The future of the Barents region depends on its ability to foster youth entrepreneurship to create new jobs, new markets and new products. Within the ENPI Kolartic programme Young Innovative Entrepreneurs we strive to support and inspire young entrepreneurs in order to create dense networks that may be the first step towards a self-sustaining entrepreneurial ecosystem in Barents.
Situated at the apex of Europe, the Barents region is the most densely populated area in the rapid changing Arctic, while simultaneously the most sparsely populated region in Europe. This adds to the uniqueness of the region and to which unique challenges arise, in addition to the more common ones. Like most sparsely populated areas the Barents region faces migration of young people. The young people’s tendency to migrate is closely linked to their beliefs regarding if their domicile will be able to offer ample possibilities within the most important aspects of their adult lives; education, employment and career prospects.
It is evident that entrepreneurship is of key importance for economic growth, productivity, innovation and employment, and all Barents countries have made entrepreneurship an explicit policy priority. As the fast paced changes in the Arctic continues alongside the perpetual globalization of the world, the economic landscape and technological change creates greater uncertainty in the world economy. Entrepreneurship offers ways to help meet these new economic, social and environmental challenges, and has gained additional attention in the current economic crisis, as it is widely viewed as a key aspect of economic dynamism.
Economies generally generate growth by increasing input; add more workers, increase investments or improve education. But sustained increases in output per person, which are necessary to raise incomes and welfare, entail using what we currently have in better ways – in other words; innovate. Entrepreneurship and innovation is closely interlaced as the majority of young companies are more innovative by nature.
The essential dynamics in economy is young companies challenging and putting competitive pressure on existing companies, forcing the existing companies to innovate and improve performance. These young companies are agile and swift to capitalize on emerging ideas and solutions, and in their search for new market opportunities they engage in industry creation and renewal, thus contributing to more dynamic and competitive markets.
Policy makers need to understand entrepreneurship in combination with innovation in order to attain sustained economic growth. The dynamic process of new company creation introduces and disperses innovative products, processes and organizational structures throughout the economy. The ability to generate new growth companies is crucial to offer employment opportunities to young people in the Barents region, because young growth companies contribute disproportionately to the creation of new jobs.
The Barents region will always be remote in national, south-north perspective. The consequences for young entrepreneurs in the region are that they constantly have to look towards central areas to find both partners and a market for their goods or services. This is a competitive disadvantage and may cause young entrepreneurs to migrate from the region. But by shifting the focus from traditional north-south perspective to an east-west perspective, one can turn the geographical disadvantage into a competitive advantage by employing the opportunities and advantages that lie across the borderlines. In addition to creating competitive advantage for individual entrepreneurs this also contributes to stability in the border area in a political, economic, cultural and social sense.
Today the rate of new startups in the Barents region is relatively high. But unfortunately a high startup rate is no guarantee for creation of young growth companies that contribute so disproportionately to the creation of new jobs. Most new Barents startups struggle to survive the growth phase, at the same time as few startups are born big. The remote location and sparse population of the region account for some of the current challenges. This highlights the need for a different strategy in supporting entrepreneurship in Barents.
Currently the Barents region is a massive blip on every investor’s radar. A region located close to the oil and gas deposits in the Arctic, abundant in fish and a promising environment for fish farms, rich in ores and minerals, in addition to its favorable position at the gate to the Northern Sea Route. All these attributes put the Barents region in pole position for future development. But how can we aid and support the young innovative entrepreneurs eager to exploit the opportunities arising in their own region?
There are some elements that are crucial to obtaining a sustainable and strong entrepreneurial ecosystem in the Barents region. We need to attain a sufficient number - a critical mass, of young, innovative entrepreneurs, so that the rate of entrepreneurship becomes self-sustaining and creates further growth in the region. Dense networks anchoring this critical mass of entrepreneurs are important to achieve collaborative ecosystems where ideas, inspirations and innovations thrive. Managed correctly these networks of successful entrepreneurs will be willing to reinvest both experience and capital back into that very same ecosystems they are part of, as they know it will return yield.
In the Young Innovative Entrepreneurs programme, where I am a project manager, we strive to contribute to the above mentioned by bringing young entrepreneurs, and future entrepreneurs, together to create a critical mass and dense entrepreneurial networks. When assembled we create enthusiasm, and inspire by disseminating knowledge about entrepreneurship and sharing success stories from our region. Our programme is a good beginning, but to ensure increased entrepreneurial activity in the region, a constant, long term focus is required.
If I were allowed to have one grand thought put to life in Barents it would be based on the concept of Start-Up Chile. Start-Up Chile is a program created by the Chilean Government, that seeks to attract early stage, high-potential entrepreneurs to bootstrap their startups in Chile, using it as a platform to go global. The end goal of the accelerator program is to convert Chile into the definitive innovation and entrepreneurial hub of Latin America.
In 2010, Start-Up Chile, at that point just a pilot, brought 22 startups from 14 countries to Chile, providing them with US$40,000 of equity-free seed capital, and a temporary 1-year visa to develop their projects for six months, along with access to the most potent social and capital networks in the country. These selected entrepreneurs were approved by an admission process conducted by Silicon Valley experts and a Chilean Innovation board that focuses ardently on global mindsets and worldwide potential, believing that the route to success is via expansion not isolation, a mindset suitable for the Barents region.
In the future I hope we can see a Barents region with a self-sustaining critical mass of young entrepreneurs in dense networks, where experience and capital is being reinvested in the ecosystem, over and over again. Investing in young, innovative entrepreneurs always pays high, long term dividends.
Project Manager of Young Innovative Entrepreneurs, a Kolarctic ENPI CBC project