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2014. 09. 01.I author: European Association of Development Agencies -

REDI: The Regional Entrepreneurship and Development Index Measuring Regional Entrepreneurship

The Europe 2020 economic growth strategy emphasizes the role of Regional Policy in unlocking the growth potential of EU regions. Through Smart Specialization and, in particular, the flagship initiative, “Innovation Union,” the European Commission promotes innovation in all regions while ensuring complementarity between EU-, national-, and regional-level support for innovation, R&D;, ICT, and entrepreneurship. To effectively implement Smart Specialisation policies, reliable and relevant metrics are needed to track regional strengths and weaknesses in innovation and entrepreneurship. While metrics to track innovation are well established due to the long- standing focus of EU economic policy on innovation, measures to track entrepreneurship in EU regions are relatively less varied. It is the objective of this report to develop a systemic index– called the Regional Entrepreneurship and Development Index (hereinafter called REDI for short)– to strengthen the portfolio of entrepreneurship at the regional level in the EU.

The REDI index developed in this report presents a fresh approach to measuring entrepreneurship in EU regions. Although the systemic approach is long established in Innovation Policy–as encapsulated in the National (and Regional) Systems of Innovation theory, a systemic understanding of entrepreneurship dynamics in countries and regions remains in its infancy. Although entrepreneurship scholars have long since recognized the regulating importance of context on entrepreneurship, the great bulk of both theorizing and empirical research on entrepreneurship has focused on the individual and the firm and ignored the study of the context within which these are embedded. This in spite of the widespread recognition that entrepreneurs do not operate in isolation from their contexts: Instead, the context exercises a decisive influence on who starts new firms, withwhat level of quality and ambition, and with what outcomes. This report builds on recent theoretical developments towards a systemic perspective to entrepreneurship in regions to develop an empirical and normative elaboration of the ‘Systems of Entrepreneurship’ phenomenon. This report argues that a systemic approach to under standing the economic potential of entrepreneurship in EU regions is
particularly important for policy, because policy initiatives address typically system-level gaps and shortcomings.