Pavel Ezekiev & Pablo Larguia at Digitalk, June 3, 2013
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Transcript of Pavel Ezekiev & Pablo Larguia at Digitalk, June 3, 2013
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DigiWALKA digital entrepreneurship network for Southeast
Europe
Europe has been ill
“European Central Bank President Mario Draghi is signaling he may
go negative in his campaign to rescue the euro-area economy.”
(Bloomberg, May 3, 2013: http://bloom.bg/18y1OSe)
“The eurozone is now in its longest ever recession”
“The eurozone is facing a double blow from necessary restructuring of its domestic economy..” - Marie Diron, senior economic adviser
to Ernst & Young
(Source Time May 15, 2013: http://ti.me/14nGHlb )
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3 years of austerity, 2 years of recession
EU illness left some stuck half way
EU: GDP/capitaEU: GDP/capitaEU: GDP/capitaEU: GDP/capita Emerging EuropeEmerging EuropeEmerging EuropeEmerging Europe Black Sea regionBlack Sea regionBlack Sea regionBlack Sea region
$39,028$36,941 $35,548
$15,001 $14,312 $12,808
$7,374 $5,930 $5,838
Germany UK France Turkey Bulgaria Romania Ukraine Georgia Armenia
Source: IMF
“We’re now trying to attract private investors to take more riskthat will help boost economic growth and create jobs.” -
Finland’s Economy Ministry
“In it’s venture capital program, Finland wants to attract 1billioneuro, where 10 funds will invest in about 100 companies, helping
to create about 6,000 jobs over five years.”
(Bloomberg April 5, 2013: http://bloom.bg/Xh8h27 ) 5
Helping oneself in 2013:
Finland turns to venture
Global Index of Cognitive Skills and Educational Attainment: Overall Results
Note: Numbers next to each country’s name indicate the country’s place in the overall rankingSource: Economist Intelligence Unit
Group 1 Group 2 Group 3 Group 4
-1
-0.5
0
0.5
1
1.5
Finland (1) SouthKorea (2)
Hong Kong(3)
Japan (4) Singapore(5)
UK (6) Denmark(12)
Poland (14) Germany(15)
CzechRepublic
(22)
Spain (28) Bulgaria(30)
Greece (31) Romania(32)
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Leadership in knowledge helps
Top 6 Bottom 6
Note: Numbers next to each country’s name indicate the country’s place in the overall rankingSource: INSEAD
68.2
64.8 63.561.8 61.2 60.5
45.3 44.541.4 40.7 40.4
37.835.3
0
10
20
30
40
50
60
70
80
Sco
re (
0–1
00
)
Global Innovation Index 2012
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Gap to bridge
As knowledge is power...
1. CEE in its current form will not exist any more –Europe will consist of EU and non-EU countries, and the region will be much more diverse
2. The region will not be among the global emerging markets but will remain the main European growth region. GDP growth will
plateau at about 2% above WE level
3. Although the CEE countries continue to develop from "workbenches" to innovation-
driven economies, the gap between Western Europe and CEE will persist
4. Lack of basic requirements (institutions, infrastructure) will remain CEE's main weakness, whereas efficiency enhancement is a competitive advantage
5. Human capital issues (demographic development, brain drain, education) will remain the second bottleneck for further
economic development
6. In 2020, CEE will still be dependent on Western Europe – Pan-CEE business is developing fast and may become a potential way out
7. Its unique position as a bridgehead between the emerging markets of Russia, Turkey,
China and the advanced economies of Western Europe is CEE's future capital
8. Counteracting the scarcity of energy & raw
materials, the consolidation of public finances and the consequences of technological progress are the main tasks for the next decade
9. The regional growth industries will be energy & utilities, IT & telecom and pharma &
healthcare – Shift toward future industries needed
10.The main future growth drivers are thought
to be energy-related (energy efficiency, renewables) and IT solutions
Ten assumptions for CEE through 2020
Source: Roland Berger – CEE 2020 study8
Emerging Europe: an account
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So, it’s difficult, but..
“In the middle of difficulty lies opportunity”Albert Einstein
Entrepreneurial ecosystem – the ideal case
Entrepreneurship
Policy
Finance
Culture
Supports
Human Capital
Markets
Leadership�Unequivocal support�Social legitimacy�Open door for advocate�Entrepreneurship strategy�Urgency, crisis and challenge
Government�Institutions e.g. investment, support�Financial support e.g. for R&D, jump start funds�Regulatory framework Incentives e.g. Tax benefits�Research institutes�Venture-friendly legislation e.g. Bankruptcy, contract enforcement, property rights and labor
Financial Capital�Micro-loans�Angel investors, friends and family�Zero-stage venture capital�Venture capital funds�Private equity�Public capital markets�Debt
Success Stories�Visible successes�Wealth generation for founders�International reputation
Societal norms�Tolerance of risk, mistakes, failure�Innovation, creativity, experimentation�Social status of entrepreneur�Wealth creation�Ambition, drive
Non-Governmental Institutions�Entrepreneurship promotion in non-profits�Business plan contests�Conferences�Entrepreneur-friendly associations
Support professions�Legal�Accounting�Investment bankers�Technical experts, advisors
Infrastructure�Telecommunications�Transportation & logistics�Energy�Zones, incubation centers, clusters
Early Customers�Early adopters for proof-of-concept�Expertise in productizing�Reference customer�First reviews�Distribution channels
Networks�Entrepreneur’s networks�Diaspora networks�Multinational corporations
Labor�Skilled and unskilled�Serial entrepreneurs�Later generation family
Educational institutions�General degrees (professional and academic)
�Specific entrepreneurship training
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Romania
Population: 21.4 millionInternet penetration: 44.1%
Greece
Population: 11.3 millionInternet penetration: 53.0%
Russia
Population: 142.5 millionInternet penetration: 47.7%
EU
Population: 504 millionInternet penetration: 73%
Turkey
Population: 74.7 millionInternet penetration: 45.7%
SerbiaPopulation: 7.3 millionInternet penetration: 56.4%
MacedoniaPopulation: 2.1millionInternet penetration: 56.7%
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Regional Regional Regional Regional VC fundsVC fundsVC fundsVC fundsUniversitiesUniversitiesUniversitiesUniversities
Exit RoutesExit RoutesExit RoutesExit Routes
NEVEQ (NEVEQ (NEVEQ (NEVEQ (€€€€26M)26M)26M)26M)
Eleven (€12M)LAUNCHub (€9M)
Bulgarian Business Angels Network (>400 projects; 3 funded)
AUBGSofia University
Technical Universities
Bulgaria-based IT companies2012 revenues > $200Mincluding multinationals > $500M
BULGARIABULGARIABULGARIABULGARIAPopulation: 7.3 millionInternet penetration: 51%
VMware/SciantSanoma/NetInfoVelti/M-TelecomApptix/Webmessenger
Sources: Eurostat; www.internetworldstats.com
IT multinationalsIT multinationalsIT multinationalsIT multinationals
NEVEQMCI3TS
Summit PartnersBLUERUN VenturesIndex Ventures
Entrepreneurial ecosystem – Bulgaria today
How to boost an entrepreneurship
ecosystem: A Formula That Works
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