Startup Internationalization. Social Foundations of Entrepreneurship презентация

About Me: Social Scientist
Tenure-Track Professor at UConn
M.S./PhD at Cornell
B.A./M.S. at BYU
Topics
Building Businesses in Emerging Markets
Building Businesses Around Emerging Tech
Contexts
U.S., Mexico, Peru, Paraguay, Jordan, Ghana, Iraq & China

About Me: Entrepreneur
Co-Founder
Minority Owner

About Me: Family Man

About Peter
Ecologist
B.S. and M.S. at UConn.
Focused on fisheries science.
Founder
Pisces Atlantic - since 2018
My likes
Nature and outdoor adventure.
Getting to know new people.
Reading, learning, challenging myself.

About Me: Massyl
Education:
Chemical Engineering
Chemistry
Entrepreneurship
Experience:
Founder: PatentPlusAI
Intellectual Property Specialist
Translator: ENG, AR, FR
Lab Research:
Solar Cells, Batteries, Hydrogen Energy, Polymers

Tell us about YOU
Why are you doing this MS degree?
What’s your best childhood memory?
What’s on your bucket list?
What is your proudest accomplishment in your life so far?

Let’s Get Centered
https://www.youtube.com/watch?v=8Ffhv3-8Sjw

Let’s Get Centered
"The happiest you've ever been,
won't be the happiest you'll ever be."

Social Foundations of Entrepreneurship
Startup Friendly Societies
Societies Friendly
to Your Startup

Why does this matter for YOU?
Your surroundings matter in terms of having power to create sustainable businesses and to enter new markets.
You need to consider hard & soft social structure when you are deciding whether to enter a new market.
You need to consider hard & soft social structure as you strategically navigate the new market you choose to enter.
Your participation in elections, and wider civil society, can create conditions that makes entrepreneurship more accessible for you and others.

Startup Internationalization
Startup Friendly Societies
Ryan S. Coles, PhD
© Ryan S. Coles

What is Entrepreneurship?

What is Entrepreneurship?
Creating a new organization, or re-organizing an existing organization, in order to exploit opportunities
Tolbert & Coles (2018)

Society & Entrepreneurship
Entrepreneurial talent is normally distributed across society, but accessibility of entrepreneurship is not normally distributed.
Frid, Wyman, & Coffey (2016)

Society & Entrepreneurship
What social conditions make entrepreneurship more accessible as a career path?

Entrepreneurial Nation
Lower taxes
Reduce regulations
Make it easier to register a new business
Invest in basic scientific research
Levy a tax on stock buybacks to provide more subsidies for health insurance

Entrepreneurial Nation
What did you choose?

Tax Rates

Tax Rates

Tax Rates

Tax Rates
Income and investment tax rates don’t seem to matter.
¾ of funds invested in start-ups are provided by investors who are not subject to individual capital gains tax
Less than 1/3 of reported capital gains are the result of appreciation of corporate equity
Effective corporate tax rates could impact entrepreneurship.
Reduce the corporate tax burden via targeted tax credits
R&D tax credit
A simple marginal rate reduction largely leads to stock buybacks
(Curtis and Decker, 2018; Fazio, Guzman, and Stern, 2019)

Regulations
4
13
37
Business Formation within 4 Quarters by State-Per 1,000 People
+
Number of resolutions from the Federal Government removing regulations

Anti-trust enforcement

Policy rooted in Neoliberalism
“The irony is that the policy agenda adopted in the name of entrepreneurs- including lower taxes, lower social spending, less regulation, financial liberalization, and weaker antitrust enforcement- hurt entrepreneurs more than it helped them.”
(Vogel, 2020; See also Coles, 2020; Shambaugh et al. 2018;Philippon, 2019)

Social Foundations of Entrepreneurship

Lower Risk: Ease of Failure
Lowering barriers to failure encourages:
More entrepreneurship
More capable (high end of human capital spectrum) individuals to be entrepreneurs
Leading to higher growth among new ventures.
Lower barriers to entry only encourages more entrepreneurship.
(Eberhart, Eesley and Eisenhardt. 2017)

Lower Risk: Debt
High student loan debt hinders entrepreneurship and entrepreneurial success.
(Krishnan and Wang, 2019)

Lower Risk: Healthcare
Research suggests that tying health insurance to employment reduces entrepreneurial activity.
Universal coverage could increase entrepreneurial activity in the workforce by 2% to 3.5%.
(Fairlie et al., 2011; Wellington, 2001)

Housing Policies
A 100+ year history of housing policies creating racial disparities of homeownership in the U.S.
U.S. Supreme Court: Euclid v. Ambler Realty (1926)
FHA policies on insuring mortgages leads to standardization of redlining in the Real Estate Industry (1934)
Subprime Mortgage Crisis (2007)
2019: The median black family owns just two percent of the wealth of the median white family ($3,600 vs. $180,000). U.S. rental housing is the least affordable of 12 advanced countries.

Housing Policies
Differences in average levels of home equity account for approximately 13% of the black-white gap in entrepreneurship.
“An increase in home equity is positively related to the probability of starting a business for whites, but not for blacks. Thus, while deficits in home assets contribute to black-white gaps in entrepreneurship, blacks who do own home assets are less able to access the housing collateral channel than whites with similar levels of home assets”
(Atkins, 2020)

Systemic Racism and Innovation
(Cook, 2014; Fechner and Shapanka, 2018)

Economic Impact of Systemic Racism
If Black entrepreneurs were given fair and equal access to credit, the U.S. economy would have generated an additional 6.1 million jobs a year from 2000 to 2020, and an additional $13 trillion in economic output.
(Peterson, 2020)

Political Stability
A 3.5% increase in violence (killings and kidnappings) was associated with a 1% increase in new venture failure rates in Colombia.
Rates of new business foundings dropped 13% in Mexican communities that saw a 1% rise in homicides per capita.
(Coles and Hiatt, In Development; Hiatt and Sine, 2014)

Social Capital
What is Social Capital?!

Social Capital
Financial Capital
Money and credit used to produce goods/services.
Human Capital
A person’s knowledge and abilities, which they use to produce goods/services.
Social Capital
Resources and information embedded in a person/community’s social network which can be mobilized to produce goods/services.

Social Capital

Sources: General Social Survey, 1972-2012; Federal Reserve Bank of St. Louis
Note: Correlation is 0.85
“If entrepreneurs must devote more time to monitoring possible malfeasance by partners, employees, and suppliers, they have less time to devote to innovation in new products or processes.”
(Knack and Keefer 1997: 1252-53)
Social Capital
(Kwon et al. 2010)

Sources: General Social Survey, 1972-2012; Federal Reserve Bank of St. Louis
Note: Correlation is -0.84
Rothstein and Uslaner (2005:45) undertook extensive statistical testing, and found “no direct effect of trust on inequality; rather, the…direction starts with inequality.”
Social Capital & Income Distribution

Social Capital
Social Capital & Income Distribution
(Coles et al., 2020)

Education
Supply and demand side benefits
Increased quality of nascent entrepreneurs
Increased consumer spending + preference for novelty
1% increase in community members with a college education is associated with 7 additional new business the following year
(Coles, Sine, and Hiatt, In Development)

Basic Research and Innovation
Who is responsible for the technological innovations in a smartphone?

Basic Research & Innovation

Basic Research & Innovation
"Where were you guys in the '50's and '60's when all the funding had to be done in the basic science? Most of the discoveries that have fueled [the industry] were created back then"
(Henderson and Schrage in the Washington Post, 1984)

Basic Research & Innovation
1% increase in research activity leads to ~700% increase in entrepreneurial activity.
(Coles, 2020)

Valued Career Path
Cultural support for entrepreneurship explained a greater variance of entrepreneurial activity than entrepreneurial skills, knowledge, and experience.
(Tominc and Rebernik, 2007; Valdez and Richardson, 2013)

Startup Internationalization
Societies Friendly Towards Your Startup
Ryan S. Coles, PhD
© Ryan S. Coles

Entrepreneurial Opportunities
Identifiable entrepreneurial opportunities are shaped by:
Institutions
(Hiatt et al., 2009)
Geography/Climate (Stuart & Sorenson, 2003)
Available Knowledge
(Acs et al., 2009)

Entrepreneurial Opportunities
Sources of New Entrepreneurial Opportunities
Technological Change
Social Change
Institutional Change
Demographic Change
Natural Change

Entrepreneurial Opportunities
Cultural-Institutional Change:
Soft Drinks and the Women’s Temperance Movement
(Hiatt et al. 2009)

Entrepreneurial Opportunities
Cultural-Institutional Change: Regulatory
Liquor Store Management in Alberta
(Dowell & David, 2011)
Bayh-Dole Act
(Patterson et al. 2018)

Entrepreneurial Opportunities
Interactions: Natural and Social Change
Wind Power Industry
(Sine and Lee, 2009)