Universities are key actors in creating vibrant entrepreneurship ecosystems for sustainable prosperity and development

The university can be an excellent player in ecosystem development, enabling an environment in which entrepreneurship contributes to achieving sustainable development and societal changes. So said Professor Eric Stam (below), a visiting professor at Stellenbosch University from the School of Economics, Utrecht University, Netherlands.

Speaking at the recent 7th Biennial Research and Innovation (R&I) Dialogue on the topic The role of universities in Entrepreneurship-led Development: An entrepreneurial ecosystem approach, Stamsaid while research and education are its twin powers, the University is not an island and does not operate in a vacuum.

His address fell within a dialogue segment titled ‘Social innovation and entrepreneurship for societal impact: Creating an enabling ecosystem for social innovation and entrepreneurship at universities.’ The R&I Dialogue is housed within Universities South Africa’s (USAf) Research and Innovation Strategy Group (RISG), whose mandate it is to ensure the adequacy of research infrastructure to meet national innovation needs.

The 2023 event, themed Research and Innovation for Societal and Economic Impact, was attended by executive and senior academics, researchers, policymakers and representatives of science councils and other entities.

Outlining the role of the university in the entrepreneurial ecosystem, Professor Stam said: “We all want our universities to have societal and economic impact with the twin powers of talent and knowledge investments. We want to achieve and realise prosperity for an increased quality of life or what the United Nations calls Sustainable Development Goals.

“Just investing in talent and knowledge with education and research programmes does not lead directly to prosperity. Making impact is a people’s business – I call this entrepreneurship.” This included education, translating research, being inspired by societal challenges and connecting the investments of knowledge and talent in universities to society in a creative way.

“It’s not just about people and doesn’t happen in a vacuum,” he said. This was about an ecosystem that organises and enables entrepreneurial ecosystems, actors and factors in such a way that they enhance productive entrepreneurship – thus contributing to prosperity, wellbeing and sustainable development.

Professor Stam leads a global community of scholars in economics, geography, business administration, sociology and data science – all creating a framework for science and practice enabling learning and the improvement of entrepreneurial ecosystems for bigger prosperity.  Based on volumes of studies on ecosystems around the world, they had surmised that for entrepreneurship to flourish, the following building blocks were vital:

• “We need formal institutions, rules and regulations that enhance entrepreneurship and innovation.” Corruption, he said, lowered the impact of entrepreneurship and led to destructive paths. A culture enhancing values of entrepreneurial behaviour was necessary.
• Connectivity in cities, regions and countries so people can exchange knowledge and information quickly while building new businesses for realising innovations. “We need physical infrastructure with digital access.”
• Purchasing power, without which people cannot buy new solutions. Intermediaries, business support, incubators and accelerators have to support those new initiatives.
• Developing talent and investing in knowledge (the core mission of universities); using the raw material to find new solutions. Many societal solutions come from research – the university is a well spring of knowledge for potential solutions for today’s and tomorrow’s problems.
• Leadership: there needs to be a shared sense of leadership where a group of people take collective action to mobilise private and public parties for improving the ecosystem.
• Investment finance. “Our core mission is to invest in talent and knowledge but there is no element in which the university could play no role. With all players in the region, universities could take a leadership role to stimulate the entrepreneurial ecosystem.”
• Using incubators, accelerators, facilitating entrepreneurial activities for experimentation, the university could, as an actor in the region, be a very important purchaser of innovative products. “Think how much money universities spend and how this can be used to trigger innovation and entrepreneurship. Universities provide a physical infrastructure, connectivity between people… they can be a broker in networks. With education and with inviting people from the public and private sector that are entrepreneurial, they can stimulate a culture of entrepreneurship. They can also stimulate institutions that enable open societies and entrepreneurship.

Professor Stam said if universities play these roles with relevant actors in the region or city it could lead to more productive entrepreneurship and these entrepreneurs – often alumni of institutions – can also give back. “This leads to better health, better education, better purchasing power. The WOW is creating cycles of ecosystem development. This is a long-term agenda and does not happen overnight. But if we get this right, the university can play an important enhancing role in ecosystem development.”

He then asked: What does this mean? What can we do? “Start with connecting all the parties in the region. Do a diagnostics: how well or badly is the region doing? Identify strong and weak points and use these to get a group of stakeholders together to collectively improve the ecosystem.

“This is a collective learning process. As scientists we want to have a factual base so we start with the diagnostics.

• Identify the kind of talent. See how stakeholders can enrich this diagnostic with their own local knowledge.
• How can we prioritise and improve the ecosystem?
• What kinds of agreements do we make?
• How do we involve national government and other institutions to improve our ecosystem?

Each region, the professor said, would do this in a way that is relevant to them. This process will identify what has been realised, what was not achieved, taking into consideration external shocks like the Covid pandemic.

“Sometimes we’ve not thought about how to implement this and need to step back and think about why, for example, we’ve not thought about how to involve the private sector. “This is a way to look at the environment; the ecosystem and to use data, and also explicit dialogues to get this collective learning process – that will ultimately improve the ecosystem – going.

He referred to a gathering that will take place to discuss these issues in November in the Western Cape that will include several South African institutions along with business associations, banks, incubators, accelerators, and government representatives. “It’s a step towards a collective learning process to improve conditions for entrepreneurship in which we as universities play very many roles. Mostly it’s to use entrepreneurial talents to solve societal challenges for prosperity and wellbeing.”

Together with a lecturer/research associate at Stellenbosch University, Professor Stam co-directs the newly formed Alan Gray Centre for Africa Entrepreneurship, whose pan-African mission is to improve ecosystem development across the continent and connect Europe and South Africa.

He said the R&I Dialogue was about acting, “these days called the Theory of Change. It’s a collective learning process. Whether in Mpumalanga or Western Cape, you need to know the weak and strong points of your ecosystems, concentrating on the weak points.

“How do we perform? How should we tackle this? What investments in education and should be prioritised? If you have R1 to spend, where will it be best spent to deliver the best output?

“You need to start activities that follow up on these investments: the best educational programmes and research in data science, physics, nursing … What is needed most for improving the conditions for societal change?”

He listed a few:

• Measuring outputs that are realised
• Increasing the number of graduates in those domains
• Research articles, citations, collaborations (which are, in themselves, not the end goal)
• More entrepreneurial activity – innovation.

The process takes many years to entrench, Professor Stam said, and included the introduction of new firms, growing firms, innovations and finding solutions to societal challenges.  “Our goal is to achieve increased prosperity, wellbeing, sustainable development. This is a theory of change you can tailor make for your institution.

“Ultimately, we want to have this purchase cycle ecosystem development where you improve the ecosystem at the leverage points where you have most effect and then positively feed back into ecosystem. Having high-end purchasing power and more educated people in the region is an output but also input for the next generation.”

A decade ago in the Netherlands, there was a complaint that the investment in knowledge did not reach society, innovations and societal challenges. They started the Dutch valorisation programme to professionalise entrepreneurship education and innovation structures and offered financial support, not only to universities, but to research consortia, municipalities, provinces and societal actors.

“You need time. So, these consortia had a valorisation plan of six years where the goal was to improve ecosystems – not just in money terms, but also co-interests. All the parties showed that they were putting investments on the table.

“It is what we want: an entrepreneurial rainbow nation with our research and education feeding into solutions for today and tomorrow’s problems; having collaborations with a data/ dialogue driven entrepreneurial ecosystem approach in which universities play a key role.”

I never speak about Intellectual Property to my researchers. I also never talk of commercialisation because it implies money.  I would therefore like to ask of the DVCs: What are their expectations of this office? What is the innovation aspect that falls under our role? If they clarify that we will be clearer of what it is that is required of us, and we will deliver on that mandate.

Charmain Naidoo is a contract writer for Universities South Africa.