This chapter describes three entrepreneurial ecosystem policies developed by national governments: French Tech (France), TechLeap (Netherlands) and the Startup Act (Italy). These policies contain holistic packages of measures to develop conducive ecosystem conditions across areas including knowledge transfer, entrepreneur networks, talent attraction, tax benefits, equity financing, advice and mentoring, incubation, and internationalisation for startups and scaleups. The chapter details success factors and key take aways for each policy.
5. Entrepreneurial ecosystem policies
Copy link to 5. Entrepreneurial ecosystem policiesAbstract
Governments use a wide variety of policy instruments across a diversity of policy areas to strengthen their entrepreneurial ecosystems. Some of these instruments provide direct support to companies, for example training or access to finance, while others aim to improve the framework conditions for business creation and growth, for example through tax incentives or regulatory measures. These different measures are often targeted at specific elements of an entrepreneurial ecosystem.
Table 5.1 maps the main types of policies for supporting start-ups and scale-ups onto the entrepreneurial ecosystem element that they primarily target or have an impact upon. Clearly, where the diagnostic indicators indicate possible bottlenecks in an entrepreneurial ecosystem governments can draw on the types of policy measures indicated in the Table.
Table 5.1. Mapping of policy types for start-ups and scale-ups
Copy link to Table 5.1. Mapping of policy types for start-ups and scale-ups|
Entrepreneurial ecosystem element |
Policies for start-ups and scale-ups |
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Institutions |
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Culture |
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Networks |
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Infrastructure |
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Markets |
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Finance |
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Knowledge |
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Talent |
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Leadership |
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Intermediate services |
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However, it is also important to develop more comprehensive, holistic policies for entrepreneurial ecosystems that recognise how entrepreneurship is favoured and hindered by factors acting together in a system. As pointed out by (Leendertse, Schrijvers and Stam, 2022[1]), a core characteristic of entrepreneurial ecosystems is the interrelationships between the different elements. For example, the capacity of an ecosystem to generate knowledge for exploitation by innovative start-ups and scale-ups is shaped by the availability of talent. In turn, the availability of talent – as well as other ecosystem elements such as market size and formal and informal institutions – are important factors in attracting private investors, who in addition to supplying finance may also act as leaders and providers of intermediate services to start-ups and scale-ups.
The interconnections between the different policy areas, as well as the large number of actors involved, mean that it is important to achieve coherence and synergy through a holistic entrepreneurial ecosystem policy. This rest of this section presents three examples of holistic ecosystem-level policy initiatives each containing a diverse set of measures that together seek to strengthen the entrepreneurial ecosystem, namely: i) France’s French Tech programme, ii) the Italian Startup Act, and iii) the TechLeap programme in the Netherlands. Key features of each of these policies are that they are holistic, involve the public sector working with a range of partners in the ecosystem, and give entrepreneurs a key role in developing policy action. They also often encourage and coordinate regional entrepreneurial ecosystem actions.
The policies are presented in order to offer inspiration on potential policy actions that governments could take to take steps to address entrepreneurial ecosystem bottlenecks identified in the diagnostics above. Clearly, further diagnostic and policy appraisal work would be required in any specific country to develop appropriate policies for that context, but this section aims to show that relevant policy actions are available as potential models.
French Tech, France
Copy link to French Tech, FranceObjectives and rationale
French Tech was created in 2013 by the French government to bring together all stakeholders in France’s entrepreneurial ecosystem under a single name and logo. The aims are:
To improve the visibility and international influence of the French start-up ecosystem and thus increase its ability to attract investment and talent to France.
To develop a local dynamic around start-ups by drawing on the initiatives of the players on the French entrepreneurial scene themselves to highlight what already exists and create a snowball effect.
To encourage the emergence of world technology leaders in France by supporting them through various programmes.
To strengthen the coherence of public actions in support of start-ups.
The overarching goal is to give French start-ups and ecosystem stakeholders a strong common identity and to encourage exchanges within it.
Description of measures
The French Tech programme is run by a small team of 30 people (the “French Tech Mission”), which is attached to the Ministry of Economy and Finance. The team has an operating budget of EUR 25 million. The French Tech Mission has two main activities in the entrepreneurial ecosystem:
1. The labelling and co-ordination of the 116 French Tech Capitals and Communities. These are typically private associations of players who are active in the local entrepreneurial ecosystem in their area and work to promote entrepreneurship and innovation. In addition to benefitting from the French Tech label, the Capitals and Communities can also apply for project funding from the French Tech Mission. Other sources of funding are membership fees, private sponsorship, and local authorities.
2. The creation and implementation of support programmes dedicated to the growth of innovative start-ups. Table 5.2 outlines the key activities of the French Tech programme, mapped to the most relevant entrepreneurial ecosystem element.
The activities conducted by French Tech align with the strengths and weaknesses identified by the entrepreneurial ecosystem benchmarking tool. The construction of co-ordination mechanisms contributes to improving Networks, one of the elements where France has historically performed relatively less well. The programme also builds upon France’s strong Leadership performance by leveraging the existing communities of entrepreneurs to act as mentors for other entrepreneurs.
Table 5.2. Activities of the French Tech programme
Copy link to Table 5.2. Activities of the French Tech programme|
Most relevant entrepreneurial ecosystem element |
Support measures |
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Institutions |
The French Tech Central programme facilitates start-ups’ access to public services in their area. Through the programme, start-ups can meet with representatives from government departments and public entities, who are based in the flagship locations of the 17 French Tech Capitals. The programme currently has more than 60 public administrations as partners in the programme and around 250 correspondents. |
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Networks |
One of the main activities of the French Tech Mission is the labelling and co-ordination of the French Tech Capitals and Communities. For a city or community to obtain the French Tech Label, the promoters must mobilise a large number of local stakeholders and demonstrate that these actors are working collaboratively to foster the entrepreneurial ecosystem. In this way, the French Tech labelling process has helped to strengthen linkages and networks within entrepreneurial ecosystems across France. |
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Market |
Among the French Tech Communities are 67 international communities across 52 countries. These are groups of French or Francophile entrepreneurs who support the actions of the French Tech Mission abroad and help to support the development of French start-ups in their geographical area. These Communities are supported by diplomatic posts and the economic departments of French embassies and consulates, by Business France, by French Chambers of Commerce and Industry abroad and by French Foreign Trade Advisors (who are volunteers, often belonging to large companies). With respect to the domestic market, the “I choose French Tech” initiative, created in June 2023, aims to increase the use of products and services from French Tech start-ups by public administrations and large companies. More than 300 companies and 80 institutional players have signed up to this programme. |
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Finance |
The French Tech Rise programme aims to reduce inequalities in access to start-up financing across France. It gives visibility to start-ups from all parts of the country in front of well-known venture capital funds. Initially, the Capitals and Communities of the French Tech network organise "French Tech Rise" meetings between investment funds and start-ups in the fundraising phase. Then, 20 regional "champion" start-ups are invited to a national event, where they can meet and have one-to-one exchanges with investors and major investment funds. |
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Leadership |
The 116 French Tech Capitals and Communities across France bring together approximately 1 400 volunteers (around 70% of whom are entrepreneurs) and 6 000 start-ups. Members of the French Tech Capital and Communities often act as mentors for entrepreneurs in their area, helping them to develop their skills, recruit workers, and identify funding opportunities, as well as directing them to local incubators and accelerators. |
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Intermediate services |
The French Tech Mission runs several incubation and acceleration programmes for entrepreneurs:
The French Tech 2030 programme, supports emerging companies that respond to major societal challenges, based on the strategic priorities of the France 2030 Plan. |
Success factors
The French Tech Capitals and Communities displayed strong dynamism. Over the last 10 years, networks of entrepreneurs, investors, incubators, accelerators, associations, and public and private actors have developed and coalesced under the French Tech banner, bringing together numerous entities that were previously unaware of one another. Programmes like French Tech both contributed to and benefitted from the rapid evolution of the ecosystem in the past decade. As shown by entrepreneurship statistics, since 2013, the number of incubators and serial entrepreneurs doubled while the among of venture capital invested tripled. In this context, the programme was well set to achieve impact, contributing, together with other activities and trends, to develop a startup movement in France.
A key to the success of the French Tech programme is the mobilisation of local actors within local entrepreneurial ecosystems and its emphasis on building on their existing initiatives and resources. This collective mobilisation began with the labelling process for the French Tech Capitals and Communities, which required the applicants to map their local entrepreneurial ecosystems and take stock of existing initiatives and stakeholders. French Tech’s success is due in large part to the voluntary involvement of local anchors. By involving the individuals and organisations running the French Tech Capitals and Communities in the design of new initiatives for their local ecosystems, the French Tech Mission was able to secure the active engagement and commitment of these stakeholders.
Another strength of the French Tech programme is its agility. The initiative has evolved over time in line with the demands of the stakeholders involved or in response to emerging problems, creating. highly targeted programmes in response to these changes or demands. The ability to do so is partly attributable to the nature of French Tech’s management team. The French Tech Mission is a small, young team of 30 people that enjoy a high degree of autonomy and can take decisions quickly. It also enjoys the longstanding support of the public authorities at the highest level.
Conclusions and takeaways
Many OECD countries face the challenge of start-up activity being concentrated in certain cities and regions, with other areas lagging behind. French Tech is an innovative policy initiative that has been successful in creating more cohesive and dynamic entrepreneurial ecosystems at a local level across the country through the mobilisation of local stakeholders. Rather than implementing large, top-down entrepreneurship promotion schemes at the national level, French Tech has sought instead to stimulate the development of local initiatives that build on existing resources and are, in part or in whole, financed and operated by local ecosystem actors from both the private and public sectors.
A key lesson from this approach is that, by empowering local entrepreneurs and entrepreneurial ecosystem stakeholders to become the creators and drivers – as opposed to merely the beneficiaries – of new initiatives, policy makers can secure the active engagement of these different players. This in turn can increase the overall pool of resources available within local entrepreneurial ecosystems. For example, 1 400 volunteers are involved in driving the French Tech Communities and Capitals, often acting as mentors to start-ups and entrepreneurs in their area. Another major achievement of the French Tech programme are the strong networks and linkages that have been built up within and between local entrepreneurial ecosystems across France. By compelling and encouraging ecosystem actors to act in collaboration and co-ordination with one another, for example through the requirements of the labelling process for the French Tech Capitals and Communities, the French Tech Programme has helped to ensure that the activities of these different actors are well aligned.
The Italian Startup Act, Italy
Copy link to The Italian Startup Act, ItalyBackground, objectives and rationale
The Italian Startup Act (ISA), which was introduced in 2012, is a comprehensive legal framework to strengthen the country’s entrepreneurial ecosystem. It draws from recommendations made in the “Restart, Italia!” report developed by a taskforce of 12 experts appointed by the Minister of Economic Development. The objectives are to:
Spur sustainable growth and enhance productivity.
Foster an innovative entrepreneurial culture.
Create new employment opportunities, in particular for youth.
Attract and retain talent and financial capital from across the world.
Description of measures
The ISA introduced a formal definition for an “innovative start-up” (limited and unlisted companies that are headquartered in Italy, are less than 5 years old, have an annual turnover below EUR 5 million, do not distribute their profits, are not created from a company merger, split-up or branch transfer, and meet at least one of the pre-defined innovation-related criteria1). Companies submit a self-certification to the local chamber of commerce in order to become a registered innovative start-up. The chambers of commerce carry out routine checks to confirm the companies meet the legal requirements to be classed as an innovative start-up. The companies are also required to confirm each year that they still fulfil the requirements articulated in the ISA.
The registered innovative start-ups qualify for a range of support measures, as outlined in Table 6.3 below. Innovative start-ups that maintain a clear innovation component can eventually be reclassified as “innovative SMEs”, which are also granted some of the benefits afforded to innovative start-ups.
Some of the activities introduced by the Startup-Act such as incentives to employment and tax benefits acted on two of the long-standing structural bottleneck of the Italian ecosystem (talent and institutions) as identified by the ecosystem diagnostics.
Table 5.3. Support for innovative start-ups provided through the Italian Startup Act
Copy link to Table 5.3. Support for innovative start-ups provided through the Italian Startup Act|
Most relevant entrepreneurial ecosystem element |
Support measures |
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Market |
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Success factors
There are strong monitoring and evaluation arrangements in place for the ISA. Annual reports on the performance of innovative start-ups and evidence on the impacts of the ISA’s support measures are published each year. In addition, independent impact evaluation studies have been commissioned. These have generally found that the ISA’s measures are effective in assisting the development of innovative start-ups in Italy, with positive causal impacts found on firms’ revenues, value-added and assets (Menon et al., 2018[2]).
One success factor is that the ISA is well integrated with other stakeholders and support instruments in the entrepreneurial ecosystem. Since the introduction of the ISA in 2012, numerous complementary support measures have been implemented that are well aligned with the ISA. These include the introduction of research and development tax credits for innovative start-ups and SMEs and the launch of the Smart&Start Italia programmes to finance innovative start-ups. Key to aligning these further initiatives with the ISA is the clear definitions for ‘innovative start-ups’ and ‘innovative SMEs’ that are established in the ISA, as well as the transparency with which these companies are registered through a special section of the business register. This enables other institutions and programmes to easily target these companies with dedicated support measures.
New companies, particularly those in innovative or technology-intensive sectors, often face long development timelines. As a result, it is important that support is provided to these start-ups throughout their development or pre-revenue stage. A key feature of the ISA is the extension of supports to older companies through the ‘innovative SMEs” classification, which helps to avoid the premature withdrawal of public support for companies that are still in a development stage.
There is a also a high degree of transparency surrounding the companies designated as innovative start-ups or SMEs under the ISA, with a searchable list of these companies freely available on an online portal. This approach helps to raise the visibility of the supported start-ups and also builds awareness of their contribution to the Italian economy and society more broadly. Another purpose of the public list is to discourage companies that do not meet all of the criteria for an innovative start-up from registering as one. This approach reduces the administrative burden on both the start-ups and those processing the applications.
The introduction of the Startup Act took place at a moment when the startup movement was on the rise in most European countries. In Italy, venture capital invested increased by 5 folds over the past decade and incubators doubled. In this context, the law benefitted from and contributed to amplify the startup trend in Italy.
Conclusions and takeaways
The Italian Startup Act (ISA) marks an important development in Italy’s entrepreneurial ecosystem. The ISA stands out in its comprehensiveness. It includes measures to help innovative start-ups to access finance, attract talent, expand into new markets, and navigate regulatory and administrative procedures. In addition, the ISA provides a number of tax advantages for innovative start-ups and also seeks to strengthen the provision of relevant support programmes through the “certified incubators” stream. This broad range of measures addresses many of the key challenges that start-ups and scale-ups face in the early stages of their development, and collectively increase the attractiveness of and opportunities to establish and grow an innovative new company in Italy. The large amount of groundwork underlying the ISA, including the commissioning of the “Restart, Italia!” study to identify the stakeholders, bottlenecks and policy development opportunities in Italy’s entrepreneurial ecosystem, enabled the development of this comprehensive package of policy supports for innovative start-ups. Through the “innovative SME’ classification, the ISA is also an excellent example of a policy that provides continuity of support to start-ups with longer development timelines.
TechLeap, The Netherlands
Copy link to TechLeap, The NetherlandsBackground, objectives and rationale
Since 2014, the Dutch government has placed a strong focus on pursuing policies specifically targeting start-ups and scale-ups, on the basis of their contributions to wealth creation and innovation as well as their role in addressing societal challenges. Startup Delta – an independent, public-private partnership that sought to create better ecosystem linkages and support start-ups access to key resources – was launched in 2014 as part of this agenda. Following three iterations of Startup Delta, Startup Delta was relaunched as TechLeap in 2019, with a larger budget, an extended programme period of four years initially, and an increased emphasis on scale-ups.
The overall aim of TechLeap is to strengthen Dutch entrepreneurial ecosystem and enable the emergence and growth of young, innovative and technology-driven companies with growth ambitions by:
Improving understanding of the elements of the Netherlands’ entrepreneurial ecosystem.
Improving supports for start-ups.
Increasing the exchange of knowledge and experience between ecosystems players, entrepreneurs, start-ups and scale-ups.
These and other initiatives have certainly contributed to build one of the stronger ecosystems globally. Based on the entrepreneurial ecosystem diagnostics data, Netherlands performs above the OECD average on 9 of the 10 elements that constitute the framework. Over the past decade, Netherlands has seen the among of invested venture capital invested increasing by more than 5 folds while incubators duplicated. TechLeap builds upon existing strengths and aims at further improving enabling conditions, aiming to become one of the top five entrepreneurial ecosystems in the world.
Description of measures
TechLeap is a non-profit organisation that is funded by the Ministry of Economic Affairs and Climate Policy. Since 2023, TechLeap has also sought private funding to support it in delivering its activities for the Dutch entrepreneurial ecosystem. TechLeap has numerous programmes and initiatives to support start-ups and scale-ups. TechLeap also has a recognised role as an advocate for Dutch start-ups, scale-ups and the entrepreneurial ecosystem. Table 0.4 summarises the TechLeap’s main activities to fulfill its mandate of strengthening the Netherlands’ entrepreneurial ecosystem.
Table 5.4. Supports for start-ups and scale-ups provided through TechLeap
Copy link to Table 5.4. Supports for start-ups and scale-ups provided through TechLeap|
Most relevant entrepreneurial ecosystem element |
Support measures |
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Institutions |
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Culture |
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Networks |
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Success factors
TechLeap is an independent entity operated at arm’s length from the government. Beyond its core mission of strengthening the Netherlands’ entrepreneurial ecosystem, it retains a high degree of flexibility in setting its agenda and activities. This allows it to be agile in responding to the evolving needs of start-ups and scale-ups and to adapt activities based on their effectiveness. The nimbleness of TechLeap was particularly important in supporting start-ups and scale-ups during the COVID-19 pandemic. It has also enabled it to adopt a more precise and targeted approach, reflected in its current focus on deeptech and scale-ups.
Many of TechLeap’s activities are geared towards building communities and creating an overall more cohesive and collaborative entrepreneurial ecosystem. Stakeholders report that this serves an important function in the ecosystem that would not be performed in the absence of TechLeap (van den Toren et al., 2023[3]). TechLeap has also been successful in raising the visibility of the Netherlands’ entrepreneurial ecosystem, through its extensive programme of events and networking activities as well as through the collection and publication of reports and data and regular media appearances by the Special Envoy. This contributes to strengthening the culture for entrepreneurship in the Netherlands.
Conclusions and takeaways
The entrepreneurial ecosystems concept is embedded in the DNA of the TechLeap initiative, with its core mandate being to strengthen the Dutch ecosystem. This is reflected in its approach to supporting start-ups and scale-ups, with an overall focus on fostering relationships and leveraging existing assets and resources that exist within the entrepreneurial ecosystem. For example, TechLeap’s activities to address financing bottlenecks focus primarily on building curated networks of investors and companies, while the Incubators United scheme seeks to stimulate synergies within the incubation and acceleration system through the sharing of knowledge, resources and best practices.
TechLeap also offers relevant insights for policy makers in other countries from an operational perspective. As an independent, arms-length entity, it has been able to respond to the emerging needs and challenges of start-ups and scale-ups, and also to concentrate its efforts on what it sees as the priorities for the Netherlands’ entrepreneurial ecosystem.
References
[1] Leendertse, J., M. Schrijvers and E. Stam (2022), “Measure Twice, Cut Once: Entrepreneurial Ecosystem Metrics”, Research Policy, Vol. 51/9, https://doi.org/10.1016/j.respol.2021.104336.
[2] Menon, C. et al. (2018), “The evaluation of the Italian “Start-up Act””, OECD Science, Technology and Industry Policy Papers, Vol. 54/September.
[3] van den Toren, J. et al. (2023), Evaluation of StartupDelta and Techleap.
Notes
Copy link to Notes← 1. The three innovation-related criteria are: i). research and development expenditure corresponding to at least 15% of the different between annual turnover and costs, ii). at least one-third of the workshop being PhDs, PhD students, or researchers, or at least two-thirds of the workforce holding a master’s degree, and iii). the company being the owner or licensee of a registered patent or the owner of original registered software.
← 2. These measures were initially launched only for innovative start-ups but were subsequently expanded to cover all Italian SMEs.