Entrepreneurial Ecosystems

Mapping entrepreneurial ecosystems: Start-up Infrastructure Diagram

Door drs. Hendrik Halbe en drs. Denise van Blitterswijk

Benieuwd hoe de infrastructuur van het Nederlandse start-up ecosysteem in elkaar zit? De Start-up Infrastructure Diagram (SID) is een tool ontwikkeld door Halbe & Koenraads om inzicht te bieden in de spelers die de infrastructuur vormen.

Lees het volledige artikel hieronder.

Dit artikel is vernieuwd in januari 2018 in het kader van de StartupDelta Summit. Dit artikel maakt oorspronkelijk deel uit van een serie publicaties binnen het thema Innovatie & Ondernemerschap over Entrepreneurial Ecosystems van SMO, powered by DutchCE.

Mapping entrepreneurship ecosystems: Start-up Infrastucture Diagrams

Introduction

This chapter presents the Start-up Infrastructure Diagram: The Netherlands (SID NL). The SID NL aims to enhance our understanding of the entrepreneurship ecosystem and provide a foundation for further discussions about the development of a supporting infrastructure for start-ups. The SID NL highlights the key pillars and themes that form the basis of the Dutch start-up ecosystem. It also shows some of the parties and entities that are shaping the various pillars and themes on an ongoing basis. The goal of the SID NL is not to offer a complex and comprehensive model, but rather to give a global overview of the main characteristics of the start-up ecosystem and the most important stakeholders. The SID NL is a concept that is constantly being developed and updated in line with developments in the ecosystem.

This chapter will firstly explain the overall design of the Start-up Infrastructure Diagram (SID), after which it will analyse the Dutch start-up ecosystem in more detail, using the SID NL. A brief explanation of each of the main pillars will be given, using examples from the diagram.

The Start-up Infrastructure Diagram (SID)

In recent years, there has been a significant, and at times overwhelming growth of start-up initiatives around the world. Entrepreneurship ecosystems are quickly developing, but a clear overview and understanding of the initiatives and stakeholders that actually form the basis of an ecosystem is often lacking. The Start-up Infrastucture Diagram (SID) has been specially developed to enhance this understanding by highlighting the organisations and entities that form the supporting infrastructure of an ecosystem in a specific geographical location.

Halbe & Koenraads identified five key pillars that form the supporting infrastructure of any entrepreneurship ecosystem that form the SID. The SID does not aim to offer an encompassing overview of all players in the ecosystem, but instead is meant to highlight those parties that really shape and determine the playing field and make a difference to the ecosystem and start-ups (as perceived by stakeholders within the ecosystem). The SID helps to enhance our understanding of the entrepreneurship ecosystem and provides a foundation for further discussions about the development of a supporting infrastructure for start-ups.

In the Startup Infrastructure Diagram: The Netherlands (SID NL) we show the organisations and entities that are shaping the various pillars of the Dutch ecosystem. The SID NL is constantly being developed and updated in line with developments in the ecosystem. It was published first in 2016 and updated in 2017. In this Whitepaper, an explanation of the design of the diagram and a short analysis of the Dutch entrepreneurship ecosystem based on the SID is presented.

SID Design

The SID is designed in such a way that it represents the most important pillars in the infrastructure of any start-up ecosystem and reflects its key players and initiatives. Naturally, there are many alternative formats but the current design has been developed for its broad applicability and is based on input by various stakeholders.

The SID is made up of a core and three circles:

  • Core: The core of the diagram represents the geographical location of the infrastructure that is presented in the SID. This can be a specific city, country or region.
  • First circle – pillars: The first circle contains the five main pillars of the SID that form the basis of any start-up ecosystem infrastructure. These pillars have been selected based on desk research and input from the field.
  • Second circle – categories: The second circle contains the main categories related to the five main pillars. Any possible subcategories are mentioned in the third circle.
  • Third circle – entities: The third circle presents the most important organisations and initiatives representing a specific pillar and that often serve as points of entry. These are often overarching associations or organisations representing smaller initiatives.

startup_leeg
Figure 1: Template Start-up Infrastructure Diagram (SID)

Criteria

The SID does not aim to offer an encompassing overview of all players in the ecosystem, but instead highlights those players who really shape the playing field and make a difference for start-ups. This is determined by the following criteria:

  1. Supporting entities: Has to have a focus on supporting and strengthening the infrastructure of the national ecosystem or directly supporting startups (not the banks, consultancy firms etc.);
  2. Proven & sustainable: Has to have proven to improve or contribute to the entrepreneurial ecosystem and aim to make a long-term impact (not one-off initiatives or short term programmes);
  3. Main entity & core business: Only the main organisation or department can be on the diagram, not its specific programs or initiatives. Organisations can only be mentioned in one category that represents their core business (were they bring the most value).

SID Nederland

The SID is applied to the context of the Dutch start-up ecosystem and its most important stakeholders, and has been established based on the input of stakeholders in the field. It should be noted that the rapid development of the ecosystem means that this SID will also be continuously updated.

startup-taart_db_v-2-nov
Figure 2: Start-up Infrastructure Diagram the Netherlands.

The Pillars of SID: The Netherlands

A. Network

A. Network : stimulating interaction and collaboration and connecting stakeholders in the ecosystem.
A1. Events Events that are mainly focused on start-ups and the ecosystem and have significant reach and impact on the ecosystem. Can be subdivided on the basis of geographical scope and impact.
A2. Competitions Start-up competitions that operate on the scale of the ecosystem (usually an ongoing or longer process).
A3. Co-working spaces Spaces that give entrepreneurs the opportunity to work on a flexible basis with access to a high-quality network/community.
A4. Platforms Parties that stimulate the start-up communities and/or (part of) the ecosystem.
A5. Start-up Media Media that are centred around entrepreneurship or have a strong presence in the start-up community.

A1. Events (National/Regional)

A large number of events on topics related to innovation and entrepreneurship take place each year. The events are mainly focused on start-ups and the start-up ecosystem and have significant reach and impact on the ecosystem. They can be subdivided on the basis of geographical scope and impact. Events vary from small, local gatherings to large, national events such as the Global Entrepreneurship Week (GEW). During the GEW The Netherlands, more than 100 local and regional events take place throughout the country. The StartupDelta Summit and Get in the Ring (GITR) are some of the main events that connect the ecosystem on a national level.

Events are a source of inspiration and knowledge exchange for stakeholders, and can be an important way of actively connecting stakeholders, stimulating interaction within the ecosystem and making the ecosystem visible. Not only does this lead to meaningful new connections, but it also enhances the promotion and image of innovative entrepreneurship both nationally and internationally.

A2. Competitions

There are a large number of entrepreneurship/start-up competitions within the Dutch ecosystem, many of which are organised by corporates. The large degree of participation in these competitions makes them an effective way to screen and scout for innovative and high potential start-ups. For start-ups, competitions offer value in terms of exposure, the validation of an idea and potentially an investment or prize. Two of the largest competitions in the Netherlands are:

  • The Philips Innovation Award: The largest student entrepreneurship award in the Netherlands. The competition aims to stimulate innovative entrepreneurship among students and offers a platform to grow from an idea to a start-up.2 Around 300 students participate yearly.
  • Get in the Ring: The competition concept Get in the Ring was developed in the Netherlands and has grown to become internationally recognised, with more than 150 events in 100 countries each year. 2015 saw 20,000 visitors and 5,000 participating start-ups.3

A3. Co-working spaces

Further connection and interaction within the ecosystem takes place at the co-working spaces in the Netherlands. Such spaces offer entrepreneurs the opportunity to work on a flexible basis with access to a high-quality network, support and services. Apart from the larger and more well-known co-working spaces highlighted in the diagram there are many smaller, sector- or topic-specific spaces. Co-working spaces with an international outlook can form a good basis for start-ups with international ambitions. According to the Global Coworking Survey, co-working is here to stay: by the end of 2017, nearly 1.2 million people worldwide will have worked in a coworking space. As long as there is a demand from entrepreneurs, start-ups and small enterprises, the number of co-working spaces is likely to continue to rise.

A4. Platforms

The parties mentioned within the pillar ‘platforms’ play an important role in connecting local, regional or national ecosystems. They stimulate the start-up communities and/or the ecosystem or parts of it. Stakeholders such as StartupUtrecht facilitate connections within a specific city/region, whereas parties such as StartupDelta foster collaboration on a national level. DutchBaseCamp is a stakeholder aimed at making connections with international tech hubs.

A5. Start-up Media

Certain media outlets are centred around entrepreneurship or have a strong presence in the start-up community. The topic of entrepreneurship is increasingly featured in the media, both through specialised channels such as StartupJuncture as well as mainstream media like RTL Z. This contributes to the promotion of the image of entrepreneurship and knowledge sharing, as well as being a source of inspiration.

 

B. Talent

B. Talent: enhancing the development of entrepreneurial talent and research.
B1. Schools & colleges Initiatives aimed at stimulating entrepreneurship and entrepreneurial skills at schools and colleges.

 

B2. Higher education Initiatives aimed at stimulating entrepreneurship and entrepreneurial skills in universities.
B3. Research Research and monitoring tools aimed at creating a better understanding of entrepreneurship.

B1. Education
Schools & colleges and higher education

Education at all different levels plays a role in stimulating and promoting innovative entrepreneurship. Our economy demands more entrepreneurial employees and it is therefore important for students to acquire entrepreneurial and digital skills from a young age. By focusing on the topic of entrepreneurship education, we are able to develop and attract new talent, increase our international position and build on the foundation of an entrepreneurial future for the Netherlands.

Jong Ondernemen is one of the stakeholders trying to achieve this, focusing mainly on primary and secondary education. They reached nearly 75.000 youths in 2016/2017. The Centers for Entrepreneurship aim to improve the quality of entrepreneurship education in the Netherlands, thereby enhancing the international position and recognition of the Netherlands in this field. Many of these centres (33 in total) work together within the Dutch Centers for Entrepreneurship.

B2. Research

Research and monitoring tools are aimed at creating a better understanding of entrepreneurship, offering insights into the phenomenon of entrepreneurship and its associated effects. In the Netherlands, research is being conducted on a variety of facets of entrepreneurship, ranging from the macro effect of entrepreneurs on the economy to the influence of education on the likelihood that potential entrepreneurs will start up and succeed. Researchers from different universities collaborate on the platform DARE, while professors participate in the Dutch Action Platform for Entrepreneurship. Both platforms aim to enhance the collaboration between research institutes and stimulate the dissemination and exchange of knowledge and research insights about entrepreneurship.

 

C. Support

C. Support: supporting start-ups from start to growth in a start-up friendly environment.
C1. Accelerators Programmes boosting early stage start-up (<500K) revenue to the next level.

 

C2. Incubators Incubators supporting start-ups during their first three to five years (medical up to 12 years).
C3. Growth Programmes supporting business to grow from one million euros onwards.
C4. Policy Influencers Organisations and initiatives trying to influence policies in order to make the environment more start-up friendly.
C5. Government (semi) Government/semi-government organisations offering support, guidance and advice to start-ups.

C1. Accelerators

Accelerators in the Netherlands range from specialised accelerators focusing on an industry or sector to more general and often international players like StartupBootcamp and Rockstart. The Netherlands performs well in the European Accelerator Report 2016, where it is ranked 6th in the top 10 countries by startups accelerated, with 169 startups. In addition, HightechXL made it to the top 20 of the most active accelerators by the numbers of startups accelerated. It is believed that accelerator specialisation and verticalization will become more and more important, which offers a lot of potential for the Dutch ecosystem too.

C2. Incubators

The number of incubators worldwide is growing quickly. In 2015, incubators YES!Delft and UtrechtInc were part of the top 10 European incubators, according to the UBI Index.

The Dutch Incubation Association (DIA) represents a large proportion of the incubators in the Netherlands. The diagram highlights only those incubators that are part of a higher education institute. University incubators often strongly contribute to the ecosystem and offer significant value to start-ups. It is also thought that the presence of these incubators may stimulate academics to be more entrepreneurial and valorise their knowledge.

C3. Growth

Several growth programmes are available to support entrepreneurs with their growth. There are now more than 3000 scale-ups in the Netherlands, but support opportunities are still relatively limited.

C4. Policy Influencers

Newly developed knowledge can form a basis for the development of new policies. Several institutions and players aim to make the policy landscape for innovative entrepreneurship as positive as possible.

C5. Government/semi-government

Government and semi-government institutions contribute to the centralisation of support opportunities for start-ups and aim to enhance the entrepreneurial climate. Ondernemersplein.nl, for instance, centralises all governmental information for entrepreneurs, and RVO also contributes to enhancing opportunities for entrepreneurs.

 

D. Capital

D. Capital: the availability of capital and investments in start-ups in varying stages
D1. Pre-seed funding Funding aimed at early stage start-ups (<500k).
D2. Crowdfunding Platforms to raise money from a large number of people.
D3. Business angels Business angel networks investing in start-ups (<1 million).
D4. Private equity & VC firms Private equity and venture capitalists aimed at financing start-ups (>250K).

 

D5. Corporate venture Capital Corporate venture funds (>250k).
D6. Public funds Publicly/semi-publicly funded funds.

D1. Pre-seed funding

Start-ups looking for pre-seed funding can reach out to different pre-seed funds. During the past year, multiple pre-seed and seed funds have been started using public resources.

D2. Crowdfunding

Crowdfunding raised 170 million euros in 2016 in the Netherlands, of which 141 million fell within the enterprises category. Crowdfunding has doubled almost each year over the past five years, and the expectation is that this trend will continue as has been seen in England, for instance. There are 71 crowdfunding platforms in the Netherlands at this moment, aimed at different types of financing.

D3. Business Angels

Business angels invest on average 30,000 euros per start-up. The current belief is that there are few real business angels in the Netherlands at the moment, and that they are difficult to reach. This group is very important for start-ups however, because they offer not only financing, but also knowledge, skills and networks (‘smart money’).

D4. Private equity & VC firms

Access to capital is one of the most important conditions for a successful ecosystem. In 2016, 252 million euros were invested in Dutch start-ups. The number of investments totalled 143 with an average of 1.79 million euros invested, which is a decrease compared to 2015. The NVP represents 90% of private equity and VC capital available in the Netherlands.

D5. Corporate Venture Capital

Increasingly, large corporations are exploring the possibilities with respect to collaborating with and investing in start-ups. More and more corporate money is being made available for start-ups through corporate venturing funds. The Corporate Venturing Network (CVN) is a network of corporations from the Netherlands and neighboring countries active in corporate venturing and open innovations and currently has 16 members, including DSM, TNO and KLM. In 2016, 185 million euros in venture capital was invested in 204 young and fast-growing businesses.

D6. Public/semi-public funds

There are various public funds that start-ups can go to for funding. Funds are available in most regions in the Netherlands, with bodies investing in innovative and fast-growing regional companies that provide capital. Regional development funds invested a total of 40 million euros in 124 companies in 2016.

 

E. Expertise

E. Expertise: areas of expertise in which a specific region excels and which are accessible for start-ups
E1. Sectors Key sectors in which a specific location specialises.
E2. Science Parks Centralised locations where key stakeholders come together to support the development of businesses.
E3. Development Initiatives that further develop a specific expertise/sector in a region and give start-ups access to this area.
E4. TTO & KTO Technology and Knowledge Transfer Offices offering access to the expertise within knowledge institutes.

E1. Sectors

Existing expertise within the Dutch ecosystem can be categorised as Security, Life Sciences & Health, Maritime & Water, High-tech, IT & Data, Agriculture & Food, Smart mobility & Logistics Energy, Creative & Design, Fintech, Sharing Economy.

E2. Science Parks

Areas of expertise are connected within ‘kennisparken’ (knowledge parks). Knowledge parks or campuses strengthen the regional economy and are a breeding ground for R&D, open innovation and collaboration. This acts to attract companies and people into the region, further enhancing the strengthening effect. There are around 40 campuses in the Netherlands (in varying development stages), each one distinguishing itself by a focus on a specific sector or topic.

E3. Development

Overarching and often regional initiatives aiming to further develop specific expertise or a sector and give start-ups access to their knowledge and services.

E4. TTOs & KTOs

Technology and Knowledge Transfer Offices (TTOs & KTOs) are important for supporting and transferring knowledge to innovative start-ups. The quality and shape of the Dutch university TTOs varies.

 

Closing remarks

As was indicated, this SID serves as an indicator of the current condition of the ecosystem. The SID NL presented in this chapter is the first version, and will be further developed based on input from the field. The SID will be further tested and validated by applying it to different ecosystems. Comments and suggestions can be sent to info@halbekoenraads.nl

 

References

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Deze publicatie is in het kader van de How to Get There Summit van 17 november 2016 tot stand gekomen. Meer informatie op HTGT.nl. Dit artikel is onderdeel van een serie publicaties binnen het thema Innovatie & Ondernemerschap over Entrepreneurial Ecosystems van SMO, powered by DutchCE.

Denise van Blitterswijk works as a consultant specialising in the field of entrepreneurship policy and ecosystems. She is closely involved with the Dutch Centers for Entrepreneurship (DutchCE) and the organisation of the Global Entrepreneurship Week the Netherlands. Prior to this, she worked at think tank SMO. Denise holds a postgraduate degree in Public Policy and Administration with a specialisation in public management from the London School of Economics and Political Science.

 

 

foto-hendrik-halbeHendrik Halbe is founder of Halbe & Koenraads, a boutique consultancy specialising in innovation ecosystems, and founder of the Erasmus Centre for Entrepreneurship. In this role, which he fulfilled until December 2015, he also led the Holland Program on Entrepreneurship (HOPE) and the Valorisation Program Rotterdam (VPR). He is co-founder and board member of the foundation responsible for the Global Entrepreneurship Week the Netherlands.

 

Dit artikel is onderdeel van een serie publicaties binnen het thema Innovatie & Ondernemerschap over Entrepreneurial Ecosystems van SMO, powered by DutchCE.