1. Introduction
Entrepreneurship is considered one of the most significant economic driving force processes that boosts any nation’s economic growth, especially in the context of sustainability. The sustainability approaches are varied between environmental, social sustainability, economic sustainability, and human sustainability. The integration between sustainability and the economic and business sector is gaining significant concern nowadays [
1]. Commonly, economic sustainability seeks to preserve the capital intact, while business sustainability aims to use firm assets to maintain its sustainability. Therefore, this study focused on shedding light on economic sustainability from an entrepreneurship perspective. Entrepreneurship is defined as innovative, risk-taking, gap filling, and acquisitive business, while sustainability is a theme of efficiency, equality, and achieving economic viability parallel with sustaining the resources [
2]. Although entrepreneurship and sustainability seem to have a contradictory conceptual kernel, they still have an interrelated, close, and widely recognized relation. Entrepreneurship habitually is aware of sustaining its activities and standing as long as possible in a competitive business environment [
3]. Consequently, this is considered one of the main pillars and principles of successful entrepreneurship in the sustainability era.
By leading to positive spillovers in the national and regional economies through achieving economic expansion, providing job opportunities, creating new products, and fostering community well-being, entrepreneurship is essential for sustainable economic development [
4,
5,
6].
In recent decades, entrepreneurship has turned into an evolving area of research in academic work. In the entrepreneurship discipline, many academic terms appeared in the entrepreneurship literature. One of the most critical terms that attracted many researchers and scholars was the entrepreneurship ecosystem, also known as Entrepreneurial Ecosystem (EE) [
5,
6]. Entrepreneurship researchers consider the individual attitudes for entrepreneurs and the economic environment factors to be the main pillars that formed the entrepreneurship ecosystem [
7]. Therefore, the paper adopted the entrepreneurial ecosystem as an analytical lens for the Egyptian entrepreneurship profile, which combined individual and institutional aspects.
Accordingly, this study explores the Egyptian entrepreneurial ecosystem from the scope of individual and institutional pillars, aiming to answer the core research question in this paper: what are the principal strengths and weaknesses of the Egyptian entrepreneurial ecosystem? Answering this question contributes to enhancing our understanding of the Egyptian entrepreneurship ecosystem throughout its both aspects: individual and institutional. Accordingly, the Egyptian government can develop and design policies and action plans to promote entrepreneurship based on this analysis and understanding. Besides, this study contributes to expanding the research contributions from the empirical side on entrepreneurship in emerging countries, particularly in the Middle East.
This paper has four key aims. Firstly, use GEI methodology and data to evaluate the Egyptian entrepreneurial ecosystem. Secondly, analyze and assess the Egyptian entrepreneurial profile. Thirdly, identify the strengths and weaknesses of both the institutional and individual variables in the Egyptian entrepreneurial profile. Finally, present recommendations for policymakers.
This article is structured as follows. Firstly, this study presents a literature review of the entrepreneurship ecosystem. Secondly, this paper shows the current Egyptian economic development performance and entrepreneurship context. Thirdly, it presents a summary of GEI methodology and an explanation of the dataset. Fourthly, the paper analyzes the performance of the Egyptian entrepreneurship GEI score through its three sub-indices and pillars, followed by a comparison between the Egyptian GEI score and the score of the other participated countries in the dataset. Fifthly, the paper analyzes the performance of the Egyptian entrepreneurship GEI through the institutional and individual variables, followed by a comparison between the Egyptian GEI score and two other countries: Saudi Arabia and South Africa. Finally, it discusses the Egyptian entrepreneurship profile’s weaknesses and strengths by presenting its penalty-bottleneck performance, followed by suggested policies and recommendations that could improve Egyptian entrepreneurship’s performance.
2. Literature Review: Entrepreneurship Ecosystem
The entrepreneurship ecosystem has been defined through the OECD as “a set of interconnected entrepreneurial actors (both potential and existing), entrepreneurial organizations (e.g., firms, venture capitalists, business angels, banks), institutions (universities, public sector agencies, financial bodies), and entrepreneurial processes (e.g., the business birth rate, numbers of high growth firms, levels of “blockbuster entrepreneurship”, number of serial entrepreneurs, degree of sellout mentality within firms, and levels of entrepreneurial ambition) which formally and informally coalesce to connect, mediate and govern the performance within the local entrepreneurial environment” [
8] (p. 5). According to this definition, there are some significant terminologies that depicted the theme of entrepreneurship ecosystem, such as “blockbuster entrepreneurship” and “serial entrepreneurs”. Block-buster entrepreneurship refers to entrepreneurs who manage entrepreneurial companies successfully, exceptional and profitable, which makes them earn wealth and reinvest it in the entrepreneurship ecosystem as investors or mentors [
8]. For example, Starbucks, Dell, and Novo’s owners are considered pioneers in the entrepreneurship community (blockbusters). Another entrepreneurship ecosystem’s keyword is “serial entrepreneurs” which represents the passion version of traditional entrepreneurs. In other words, we can say that serial entrepreneurs are people who are extraordinarily innovative when it comes to generating fresh business ideas and then putting those ideas into action to start a new business [
9]. Elon Musk can be presented as a vivid example of a serial entrepreneur in our modern society. Furthermore, the entrepreneurship ecosystem (Isenberg Model) consists of six critical domains, with 12 sub-elements operating in an extraordinarily nuanced and individualistic technique [
8,
10] (
Figure 1). The first domain focused on enabling policies, and it had two main sub-elements: government and leadership. The government sub-element consists of institutional (e.g., investment and support), financial support (e.g., for R&D), regulatory framework incentives (e.g., tax benefits), research institutes, and venture-friendly legislation.
Meanwhile, the leadership sub-element consists of unequivocal support, social legitimacy, open door for advocates, entrepreneurship strategy, and urgency crisis and challenges [
11]. The second domain deals with venture-friendly markets for products structured on early customers through early adopters for proof of concept, expertise in productizing, reference customer, and first reviews. The third domain adopted human capital, which focused on labor through skilled and unskilled, serial entrepreneurs, later-generation family, general degrees (professional and academic), and specific entrepreneurship training. The availability of appropriate finance considers the fourth domain from Isenberg’s model view through micro-loans, angel investors, family, venture capital funds, private equity, and public capital markets. The fifth domain was a conducive culture dealing with societal norms through visible successes, wealth for funders, international reputation, innovation, creativity, experimentation, social status of entrepreneurs, and wealth creation. The last domain focuses on a range of institutional supports that appear in infrastructure, support professions, and non-governmental institutions. Where infrastructure representative in telecommunications, transportation, energy zones, incubators, co-working, and clusters. Meanwhile, support professions are representing legal, accounting, and technical experts. Non-governmental institutions contain entrepreneurship promotion in non-profits, business plan contests, entrepreneur-friendly associations [
5].
Following that, many researchers defined the entrepreneurship ecosystem but there was a difference in its definition, leading to direct and indirect different entrepreneurship measurements and indexes. These measures have differed literature between the personality measures for entrepreneurs and attitude measures, output measures that focus on activity-related density measures, framework measures that discuss institutional context measures, and the ecosystem’s measures [
12]. Although entrepreneurship’s role in economic development is becoming more transparent, entrepreneurship’s developmental policies’ understanding persists insufficient. Economists have attributed this lower understanding due to the contradiction between the definition and the measurements of entrepreneurship [
13]. Consequently, there is a significant gap between the quantity indices for entrepreneurship activities and quality indices. Therefore, it can be said that the entrepreneurship ecosystem concept or definition is “not one size fits all”, especially when this ecosystem is connected with the location assets [
14]. Therefore, a set of indexes have been developed to measure entrepreneurial competency. Although these indexes have common components to measure entrepreneurship, each index has tailor-made policy recommendations. Additionally, these indexes went through two stages of development, as they were initially concerned with measuring the entrepreneurs by identifying the ability of individuals to become future entrepreneurs. Subsequently, these indexes focused on studying and analyzing the entrepreneurship process itself. Therefore, entrepreneurship indexes are considered useful analytical tools for both the entrepreneurs and the entrepreneurship ecosystems themselves.
One of these indexes is the Kauffman Index of Entrepreneurial Activity (KIEA), which developed in 1996 [
15]. The primary idea of this index was to measure a new business creation in the USA from the perspective of the demographic and geographical dimensions of entrepreneurial activity. In other words, this index presents the outputs achieved in the various American states in terms of rates and trends [
15]. Another entrepreneurship index is the Santander enterprise index (SEI), created by the global entrepreneurship and development institute (GEDI) [
16]. It is an annual index ranking of the UK’s regional entrepreneurial ecosystems. It is considered one of the first indexes that dealt with the concept of entrepreneurial ecosystems. Additionally, SEI confirmed the importance of the resources, local economic infrastructure, and societal attitudes toward entrepreneurship as crucial factors for entrepreneurs’ success [
16]. The Legatum prosperity index (LPI) which Legatum Institute established considered a third example of the entrepreneurship indexes [
17]. According to the 2020 report, LPI contains 12 pillars of prosperity, including entrepreneurship, to reveal the ranking of 167 countries from the view of most and least prosperous performance of country success [
17]. Lastly, the Ivey entrepreneurs index, which developed by Ivey Business School at Western University in Canada [
18]. This index aims to recognize entrepreneurs’ ability and optimism level for Canada’s entrepreneurs through effective consults related to operational, financial, and business challenges.
Furthermore, some other measures are dealing with different aspects of the entrepreneurship ecosystem such as the global entrepreneurship monitor (GEM) [
19], global entrepreneurship index (GEI) [
20], ease of doing business (EDB) [
21], national entrepreneurship context index (NECI) [
22], regional entrepreneurship and development index (REDI) [
23], and global competitiveness index (GCI) [
24] are the well-known main measurements of the entrepreneurial ecosystem. Every measure has its own approach to describe and analyze the entrepreneurial ecosystem. For example, the global entrepreneurship monitor (GEM) is a single-level measure that provides entrepreneurship indicators which are mainly measured by self-employment and total early-stage activity (TEA) at the country’s level [
25]. GEM’s primary deficiency is the combination of low quality and highly masterly business types “gazelles” [
26]. “Gazelles” as a term appeared in the 1980s by David Birch and referred to the young, fast-growing, rapidly rising sales, and rapidly expanding workforce firms [
27,
28,
29]. David Birch defined this term in his book for the first time as "one that doubles its sales every four years" [
30]. What distinguishes these types of companies is their ability to enhance economies by creating enormous job opportunities.
Additionally, other recently common characteristics of gazelles were that these types of companies had been high-tech or internet firms, which looked up to regular expansion for capital turnover and employment opportunities [
28]. Another measure is the ease of doing business index (EDB), which measures the regulatory context of the business environment [
21]. Therefore, it partially deals with the quality of the output, lacking a holistic view of the entrepreneurial ecosystem.
Although the diversity of the entrepreneurial ecosystem indexes and measures, most of them focused on discussing the individual and contextual entrepreneurship levels only [
13]. Furthermore, these indexes only measure the quantity output, not containing the quality output of individual entrepreneurs’ activities and calculating them as a representative measure for country-level [
12,
31]. The national measuring system needs a sound approach from the empirical and conceptual aspects to achieve its goals [
12]. It should also deal with these national entrepreneurship systems as an interaction between entrepreneurial ability, attitudes, and entrepreneurial aspirations [
12]. In this context, most measures of the entrepreneurial ecosystem should include measurements of the varied system-level framework conditions with individual-level measures to provide proper context. Moreover, the indexes should allow interaction between the system components through the system dynamics.
For these considerations, the global entrepreneurship index (GEI) is presented as a comprehensive and systemic approach to measuring the entrepreneurship ecosystem within the country [
12]. For these reasons, this paper focuses on studying and analyzing the global entrepreneurship index (GEI) as the primary measure to identify the entrepreneurship ecosystem performance in Egypt. The global entrepreneurship index (GEI) opted in this study for three main reasons: (i) it provides an exhaustive measurement of country-level entrepreneurial ecosystems, (ii) GEI combines institutional and individual factors in a single framework, reflecting the factors influencing the Egyptian entrepreneurship ecosystem development, and (iii) the regularity of Egypt’s participation in GEI through the selected period for analysis.
4. Results and Discussion
4.1. Egyptian Entrepreneurial Performance Based on the GEI: Trends of Sub-Indexes and Pillars
Based on Egypt’s participation in GEI data through the period 2008–2017,
Figure 4 shows the development of GEI scores over time. The lowest GEI score was in 2012 due to the social and economic issues that accompanied the Egyptian revolution of 2011. This revolution began in December 2011, when mass demonstrations broke out all over Egypt protesting against poverty, government corruption, unemployment, and low economic levels in the country. Subsequently, Egypt went through various drastic changes that affected all the economic sectors and processes. After this period, the Egyptian GEI scores expanded to increase social and economic opportunities [
38]. Therefore, the tendency has increased after the revolution period by a growth of 4.6% between 2012 and 2016. This reflects the improvement of GDP annual growth from 2.22% in 2012 to 4.34% in 2016; followed by a high fluctuation from 2016 to 2017, with a 4.18% decline in GDP growth.
Aspiration sub-index (ASP) records progress over time, with an annual average increasing to 1.15% from 2006 to 2017, and hit the peak in 2015/2017. This entrepreneurial aspiration sub-index seems to have a substantial aspect in the Egyptian entrepreneurship ecosystem. This might be due to the significant progress in the Egyptian economy’s annual GDP growth, which increased from 1.675% in 2011 to 5.314% in 2018 [
35]. Regarding the attitudes sub-index (ATT) records, the annual average score retreated by 2.36% from 2006 to 2017. Accordingly, the entrepreneurial attitudes sub-index seems to be a weak aspect of the Egyptian entrepreneurship ecosystem.
The abilities sub-index (ABT) recorded a retreat of 2.36% from 2006 to 2017, with a slight improvement from 2014 to 2017 and achieved its highest score in 2017. The entrepreneurial ability sub-index seems a weak aspect, with a slight improvement in the last years from 2014. Based on the doing business project, the startup procedures to register a business for Egypt stayed flat curve from 2008 to 2017 without any improvements, but decreasing by 5% till 2019. A closer analysis reveals that the overall decline in the Egyptian GEI index value was due to the slight fall in the attitudes and the abilities sub-indexes. Overall, this drop remains unclear from 2012 to 2016, though Arab spring events that influenced Egypt’s economic growth and affected the entrepreneurial ecosystem in general. The Arab spring events affected the economic systems in some of the MENA region countries, including Egypt. One of the challenges that led to the uprisings is the exclusion of the economic opportunities from most people to the power class, besides some social and political challenges [
49]. These obstacles and challenges undermined worked Egyptian entrepreneurial ecosystem performance.
To emit more light on explaining these tendencies, we next examine the Egyptian entrepreneurial sub-indices pillars’ analysis.
Figure 5 shows the trends for the constituent pillars of the attitudes sub-index. We can see that the movement from 2012 to 2017 was at least mildly declining for all pillars, excluding the startup skills and culture support pillars. There was a significant drop in the risk acceptance and networking pillars in 2012. The startup skill pillar exhibits a light increasing trend from 2012 to 2017, especially in 2009–2012.
Furthermore, the culture support pillar exhibits an increasing trend from 2009 to 2015, with a slight decline through the 2015–2017 period. Egyptian entrepreneurial abilities pillars revealed different trends (see
Figure 6). In 2009, there was a vivid rise in technology absorption, competition, and opportunity startup pillars, possibly due to those more people being in self-employment in post-revolution 2011. Interestingly, the human capital pillar shows a u-curve pattern that bottoms out in 2012. This trend could be explained through the firms’ target of reducing job opportunities to mitigate the effects of the economic recession after the Egyptian revolution in 2011.
Figure 7 shows the trends for the constituent pillars of the aspirations sub-index. It can be seen that the trend from 2006–2017 increased for all pillars, excluding the internationalization pillar. However, there was a sharp drop from 2009 in the internationalization pillar, followed by slight improvements in 2014. Furthermore, the process innovation and product innovation pillars exhibit a remarkable mounting. Although the trend is somewhat less clear for the high growth pillar, where scored increasing trend to 2014 with a retreat from 2015–2017, this decline could be explained by the decrease in the Egyptian GDP growth annual rate from 4.4% to 4.1%.
4.2. The Analysis of Egyptian Entrepreneurial Profile
This part analyzes the 14 pillars, which are the component of the GEI sub-indices. Based on GEI’s dataset from 2006–2017, data from 73 countries were available. Therefore, the following analysis has compared the Egyptian profile to 33% and 67% of the engaged countries. The aim of this analysis illustrates the Egyptian condition of GEI pillars comparing to other participated countries. The previous study of GEI sub-indices has cleared that the Egyptian term has strong points in entrepreneurial aspirations and abilities sub-indices.
The economic issues post-revolution (2011) have influenced the unemployment rate, which in turn decreases entrepreneurial attitude. According to the entrepreneurial attitude pillars, risk acceptance, and networking pillars are the weakest aspects with a score below the 33% countries’ bottom, as shown in
Figure 8. Among the three sub-indices, entrepreneurial aspiration contributes best to the Egyptian GEI score, which indicates that the country has a moderately qualitative and distinguishing nature of entrepreneurial activities. Compared to GEI countries over the period, entrepreneurial aspiration places Egypt approximately in a promising position at 44th rank, while entrepreneurial abilities set it in 58th and entrepreneurial attitude puts it in the weakest rank 71st. As shown in
Figure 8, all Egyptian entrepreneurial pillars are below the top 67 percentile; some pillars are considered bright pillars from the Egyptian context such as risk capital, high growth, process innovation, and product innovation. These pillars were recorded between scores ranging from the lowest (33%) and the highest (66%). In contrast, nine entrepreneurial pillars have below the lowest 33% of the participating countries; besides, all entrepreneurial attitudes pillars, further opportunity startup, technology absorption, and competition from the entrepreneurial ability pillars.
In sum, the Egyptian entrepreneurship profile is still below performance levels, where around two-thirds of the total 14 entrepreneurial pillars below the lowest 33 percentile from the participated countries in the dataset. Meanwhile, there are five pillars within the range between the most economical and the highest percentile, which must be maintained and improved to reach the most top score percentile.
4.3. The Analysis of Entrepreneurial Profiles-Institutional vs. Individual Variables
Based on an analysis of the Egyptian situation, more than 70% of institutional variables have a dramatic retreat and scored less than the average for the 25% least of the participated countries, especially the institutional variables for entrepreneurial attitudes and abilities sub-indices. The weak institutional variables were freedom, education, country risk, connectivity, and corruption, as shown in
Table 3. Indeed, the country’s freedom degree influences the entrepreneurship ecosystem, which retreats from 2009 to 2017 by the total score for economic freedom 5.05 with a late ranking 155 of 162 participated countries [
54].
The entrepreneurial abilities variables have shown fewer scores, and these weak variables were governance, technology absorption, labor market, and competitiveness and regulation. As mentioned above in the overview economic performance section, the competitiveness index for Egypt improved, but other aspects still need improvement, such as governance. On the other hand, the variables of entrepreneurial aspirations have shown progress compared to the 2nd 25% of the participated countries and 3rd 25%, excluding the economic complexity depth of capital variable, which has retreated at scored 0.40. Overall view, the institutional variables for Egyptian condition have scored 0.38, which was less than the average for 25% of the participating countries.
In contrast, the individual variables have shown strong points and scored 0.62 overall, higher than the 3rd 25% of participated countries. Examples of these variables are: career status, educational level, and new technology which are considered strength aspects for the Egyptian entrepreneurial index. These variables have appeared as the highest score compared to the 25% best country. Besides, some institutional variables have achieved progress, compared to the 3rd 25% of the countries such as opportunity recognition, risk perception, and gazelle.
Nevertheless, the institutional variables have some declining variables and are considered disadvantage points in the Egyptian entrepreneurship ecosystem. In addition, the entrepreneurs and opportunity motivation variables have shown retreat in their scores. Finally, the analysis of the institutional and individual variables has demonstrated that the Egyptian entrepreneurship index has weak institutional variables with some progress and strength points in individual variables.
4.4. Comparison Analysis for Egyptian Context
This part discusses Egypt’s GEI Profile compared to other two countries: Saudi Arabia and South Africa. The choice of these two countries was based on criteria such as being in the same spatial and geographic region (the Middle East and Africa), population size, a close GEI score with the Egyptian condition, and the variety of economic levels in these two countries. In addition to the previous criteria, it can be said that the entrepreneurship practices in Saudi Arabia and South Africa were one of the main reasons for choosing these two countries particularly. For example, in Saudi Arabia, there are many government initiatives carried out to enhance the KSA entrepreneurship ecosystem. In 2015, for instance, there was a significant shift in the government policies where the Saudi SME authority developed a board coordination strategy between different stakeholders [
55]. This strategy aimed to promote the networking pillar in GEI by identifying the problems and challenges faced by the entrepreneurs and overcome it by providing new laws and regulations. Moving to South Africa, with its high unemployment rate and low economic growth, the national government was focusing on pushing the entrepreneurship ecosystem by improving the abilities and skills of the entrepreneurs [
56,
57]. By conducting reconstruction and development program (RDP), which started in 1994, the South Africa government indicated that entrepreneurship education is a core pillar to improve TEA in GEI measure [
58].
This comparison aims to show the Egyptian entrepreneurial pillars from other countries’ perspective and identify its strengths and weaknesses. The web chart presented in
Figure 9 shows that Saudi Arabia’s profile is more durable for the attitude pillar than the Egyptian and South African ones. Regarding the aspirations pillar, Egypt tended to have better aspiration sub-index scores than Saudi Arabia, with South Africa’s superiority in this pillar.
The biggest bottleneck for Egyptian performance appears to be in risk acceptance and networking pillars. Egypt also lagged behind the two other countries in internationalization, opportunity startup, and culture support. Egypt’s relative strength is found in human capital and relative strength compared to South Africa in the risk capital pilar. So, aspirations sub-index pillars have shown some advantages for the Egyptian condition compared to the other two countries. According to entrepreneurial abilities, competition and product innovation pillars have achieved progress compared to Saudi Arabia, but still less than South Africa that is making remarkable progress in these pillars. According to the technology absorption pillar, there is a vivid retreat in the three countries with a slight superiority in the Egyptian index score compared to the two other countries. Finally, based on this comparative analysis for these countries, Egypt has advantages in entrepreneurial aspirations pillars, some vital points at entrepreneurial abilities, and disadvantages and severe retreats in entrepreneurial attitudes pillars.
4.5. Penalizing for Bottleneck Method Analysis (PBM)
As mentioned previously the institutional and individual variables are considered to be the main structure of the Egyptian entrepreneurial context. Z.J. Ács et al. (2014) argued that the valuable contextualization analysis provides a balance between different components [
12]. These components interact with themselves to produce the system performance. At the same time, most of the used variables are not systemic, which badly effects the interaction of the GEI components and resulting an ignore of the system dynamics. Besides that, entrepreneurship is defined as the interaction between entrepreneurial abilities, attitudes, and aspirations across various levels of development [
31]. Therefore, the value of each pillar is penalized after equalizing the averages of all pillars through the weakest performance pillar in the Egyptian context.
As defined in the literature, the bottleneck is the weakest point or bound constraint in the national entrepreneurial dynamic. It is represented mathematically by the smallest value within a set of normalized pillars of the index [
12,
13]. The GEI creators have used the method through optimum configurations, which are defined as not too different levels of the entrepreneurship variables in a particular country. The higher the variance of various entrepreneurial features in one specific country, the more problematic it is to be able to exploit the advantage of the high entrepreneurial feature. Therefore, they dealt with average adjustments through pillar averages are equalized to consider the difficulty (marginal effect) of reaching a particular pillar value. The GEI authors argued that this method is beneficial for every country’s policy suggestions [
53].
The concept of bottlenecks of entrepreneurial Egyptian context represents direct results of pillars components interactions. The theories related to the concepts of the weakest point and constraints in the system performance argued that the improvement for the system could be achieved through working on strengthening the weakest pillar for the system [
12]. This means that if risk acceptance and networking constitute a bottleneck for the Egyptian entrepreneurial context, more efforts must be made in these pillars to reach the desired position.
For example, risk acceptance and networking within the entrepreneurial attitude sub-index recorded the weakest scores among all Egyptian entrepreneurial pillars with 0.07 and 0.08, respectively. Hence, based on the data analysis for GEI 2006–2017 to improve the Egyptian entrepreneurial index (see
Table 4), increasing the risk acceptance and networking pillars is necessary to increase the total new effort for these pillars by 50% each. Consequently, the overall Egyptian GEI score will increase by 2%. Making more effort in entrepreneurial attitudes sub-index by 4%, the GEI target’s influence score increased by 3% to achieve a 27.8 rating. This new effort for the entrepreneurial attitude sub-index increases entrepreneurial abilities and aspiration sub-indices by 1% and 2%, respectively (see
Table 5).
On the contrary, there are bright aspects or strength pillars from the Egyptian context, which should be maintained and improved to reach the highest percentile. These pillars were risk capital and process innovation, and human capital.
5. Conclusions and Policy Suggestions
Based on the analysis of GEI and its sub-indexes, pillars, and institutional and individual variables, it has become clear for the Egyptian policymakers that they should be making more effort in the entrepreneurial attitudes sub-index, especially risk acceptance and networking pillars. The risk acceptance pillar is influenced by the fear of the population’s failure to start a business and the various risk condition. The fear of failure among people who perceive Egypt’s entrepreneurial opportunities is not high (30.2%) compared to the global average (41.3%) in 2017 [
25]. Decrement from previous years between 33% in 2012 to 36% in 2016, the fear of failure is not the main hurdle for entrepreneurs in Egypt [
38]. Therefore, to improve the risk acceptance pillar in the Egyptian case, the policy should work on the business risk condition, which deals with country risk and institutional variables to improve the risk acceptance pillar.
According to the networking pillar definition (see
Appendix A;
Table A1), there are two main aspects of networking: the ability of entrepreneurs to access and mobilize opportunities and resources, and the possible use of the internet [
59]. Consequently, the networking pillar is influenced by the connection between various entrepreneurs, where internet connection plays a vital role. With the fact that the number of internet users grew by 33.4% from 2006 to 2017 based on the World Bank data, creating a solid internet connection between the Egyptian entrepreneurs can improve the Egyptian entrepreneurial attitude and push the national GEI score. It is also worth mentioning that this recommendation related to the organization between entrepreneurs is a responsibility of the micro, small, and medium enterprises development agency (MSMEDA) in Egypt.
The study has concluded that the Egyptian entrepreneurial profile analysis has shown that the entrepreneurial aspirations pillar appeared to be a vital aspect of the Egyptian entrepreneurship ecosystem. In contrast, entrepreneurial abilities pillars are considered weak points in the Egyptian profile of entrepreneurship. Furthermore, Egyptian entrepreneurial attitudes have been considered the main disadvantage of forming the Egyptian entrepreneurship index. The risk acceptance and networking pillars have shown the weakest aspect of the Egyptian entrepreneurial profile. Therefore, the bottleneck analysis demonstrated that increased effort by 50% for each of these pillars would improve the Egyptian entrepreneurial profile situation by 3%. Lastly, the analysis of institutional and individual variables has shown that the Egyptian entrepreneurship index has weak institutional variables with some progress and strong points in individual variables.
Additionally, comparing these study findings with the previous studies revealed that improving the Egyptian entrepreneurial ecosystem needs more funding facilitation efforts, supporting venture capital, encouraging venture capital, and encouraging private funds to invest in innovative enterprises [
44,
60]. These previous findings refer to the lack of entrepreneurial abilities in the Egyptian context. For example, Mansour et al., in their study in 2018 mentioned the need for an empirical approach to assessing the Egyptian entrepreneurship ecosystem [
44]. Besides, this study highlighted the importance of building an infrastructure of innovation in the Egyptian entrepreneurship ecosystem, and enhancing technical and managerial education. Furthermore, Mansour et al. (2018) study’s results refer that the entrepreneurial attitudes aspect needs more improvements [
44], which enhancing the current study findings.
In summary, this study made some noteworthy academic contributions to the entrepreneurship scientific area. Firstly, this study addressed the possibility of applying or transferring its results to other countries or geographical areas that have the same economic situation. In other words, understanding contextual factors that influence outcomes enhances the transferability of solutions or approaches to other programs, case studies or issues. Here, the study focused on countries with emerging economies or countries that have recently gone through the same economic and social changes that Egypt has undergone, such as countries in which the Arab Spring revolutions took place. For example, through this research paper, the weakness of the educational dimension was indicated as the primary variable that significantly affects the entrepreneurship ecosystem, and this dimension is an apparent weakness faced by most countries with emerging economies. Secondly, this study highlighted the importance of the institutional dimension as one of the essential dimensions that should be studied when dealing with or assessing the entrepreneurship ecosystem. This may guide other academic studies that are not related to a specific geographic area or those that focused on the theoretical perspective of the entrepreneurship ecosystem. Thirdly, this research confirmed that the academic background for studying the entrepreneurship ecosystem in Egypt is still new and needs more scientific research. Thus, this study provides a good presentation of the performance of entrepreneurship from the perspective of strengths and weaknesses. Consequently, this opens the way for more future research ideas related to urgent issues and gives more robust results when studying the entrepreneurship ecosystem, whatever in Egypt or any countries with a similar economic situation. Finally, this study contributes to expanding the research contributions from the empirical side on entrepreneurship in emerging countries, particularly in the Middle East.