Exposé referring to the research paper

Comparing the Suitability of Stockholm and Shanghai for

Technology Start-up Companies

Business Administration and Engineering Degree Program

Corporate State University Baden-Württemberg Stuttgart, Germany

Markus Vetter

06.01.2023

Matriculation Number 9035674

Course TWIW20IP2

Supervisor Fabian Sommer M. Sc.

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I herewith declare that I wrote this exposé on my own and did not use any unnamed sources or
aid. Thus, to the best of my knowledge and belief, this exposé contains no material previously
published or written by another person except where due reference is made by correct citation.
This includes any thoughts taken over directly or indirectly from printed books and articles as
well as all kinds of online material. It also includes my own translations from sources in a
different language.

The work contained in this exposé has not been previously submitted for examination.

Bludenz, 06.01.2023 Markus Vetter

Ecosystem Analysis Markus Vetter

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I. Declaration of Authenticity................................................................................................. 2

II. Index ................................................................................................................................ 3

Introduction ................................................................................................................................ 4

1.1. Research issue.............................................................................................................. 4

1.2. Definition of start-up companies ................................................................................. 4

1.3. Contemplation limitation ............................................................................................. 5

1.4. Definition and models of entrepreneurial ecosystems ................................................. 5

2. Framework .......................................................................................................................... 7

2.1. Methodology and Approach ........................................................................................ 7

2.2. Complexity and Solutions ........................................................................................... 8

III. Appendix ....................................................................................................................... 10

a. Conceptual Framework: Table of Contents .................................................................. 10

b. Register of Figures ........................................................................................................ 10

c. Reference list ................................................................................................................. 10

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This exposé will outline a framework, referring to the following study about the ecosystem
analysis and comparison of Shanghai and Stockholm. The referenced paper will deliver results
to the points raised in this exposé.

Various of currently leading technology companies, such as Uber Technologies Incorporation,

once launched as start-up companies.1 The transportation service provider company was
founded in 2009 and since has seen major entrepreneurial success, while being supported by
external investors such as Google Ventures.2 However, this example represents just a few
successful outliers. More than 90 percent of entrepreneurs fail to develop a successful business,
as the database provider Startup Genome states.3 The development of small businesses is
dependent on a variety of factors, such as the funding or the business model.4 Incorporating a
wider perspective shows that the ecosystem, which companies are surrounded by, can benefit
or limit the entrepreneurial success drastically.5

In the referenced paper common start-up ecosystem models will be analyzed and compared in
order to elaborate a pattern for the comparison of Stockholm and Shanghai´s ecosystems.

Although different publications give different definitions of what start-up companies are, a
generally accepted definition is nonexistent. The wide range of start-up definitions mainly vary
in specificness and the orientation towards qualitative or quantitative statements.6 As the start-
up culture has been very dynamic and the referring paper aims to outline a contemporary
analysis, a relatively modern definition will be utilized. Forbes Author Baldrige defines start-
up companies as young businesses, which provide the market with irreplaceable innovative
products or services.7

Referring to the business idea, this definition categorizes businesses strictly. On the contrary
this definition does not include quantitative statements with regards to the age or size of
companies. Overall, this definition seems to be suitable for the data gathering and research for

1
cf. Gans, 2012
2
cf. Schröder, 2014
3
cf. Startup Genome LLC, Global Startup Ecosystem Report 2019, 2019, p. 19
4
cf. Sevilla-Bernardo et al., 2022, p. 15-16
5
cf. Jacobides, 2019
6
cf. Skala, 2019, p. 2
7
cf. Baldrige, 2022

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the comparison of different start-up ecosystems. However, the usage of slightly differing
definitions cannot be precluded, as most data sources are based on different start-up definitions.

Start-up companies can be categorized by different attributes. In order to deliver scientifically

reasonable results, the contemplation of the ecosystem comparison will be limited. The analysis
and comparison will focus on companies active in the technology sector. In addition to that,
limitation can be achieved by analysing the life-cycle stage. These companies run through
different chronological stages of their respective life cycle8. The lifecycle-model shown in
figure 1, will be utilized as a maturity model.

Figure 1 - The different start-up funding rounds and stages of development 9

For the following ecosystem comparison aims to give a universally statement, with marginal
focus on companies in the phases between incubation and acceleration. As these stages should
represent a relatively homogenous and standardized processes throughout the lifecycle.

Entrepreneurial ecosystems are defined as the combination of multiple interdependent actors

and factors, which make entrepreneurial success at a certain geographical location possible.10
The more specific definition of these actors and factors and their segmentation varies between
different ecosystem models.

8
cf. Salamzadeh and Kawamorita, 2015, p. 4-5
9
Laure and Duchatelet, 2018, via blogs.worldbank.org
10
cf. Stam and Spigel, 2016, p. 0

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The most established model, visualized in Figure 2, defines the environment with the following
six domains: Policy, Finance, Culture, Supports, Human Capital and Markets. This model by
Isenberg is widely acknowledged and provides a basis for multiple other models. Most of these
domains are each divided into multiple sections defining the superior domain more specific.
For example, human capital is assembled of the two sub-factors labor and educational
institutions, which both affect the employee market of the ecosystem.11

Figure 2 - Domains of the entrepreneurship ecosystem12

11
cf. Isenberg, 2016, p. 571-573
12
Isenberg and Onyemah, 2016

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Figure 3 - A Review of Entrepreneurial Ecosystem Diagnostic Tools13

As shown in Figure 3 multiple entrepreneurial ecosystem models include different categories

of an ecosystem, the Isenberg model is referred to as Babson.14 The confinement of the different
models varies strongly between these models.

In the referenced paper, different models will be analyzed and compared precisely to elaborate
the optimum model for the comparison of technology start-up companies. It is to be presumed,
that slight adaption of one of the given models will be necessary, to ensure conclusive results.

The following chapter will outline the planned framework for the referred paper. As the interim
results of different milestones of this study are still unknown, washback effects and minor
adjustments to the presented framework are expected with a high degree of probability.

In the first place the ecosystem framework must be determined. By comparing different
ecosystem models and evaluating their suitability for the technology sector, the ideal
compromise of existing definitions should be elaborated. It is intended to follow a mainly

13
Aspen Network of Development Entrepreneurs, 2013, p. 3
14
c.f. Babson College, n.d., via entrepreneurship.babson.edu

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chronological linear progression in finding the appropriate model, to eliminate falsification

provoked by misguiding assumptions, created in the data gathering phase.

Building on this basis several comparison methods will be researched and analyzed. The
ecosystem model will then provide the needed segmentation for the different attributes of the
comparison. The referred paper will feature the results of an analysis of current ranking and
scoring systems. Already conducted research has shown, that several database providers such
as Startup Blink15 or Startup Genome16 use algorithms with weighted calculation of different
ecosystem attributes to rank geographical locations. Integration of methods and results
presented by such organizations will be discussed.

During the phase of data gathering and processing the given reports of several database
providers will very likely play an important role as these platforms can benefit from
sophisticated networking partners and expert parties.17 In addition to that, the integration of
different empirical studies can be assumed. Scientific papers such as “Evaluation of
Technological Innovations and the Industrial Ecosystem of Science Parks in Shanghai: An
Empirical Study” give extraordinary insight into the characteristics of the different
ecosystems18.

The goal of the comparison is a well-founded statement on the suitability of the compared
entrepreneurial ecosystems for technology startup-companies. The statement should contain
qualitative and quantitative information and specific recommendation for action. Lastly it is
anticipated that, the elaborated methods and results will be scrutinized and evaluated.

In this chapter the complexity and affiliated solutions of multiple aspects of the planned
procedure will be discussed.

Due to many different ecosystem models being propagated, an early containment will be
critical. Therefore, a systematic and solution-orientated approach will be crucial. To support
and accelerate the elaboration of a suitable ecosystem model the incorporation of given study
results will be considered. For example, the ANDE Entrepreneurial Ecosystem Diagnostic

15
c.f. Startup Blink, 2022, Startup Ecosystem Report 2022, p. 11
16
c.f. Startup Genome, 2022, The Global Startup Ecosystem Report 2022 via startupgenome.com
17
c.f. Startup Genome, 2022, The Global Startup Ecosystem Report 2022 via startupgenome.com
18
c.f. Min Ren et al., 2020

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Toolkit could very likely improve the efficiency in the ecosystem model defining process, as it
provides conflated information.

Additionally, the incorporation of qualitative and quantitative data into a single universal
ranking method will presumably represent a major complexity. Therefore, specific advice could
be requested via expert interviews. Another strategy to cope with this obstacle could be an
analysis of the methodology and accuracy of leading indices and algorithm-based scoring
systems.

The large number and size of datasets provided by multiple sources could increase complexity,
as the data processing could get influenced negatively. If this occurs, even further limitation of
the approach should be considered.

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Figure 1 - The different start-up funding rounds and stages of development ........................... 5
Figure 2 - Domains of the entrepreneurship ecosystem ............................................................. 6
Figure 3 - A Review of Entrepreneurial Ecosystem Diagnostic Tools ...................................... 7

Joshua Gans (2012): Uber and the Delicate Business of Creating a Platform. Harvard
Business Review. https://hbr.org/2012/08/uber-and-the-delicate-business (05.01.2023)

Thorsten Schröder (2014): Die Uber-Flieger. Die Zeit. https://www.zeit.de/mobilitaet/2014-

02/verkehr-taxi-uber?utm_referrer=https%3A%2F%2Fde.wikipedia.org%2F (05.01.2023)

Startup Genome LLC (2019): Global Startup Ecosystem Report 2019.

https://startupgenome.com/reports/global-startup-ecosystem-report-2019. (05.01.2023)

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Javier Sevilla-Bernardo, Blanca Sanchez-Roblesand Teresa C. Herrador-Alcaide (2022):

Success Factors of Startups in Research Literature within the Entrepreneurial Ecosystem.
Graduate School, Department of Economic Analysis, Department of Business and
Accounting, Universidad Nacional de Educación a Distancia UNED; ESIC Business &
Marketing School

Michael G. Jacobides (2019): In the Ecosystem Economy, What’s Your Strategy?. Harvard
Business Review. https://hbr.org/2019/09/in-the-ecosystem-economy-whats-your-strategy
(05.01.2023)

Agnieszka Skala (2019): The Startup as a Result of Innovative Entrepreneurship (published

in: Digital Startups in Transition Economies, 2019)

Rebecca Baldrige (2022): What Is A Startup? The Ultimate Guide. Forbes Advisor.
https://www.forbes.com/advisor/business/what-is-a-startup/#544a2a9a4c63 (05.01.2023)

Aidin Salamzadeh and Hiroko Kawamorita Kesim (2015): Startup Companies: Life Cycle and
Challenges. Faculty of Entrepreneurship, University of Tehran, Faculty of Engineering,
Ondokuz Mayıs University

Alexandre Laure and Simon Duchatelet (2018): Why providing pre-seed and seed capital is the
essential step to bringing West Africa and Sahel’s entrepreneurs to the next level.
blogs.worldbank.org. https://blogs.worldbank.org/psd/why-providing-pre-seed-and-seed-
capital-essential-step-bringing-west-africa-and-sahel-s (05.01.2023)

Erik Stam and Ben Spigel (2016): Entrepreneurial Ecosystems. Utrecht University School of
Economics, University of Edinburgh Business School

Daniel J. Isenberg and Vincent Onyemah (2016): Fostering Scale Up Ecosystems for Growth:
The Cases of Manizales-Mas and Scale Up Milwaukee

Daniel J. Isenberg (2016): Applying the Ecosystem Metaphor to Entrepreneurship: Uses and
Abuses. The Antitrust Bulletin

Aspen Network of Development Entrepreneurs (2013): ANDE Entrepreneurial Ecosystem

Diagnostic Toolkit

Babson College (n.d.): Author: Daniel Isenberg.

https://entrepreneurship.babson.edu/author/disen/ (05.01.2023)
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Startup Genome (2022): The Global Startup Ecosystem Report 2022.

https://startupgenome.com/article/methodology-2022 (05.01.2023)

Startup Blink (2022): Startup Ecosystem Report 2022

Min-Ren Yan, Haiyan Yan, Lingyun Zhan, Xinyue Yan, and Mengen Xu (2020): Evaluation
of Technological Innovations and the Industrial Ecosystem of Science Parks in Shanghai: An
Empirical Study. Science, Technology and Society, Volume 25, Issue 3

Ecosystem Analysis Markus Vetter