Vol. I No.: 01 January- 2018 International Journal of Management & Economics (IJME) ISSN: 2231-4687 Vol.-1, Issue-1, January 2018 Lisbon Startup City Characterization of Lisbon's entrepreneurial ecosystem (2010 – 2015) Lourenço Gouveia Booth Universidade Nova de Lisboa, Portugal, 2015 [email protected] Abstract— This paper aims to understand the reasons that something different with value, (b) devoting enough time lead an entrepreneur to host his project in Lisbon. In this and effort, (c) assuming the financial, psychological and investigation we intend to study the support for social risk (d) receiving a monetary reward, personal entrepreneurship in Lisbon, focusing on the lines of action satisfaction and sense of independence. But there are also of Lisbon's City Council strategy, in order to understand more general definitions such as the Global the city's entrepreneurial ecosystem and its evolution over Entrepreneurship Monitor [6] that defines the past five years. entrepreneurship as any attempt to create a business or K e y w o r d s - c o m p o n e n t ; E n t r e p r e n e u r s h i p , initiative by an individual, team of individuals or Entrepreneurial Ecosystem, Lisbon, startups, startup city. businesses already established. On the other hand, an entrepreneur can be more difficult to I. INTRODUCTION characterize because there are various types of Nowadays, innovative and creative entrepreneurs are the entrepreneurs (from the aspirants, to entrepreneurs by way ignition for great revolutions in the industrial, production of life or even growth entrepreneurs [2]). But there is no and services world [1]. Despite its recent academic study formula to identify an entrepreneur. Essentially the the use of the term comes from the seventeenth century, entrepreneur is one who takes the initiative to create from the French entreprendre, which literally means 'to something new that gives value for himself and for board in' and was used to characterize those who took risks customers, dedicating effort and time, which bears the risk of new ventures [2]. of failure and collects the rewards [7]. The motivations of The economy of innovation in which we currently live in, these special people can vary and nowadays we have entrepreneurship has become a major vehicle of entrepreneurs who create businesses out of necessity (no development. other ways of getting income) or opportunity (resulting With this study we intend to analyze the entrepreneurial from the desire to take a chance of a business opportunity ecosystem of Lisbon, its characteristics and what has been in the market) as stated in the GEM [6]. its evolution over the past five years. B. Types of entrepreuneurship This paper will start with a review of the literature on Entrepreneurship doesn't mean one must have to take just entrepreneurship, who is the entrepreneur and what its role financial gain nor does it imply that new companies are in society is. After the methodology is presented, the main created. There have been identified different types of characteristics and evolution of the entrepreneurial entrepreneurship that are beginning to be relevant in the ecosystem of Lisbon will be shown, culminating with the global economy. respective conclusion. Large companies increasingly begin to stimulate II. ON ENTREPRENEURSHIP intrapreneurship, encouraging innovative employees to A. Entrepreneurship and the Entrepreneur create something different with value within the Despite it being a concept that has been used for more than organization [8]. On the other hand social entrepreneurs' three centuries, only in the second half of the twentieth main concern is to add value to individuals and society, century it began to be studied [3]. Joseph Schumpeter [4] where the main reward often is not financial but rather a referred to the entrepreneur as an innovator that develops social good for the community in which the project is part new technologies through a 'creative-destructive' process, of [9]. that is, for innovation to occur is necessary that something More recently a new type has been developed: the concept ceases to exist. Thus the entrepreneur is seen as an agent of of institutional entrepreneurship [10] which brings change in society and in the economy. together social concerns and intrapreneurship as a means Today the concept has evolved and we can find different of public institutions to innovate, by providing a higher definitions. One of the definitions that gathers some quality service, always under the scrutiny of public consensus has been over Hisrich and Peters [5] theory that accountability. define entrepreneurship as the process of (a) creating C. Innovation and Entrepreneurship 1 Innovative and creative entrepreneurs, are now to be the this conditions should be taken in account. engine for major breakthroughs to industry, production III. METHODOLOGY and services [1]. Joseph Schumpeter was the first Taking into account the conducted research, the purpose of economist to identify innovation as a result of it will be exploratory in order to describe unexplored entrepreneurship [10]. For Schumpeter [4] the features to date and select issues of interest for research, entrepreneur disrupts markets and causes the formation of exploring the entrepreneurial ecosystem of Lisbon, and new markets, called disruptive innovation, which implies a what makes the city attractive to new business creation. paradigm shift. In turn, innovation requires a process of Given the subjective reality and the necessary interaction application and its materialization is called of the researcher with the study object, and because it is an entrepreneurship. In the knowledge era we live in, the inductive process, multifaceted and constantly changing competitive advantage of economic actors lies on as is Lisbon's entrepreneurial ecosystem this research will innovation processes that develop and come of its human follow the indications of a qualitative research. resources and the knowledge they have, be it tacit or A. Research Questions explicit. Thus there were established the following questions D. Importance of entrepreneurship for economic intended to be answered at the end of this paper: development Q1: What makes Lisbon an attractive city for One cannot understand the phenomenon of entrepreneurs? entrepreneurship as an isolated phenomenon, but rather Q2: What has been the effect of the actions of Lisbon's involved in a macroeconomic context. Nowadays, entrepreneurial strategy on the city's economy between entrepreneurial activity is a major factor of industrial 2010 and 2015? dynamism, development and economic growth [10] [11] B. Case Study [12]. And entrepreneurs today are the ones responsible for The qualitative research method was the one considered many innovation breakthroughs. more appropriate for this investigation, and the best E. Structural conditions for entrepreneurship method was considered the single case study. This is the There are many necessary conditions that can be research method used to explore a unique phenomenon, developed to create positive entrepreneurial ecosystem limited in time and in action, different and complex, where and many indicators to measure it. OECD [13] presents a the researcher collects detailed information [14]. Even list of indicators of entrepreneurial determinants that are though generally this type of study is associated with a classified into the six categories of determinants set by the qualitative research it may sometimes include several OECD-Eurostat Entrepreneurship Indicators Program: 1) different methods, including quantitative and qualitative Regulatory Framework (administrative burdens, techniques [15] [16]. bankruptcy regulations, court and legal framework, social As Yin [17] and Barañano [15] say, case study is used when and health security, income taxes; wealth/bequest taxes, it comes to an investigation that aims to deepen 1) a business and capital taxes, patent system); 2) Market contemporary phenomenon in a real context and the Conditions (access to foreign markets, degree of public boundaries between the context and the phenomenon are involvement, private demand); 3) Access to Finance not easily distinguishable; 2) a situation in which there (access to debt financing, access to venture capital, stock may be several variables; 3) there are many sources of markets); 4) Creation and Diffusion of Knowledge (R&D evidence and 4) it is required prior development of activity, transfer of non-commercial knowledge, co- theoretical propositions to guide data collection and operation among firms, technology availability and take- analysis. So this method is best suited when starting up); 5) Entrepreneurial Capabilities (business and questions aim to answer the "how", "why" or even "what". entrepreneurship education, immigration) and 6) So, given the descriptive character of this research and the Entrepreneurial Culture (such as desirability of becoming attempt to explain in what way the entrepreneurial self-employed or entrepreneurial intention and panorama has developed in Lisbon, the case study will be motivation. essentially descriptive analyzing a single case study, with Besides this and with a global view the Global just one phenomenon - Lisbon's entrepreneurial Entrepreneurship Monitor [6] sets nine structural ecosystem. entrepreneurial conditions that are used to better C. Sources of evidence understand the factors that promote or limit For the exploratory case study, an initial documental entrepreneurship in a country: (a)