Looking inside the spiky bits: a critical review and conceptualisation of entrepreneurial ecosystems

Small Business Economics, May 2017

The concept of entrepreneurial ecosystems has quickly established itself as one of the latest ‘fads’ in entrepreneurship research. At face value, this kind of systemic approach to entrepreneurship offers a new and distinctive path for scholars and policy makers to help understand and foster growth-oriented entrepreneurship. However, its lack of specification and conceptual limitations has undoubtedly hindered our understanding of these complex organisms. Indeed, the rapid adoption of the concept has tended to overlook the heterogeneous nature of ecosystems. This paper provides a critical review and conceptualisation of the ecosystems concept: it unpacks the dynamics of the concept; outlines its theoretical limitations; measurement approaches and use in policy-making. It sets out a preliminary taxonomy of different archetypal ecosystems. The paper concludes that entrepreneurial ecosystems are a highly variegated, multi-actor and multi-scalar phenomenon, requiring bespoke policy interventions.

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Looking inside the spiky bits: a critical review and conceptualisation of entrepreneurial ecosystems

Looking inside the spiky bits: a critical review and conceptualisation of entrepreneurial ecosystems Ross Brown 0 Colin Mason 0 0 C. Mason Adam Smith School of Business, University of Glasgow , Glasgow , UK 1 ) Centre for Responsible Banking and Finance, School of Management, University of St Andrews , St Andrews , UK The concept of entrepreneurial ecosystems has quickly established itself as one of the latest 'fads' in entrepreneurship research. At face value, this kind of systemic approach to entrepreneurship offers a new and distinctive path for scholars and policy makers to help understand and foster growth-oriented entrepreneurship. However, its lack of specification and conceptual limitations has undoubtedly hindered our understanding of these complex organisms. Indeed, the rapid adoption of the concept has tended to overlook the heterogeneous nature of ecosystems. This paper provides a critical review and conceptualisation of the ecosystems concept: it unpacks the dynamics of the concept; outlines its theoretical limitations; measurement approaches and use in policy-making. It sets out a preliminary taxonomy of different archetypal ecosystems. The paper concludes that entrepreneurial ecosystems are a highly variegated, multi-actor and multi-scalar phenomenon, requiring bespoke policy interventions. Entrepreneurship; High growth; Entrepreneurial ecosystems; Entrepreneurship policy - The spatial concentration of economic activity is one of the most enduring traits of contemporary capitalism (Marshall, 1890; Myrdal, 1957; Krugman, 1991; Fujita et al., 2001; Scott, 2006). Rather than a world of equal opportunity where globalisation and telecommunications eradicate the importance of geographical distance—the so-called ‘flat world’ thesis (Friedman, 2007)—the contours of the world economy appear inherently and, enduringly, ‘spiky’ (Florida, 2005). Arguably, technological advancement has accentuated this process making the world ‘more curved’ than ever before (McCann, 2008, p. 368; Rodríguez-Pose and Crescenzi, 2008). As a consequence of these powerful centripetal forces, entrepreneurs are drawn to and, inextricably bound together, with other core entrepreneurial actors in close geographic, institutional and relational proximity. In recent years, entrepreneurial ecosystems (EEs) has become the latest conceptual ‘fad’ (Martin, 2015) seeking to help explain the dynamics of these entrepreneurial ‘spiky bits’ (Neck et al., 2004; Isenberg, 2011; Mason and Brown, 2014; WEF, 2014; Stam, 2015). While this systemic concept is intuitively appealing, its rapid adoption has tended to overlook the heterogeneous nature of specific ecosystems. Given the increasing attention being paid to the concept by scholars (Mason and Brown, 2014; Audretsch and Belitski, 2016) together with its increasing prominence in public policy circles (Isenberg and Onyemah, 2016), it appears timely to scrutinise the concept in greater depth to help develop this important area of research (Borissenko and Boschma, 2016). Accordingly, this paper offers a critical review and conceptualisation of the ecosystems concept by unpacking its theoretical limitations, core dynamics, measurement approaches and use in policy-making. In doing so, it aims to provide a way forward for scholars and, potentially, help policy makers apply the concept more fruitfully. To highlight their heterogeneous and path dependent nature, a preliminary taxonomy of archetypal ecosystems is proposed. The paper concludes that entrepreneurial ecosystems are highly variegated, multi-actor and multi-scalar phenomenon which therefore requires bespoke policy interventions. The remainder of the paper is as follows. First, it provides a review of the literature then assesses the definitional ambiguities surrounding the concept. It then delineates the main components of EEs. It then critiques how scholars have assessed, measured and conceptualised the concept as well as proposing a classification of EEs. In the penultimate section, policy implications are explored before conclusions are offered. 2 Literature review Analysing the process of spatial agglomeration has been a source of great fascination for scholars during the last century and more. This began with Marshall’s (1890) pioneering analysis of the industrial concentrations in Victorian England which led to the identification of ‘agglomeration economies’. Firms accrue multiple pecuniary and non-pecuniary advantages firms from spatial co-location with firms in the same sector, notably the development of specialised pools of human capital, the creation of specialist suppliers and the creation of specialist infrastructure benefiting firms in the same sector (Marshall, 1890). These Marshallian externalities contrast with so-called Jacobian externalities (Jacobs, 1969). Jacobs argued that knowledge may spillover between unrelated industries within urbanised agglomerations as ‘ideas developed by one industry can be applied in o (...truncated)


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Ross Brown, Colin Mason. Looking inside the spiky bits: a critical review and conceptualisation of entrepreneurial ecosystems, Small Business Economics, 2017, pp. 11-30, Volume 49, Issue 1, DOI: 10.1007/s11187-017-9865-7