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Building an Entrepreneurial Ecosystem for Tech Start-Ups a CASE STUDY of the ROLE PLAYED by a PRIVATE UNIVERSITY

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Building an Entrepreneurial Ecosystem for Tech Start-Ups a CASE STUDY of the ROLE PLAYED by a PRIVATE UNIVERSITY BUILDING AN ENTREPRENEURIAL ECOSYSTEM FOR TECH START-UPS A CASE STUDY OF THE ROLE PLAYED BY A PRIVATE UNIVERSITY university) overcome the multiple chal- M H Bala Subrahmanya*, H S Krishna and lenges towards creating a nascent eco- K N Krishnaswamy system for tech start-ups in a Tier 2 city Department of Management Studies, Indian Institute of Science, through the establishment of a TBI is Bangalore-560012, India interesting to examine and analyze. This *E-mail: [email protected] is done by means of an exploratory case study for KLE Technological University Abstract (which was earlier known as BVB College of Engineering) in Hubli, Karnataka. The promotion of entrepreneurial ecosystems for tech start-ups through policy initia- A case study is an empirical inquiry tives is a recent development in India. As of now, tech start-up hubs are predominantly that investigates a contemporary phe- confined to Tier-1 cities, particularly Bangalore, National Capital Region (NCR) Delhi, Mumbai, Hyderabad, Chennai and Pune, and the emergence of tech start-ups in Tier-2 nomenon within its real life context, and cities is an exception than a rule. This is primarily due to the absence of a conducive relies on multiple sources of evidence (Yin, entrepreneurial ecosystem for nurturing tech start-ups. However, a private technologic- 2014). A case study is a complete analysis of al university in a Tier-2 city (Hubli) in Karnataka has slowly but steadily taken exceptional an individual subject with respect to spe- leadership initiatives towards the building up of a nascent ecosystem for generating cific phases of its totality (Krishnaswamy tech start-ups. How did this happen? What results did it yield so far? Given the current et al., 2006). The advantage in using case scenario, what prospects does the ecosystem have for the future? This article explores studies as a method of business research and throws light on these issues. is that they offer rich and reliable results due to the combination of both quanti- Introduction sponsored and promoted by academic tative and qualitative data collection and institutions/universities, mostly in fairly analysis methods and the triangulation of niversity promoted incubation to information from multiple sources (Rob- well-developed technology/innovation assist the growth of spin-off firms son, 1993). U clusters which has a strong base of univer- through a dedicated facility providing sity research (Mian et al, 2016). However, subsidized space, consultation and other Role of academic institutions they can also be found in institutions that services and support to encourage tech- and TBIs in an ecosystem for do not perform basic research, but which nology entrepreneurship is a noted world- tech start-ups: A review of wide phenomenon (Etzkowitz, 2002). This have strong links with the infrastructure literature of science and technology and the com- is done through, what is commonly known The creation, sustenance and growth of mercialization of technologies (Breschi as, Technology Business Incubators (here- a tech start-up involve a considerable de- and Lissoni, 2001). after TBIs). In fact, universities constitute gree of uncertainty and challenge to its one of the Triple Helices and TBIs form But, in an emerging economy, particu- founders/promoters, due to three import- one of the indispensable components of larly in a city, which has the presence of ant factors, which are as follows: an entrepreneurial ecosystem for technol- neither a well-developed entrepreneurial (i) These tech start-ups are unfamiliar ogy based start-ups (Bala Subrahmanya, ecosystem nor a strong university research and without precedence and there- 2017a). TBIs provide a mechanism for tech- base, initiating a TBI and thereby driving fore suffer from the liability of new- nology transfer and commercialization for the creation of an entrepreneurial eco- ness; new venture creation (Wonglimpiyarat, system for technology based start-ups (ii) They are generally created on a small 2014). Over a period of time, they have be- is quite a challenge. The hurdles to bring scale with limited resources; and come one of the most successful tools to together the ecosystem components for (iii) They often, directly or indirectly, face mentor start-up ventures (Jordan, 2010). enabling ideation, commercialization of established competitors, powerful Today, TBIs are present in many parts innovations and technology transfer for suppliers, sceptic customers and hesi- of the world that facilitate development creating tech start-ups will be numerous tant financiers. of regional innovations through industry- and daunting, to say the least. Given this, Given their limited internal resources and institute interactions (Thursby and Kemp, how did a private engineering institu- strength, they tend to depend on the local 2002). More often than not, TBIs are tion (which later became a full-fledged environment for critical resources which TECH MONITOR • Apr-Jun 2018 39 Building an entrepreneurial ecosystem for tech start-ups are essential to sustain their operations There are two unique entrepreneur- ecosystem for the benefit of tech (Romanelli and Schoonhoven, 2001; Bala ial ecosystems for tech start-ups in the start-ups. Subrahmanya, 2015). Start-ups which are global economy which are often cited as promoted in a structured and vibrant entre- the benchmarks, namely, Silicon Valley The above discussion enables one to preneurial ecosystem have higher chances of and Israel. Both have generated more suc- understand that entrepreneurial ecosys- success compared to the rest, because such cessful start-ups than other nations could tems are crucial for nurturing tech start- ecosystems have a positive impact on start- create in years or decades, and they are ups, and these ecosystems can be defined up fertility, stability and growth (Arruda et al., not identical but distinct in their respec- in terms of certain common components 2013; Cukier, 2016). A strong entrepreneurial tive ambiences (Arruda et al., 2013). This and their functions. Further, an ecosystem ecosystem in a region will have the ability brings out that different nations with is dynamic in nature as it can be nurtured/ to promote technological innovations and different economic environments, can developed in a region, over a period of development of business environment for build their own entrepreneurial ecosys- time. Given this, it is appropriate to know the growth of tech start-ups in that region, tems to nurture successful tech start-ups. the key elements which can drive the crea- which in turn, would promote employment There is no exact formula for creating an tion/development of an entrepreneurial generation and national income in an econ- ecosystem, but there are only practical, ecosystem in a region. omy (Krajcik and Formanek, 2015). Due to though imperfect, road maps (Isenberg, There are nine core issues concerning these reasons, policy makers in the world’s 2011). This implies that it is not possible an entrepreneurial ecosystem for tech most dynamic areas explicitly focus on to replicate either a Silicon Valley or an start-ups, which are as follows: (i) sources of promoting entrepreneurial ecosystems for Israel, rather what is significant is to iden- entrepreneurship, (ii) finance, (iii) market, start-ups (Manzella, 2015). tify and promote the key bench mark ele- (iv) human resources, (v) support structure Though several empirical studies have ments of an ecosystem for nurturing tech (including accelerator/TBIs/proof of con- defined entrepreneurial ecosystems for start-ups. cept centres/prototype/product develop- start-ups in different ways, there are found It is equally important to note that ment & testing centres), (vi) business & to be some common components which entrepreneurial ecosystem for tech start- technology mentorship, (vii) policy, (viii) are interlinked with one another in the ups is dynamic in nature. Ecosystems culture, and (ix) media. These nine core process of start-up creation, sustenance change from time to time, in terms of issues are provided or promoted by one and growth. In a broad sense, an ecosys- people, organizations and environments. or more of the four key elements, namely, tem for start-ups is defined as a set of inter- This could be due to differential-talent (i) large companies (domestic as well as connected entrepreneurs (both potential pool, resource base, cultural attitude and foreign), (ii) tech start-ups (in different and existing), entrepreneurial organiza- support structure, created/emerged over stages of their lifecycle), (iii) education & tions (e.g., firms, venture capitalists, angel a period of time. Further, the introduc- research institutions, and (iv) governments investors, banks), institutions (such as uni- tion of non-native people, knowledge (regional and national) (Figure 1) (Bala Sub- versities, public sector organizations, and and skills can cause substantial shifts in rahmanya, 2017a). The four key elements financial agencies), and entrepreneurial the ecosystem functions (Isenberg, 2011). broadly fall under (i) Government (G), (ii) processes (consisting of business births, This enables us to derive three inferences, Academia (A), and (iii) Industry (I), which number of high growth firms, levels of which are as follows: constitute the Triple Helix model, as origi- ‘blockbuster entrepreneurship’, number nally proposed by Etzkowitz (2003). of serial entrepreneurs, degree of sell-out (i) Even within a country where start-ups It is this Triple Helix and its
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