Entrepreneurial Ecosystems Best Practices and Lessons amongst SMEs in BRICS Member Countries: A Systematic Literature Review

Abstract

The Small and Medium Enterprise (SME) sector is the backbone of the economy in various countries, and several challenges have hindered its growth. The sharp decline of participants in the SME sector across BRICS countries indicates the difficulties besetting the industry. This study explores the entrepreneurial ecosystems within BRICS nations, emphasizing that regulatory frameworks, policies, and legislation are pivotal factors contributing to the stagnation and decline of SMEs, especially in developing contexts. While governments aim to stimulate growth for the SME sector, on one end, the very SMEs are suffocating with compliance issues, labor laws, tax-related matters, and municipal bylaws, among others. This paper presents the main findings from qualitative research mapping the BRICS entrepreneurial ecosystem (EE). The analysis is underpinned by the six elements of EE developed by Daniel Isenberg: the regulatory framework, market conditions, access to finance, policy, Human capital, and an enabling culture. The study gathered qualitative data from secondary sources and interrogated existing policies on the above-mentioned determinants. Publications from Scopus, Web of Science, OECD reports, and government websites were used to source information using keyword searches. A notable decline in SME participation across BRICS countries underscores the difficulties faced. Barlow and Panton identify regulatory compliance burdens as a primary obstacle for SMEs, leading to higher operational costs and reduced competitiveness. Similarly, the World Bank's "Doing Business" report highlights that complex tax regulations and labor laws disproportionately affect smaller enterprises, often stifling their growth potential. This paper presents findings derived from a qualitative research mapping of the BRICS entrepreneurial ecosystem (EE), Grounded in Daniel Isenberg’s entrepreneurial ecosystem, this paper based its findings on qualitative data obtained from BRICS countries. Using targeted keyword searches, data was gathered from secondary sources, including Scopus, Web of Science, OECD reports, and government websites. The analysis reveals that while governments aim to stimulate SME growth, many inadvertently impose compliance issues that suffocate these enterprises. The study recommends that governments review restrictive regulations and implement initiatives to enhance SME performance, ultimately contributing to broader economic growth. By addressing these regulatory challenges, a more vibrant and resilient SME sector can emerge, capable of driving innovation and job creation.