Understanding Entrepreneurial Ecosystem

Introduction

The concept of “Entrepreneurial/ Entrepreneurship Ecosystem” (EE) has received increasing interest over the past decade as governments, private enterprises, universities, and communities have started to recognize the potential of integrated policies, structures, programs and processes that foster regional entrepreneurship activities and can support innovation, productivity and employment growth (Autio et al., 2014; Stam, 2015; Mack & Mayer, 2016; Acs et al., 2016). A variety of local ecosystems projects has been launched in cities, regions, countries and around the world, particularly in mid-income and advanced economies (Mason & Brown, 2014). The active participation of various stakeholders has been identified as a key success factor for entrepreneurship ecosystem creation. Global surveys indicate that the interest in entrepreneurship ecosystems continues to grow as local public and private leaders feel increasing pressure to stimulate economic growth by supporting more and successful entrepreneurial activities in a given geography (Foster et al., 2013).

The phenomenon of entrepreneurship ecosystems has been investigated in a variety of different research streams from policy circles to academic studies (Hwang & Horowitt, 2012; Isenberg, 2011; Mason & Brown, 2014; Prahalad, 2005). The fundamental idea of an entrepreneurship ecosystem is to create a favorable environment to support innovation, the formation of new successful firms, and corresponding sustainable employment growth within a specific geographic region (Bruton et al., 2010).

The entrepreneurship ecosystem is a highly complex multi-level construct. At the regional level, it includes stakeholders, such as political decision makers, government agencies, universities and industry associations (Isenberg, 2011). At the firm level, the activities of new start-up and existing small or larger firms represent the engine to spur innovation-based regional economic development. The relevant activities often spread across organizational boundaries as knowledge and resources are shared. Actually, the relevant firms may include firms that provide valuable services to entrepreneurial firms, such as patent law firms, venture capitalists, and others. At the group and individual level, individuals engage in micro-activities that determine any firm-level outcomes. In addition, this micro-level focus is crucial for any investigations of entrepreneurial activities that precede and eventually may lead to the creation of a new venture (Alsos & Kolvereid, 1998).

Building on prior work on entrepreneurial environments and the geography of entrepreneurship, current ecosystem research has been driven by a strong policy interest rather than based on a strong research foundation (Neck et al., 2004; Spilling, 1996). As a result, there has been substantial attention paid to identifying the particular elements or factors associated with strong entrepreneurial ecosystems, less is known about how entrepreneurs actually engage with their ecosystem and how they draw on the resources, ideas, and networks held within them (Mason & Brown, 2014; Spigel, 2016). Ecosystem research has focused on a macro-perspective of identifying ecosystems and their primary attributes rather than on the micro perspectives on how entrepreneurs interact with and gain resources from their ecosystem. This makes it difficult to empirically verify the role of ecosystems and what benefits, if any, entrepreneurs gain from their engagement with it.