Éva Komlósi

The Entrepreneurial Ecosystem: The Regional Entrepreneurship and Development Index

Our article develops a Regional Entrepreneurship and Development Index (REDI) for capturing the contextual features of the entrepreneurial ecosystems. Building on the National Systems of Entrepreneurship Theory, REDI advances our understanding to profile Entrepreneurial Ecosystems. An important aspect of the REDI method is the Penalty for Bottleneck analysis, which helps identifying constraining factors at the system level. The index structures the ecosystem disparities amongst a mix of 125 NUTS 1 and NUTS 2 regions for 24 EU countries and provides regional level policy suggestions to improve the level of entrepreneurship and optimize resource allocation over the different pillars of the ecosystem.

REDI: The Regional Entrepreneurship and Development Index –Measuring regional entrepreneurship Final report

The main outcome of the project is a new index (REDI - Regional Entrepreneurship and Development Index) that describes the entrepreneurial process. The index takes into account both individual attitudes and characteristics and the regional context and, accordingly, not only whether people are willing to start a business but whether the conditions to do so are in place in the region concerned. The index is composed of three sub-indices covering entrepreneurial attitudes, abilities and aspirations. Each of the sub-indexes has an individual component (relating to the individual decision making behaviour) and an institutional component (relating to the context). Entrepreneurial attitudes indicate the attitudes of the population in a region as they relate to entrepreneurship, including elements such as perception of opportunities and risks, cultural support and networking. These are measured by indicators of market agglomeration, social capital and the extent of corruption. Entrepreneurial abilities measure characteristics of entrepreneurs and business start-ups with high growth potential, such as the take-up of technology, the level of human capital and the degree of market competition. The index contains both individual-level and institutional or environmental indicators, which reflect the regional context. For example, a factor such as the perception of risk is the outcome of combining an institutional factor (the actual business risk faced by a start-ups as measured by the business closure rate) and an individual one (the personal acceptance of risk by entrepreneurs, measured by the proportion of the population aged 18-64 stating that the fear of failure would not prevent them starting a business).

Quality related regional differences in entrepreneurship based on the GEDI methodology: the case of Hungary

This paper presents a regional application of the Global Entrepreneurship and Development Index (GEDI) methodology of Acs et al. (2013) to examine the level of entrepreneurship across Hungary’s seven NUTS-2 level regions between 2006 and 2012. The Regional Entrepreneurship and Development Index (REDI) has been constructed for capturing the individual efforts, and their contextual features, of entrepreneurship across regions. The REDI method builds on a Systems of Entrepreneurship Theory and provides a way to profile Regional Systems of Entrepreneurship. Important aspects of the REDI method include the Penalty for Bottleneck analysis, which helps in identifying constraining factors in Regional Systems of Entrepreneurship, and Policy Portfolio Optimisation analysis, which helps policymakers consider trade-offs between alternative policy scenarios and associated allocations of policy resources. The paper describes the entrepreneurial disparities amongst Hungarian regions and provides public policy suggestions to improve the level of entrepreneurship and to optimise resource allocation over the 14 pillars of entrepreneurship in the seven Hungarian regions.

A Multidimensional, Comparative Analysis of the Regional Entrepreneurship Performance in the Central and Eastern European EU Member Countries

This paper aims to examine the entrepreneurial performance of the Central and Eastern European (CEE) regions by applying the Regional Entrepreneurship and Development Index (REDI) approach. The REDI structures the individual and the institutional elements of entrepreneurship in a systemic way by taking into account the mutual dependence of its components. We have demonstrated that the overall entrepreneurial performance of the CEE regions is below that of the other two macro-regions, Southern European (SE) and the Northern and Western European (NWE). We found that CEE country regions tend to cluster together—as do SE and former East German regions. Besides notable similarities, CEE country regions differ significantly in terms of the configuration of their 14 pillars. In general, CEE regions are weak in entrepreneurial attitudes but relatively strong in entrepreneurial aspirations-related pillars. Albeit the entrepreneurial abilities-related opportunity start-up is the most problematic pillar that reflects to the high ratio of necessity-motivated start-ups in these regions. In the final section, we present an entrepreneurship policy portfolio for each CEE region, based on the assumption that the weakest performing elements of entrepreneurship should be improved in order to achieve maximal improvement in the overall REDI scores. The penalty of bottleneck methodology underlines the importance of an individual-based tailor-made policy as opposed to a uniform, ‘one-size-fits-all’ approach.

Gyors növekedésű vállalatok Magyarországon. Az innovatív, a rejtélyes és a virtuális gazellák

Az utobbi evekben egyre nagyobb a gyors novekedesű vallalatokkal (gazellakkal) kapcsolatos kutatoi erdeklődes. Az uj eredmenyek ellenere tovabbra is nagyon keveset tudunk a vallalatok ezen (aranyaiban kicsi) szegmenseről. A tanulmany a magyar gazellak azonositasat kovetően a gyors novekedes demografiai es belső vallalati tenyezőit vizsgalja egy teruleti szempontbol reprezentativ, 404 gazellabol allo mintan. Majd egy 344 vallalatot tartalmazo klaszterelemzest vegez, amely szerint a gazellak korantsem alkotnak homogen csoportot: het klaszterből csupan negyben azonosithatok a magas novekedes valoszinűsithető belső okai (innovacio, nemzetkoziesedes, emberi tőke vagy a kivalo menedzseri kepessegek), de ezek egyuttes jelenlete is csak az egyik csoportra jellemző. Ket csoport eseteben feltehetően a kozponti regio pozitiv agglomeracios hatasa ervenyesul. A leggyorsabban novekvő fiatal cegek csoportja eseteben rejtely, mi okozza a novekedest. A legnagyobb csoportot az idősebb, inkabb - a helyi kapcsolataira epitő - videki kozepes vagy nagyvallalatok alkotjak. A vizsgalatok alapjan nem lehet csak pozitiv hatasokat tulajdonitani a gazellaknak. Vannak gyorsan novekvő cegek, amelyek nem innovativak, nem exportalnak, nem alkalmaznak magas szinvonalu emberi tőket, vezetőik nem igazan iskolazottak vagy tapasztaltak. Feltehetően ezek az okok magyarazhatjak, hogy szamos ceg nem kepes tartos novekedest megvalositani es versenykepes meretű kozepes vagy nagyvallalatta valni.* Journal of Economic Literature (JEL) kod: D22, L21, L25, O31.

The Impact of Urban Concentration on Countries' Competitiveness and Entrepreneurial Performance

This paper aims to elaborate the role of Jacobs-type of agglomeration effects on countries’ competitiveness and entrepreneurial performance. Our research allows for a better understanding of the relationship that exists between a country’s urban system, characterized by spatial agglomeration (concentration) or deglomeration (deconcentration) processes, and its competitiveness and entrepreneurial performance. Urbanization economies refer to considerable cost savings generated through the locating together of people, firms and organizations across different industries. It has recently become an axiom that the better performance of global cities (as they are important nodes of innovation and creativity) is derived from agglomeration effects. This general assumption follows that the more concentrated an urban system of a country, the more competitive and better its entrepreneurial performance. Even though this notion has gained quick and ardent acceptance from practitioners, the related literature shows contradictory results;this has induced a heated debate in academic circles, because it has raised serious doubts about the “bigger is better” theory. We hope to contribute to this debate with our detailed analysis. To understand the impact of urban concentration, we selected 70 countries and calculated the so-called ROXY Index measuring the degree of agglomeration or deglomeration in their urban systems. To exemplify country-level competitiveness, we applied the Global Competitiveness Index (GCI) while the Global Entrepreneurship and Development Index (GEDI) was used to demonstrate country level entrepreneurial performance. Using these indexes correlation and cluster analysis were designed to obtain understanding of the relationship between them. Our analysis indicates that as urban concentration initially increases competitiveness, entrepreneurial performance also increases, but at a decreasing rate. Both of them eventually reaches a maximum, and then after a certain point decrease with further concentration. Therefore, the curve for this relationship is non-linear and folds back. This indicates that over- or under-concentration of the population within an urban system does not necessarily result in a better outcome. However, we should consider that a high concentration of population is only one important factor for competitiveness and entrepreneurial performance while other effects may exist.