Championing the role of institutional entrepreneurialism, talent management, and partnerships for levelling up

  • Living standards and Levelling up

Professor Yipeng Liu, University of Reading 

Here Professor Yipeng Liu explores the benefits of government acting as an institutional entrepreneur, effective talent management, and establishing strong partnerships for sustainable regional development and the role such approaches could play in levelling up.

We are living in uncertain, disruptive, and challenging times. Levelling up to achieve a more balanced regional development, and economic and social co-prosperity has increasingly been at the top of the governmental agenda in decision making and launching policy initiatives around the world in both emerging and developed economies. I argue that three key factors can play an important role for Britain’s levelling up agenda, namely:

(1) government as institutional entrepreneur,

(2) the impetus of entrepreneurial talent and global talent mobility, and

(3) the importance of local and global partnerships for sustainable regional development.

Government is strategically important for designing and implementing the levelling up agenda. As institutional entrepreneur government can initiate and sustain institutional change. Not only central government but local government should play an active role in designing institutions and arranging the framework conditions that are conducive to levelling up and balanced development. Central government is deemed to set up the overall policy framework that signals the strategic direction and developmental trajectory for the whole nation. Yet, regional government possesses the leeway and power to act and adapt by considering the regional characteristics, historical conditions, and local legacy.

For instance, China’s Five-Year-Plan is a national-level policy guidance that embeds institutional endurance and novelty suited to the new policy environment and global contexts in shaping and influencing China’s development for every five years. In 2021 China’s 14th Five-Year-Plan identified several strategic areas, such as environmental protection and net-zero economy, highlighting its urgency to tackle economic and societal challenge. Yet, renewable energy, for instance the solar photovoltaic (PV) industry, has been pushed by Chinese local government over the last 20 years, especially Jiangsu province, and Wuxi city. But why and how can a second-tier city, like Wuxi, become the cradle for China’s solar PV industry? This requires the proactive engagement of local government as institutional entrepreneur to seek and grab the opportunity early on and act upon it with the affordable appetite for risk. Especially, local government needs an entrepreneurial mindset alongside the experimental and trial-and-error approach in piloting institutional change and safeguards against potential setbacks. Notably, Wuxi produced the first privately-owned Chinese solar PV company’s overseas IPO (Initial Public Offering) at the New York Stock Exchange (NYSE) in 2005 with the signalling effect to lure talented entrepreneurs and alike to flock to this region. Infused by the solar PV industry’s entrepreneurial activity, Wuxi has transformed itself from a typical second-tier city occupied by traditional industry to an economy contributed by renewable energy with significantly enhanced regional productivity.

Both the Global North (e.g., the UK Office for Talent, launched in 2020) and Global South (e.g., China’s Talent Strategy, Africa Union 2063) are engaged in fierce competition to attract and cultivate the best talent as they seek to gain the upper hand in boosting innovation and promoting economic recovery and growth, and entrepreneurship in the post COVID-19 world. Global entrepreneurial talent is of significant value for transforming organisations, developing industries and innovation, rebuilding our communities and societies, and recovering our environment. For instance, global entrepreneurial talent plays a critical role in fighting against the global health crisis COVID-19, ranging from scientists leading vaccine development (e.g. BioNTech) to high-growth ventures delivering innovative solutions (e.g. digital economy). Furthermore, entrepreneurial talent can serve as role models for aspiring entrepreneurs to learn skills and to build competencies, and there is the spill-over effect on local entrepreneurship and innovation ecosystems. Importantly, talent is driving the Green agenda and solutions to achieving net zero emission, which is arguably seen as the biggest challenge facing humanity.

In essence, entrepreneurial talent is the core ingredient in building regional entrepreneurship and innovation ecosystem and levelling-up. Talent may be cultivated when capable and competent organisations and institutions (such as universities or multinational enterprises) are present. Alternatively, talent can be attracted from outside the focal region beyond the geographical boundary. In the case of China, two second-tier cities (i.e., Suzhou and Wuxi) have undergone two distinctive pathways in supplying talent while building regional entrepreneurship and innovation ecosystems. Suzhou took the conventional approach in setting up new universities or new branches of established domestic and overseas universities, with the notable establishment of Xi’an Jiaotong Liverpool University in 2006, a joint venture between Liverpool University in the UK and Xi’an Jiaotong University in China. By contrast, Wuxi decided to attract overseas entrepreneurial talent to this region through attractive talent policy via active governmental intervention and institutional design, such as start-up capital, free of charge workplace and accommodation for the initial few years to reduce the risk exposure for entrepreneurs. In turn, the entrepreneurial talent community may act as a substitute for a university when the traditional approach of building universities takes a much longer time. Attracting talent can happen in a rather quicker fashion, because obviously talent is mobile and less bound to locality.

Finally, partnership is at the core of the levelling-up agenda and developing talent by engaging with institutions, business communities, entrepreneurial hubs, and policymakers both locally, nationally, and globally. Partnership can contribute to national and regional development by leveraging global high-growth entrepreneurs and their spill-over effect on regional entrepreneurship and innovation ecosystems. Individual regional economic development plans can define the regional characteristics, such as the differences between North East (e.g. Newcastle) and South of England (e.g. Thames Valley). For instance, global partnership via the business incubation platforms in Newcastle with the unique linkage to China opens the door for British entrepreneurs to match their products and applications with the potential Chinese market and consumers. Local partnerships, through the engagement and interplay between university and business communities, can profit the regional entrepreneurship and innovation ecosystem and ignite dynamic regional development.

For instance, the Thames Valley Berkshire, with the city of Reading at its centre, is the UK’s most productive sub-region and one of the most entrepreneurial regions. According to the PwC–Demos Good Growth for Cities Report 2016, Reading was the leading entrepreneurial city in the UK, largely because it had the largest cluster of fast-growing digital businesses outside London. The Financial Times recently ranked Reading as one of the top European cities and regions of the future, especially for innovation and entrepreneurship. An illustrative example of local partnership is the business angel networks connecting investors, university graduates and alumnus to leverage these regional advantages.

To summarise, the lessons and empirical evidence gathered in China and the UK regarding regional entrepreneurship and innovation may shed some revealing lights on the UK’s levelling up agenda. The three key ingredients to deliver sustainable regional development and levelling up are: proactive role of (local) government, entrepreneurial talent and global talent mobility, and the importance of local, national, and global partnerships.

Photo credit: Marvin Meyer on Unsplash


About the author

Professor Yipeng Liu FAcSS is Professor in Management and Organisation Studies and Founding Director of the Research Centre for China Management and Global Business at Henley Business School, University of Reading. His research interests centre on entrepreneurship and innovation, global talent management, business sustainability, and emerging markets. His recent books are Research Handbook of International Talent Management (2019), and Innovation in Global Entrepreneurship Education (with Heidi Neck, 2021).