates of entrepreneurship when compared to ‘performance based cultures.’ Though additional research is needed to confirm these findings, the above paragraph is part of a larger conversation that confirms new logics may drive entrepreneurial based economic development.
Moving Erie’s Culture of Entrepreneurship Forward
The Innovation Collaborative has come to witness many organizations within our region that are pioneering these new collaborative business models. These organizations are breaking down barriers to create collaborative partnerships among organizations that previously would not have collaborated.
But one of the most encouraging aspects of Erie’s entrepreneurial based economic growth is the growing sense that economic leadership recognizes the risks that go into entrepreneurship and are willing to provide adequate support to Erie Entrepreneurs. For young people, who often have the technical skills to launch competitive businesses in the new economy, a culture of unconditional support is essential. Friendliness and cooperation, along with a celebration of entrepreneurship, are vital to the growth of Erie’s entrepreneurial ecosystem.
Bill Scholz has a Master’s Degree from the University of St. Andrews in Scotland where he studied the economic and management logics of entrepreneurship and the creative industries.
CC image unaltered Missy Schmidt