Startup Estonia: A foreign founder’s perspective
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School of Business |
Master's thesis
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Authors
Date
2019
Department
Major/Subject
Mcode
Degree programme
Global Management
Language
en
Pages
108 + 2
Series
Abstract
The increasing popularity of startup visas worldwide provides startup founders with a location choice. By making a location choice, founders hope to get access to better entrepreneurial ecosystems, international financing opportunities and global networks. While the majority of location choice research is in the scope of MNEs, in this thesis a theoretical framework for the foreign founder’s location choice is compiled. This framework combines location choice factors from the OLI paradigm, transaction cost economics and the institutional environment and embeds them in the entrepreneurship process for a foreign founder. This study applies qualitative research methods and collects data through in-depth interviews with eight startup founders from Startup Estonia, which initiated startup visas in 2017. In addition, data is collected from Startup Estonia’s programme manager and from public sources, such as from the founder’s LinkedIn and startup homepages as well as from global entrepreneurship reports (GEM, GEDI, World Bank). The interview data is analysed using thematic analysis, exploring the location choice factors from the theoretical framework, after which it is triangulated using external data sources (webpages, entrepreneurship reports). The data analysis provides eight themes that emerged as relevant when foreign founders made the location choice of Estonia. This thesis contributes two main findings. First, the embedding of an iterative location choice into the entrepreneurship process of a foreign founder. The founder is willing to make new location choices as he progresses on the entrepreneurship process, reflecting a more flexible approach towards location choice than what is expected from the literature review. Second, awareness about the impact of the digital ecosystem on the perceived institutional distance of locating. Locating to a new environment is made easier for founders, as the digital ecosystem and digital services reduce the adjustment costs experienced in the new location. Policy-wise, this study provides a better understanding of Estonia’s locational advantages that should be highlighted when trying to attract foreign founders to Estonia. These are Estonia’s digital identity and digital ecosystem as well as the unrestricted talent hiring worldwide. Suggestions for startup visa programme improvement are supporting outsourcing possibilities, improving non-digital bureaucracy, while also providing better access to financial investment opportunities.Description
Thesis advisor
Kähäri, PerttuKeywords
location choice, global startup, INV, entrepreneurship process, digital ecosystem, startup visa, Startup Estonia