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Entrepreneurship and Innovation

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Entrepreneurship and Innovation essay
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Entrepreneurship and innovation often come from a vast and diverse exchange of ideas. Diversity is the cornerstone of innovation; new products and services are from the exchange of the wants and needs of consumers. Hotspots today are typically cosmopolitan cities where people of backgrounds interact. Thanks to technology and subsequent improvements in communication, smaller cities and towns are rising to prominence in the startup scene. The diversity of thought, culture, knowledge, and people drive forward atypical areas to become a startup hotspot. Talent, funding, entrepreneur-friendly spaces and laws are all found in hotspots today.

Before discussing the up-and-coming startup hubs, it’s important to analyze the causes of today’s traditional entrepreneurial hotspots. Cities like London, the Silicon Valley, Boston, Tel Aviv are at the center of business. Their proximity to well-established corporations, universities and colleges, and the well-developed environment make these cities attractive for businesses. According to Ressi, “grassroots efforts led by a few” are more successful than “top-down”, government driven efforts. This is due to the fact that successful entrepreneurship comes from the novelty and value created from an idea. Therefore, ideas that come from the people, rather than the government, can properly address the needs of a niche. In addition, without the rest of the makings of a startup ecosystem in place, government efforts are likely to fall short. Policy initiatives only relieve business people from bureaucratic red tape and do not necessarily promote creativity. That being said, the local government still plays a large role in the creation of startups through the promotion of accelerators and incubators, as well as ensuring that the laws and policies are entrepreneur-friendly.

While the government plays a large role in the entrepreneurial ecosystem, other factors influence startup hubs as well. For example, the flow of ideas across students to students, student to faculty, and faculty to faculty significantly helps with the evolution of ideas. The presence of universities means that the smartest minds congregate in one place. Academic institutions are at the forefront of research and are constantly discovering applications for new knowledge. Furthermore, the physical environment must be conducive to innovation and creativity. Startup hotspots tend to have “co-working spaces, networking events, …, accelerators and incubators” (Ressi). Coworking spaces allow for collaboration. Without collaboration, it is difficult for entrepreneurs to get constructive criticism or obtain opinions from people in other fields. In cities, the proximity to industry experts, corporations, universities and think tanks increase the ease of communication. In contrast, in a rural town, it may be more difficult to hear, see, and feel what others need from an entrepreneur.

Furthermore, the need for internet access is paramount for an everyday consumer, even more so for an entrepreneur. A city like London or Los Angeles already has the infrastructure in place for such technology. A rural town in Czechoslovakia might not. The availability of technology can dictate whether an area becomes an emerging hotspot. Without the flow of ideas from others, the startup ecosystem is stagnant and difficult to succeed. Lastly, one of the most important parts of a thriving startup hotspot is the ability to gain funding. The proximity to venture capitalists and angel investors is fundamental for a budding business to grow. Due to convenience, many accelerators and investing firms are based in cities and often happen to be offshoots or smaller branches of larger corporations. In all, the accessibility to collaboration, communication, knowledge, and funding are the factors essential for a successful startup ecosystem.

With these factors in mind, it is then inferrable that other cities are on the up-and-coming areas for entrepreneurs. According to CB Insights, Dublin, Jakarta, and Buenos Aires compete in the top 10 list of non US emerging startup hub cities. Austin makes up one of the many emerging hubs in the United States (Caminiti).

As a university town in Texas, Austin is a magnet for students and young people. In combination with one of the best computer science programs in the nation at the University of Texas, Austin’s tech industry startup scene is becoming a hotspot. According to VOAnews, the culture of Austin and the recent moves of Dell, Facebook, and Google corporate offices make Austin an attractive spot for entrepreneurs (Lee). The recent development of tech offices in Austin may explain why the city is developing into a startup hub now versus developing years ago. Many employees at these tech companies tend to use their work experience to start businesses of their own. The openness of the city and the university allows for collaboration between people of all backgrounds and education levels. In addition, the availability for funding “totaled more than $600 million” in 2016 (Caminiti). Combined with the fact that the University of Texas also provides funding for its entrepreneurial students, the availability of money is widespread. The vibrancy of the city combined with its knowledge foster the creative energy in Austin, making it a lively environment for businesses.

Outside of the United States, Jakarta, named “8th among 45 cities in the world with the highest confidence … for digital transformation,” is an emerging Southeast Asian tech hub with four “unicorn” startups (Wijaya). Many entrepreneurs tend to flock to Jakarta for tech and digital businesses. As the population grows in Asia and less space is available in Hong Kong, Mumbai, or Tokyo, many flock to Jakarta for opportunities. Business ventures are supported by the local startup community. Government initiatives have eased the process of starting a business and are supportive of startups. Many coworking spaces have opened, attracting many to the city. In addition to privately-owned coworking spaces, there are city-owned spaces as well. Government regulations have eased, allowing innovators to start businesses easily without the hassle of bureaucratic paperwork. While the city is on the way to becoming an ecosystem for businesses, it still lacks talent (Marzuki). That being said, this could explain why Jakarta has not traditionally been considered an entrepreneurial hotspot. However, with the city itself open to new collaborations, the thriving economy and business-welcoming regulations, Jakarta enables itself to becoming one of the next startup hubs.

Traditionally, Dublin has always been overshadowed by London when thinking about startups. London has the built-in physical, social, and intellectual infrastructure to support entrepreneurs. However, according to Kobie, due to recent events such as Brexit, Dublin is now becoming a fledgling hotspot. With concerns about the effects of Brexit on the economy, Dublin is a good substitute for London due to its English-speaking culture. Its proximity to England allow for potential entrepreneurs in London to do business in Dublin with less hassle. In addition, private and government support help startups with funding. “Enterprise Ireland … even local councils” are supportive of new businesses and tend to help with “early-stage investment” (Kobie). With the presence of Facebook and Google offices, the availability of bright minds and talent are not at a shortage. Consequently, the majority of Dublin startups are based in tech, health, and finance. Combined with the talent pool and the fostering environment the local government promotes, Dublin is a promising hotspot on the rise.

On the southern hemisphere, Buenos Aires, the capital of Argentina, attracts many entrepreneurs and companies. According to Besserman, the physical location, community that encourages entrepreneurial growth, and financial factors promote the startup culture in Buenos Aires. As a large capital city in South America, it provides easy access to the rest of the continent, enlarging the potential market. In addition, the lateral difference from New York City allows for ease of communication across the 1 hour time zone. Meetings with potential investors or other businesses aren’t necessarily hindered by time. Furthermore, the amount of co-working spaces in Argentina are based in Buenos Aires. The availability of these spaces allow for more entrepreneurial education and networking workshops that help promote the startup ecosystem. In addition to help from the private sector, the government promotes entrepreneurship through having its own incubator program. Not only does this provide a potential source of funding, it sends a signal that Buenos Aires is ready for businesses to flourish. Lastly, the financial influences in Buenos Aires are a huge contributor to the emerging hotspot. The cost of living and wages means that an entrepreneur can spend less on their own living expenses while saving money on investing on the physical labor for the company. Skill levels and talent in Argentina are comparable to the US with “the highest language of English proficiency in Latin America” and the “largest amount” of “tertiary educated citizens” (Besserman). The salary of a software or web developer in Argentina is much less than the US counterpart. This allows for a company to cater to English-speaking countries while staying at a low cost, a preferred balance at the startup phase. Buenos Aires has all the makings of a startup hub with its availability of talent, money, ease of regulations, and access to different markets in the world.

Across the ocean from South America, Nairobi, with poor infrastructure and relatively high crime rates, is not a city when one thinks of startup hotspots. However, the increase in university graduates with degrees in the STEM fields have propelled this city to significance. Factors such as IBM investment, government initiatives, and an increase in mobile phone usage have positively changed the tech startup industry in Nairobi (Henry). With attention from IBM, many people flock to Nairobi as a source of employment and networking. These young employees bring their entrepreneurial ideas as well. The recent increase in mobile phone ownership has brought along creative ideas. Mobile app innovation is a product of rapid expansion (i.e. mobile phones) and non-technological needs (i.e. farming). For example, according to Henry, a startup has recently developed an app for farmers to query the prices for farm supplies and sales. This has effectively cut out the middleman and has the potential to increase profit margins for Kenyan farmers. This type of startup has benefited the local economy and revolutionizing the farm to market process. The rapid expansion of personal technology has allowed young entrepreneurs to think of new ways to solve old problems. This is an aspect of innovative entrepreneurship that should not be overlooked. With its international investment from IBM, surge in education, and government regulations, Nairobi is certainly an emerging startup hotspot.

The importance about the diversity of these cities should not be overlooked. They are not the traditional cosmopolitan cities that are built for businesses; but instead, Austin, Jakarta, Dublin, Buenos Aires, and Nairobi are evolving to fit the world of today. The change that these cities bring are shaped to fit the needs of the future and bring with it the inventive minds of today. For the future of entrepreneurship, emerging places allow more opportunities for rural or, non-cosmopolitan areas to grow and enter the world market. This allows for economic growth in the area, providing more chances for an everyday consumer to become an entrepreneur. In turn, this could potentially allow more lateral movement in each area’s society. For example, if a farmer entrepreneur from Shenzhen has a successful business proposition, then he may be able to move up from a farmer’s wage to an entrepreneur’s earnings. The significance of this is that it allows economically “stuck” people to succeed without having to have to move miles or kilometers away to a new city. Overall, emergent hotspots level the playing field for the majority of the world’s citizens and allows those who cannot access big metropolitan cities to participate in entrepreneurship.

The new hotspots in Austin, St. Louis, Jakarta, Dublin, Buenos Aires, and Nairobi mean that the need for innovation is widespread and can come from anywhere with smart minds and good support. The combination of academic knowledge and physical location makes networking and the flow of ideas possible for startups to grow and succeed. The overarching theme of emerging hotspots is the ability to communicate. This has been expedited by the rapid, exponential expansion of internet, mobile phones, and computers to the more remote areas of the world. Consequently, many startups, especially in developing areas, tend to start businesses based on technology. Hopefully, the emergence of non-traditional startup hotspots will open doors for people who may not have had such opportunities before.

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Entrepreneurship and Innovation. (2019, April 10). GradesFixer. Retrieved September 26, 2021, from https://gradesfixer.com/free-essay-examples/entrepreneurship-and-innovation/
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