Iqbal M. Khan Founding Chairman SURE Group Chairman Schumpeterian Entrepreneurship Society

1. Fostering Innovative Entrepreneurship: Regulatory and Institutional Environment Conducive to Urban and Rural Economic Development Iqbal M. Khan Founding Chairman SURE Group Chairman Schumpeterian Entrepreneurship Society Executive Committee Member Hall of Fame Pakistan Think Tank Member World Entrepreneurship Forum Senior Fellow Entrepreneurship Lahore School of Economics ibajauri@gmail.com +92.321.4046625

2. Relationship between Entrepreneurship, Innovation & Economic growth: “People living in the first decade of the twentieth century did not know modern dental and medical equipment, penicillin, bypass operations, safe births, control of genetically transmitted diseases, personal computers, compact discs, television sets, automobiles, opportunities for fast and cheap worldwide travel, affordable universities, central heating, air conditioning” (Lipsey et al 2005).

3. Relationship between Entrepreneurship, Innovation & Economic growth: Entrepreneurs Through Innovation bring in change, new products, new processes and new markets for growth. (Adam Szirmai, Wim Naude and Micheline Goedhuys 2011) Schumpeter states entrepreneurs are continually reorganizing the economic system through either the creation of a new firm or in an existing firm, or new product or process involving innovation. As can be seen there is an entrepreneurship-innovation nexus that has a great impact on development.

4. Relationship between Entrepreneurship, Innovation & Economic growth: • However entrepreneurship has tendency to flourish at different rates in different stages of development as has been shown by the research carried out by Acz & Szerb(2009)in Michel Porter’s ‘stage theory’. • Developing Countries do not have the resources nor capacity for innovation (generally 5%) to contribute to their economic development.

5. Relationship of Entrepreneurship and Innovation: But we are aware that market drives this desire for growth. However in the developing countries these markets are imperfect, have low per capita income, lacking infrastructure, and having bad policies. With fragmented markets there is no incentive for innovation. Innovation requires knowledgeable, experienced and skilled entrepreneurs.

6. Relationship of Entrepreneurship and Innovation: Therefore investment in education is essential to foster entrepreneurship and innovation. To develop the adsorptive capacity in the society through a meaningful education policy. To build our Entrepreneurial Capital which is combination of financial and non-financial resource and institutions, culture conducive to creation of new firms; involving social acceptance of entrepreneurial behavior, social cultural and symbolic capital of business owners

7. Recognizing relationship between Entrepreneurship & Economic Development: Economic development is closely related to enterprising culture which consists of the following: (1)Entrepreneurial attitude in society, which is recognizing opportunity, attaching high status to entrepreneurs, risk taking capacity, creating an entrepreneurial culture, (2) Entrepreneurial activity which is the rate of new venture creation in a society, the educational level of entrepreneurs, absorptive capacity.

8. Recognizing relationship between Entrepreneurship & Economic Development: (3) Entrepreneurial aspiration which is the innovation aspect to produce better products or go for better process planning, to bring a change, to consistently innovate. The resultants ‘entrepreneurial capital’ is responsible for sustained economic development. But to foster innovative entrepreneurship we need the support of innovation that comes from the ‘Incubators’ We need to reinvent the Incubator

9. What is the relationship between Entrepreneurship and Business Incubators?: Business incubation is “a process which focuses on nurturing innovative early stage enterprises that have high growth potential Many nations have come to realize that to improve the national system of innovation they must support business incubators. Such incubators support growth and help overcome the weakness in the systems and lack of institutions and regulations.

10. What is the relationship between Entrepreneurship and Business Incubators?: In such an environment small enterprises with highly experienced, gifted and educated skilled people work together and learn from each other. The eventual aim of incubators, whether business incubators or agribusiness incubators is to commercialize scientific knowledge, technologies and research. Because of the demand of the market economy and fierce competition the concept of incubators has been re-invented. It is now a policy imperative, worthy of consideration for all societies and nations.

11. What is the relationship between Entrepreneurship and Agribusiness Incubators: Much of the innovation has also permeated in the agriculture sector. It is being said that innovation in agriculture has come about because of circumstantial conditions such as drought, floods, earth quakes, conflict areas and Poverty and food insecurity. These agribusinesses entrepreneurs are pushing the boundaries of convention. But the most important contribution of agribusiness is poverty reduction and this comes about by the inclusion of entrepreneurship into agriculture.

12. What is the relationship between Entrepreneurship and Agribusiness Incubators: “The potential of agricultural growth to reduce poverty is four times greater than the potential of growth from other sectors” (WB 2008 World Dev Report). Agribusiness Incubation creates a mechanism to assist agricultural research universities or institutions to commercialize their research. Hence interventions of the agribusiness entrepreneurship are required to unleash their potential for innovation in agriculture sector.

13. How to make Agribusiness as ‘Inclusive’ for Economic Development: Now think about the agriculture and its usual pace!!!!! In the absence of agribusiness entrepreneurs, business development will not take place, market linkage may not take place, access to finance will remain a serious problem; access to quality and safety standards will not be possible, bringing new technology to market will not take place, cost of capital or marketing a new technology will be an impediment.

14. How to make Agribusiness as ‘Inclusive’ for Economic Development: • Hence facilitating entrepreneurs in agribusiness may be the way for developing this sector fast enough. • Economic development is recognized to be closely related to agriculture and agriculture development is cogent to agribusiness incubators, hence the need to plan to make it ‘inclusive’ for Economic Development.

15. Agribusiness Entrepreneurship: The evolution of a new challenge: The advent of Agribusiness Incubation has brought together the private sector into agriculture. These entrepreneurs have started showing results in agribusiness. Many models and theoretical frame work has emerged, one such model is given below: Business Incubation Framework

16. Entrepreneurial Universities & Technology Transfer: (Janet Bereovitz M. Foldmann 2006 J of Tech Transfer) Universities are recognized as high roads of knowledge. This has created a new role for the university termed by Etzkowitz (1983) as “entrepreneurial universities”. This transfer of technology from university to industry is affected by number of factors. It has to be supported by political will and by policy, directing and guiding; by economic policy that promote through incentives, making market sense to commercialize such research, This leads to social influences that encourage sharing of knowledge and producing of knowledge.

17. What is the relationship of Entrepreneurship and Entrepreneurship Ecosystem: This brings us to the important juncture of our journey. Until 1985 it was believed psychological factors shaped personality characteristics and traits of the entrepreneur. But subsequently evidence is surfacing that environmental factors also play a role in the decision making process for venture creation (Suresh and Ramraj 2012). Byers, Kist and Sutton (1977) report evidence based on past experience that shows entrepreneurs acknowledging there are combination of external forces that play a significant role in their success.

18. What is the relationship of Entrepreneurship and Entrepreneurship Ecosystem: Lee and Peterson (2000) Entrepreneurial ecosystem acts as prime mover in the economies that face decline. It is a combination of individual and social factors that enable the development. They conclude with a model of entrepreneurship ecosystem consisting of moral support, financial support, network support, government support, technology support, market support, social support and environmental support.

19. What is the relationship of Entrepreneurship and Entrepreneurship Ecosystem: • Since developing countries do not have infrastructure of support system for small enterprises, a model of Small Enterprise Hub could be introduced; Khan (2000) with modified features for transition to “Entrepreneurship Ecosystem” such a Hub could be called the Entrepreneurship and Small Enterprise Hub”. (Khan 2009)

20. Generic Model of the Entrepreneurship and Small Enterprise Hub (ESEH) 2009 Entrepreneurial Policy Support Advocacy Function Associations and Chamber of Commerce and Industry Observatory and Regional Networking for growth of Small Enterprising gain from experience Entrepreneurship Education Support Enterprising Culture Support Information Support Dissemination of Knowledge, R&D Entrepreneurial Venture Financial Support Entrepreneurship and the Small Enterprise Hub Common Facilities Support Entrepreneur as the Nucleus of the Economy Technology Support for Entrepreneurship Business Incubator Marketing Support Trade Fairs and Merchandise Display Centres Entrepreneurship and HRD Support Nurturing Entrepreneurship as nucleus of economic growth International Linkages Support for sharing experiences and knowledge Industrial Support, Industrial Clusters, Industrial Zone, Export Processing Zones Business Development Services Support

21. What is the Significance of Regulatory Environment in Combining these Factors: The paper also emphasizes a culture of research and innovation and environment of “greed for innovation”. The regulatory purpose of the policy should be to empower the financial sector to become pro-entrepreneurial financial sector and to promote economic development through incubators for Entrepreneurship promotion. The policy should insist on academia and industry and agriculture linkage.

22. CONCLUSION The conclusion that one can draw from this is that Innovation requires knowledgeable, experienced and skilled entrepreneurs. Therefore investment in education is essential to foster entrepreneurship and innovation. What is required is to develop the adsorptive capacity in the society through a meaningful education policy.

23. CONCLUSION • Just as many nations have come to realize that to improve the national system of innovation they must support business incubators, agribusiness incubators have also become important. • The ingenuity of the business entrepreneurship will be well placed to take up the challenge in the agriculture sector. • And the potential of the agriculture sector will be multiplied by the thrust of entrepreneurship and innovation. • The advent of Agribusiness Incubation has brought together the private sector and agriculture.

24. CONCLUSION These entrepreneurs have started showing results in agribusiness. A consensus among academic researchers is emerging regarding the role of support systems for the growth of entrepreneurship.

25. CONCLUSION A model of ecosystem has been developed called the Entrepreneurship & Small Enterprise Hub of Support System for growth of entrepreneurship and Small Enterprises in developing countries . The regulatory purpose of the policy should be to empower the financial sector to become pro-entrepreneurial financial sector and to promote economic development through incubators.

26. CONCLUSION The policy should bring about change in Education Policy in favor of entrepreneurial education. It should induce thinking that innovation is the best way to perpetuate growth. The clout for the SME sector and Entrepreneurship comes from policy and creating a regulatory environment to combine the factors. Hence policy regulatory environment will play the most crucial role in Entrepreneurship and Innovation and Economic Development.

27. THANK YOU..