Top back rows: John Haltiwanger, David Audretsch, Niklas Elert, Lars Persson, Roy Thurik. Middle row: Mark Sanders, Maria Minniti, Fredrik Sjöholm, Simon Parker. Front rows: Magnus Henreksen, Siri Terjesen, Mikael Stenkula, Pehr Johan Norbäck, Mirjam van Praag.
Attracting world-leading entrepreneurship researchers, the conference took place on Vaxholm, an Island in the Stockholm archipelago. The presentations covered four topics relating to entrepreneurship; human capital, politics, resilience, and markets.
“Magnus has had a tremendous impact on IFN. Today, IFN has an important role in Sweden’s policy debate, which I would say is greatly thanks to Magnus."
– Fredrik Sjöholm, IFN
Human Capital
Is "Childlike" Human Capital Important in the Entrepreneurship Equation?
"When I started preparing this presentation, I thought of Magnus. When I think of him, I see wisdom, cheerfulness, and some childlike sparkling. He always has a very different perspective on things."
– Mirjam van Praag, Vrije Universiteit Amsterdam
Mirjam van Praag related Magnus’ childlike side to an early idea of hers, exploring the role of childlikeness for entrepreneurs and leaders. She asks whether this childlike human capital is productive in the labor market. And if such human capital is valuable, what are we doing wrong in the school system? Can we develop childlike human capital? How? And what is the return to it? She continues:
“The focus in the literature thus far has been reason and rationality. I believe that to understand entrepreneurship in the early stages, we would benefit from an approach of Magnus’ playfulness.”
Educational Investment Alone will not Boost Entrepreneurship
David Audretsch argued that it takes more than educational investment and technology to boost entrepreneurship. Important factors could be culture, networks, leadership, and local identity. He demonstrated that an education investment will not promote entrepreneurship absent an entrepreneurial culture. To boost entrepreneurship, we would therefore need contextual policies tailored to local environments, not just educational investment.
"Magnus has this very unusual ability to make people listen, since he knows how to talk to both policy makers and academia. In that sense, he has really been a role model for me."
– David Audretsch, Indiana University
Underdogs Invest More to Surmount their Disadvantage
“Magnus and I have been working very closely the last fifteen years, and the main thing I’ve learned from him is to look for research questions in reality, and not in the journals. To answer real questions.”
– Lars Persson, IFN
Lars Persson presented work on the so-called underdog effect, which states that children born later in the year have a disadvantage compared to those born earlier and therefore put in extra effort to become the best. Using Swedish soccer data, he shows that players in the junior league are primarily born in January and February. However, it turns out most elite players are born in autumn, in support of the underdog hypothesis. The authors find the same pattern when replicating the analysis for board members and CEOs.
Some interesting discussions during the coffee breaks and lunch at the Waxholm Hotel.
Politics and Entrepreneurship
Political Institutional Change affects Local Entrepreneurship
Özge Öner, University of Cambridge
Özge Öner presented a paper investigating how a change in municipal government impacts entrepreneurship. Using Swedish municipality data over time, she finds a strong relationship between right-wing support, the overall entrepreneurship rate, and market churn.
Could the Median Voter Counteract Lobbying?
Incumbent firms lobbying against entrants are widely believed to retard entrepreneurship. Yet, the US has high levels of both lobbying and entrepreneurship. As an explanation, Simon Parker proposed a voting model where the median voter is assumed to vote for pro-entrepreneurial policies because entrepreneurship increases social returns. Moreover, because the median voter can foresee that lobbying will lessen policy effectiveness, they will push for an even more pro-entrepreneurial policy at the outset. Thus, the median voter’s preference for entrepreneurship neutralizes the negative effect of lobbying.
"This presentation is a tribute to Magnus, since the paper wouldn’t have come into being without him, and without this conference."
– Simon Parker, Ivey Business School
Entrepreneurship for Resilience
Organized Communities Important for Building Resilience to Disasters
"Community organizing happens when individuals in a place come together in a bottom-up fashion, in order to achieve something. These individuals have congruent but perhaps different incentives"
– Maria Minniti, Syracuse University
The 2018 Camp Fire in California destroyed the town of Paradise entirely, while nearby communities were unaffected. Maria Minniti asked herself why. Her research finds that communities in the US with many community initiatives and bottom-up collaborations are less damaged by wildfires. The reason might be that these communities have access to unique local knowledge, which helps in fire prevention and containment.
Entrepreneurship Important for Resilience to Financial Crisis
"Magnus has done piles and piles of valuable research on entrepreneurship, so it is easy to use his work as a starting point to motivate this paper of mine. In his research, he has shown that young growing firms create most jobs, that institutions indeed might help or hinder entrepreneurship, and that supporting policies cannot easily be engineered top-down.”
- Mark Sanders, Maastricht University
Mark Sanders evaluates the importance of entrepreneurship for European countries in response to the financial crisis of 2008. “The same traits, skills, and experience that make people successful entrepreneurs in stable times, may well prove essential in building more resilient economies,” he argues. “If that is the case, what promotes innovation in normal times is what promotes resilience in a crisis. That would revolutionize the way we prepare for shocks, and building a more entrepreneurial society becomes a win-win strategy.”
The sun is slowly setting over the Stockholm archipelago, while the participants celebrate with some champagne.
Markets and Entrepreneurs
Adolescent Tech Entrepreneurship
Founders’ experience with tech ecosystems in their adolescence seems to matter greatly for becoming an entrepreneur later in life. Siri Terjesen, using survey data from The US, presented a paper on the adolescent predictors of becoming an entrepreneur as an adult. She finds that parents’ and teachers’ support for tech education, tech-related club participation, and home learning resources are key predictors of later becoming an entrepreneur.
“I'm impressed by Magnus since he’s very brave and comes out in the policy debate, most recently concerning education.” Siri Terjesen, Florida Atlantic University, with a copy of Magnus' latest book “Dumbing Down; The Crisis of Quality and Equity in a Once-Great School System-and How to Reverse the Trend”.
Innovation in Quasi-Markets. The Case of Swedish Schools.
Niklas Elert presented some work he has done together with Magnus, covering possible reforms to improve the conditions for innovation in the Swedish school market. He argued that reforms improving the view of knowledge and grading systems would create healthy incentives for knowledge-enhancing innovation in the Swedish school system.
Reform suggestions: • Return to a classical, fact-based view on knowledge and emphasize the teachers’ responsibility to impart that knowledge. • Return to a grading system involving an absolute component, measuring the actual knowledge, and a relative component, which prevents the highest grading systems from deviating upwards.
– Niklas Elert, IFN.
Premature Death of an Early Joiner Has Long Run Negative Effects for the Start-up
John Haltiwanger, University of Maryland.
John Haltiwanger investigates the importance of employees who join a company early. He evaluates the effect of premature death of such early joiners on outcomes such as the firm’s employment and revenues. He finds that a premature death worsens both outcomes, an effect that persists for at least ten years. He argues this happens because early joiners embody a kind of organizational capital that is not easily replaceable.
Roy Thurik, Erasmus School of Economics, spoke warmly of Magnus: "Magnus has been very good with junior scholars, and generous with help and advice. Moreover, in order to make the institute more relevant, he brought people together, and made people come together even when he wasn't there himself."
Final Words
A somewhat overwhelmed Magnus ended the conference with some final words, thanking everyone for their kindness, exciting research, and two lovely conference days.
”My vision as head of IFN, was that we with our research would make Sweden and the world a better place. This turned out to be the best 15 years of my life"
– Magnus Henrekson, IFN.
He spoke about his time as head of IFN: “In early summer of 2005, I was offered the position as head of IFN. This was a very difficult choice for me; stay at a very prestigious position at the Swedish School of Economics, or give that up to become an entrepreneur myself. I did accept the position, and I started to change the culture without micromanaging any of the researchers. We had to create an environment where people could be congruent with our vision that what we do at IFN will make Sweden a better place – and also maybe make the world a better place.”
