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Purpose

This study aims to examine how government agencies in Bangladesh collaborate to support startups.

Design/methodology/approach

This study used a modified exploratory sequential mixed-methods approach, which was anchored in a theoretical framework and integrated established theories with surveys, interviews and collaboration mapping, to examine how government agencies coordinate and share information to support startups.

Findings

This research identified several institutional and cultural factors that shape collaboration among government agencies in Bangladesh’s startup ecosystem. Hierarchical communication structures, collectivist organizational norms, fragmented institutional mandates and limited startup literacy among policymakers hinder effective information sharing and inter-agency coordination. The findings also highlight the absence of key collaboration mechanisms, including horizontal collaboration frameworks and a shared understanding of startup ecosystem dynamics, which weaken the effectiveness of startup-related policies. Strengthening inter-agency coordination and enhancing policymakers’ understanding of startups emerged as crucial steps to improve government support for entrepreneurship.

Research limitations/implications

This study involved 15 participants. The sample size was determined based on the influence of a few key stakeholders shaping the early-stage startup ecosystem, especially those from the public sector.

Originality/value

This study adds to the growing body of research on the startup ecosystem in Bangladesh and offers relevant insights for policymakers in emerging economies aiming to support startups. Additionally, it fills a gap in the literature by presenting broad perspectives of stakeholders in the startup ecosystem and connecting them to the prevailing organizational culture.

Entrepreneurship has emerged as a powerful catalyst for economic transformation and sustainable development, particularly in emerging markets (Al-Thani, 2023). Countries such as Malaysia, Thailand, Vietnam and Indonesia each boast a vibrant startup scene. The government of Bangladesh has recognized the importance of nurturing the startup ecosystem and implemented various initiatives to support startups. One noteworthy initiative is the establishment of Startup Bangladesh Ltd (SBL), a government-funded venture capital (VC) firm.

Entrepreneurship and economic growth depend on supportive government policies (Onileowo, 2024). A study by the Centre for Economic Policy Research (CEPR) found that bureaucracies play a significant role in a country’s economic development and showed that all high-income countries had built effective bureaucracies (CEPR, 2021). Furthermore, a case study exploring the culture of Singapore’s Economic Development Board (EDB) highlighted sectoral collaboration as a key cultural paradigm contributing to the organization’s remarkable success (Schein, 1996). These findings underscore the importance of a highly efficient and collaborative bureaucracy in fostering development in Bangladesh’s emerging economy.

Although Doblinger et al. (2019) have explored government partnerships with startups and the private sector, there has been little focus on collaboration among government agencies. A report by the Daily Star highlighted the problems that can arise from a lack of coordination and corruption. Entrepreneurs often have to pay up to six times the official fees to obtain the necessary licenses from different government agencies in Bangladesh (The Daily Star, 2024b).

Examining how information is exchanged among government agencies can help identify priority areas for improvement and support gaps. This examination is crucial for designing targeted policies to address the unique challenges startups face, such as securing private investment and navigating complex regulatory frameworks. The present study aimed to explore issues related to collaboration among government agencies affecting startup development in Bangladesh and to generalize the findings to other emerging economies. This study also emphasized the role of government agencies in addressing these obstacles and identified areas in which further policy interventions are needed.

This study had the following objectives:

  • to examine the state of the relationships among government agencies in Bangladesh and their coordination in supporting startups;

  • to investigate how information about startups is shared among relevant government agencies in Bangladesh; and

  • to explore potential areas of collaboration among government agencies to foster an effective startup ecosystem in Bangladesh.

Research on startup ecosystems increasingly highlights the role of government support in enabling entrepreneurial growth, particularly in emerging economies where institutional gaps and regulatory complexity shape entrepreneurial activity (Baalbaki and El Khoury, 2024; Onileowo, 2024). Existing studies identify access to capital, mentorship and supportive regulatory frameworks as key determinants of startup success (Ajayi-Nifise and Asuzu, 2024). However, much of this literature focuses on government–private-sector partnerships rather than on coordination among government agencies.

Complex policy environments often require collaboration among multiple public institutions. Ansell and Gash (2008) argue that increasingly specialized and distributed knowledge within institutional infrastructures calls for more collaboration among public actors. In emerging economies, fragmented public sector governance can lead to regulatory uncertainty and information barriers for startups, where empirical research on inter-agency collaboration in entrepreneurial ecosystems remains limited. This gap is especially evident in Bangladesh, where various government agencies support the startup ecosystem. To address this, the study examines how government agencies collaborate within Bangladesh’s startup ecosystem and how institutional and cultural factors shape these interactions.

Bangladesh remains one of the largest emerging economies in South Asia, with long-term growth potential supported by strong exports, remittance inflows and a growing domestic market (World Economics, 2024). Despite recent geopolitical uncertainties, political changes and external economic pressures, the country has shown economic resilience, although growth has slowed in recent years. Real GDP growth declined to about 4% in FY2025, marking the third straight year of slowdown amid political transition and global economic shocks (Khatun, 2025). However, strong foreign exchange reserves, rising remittances, continued export performance and engagement with development partners have helped stabilize macroeconomic conditions.

Structural challenges nevertheless persist. Investment growth remains uneven and sensitive to external shocks, while weaknesses in financial sector governance and cautious private investment continue to constrain economic momentum (LightCastle Partners, 2026b). Bangladesh’s upcoming graduation from Least Developed Country (LDC) status in 2026 further underscores the need for institutional reforms and economic diversification. These conditions highlight the importance of strengthening innovative sectors and improving coordination among government agencies supporting entrepreneurship.

Bangladesh’s startup ecosystem has emerged as a high-potential investment frontier in Asia, attracting over $1bn in investment across 479 deals as of April 2025 (LightCastle Partners, 2025). The ecosystem (Figure 1) includes more than 2,500 active startups and impact enterprises, with over 200 new ventures launching annually (Startup Bangladesh Ltd, 2023). These startups support more than 750,000 small and medium-sized enterprises (SMEs), expanding access to digital and financial services nationwide (ESCAP, 2022). Government initiatives such as the Innovation Design Entrepreneurship Academy (iDEA) and SBL, along with the development of over 28 high-tech parks under the Bangladesh Hi-Tech Park Authority (BHTPA), aim to strengthen infrastructure support for technology-driven firms. Despite this growth, startup opportunities remain concentrated in Dhaka, reflecting persistent regional disparities.

Figure 1.
An infographic showing category-wise stakeholders in the startup ecosystem of Bangladesh.The large infographic groups many organisation logos into sections around a central circle labelled government initiatives. Outer sections are investors, accelerators and incubators, development partners, competitions, academia universities and associations, ecosystem builders and professional services. The central circle contains logos of public programmes and agencies. Dotted dividing lines separate the surrounding sectors. A blue border frames the full layout. Numerous company, university, foundation, and programme logos fill each section.

The startup ecosystem in Bangladesh

Source:Startup Bangladesh Ltd (2023) 

Figure 1.
An infographic showing category-wise stakeholders in the startup ecosystem of Bangladesh.The large infographic groups many organisation logos into sections around a central circle labelled government initiatives. Outer sections are investors, accelerators and incubators, development partners, competitions, academia universities and associations, ecosystem builders and professional services. The central circle contains logos of public programmes and agencies. Dotted dividing lines separate the surrounding sectors. A blue border frames the full layout. Numerous company, university, foundation, and programme logos fill each section.

The startup ecosystem in Bangladesh

Source:Startup Bangladesh Ltd (2023) 

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SBL is the flagship VC company of the Information and Communication Technology Division (ICTD) under the Ministry of Posts, Telecommunications and Information Technology. Established in 2020 with an initial allocation of $65m, it represents the first government-sponsored VC initiative in Bangladesh (Startup Bangladesh Ltd, 2023). SBL provides funding, advisory support and assistance in navigating regulatory frameworks for startups. Beyond financing, the organization has been actively involved in developing the national startup policy. As a central actor in government-led startup initiatives, SBL provides a strategic vantage point for examining inter-agency collaboration in the ecosystem.

Despite government efforts to improve the ease of doing business – such as streamlining registration processes, expanding financial and policy support for startups, strengthening digital infrastructure and introducing regulatory reforms – bureaucratic complexity and regulatory fragmentation continue to create significant barriers for entrepreneurs. The Bangladesh Business Environment Report 2023, published by the Centre for Policy Dialogue (CPD), notes that the public sector does not adequately support startups, raising concerns about the effectiveness of existing financing mechanisms (Moazzem and Anika, 2024). The report also identifies corruption, inefficient bureaucracy and foreign currency instability as the most significant obstacles to doing business in Bangladesh. These challenges are reflected in Bangladesh’s ranking of 149 out of 180 in the Corruption Perceptions Index (Transparency International, 2023). Previous research has further highlighted limited coordination among government agencies and the perceived inaccessibility of information on government support for entrepreneurs (Azad, 2022). Together, these challenges underscore the importance of examining how government agencies coordinate policies, information flows and regulatory responsibilities within the startup ecosystem.

Research on organizational culture in Bangladesh highlights communication norms shaped by collectivism, indirect communication styles and a preference for consensus-building (Rabbani et al., 2024). Maintaining harmony and avoiding confrontation are important cultural values, particularly when addressing sensitive issues or providing negative feedback. The hierarchical nature of Bangladeshi society further influences organizational communication, as strong respect for authority and seniority often limits open expression of dissenting views. In addition, communication frequently relies on contextual cues and nonverbal signals, requiring implicit understanding rather than direct expression. These cultural dynamics can restrict information sharing and influence how government agencies communicate and coordinate policy implementation within the entrepreneurial ecosystem.

As an emerging economy, Bangladesh’s entrepreneurial landscape shares many features with those of other developing markets. While emerging economies often rely on isolated enclaves or free trade zones to bypass domestic constraints, Porter (1990) argues that sustainable growth requires transforming these isolated zones into integrated clusters with strong linkages to the local economy, in which startups can play a key role.

Entrepreneurship in emerging economies is also shaped by institutional voids, which manifest as missing or weak market-support institutions and regulatory frameworks (Cao and Shi, 2020). Hamdan et al. (2021) identify several key characteristics, including underdeveloped institutional infrastructure, legacies of centralized economic control and diverse cultural and social contexts that influence entrepreneurial behavior. Weak institutions possessing these characteristics can hinder entrepreneurial activity, even though such institutions are crucial for structural change and economic growth. These institutional conditions, also emphasized by Acemoglu and Robinson (2012), often shape how governments design and coordinate support policies for entrepreneurship. Therefore, fostering inter-agency collaboration and developing policy mixes that promote both vertical and horizontal cooperation among government agencies are vital yet understudied aspects of entrepreneurial ecosystem governance in emerging economies (Wang et al., 2022).

Entrepreneurs in Bangladesh operate within complex institutional environments characterized by regulatory fragmentation and infrastructure constraints. Addressing this complexity often requires coordination among multiple government agencies. Collaborative governance research highlights the importance of institutional design that facilitates cross-agency cooperation in such complex policy settings (Ansell and Gash, 2008). At the same time, entrepreneurial ecosystems can also be seen as networks of interconnected actors and institutions whose interactions influence entrepreneurial outcomes (Fubah and Moos, 2021). Therefore, understanding these dynamics requires an analytical framework capable of examining relationships among multiple actors within entrepreneurial ecosystems. Several complementary theories provide insights into these interactions, especially in emerging economies.

Stakeholder theory examines how different actors within an ecosystem manage competing interests and priorities (Smith et al., 2013). In the Bangladeshi context, for example, startups seeking foreign direct investment (FDI) must simultaneously comply with Bangladesh Bank’s (BB) capital movement regulations, highlighting tensions between entrepreneurial objectives and regulatory requirements. Systems theory provides a broader perspective by conceptualizing entrepreneurial ecosystems as interconnected structures in which changes in one component influence others (Daniel et al., 2018). In emerging economies, conflicting regulatory mandates among agencies – such as the Bangladesh Securities and Exchange Commission (BSEC) and the Registrar of Joint Stock Companies and Firms (RJSC) – can create systemic inefficiencies that affect entrepreneurial activity. Network theory focuses on the relational dynamics among ecosystem actors, examining patterns of interaction, connectivity and information exchange (Purbasari et al., 2020). This perspective is particularly useful for analyzing relationships among government agencies, startups, investors and support organizations and for identifying structural gaps and information bottlenecks within the ecosystem. While each of these perspectives offers valuable insights, understanding government agency collaboration requires integrating them into a unified analytical framework.

Building on the theoretical perspectives discussed above, this study develops an integrated analytical framework combining stakeholder theory, systems theory and network theory to examine collaboration among government agencies in Bangladesh’s startup ecosystem. Stakeholder theory is used to identify the key actors involved in startup governance and analyze their competing interests through interviews and document analysis. Systems theory provides a lens for understanding how coordination – or the lack thereof – among government agencies affects ecosystem performance. Within this perspective, Schein’s (2010) three levels of organizational culture are applied to explore how institutional norms and practices influence collaborative behavior. Network theory complements these perspectives by mapping relationships among agencies such as SBL and other stakeholders listed in Table 1, enabling the analysis of relationship strength, information flows and knowledge exchange within the ecosystem.

Table 1.

Research participants

SerCategoryOrganizationAbbreviationInterviewsSurvey
1Government agencyStartup Bangladesh LtdSBL
2Bangladesh Investment Development AuthorityBIDA
3Bangladesh BankBB
4Bangladesh Securities and Exchange CommissionBSEC
5National Board of RevenueNBR
6Private sectorIDLC Finance PLC(domestic VC)IDLC
7Anchorless Bangladesh (global VC)AB
8LightCastle Partners (consulting agency)LCP
9EDGE Asset Management (mutual fund)EDGE
10StartupiFarmeriF
11AgroshiftAS
12BismoBismo
13MasterCourseMC
14AcademiaNorth South UniversityNSU
15BRAC UniversityBRAC
Source(s): Author

By integrating these theoretical perspectives, the framework connects macro-level institutional conditions – such as the centralized governance legacies and institutional voids identified by Hamdan et al. (2021) – with micro-level patterns of collaboration among government actors. This approach aligns with integrative frameworks in collaborative governance literature, which utilize nested dimensions to show how the larger system context affects internal collaboration dynamics (Emerson et al., 2011). This integrated approach provides a structured basis for analyzing how institutional relationships and cultural dynamics influence collaboration among government agencies within Bangladesh’s evolving entrepreneurial ecosystem.

This study used an exploratory sequential mixed-methods approach with a significant adjustment. In standard exploratory sequential designs, qualitative insights typically inform the creation of quantitative instruments (Creswell and Clark, 2018). However, this study took a different approach, using qualitative findings from interviews and document analysis to guide the use and interpretation of an existing quantitative tool [the United States Agency for International Development (USAID)/Rwanda collaboration mapping survey]. This adjustment preserved the essential sequential feature of the design, in which the qualitative phase informs the quantitative phase (QUAL → quan), while acknowledging that the building integration method emphasizes application over the development of the quantitative instrument. As Creswell and Clark (2018) noted, exploratory sequential designs can be tailored to specific research situations while maintaining methodological integrity.

Figure 2 illustrates the connections between the elements of the theoretical framework and the stages of the modified exploratory sequential mixed methods approach. Based on the work of Creswell and Clark (2018), this framework was used to maintain the sequential flow of the study, with relevant theories and methods informing each stage. The placement of the theories ensured a logical progression of concepts throughout the research, moving from interests to interactions and leading to relationships among stakeholders in the entrepreneurial ecosystem, while highlighting the connections between the theories.

Figure 2.
A conceptual framework linking three theories with methods within a modified exploratory sequential mixed methods research approach.The framework has three horizontal levels labelled associated theory, means, and research methodology. The top level contains stakeholder theory, systems theory, and network theory, connected by dashed lines. The middle level links each theory to an oval method: interviews and document analysis, three levels of culture analysis, and collaboration mapping. The bottom level shows a sequence of boxes and ovals: qualitative data collection and analysis, results connected to and build to, quantitative measure or instrument selection, tested or applied by, quantitative data collection and analysis, and interpretation. A large arrow surrounds this sequence and is labelled modified exploratory sequential mixed methods approach.

Relationship between the theoretical framework and the research methodology

Source: Methodology adapted from Creswell and Clark (2018); theoretical framework developed by the author

Figure 2.
A conceptual framework linking three theories with methods within a modified exploratory sequential mixed methods research approach.The framework has three horizontal levels labelled associated theory, means, and research methodology. The top level contains stakeholder theory, systems theory, and network theory, connected by dashed lines. The middle level links each theory to an oval method: interviews and document analysis, three levels of culture analysis, and collaboration mapping. The bottom level shows a sequence of boxes and ovals: qualitative data collection and analysis, results connected to and build to, quantitative measure or instrument selection, tested or applied by, quantitative data collection and analysis, and interpretation. A large arrow surrounds this sequence and is labelled modified exploratory sequential mixed methods approach.

Relationship between the theoretical framework and the research methodology

Source: Methodology adapted from Creswell and Clark (2018); theoretical framework developed by the author

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This study used triangulation within and among the data collection methods to enhance validity and comprehensiveness (Valencia, 2022). The data collection process occurred in two distinct phases:

  1. Phase 1: qualitative data collection

    • Key informant interviews (KIIs): 11 representatives (one each) from 11 organizations encompassing government agencies, the private sector and startups were interviewed. These semi-structured interviews lasted 45–60 min and covered organizational roles, communication processes, collaboration challenges, resource sharing and the overall effectiveness of support.

    • Document analysis: To capture collaboration policies and partnerships, a systematic collection and review of organizational documents, including memos, policies, websites, charts and reports, was conducted.

  2. Phase 2: quantitative data collection

    • Survey instrument: The application of the USAID/Rwanda collaboration mapping survey was guided by themes and insights identified during the qualitative data analysis. The survey questionnaire is included in the  Appendix.

    • Survey administration: The survey was conducted electronically through a secure platform to a single representative from each of the 14 organizations listed in Table 1.

The study used a purposive sampling strategy to identify key stakeholders in Bangladesh’s startup ecosystem. The selection criteria were as follows:

  • government agencies with direct regulatory or support functions for startups;

  • private sector organizations with at least seed stage investment or support for the startup ecosystem;

  • startups representing various sectors and development stages; and

  • academic institutions with entrepreneurship programs or research centers.

As shown in Table 1, the final sample included representatives from 15 organizations across these four categories. The sample size was determined by the influence of a few key stakeholders shaping the early-stage startup ecosystem. There are only a few government agencies in Bangladesh, such as NBR, BIDA, BSEC, BB, RJSC and SBL, which are currently involved in the startup ecosystem, as it is still in its early stages. Most relevant agencies have participated in this study. The participants were selected for their key positions within each organization, ensuring they had a thorough understanding of the interagency collaboration process.

Regarding the qualitative analysis, content analysis grounded in stakeholder theory was conducted to identify patterns and recurring themes in stakeholders’ perspectives on collaboration within the startup ecosystem. Systems theory and Schein’s (2010) three levels of culture framework informed the analytical dimensions of the study and guided the design of the quantitative instrument – the collaboration map – by identifying relevant institutional and cultural factors that influence inter-agency collaboration. The qualitative findings provided contextual insights that informed the survey design and the interpretation of the collaboration map.

For the quantitative analysis, survey data were used to create a collaboration map, a tool developed by USAID/Rwanda to visually represent an organization’s relationship with key stakeholders (USAID, 2018). Drawing on concepts from network theory, the collaboration map illustrates patterns of interaction and influence among actors within the ecosystem, helping identify areas where collaboration is strong or limited.

SBL was chosen as the central node in the collaboration map as it is the main government entity responsible for startup related initiatives in Bangladesh. Therefore, it offers a strategic vantage point to examine inter-agency relationships. However, the analysis does not treat SBL as the sole hub of collaboration; rather, the mapping aims to identify perceived interaction patterns among agencies linked through SBL. Since the collaboration map was created based on the perspectives of key stakeholders connected to SBL, the analysis may reflect certain institutional biases and limit broader generalizability, thereby highlighting focus areas for future research.

The findings are organized thematically according to the research objectives. This section examines three levels of culture and the collaboration map to understand how government agencies coordinate and share information within the startup ecosystem. The next section explores cultural attitudes that influence support for startups and identifies regulatory gaps.

Connecting the organizational culture part of the literature review with Schein’s (2010) three levels of culture analysis led to the insights shown in Table 2 about the work culture in Bangladesh. This is further discussed in the startup context in Section 5.2.

Table 2.

Three levels of culture analysis

Three levels of cultureDescriptionFindings
Artifacts
  1. These are visible and feelable structures and processes

  2. Observed behavior is also an artifact but can often be difficult to decipher

  1. Communication practices: informal communication, consensus building and avoiding confrontation are the norm

  2. Hierarchy: top-down organizational design is mostly prevalent

  3. Business etiquette: customs and norms surround business interactions, such as the use of formal titles, greetings and respectful submission to authority

Espoused beliefs and values
  1. These are ideals, goals, values and aspirations

  2. Ideologies

  3. These could be rationalizations which may or may not be congruent with people’s behavior and other artifacts

  1. Harmony and conflict avoidance

  2. Respect for authority and seniority

  3. Collectivism and conformity

Basic underlying assumptionsThese are unconscious, taken-for-granted beliefs and values that determine behavior, perception, thought and feelingFear of differing opinions
Source(s): Created by the author using concepts from Schein (2010) 

Figure 3 shows SBL’s collaboration map, which depicts the relationships between SBL and other stakeholders in the startup ecosystem. The diagram encodes three dimensions, each on a numeric scale of 1–10, which were selected in connection with the research objectives and the findings described in Section 4.1. They are explained as follows:

Figure 3.
A collaboration map depicting relationships between SBL and other stakeholders in the startup ecosystem across four categories - private sector, government agency, startup, and academia.The bubble chart titled Collaboration Map of S B L is divided into four quadrants around a central circle labelled Startup Bangladesh Limited. The quadrants are private sector, government agency, startup, and academia. Circles of different sizes represent organisations. Private sector includes EDGE, L C P, I D L C, and A B. Government agency includes B B, B S E C, N B R, and B I D A. Startup includes iF, M C, Bismo, and A S. Academia includes N S U and B R A C. Horizontal and vertical arrows cross through the centre.

Collaboration map for SBL

Note: (EDGE – EDGE Asset Management, LCP – LightCastle Partners, AB – Anchorless Bangladesh, IDLC – IDLC Finance PLC, iF – iFarmer, MC – MasterCousre, Bismo – Bismo, AS – AgroShift, BB – Bangladesh Bank, NBR – National Board of Revenue, BSEC – Bangladesh Securities and Exchange Commission, BIDA – Bangladesh Investment Development Authority, BRAC – BRAC University, NSU – North South University)

Source: Created by the author using a tool developed by USAID (2018) 

Figure 3.
A collaboration map depicting relationships between SBL and other stakeholders in the startup ecosystem across four categories - private sector, government agency, startup, and academia.The bubble chart titled Collaboration Map of S B L is divided into four quadrants around a central circle labelled Startup Bangladesh Limited. The quadrants are private sector, government agency, startup, and academia. Circles of different sizes represent organisations. Private sector includes EDGE, L C P, I D L C, and A B. Government agency includes B B, B S E C, N B R, and B I D A. Startup includes iF, M C, Bismo, and A S. Academia includes N S U and B R A C. Horizontal and vertical arrows cross through the centre.

Collaboration map for SBL

Note: (EDGE – EDGE Asset Management, LCP – LightCastle Partners, AB – Anchorless Bangladesh, IDLC – IDLC Finance PLC, iF – iFarmer, MC – MasterCousre, Bismo – Bismo, AS – AgroShift, BB – Bangladesh Bank, NBR – National Board of Revenue, BSEC – Bangladesh Securities and Exchange Commission, BIDA – Bangladesh Investment Development Authority, BRAC – BRAC University, NSU – North South University)

Source: Created by the author using a tool developed by USAID (2018) 

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  1. Dimension 1 (relationship strength): This dimension determines each circle’s proximity to the center of the map. The stronger the relationship with SBL, the closer the circle is to the center.

  2. Dimension 2 (startup literacy): This dimension determines the circle’s relative size. The more knowledgeable an organization is about startups, the larger the circle.

  3. Dimension 3 (information flow): This dimension determines how light or dark the circle color is. The higher the flow of information, the darker the circle’s fill color.

All participants in the study labeled SBL a high-priority organization and expressed a desire to collaborate to support startups. Figure 3 shows that SBL has a stronger relationship with the private sector than with other government agencies. This is likely because the company is largely staffed by private sector employees, even though it is a government entity under the ICTD. As a VC firm, its primary responsibility is to invest government funds in startups effectively, which explains the presence of private sector employees. While this choice of employee type is logical, it could pose challenges in coordinating with other government agencies, which are staffed primarily by bureaucrats. Private sector employees may not fully understand how government ministries operate. Given the challenges of doing business in Bangladesh and private sector employees’ lack of government experience, there is concern about how effectively SBL can navigate the bureaucratic process or develop a system to do so. Some of these limitations may also arise in the national startup policy in development unless relevant government agencies review it before full implementation. While SBL’s publication and subsequent implementation of this policy will offer many guidelines for interagency collaboration and regulatory compliance, potential issues may persist without comprehensive collaboration frameworks and well-designed processes.

There is also a considerable lack of information sharing among government agencies in Bangladesh. Figure 3 shows lower levels of information exchange between SBL and government agencies compared with SBL’s interactions with other sectors. Communication within government agencies is shaped by hierarchical organizational structures that favor top-down information flows. Collectivist cultural norms and high-context communication styles further discourage open information exchange between agencies. The absence of horizontal collaboration frameworks reinforces this fragmentation, as agencies tend to operate within siloes. In addition, agencies lack a shared list of stakeholders to consult during collaborative decision-making processes. As shown in Table 2, upward communication is also limited because lower-level employees are often reluctant to challenge authority. In such environments, information hoarding becomes more likely, resulting in fragmented policies that reduce the effectiveness of support mechanisms for startups.

The startup ecosystem in Bangladesh remains in its early stages, with several regulatory gaps that require urgent attention to support growth. Many startups continue to register in Singapore due to stringent domestic requirements and limited funding policies, despite recent BB initiatives, such as the Startup Financing Directives, Share Swap Framework and Fund of Funds (LightCastle Partners, 2026a). While organizations like LightCastle Partners produce valuable ecosystem insights, comprehensive and centralized data remain limited. In addition, key policy areas – such as clear tax incentives and the establishment of a regulatory sandbox – are still lacking. These challenges are interconnected and cannot be effectively addressed by a single agency, underscoring the need for coordinated action among key institutions, including SBL, BIDA, BSEC, RJSC, BB and NBR. Although multiple agencies are engaged in startup-related policymaking, including the development of a national startup policy, there remains significant scope for improved inter-agency collaboration to address institutional voids and structural gaps in the ecosystem (Cao and Shi, 2020).

The gray text in Figure 4 highlights the typical issues startups face in complying with global standards. Each compliance category (such as taxation) is matched with its corresponding regulatory body (such as NBR for VAT and BB for foreign exchange regulations). The blue boxes represent the broad compliance categories, while the relevant government agencies are displayed in blue text adjacent to the boxes. The figure draws on findings from the literature regarding regulatory gaps in Bangladesh and data collected from KIIs. It also highlights which government agencies can help address these issues within the Bangladeshi context. Although it may not cover every possible scenario, it addresses all significant compliance categories.

Figure 4.
A mind map connecting regulatory issues across broad compliance categories to related ministries and concerned government agencies.A central box labelled regulatory issues connects to multiple surrounding categories. Top categories are regulations, data security, employee, and licenses and permits. Side categories are international compliance, financial compliance, consumer protection, and business structure. Bottom categories are industry standards, environment, and foreign exchange. Each category lists related examples such as laws and regulations, cyber security, labour laws, import-export, customs, tax, consumers’ rights, registration, pollution, and exchange rates. Blue text names responsible ministries, divisions, agencies, or authorities linked to each category.

Startups’ compliance issues and associated government agencies

Source: Author

Figure 4.
A mind map connecting regulatory issues across broad compliance categories to related ministries and concerned government agencies.A central box labelled regulatory issues connects to multiple surrounding categories. Top categories are regulations, data security, employee, and licenses and permits. Side categories are international compliance, financial compliance, consumer protection, and business structure. Bottom categories are industry standards, environment, and foreign exchange. Each category lists related examples such as laws and regulations, cyber security, labour laws, import-export, customs, tax, consumers’ rights, registration, pollution, and exchange rates. Blue text names responsible ministries, divisions, agencies, or authorities linked to each category.

Startups’ compliance issues and associated government agencies

Source: Author

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The findings show that cultural norms and limited information sharing create obstacles to collaboration among government agencies involved in Bangladesh’s startup ecosystem. While agencies appear familiar with concepts such as startup funding, valuation, registration, investor exit strategies, intellectual property rights and pilot licensing, the collaboration map indicates that their practical understanding of these processes remains limited. This gap in “startup literacy” hinders effective policy development and inter-agency cooperation. From a theoretical perspective, these findings highlight how stakeholder interests, institutional interdependencies and network relationships collectively influence collaboration within entrepreneurial ecosystems. Cultural tendencies toward consensus and hierarchical communication can reinforce institutional silos and discourage proactive collaboration. Wilson’s (2001) analysis of bureaucratic behavior helps explain this resistance, as organizations often hesitate to pursue tasks that conflict with established institutional practices.

Tackling the challenges outlined above requires initiatives that enhance startup literacy among policymakers and promote structured knowledge exchange across agencies. Training programs, inter-agency workshops and information-sharing mechanisms could help policymakers better understand the operational realities of startups and encourage more collaborative policy development.

Figure 5 proposes a conceptual framework for a direct-link horizontal collaboration network involving key government stakeholders, with SBL and the Bangladesh Investment Development Authority (BIDA) serving as the principal coordinating entities. BIDA’s institutional position under the Prime Minister’s Office and its experience with cross-agency initiatives such as the One Stop Service Act provide a potential platform for facilitating coordination (The Daily Star, 2024a). Establishing a structured coordination platform among agencies involved in the startup ecosystem can help streamline policy development, improve information flows and reduce regulatory complexity faced by startups.

Figure 5.
A network diagram linking Startup Bangladesh Ltd and BIDA with key ministries, regulators, and government agencies.A central circle labelled Startup Bangladesh Ltd and B I D A is connected by lines to surrounding rounded boxes. The connected organisations are National Board of Revenue N B R, Bangladesh Securities and Exchange Commission B S E C, Registrar of Joint Stock Companies and Firms R J S C, Bangladesh Bank B B, I C T Division, Local Government, Ministry of Environment, Ministry of Labour and Employment, Ministry of Industries, Ministry of Commerce, Stakeholder Ministry, and Directorate of National Consumers’ Right Protection. The layout forms a radial network around the centre.

Direct link startup collaboration network

Source: Author

Figure 5.
A network diagram linking Startup Bangladesh Ltd and BIDA with key ministries, regulators, and government agencies.A central circle labelled Startup Bangladesh Ltd and B I D A is connected by lines to surrounding rounded boxes. The connected organisations are National Board of Revenue N B R, Bangladesh Securities and Exchange Commission B S E C, Registrar of Joint Stock Companies and Firms R J S C, Bangladesh Bank B B, I C T Division, Local Government, Ministry of Environment, Ministry of Labour and Employment, Ministry of Industries, Ministry of Commerce, Stakeholder Ministry, and Directorate of National Consumers’ Right Protection. The layout forms a radial network around the centre.

Direct link startup collaboration network

Source: Author

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Government policy often plays a more prominent role in shaping entrepreneurial ecosystems in emerging economies and underdeveloped institutional settings than in advanced economies (Wei, 2022). However, the findings of this study suggest that the effectiveness of such policy involvement depends not only on the presence of supportive initiatives but also on the ability of government agencies to coordinate their efforts. The analysis shows that fragmented institutional responsibilities and limited information sharing create significant bottlenecks that weaken the implementation of startup support policies. Importantly, these findings indicate that governance challenges may arise not only from institutional gaps or resource constraints but also from coordination failures within the public sector itself. Hierarchical communication structures and limited cross-agency interaction further restrict information exchange, reducing policy effectiveness.

As illustrated in Figure 6, these internal governance barriers operate within broader structural constraints and collectively contribute to public sector coordination failure. These dynamics highlight the importance of policy design that facilitates coordination among government agencies while accounting for contextual differences and cultural factors (Candeias and Sarkar, 2022). The figure also highlights the role of specialized government entities like SBL, as potential hubs for collaboration that can help align policy priorities, facilitate multi-level stakeholder interactions and address ecosystem bottlenecks, thereby strengthening overall ecosystem governance (Stam, 2018; Feldman and Lowe, 2018).

Figure 6.
A conceptual diagram linking internal governance barriers coupled with ecosystem constraints to coordination failure with a potential collaboration hub solution.The diagram contains several labelled boxes. Left boxes list entrepreneurial ecosystem issues: institutional gaps and resource constraints, and internal governance barriers: fragmented responsibilities, limited information flow, and hierarchical culture. A dashed box lists contextual differences: cultural norms and administrative structure. An arrow points to a central box labelled public sector coordination failure. A right arrow leads to a collaboration hub containing specialised government entities, for example, S B L. Listed functions are align policy priorities, facilitate stakeholder interaction, address ecosystem bottlenecks, and bridge contextual differences.

Conceptual model of entrepreneurial ecosystem governance in emerging economies

Source: Author

Figure 6.
A conceptual diagram linking internal governance barriers coupled with ecosystem constraints to coordination failure with a potential collaboration hub solution.The diagram contains several labelled boxes. Left boxes list entrepreneurial ecosystem issues: institutional gaps and resource constraints, and internal governance barriers: fragmented responsibilities, limited information flow, and hierarchical culture. A dashed box lists contextual differences: cultural norms and administrative structure. An arrow points to a central box labelled public sector coordination failure. A right arrow leads to a collaboration hub containing specialised government entities, for example, S B L. Listed functions are align policy priorities, facilitate stakeholder interaction, address ecosystem bottlenecks, and bridge contextual differences.

Conceptual model of entrepreneurial ecosystem governance in emerging economies

Source: Author

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This study examined collaboration among government agencies in Bangladesh’s startup ecosystem by integrating stakeholder, systems and network theories, drawing on insights from collaborative governance literature. The findings indicate that institutional fragmentation, limited information flows and organizational cultural dynamics significantly shape the effectiveness of inter-agency collaboration in supporting startups. In particular, hierarchical communication structures, limited startup literacy and the absence of structured coordination mechanisms contribute to fragmented policy implementation across government agencies.

The study underscores the importance of strengthening inter-agency collaboration and improving policymakers’ understanding of startup dynamics. Structured coordination platforms and knowledge-sharing initiatives may help address regulatory complexity, improve information flows and enhance the effectiveness of government support for startups. While the study identifies potential avenues for collaboration among government agencies, the development of specific policy interventions lies beyond the scope of this research.

Beyond the Bangladeshi context, the findings indicate that challenges in entrepreneurial ecosystems in emerging economies may stem not only from institutional voids and resource constraints but also from coordination failures within the public sector. By showing how fragmented directives, hierarchical communication structures and limited information sharing influence government agency collaboration, this study offers empirical insights into how internal coordination dynamics within the public sector impact entrepreneurial ecosystem governance in emerging economies.

The author wishes to sincerely thank Dr Mohammad Solaiman for his invaluable guidance and support throughout this research project. His expertise, insightful feedback and unwavering encouragement have been instrumental in shaping the direction and quality of this work. The contribution of the Bangladesh Public Administration Training Centre (BPATC) is noteworthy in enabling the author to obtain the necessary permission and connections to visit various government agencies for research purposes.

This is to confirm that the research study titled “Startup Support in Emerging Economies: A Study of Collaboration Among Government Agencies in Bangladesh” has adhered to all relevant ethical standards and guidelines throughout the research process. This research received approval from the Bangladesh Public Administration Training Centre on May 23, 2024, and was conducted in accordance with the ethical guidelines established by the institution.

Prior to data collection, participants received comprehensive details about the study’s procedures and were fully aware of the research purpose and its objectives. They were informed about their rights as respondents, including the ability to refuse participation or withdraw from the study at any time and the steps taken to ensure their confidentiality and anonymity. Additionally, they were informed on how the collected data would be utilized. Participation in the study was entirely voluntary, and participants indicated their consent through participation.

Furthermore, the author confirms that the study adheres to the relevant ethical guidelines for human participants, and that it followed ethical measures in compliance with institutional and international guidelines, including:

• Maintaining and respecting the autonomy, confidentiality and anonymity of all respondents throughout the study by collecting qualitative data through interviews in private settings and quantitative data in the form of a survey via a secure electronic medium;

• Using collected data solely for the purposes outlined in the study;

• Ensuring transparency in data handling and reporting; and

• Avoiding any form of coercion or undue influence in securing participation.

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Below is the list of questions given to the research participants, whose responses were used to develop the collaboration map. Section 4.2 provides the encoding and interpretation of the diagram:

  • Question 1: On a scale of 1–10 how do you rate the relationship state of your organization to SBL?

  • Question 2: On a scale of 1–10 how do you rate the knowledge of your organization about startups?

  • Question 3: On a scale of 1–10 how do you rate the flow of information between your organization and SBL?

  • Question 4: Is SBL a priority organization for you?

Published in Asia Pacific Journal of Innovation and Entrepreneurship. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at Link to the terms of the CC BY 4.0 licenceLink to the terms of the CC BY 4.0 licence.

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