Toward a process theory of entrepreneurial ecosystems

• Date: 01 March 2018
• Published date: 01 March 2018
• Author: Ben Spigel,Richard Harrison
• DOI: http://doi.org/10.1002/sej.1268

SPECIAL ISSUE ARTICLE

Toward a process theory of entrepreneurial

ecosystems

Ben Spigel | Richard Harrison

University of Edinburgh Business School,

Edinburgh, U.K.

Correspondence

Ben Spigel, Entrepreneurship and Innovation

Group, University of Edinburgh Business

School, 29 Buccleuch Place, Edinburgh EH8

9JS, U.K.

Email: ben.spigel@ed.ac.uk

Research Summary: Entrepreneurial ecosystems have recently

emerged as a popular concept within entrepreneurship policy and

practitioner communities. Specifically, they are seen as a regional

economic development strategy that is based around creating sup-

portive environments that foster innovative start-ups. However,

existing research on entrepreneurial ecosystems has been largely

typological and atheoretical and has not yet explored how they

influence the entrepreneurship process. This article critically exam-

ines the relationships between ecosystems and other existing litera-

tures such as clusters and regional innovation systems. Drawing on

this background, the article suggests that a process-based view of

ecosystems provides a better framework to understand their role in

supporting new venture creation. This framework is used to explain

the evolution and transformation of entrepreneurial ecosystems

and to create a typology of different ecosystem structures.

Managerial Summary: Entrepreneurial ecosystems are a new buzz-

word within research and managerial circles. They represent the

types of cultural, social, economic, and political environments

within a region that support high-growth entrepreneurship. But

current research does little more than look at successful ecosys-

tems to identify best practices. This article examines what we

know about entrepreneurial ecosystems and links them with exist-

ing theories like clusters and regional innovation systems. We

argue that successful and unsuccessful entrepreneurship within an

ecosystem generates critical entrepreneurial resources like invest-

ment capital, skilled workers, and entrepreneurial knowledge. This,

in turn, supports future high-growth venture creation. The types

of resources available in an ecosystem and the ability of these

resources to flow through social networks helps separate strong,

well-functioning ecosystems from weak, poorly functioning ones.

KEYWORDS

clusters, culture, entrepreneurial ecosystem, networks, regional

innovation systems, regions

Received: 1 December 2015 Revised: 17 May 2017 Accepted: 18 May 2017 Published on: 21 November 2017

DOI: 10.1002/sej.1268

Copyright © 2017 Strategic Management Society

Strategic Entrepreneurship Journal. 2018;12:151–168. wileyonlinelibrary.com/journal/sej 151

1|INTRODUCTION

Although not new, the idea of entrepreneurial ecosystems (EE) has rapidly gained currency within entrepreneur-

ship practitioner and research circles. Ecosystems are a conceptual umbrella for the benefits and resources

produced by a cohesive, typically regional, community of entrepreneurs and their supporters that help new high-

growth ventures form, survive, and expand. However, academic research on EE has lagged behind popular inter-

est, leading to the term becoming a chaotic conception characterized by little systematic and consistent empirical

evidence and few theoretical frameworks (Sayer, 1992). As Stam (2015) argues, this leads to a situation of policy

leading theory rather than theory informing policy and practice. There is a risk of limiting an otherwise fertile

research field because of a lack of conceptual rigor, in which research is confined to identifying best practices

rather than exploring the broader relationships between context and entrepreneurial strategy within modern

capitalism.

In response to this challenge, this article makes the following contributions to the growing ecosystems litera-

ture: First, we demonstrate that the study of EE is a unique domain, distinct from related work on clusters and

regional innovation systems. Second, we develop a process perspective on EE, in which ecosystems are viewed as

ongoing processes of the development and flow of entrepreneurial resources such as human and financial capital,

entrepreneurial know-how, market knowledge, and cultural attitudes. The presence and circulation of these

resources helps explain how ecosystems evolve and transform over time and allows us to distinguish between

strong, well-functioning ecosystems and weaker, poorly functioning ones. Third, we show that a process perspective

on ecosystems provides a more nuanced approach to how ecosystems operate and influence the entrepreneurship

process, which can lead to more effective policy interventions.

2|ENTREPRENEURIAL ECOSYSTEMS IN CONTEXT

The EE concept emerged out of the changing debates about entrepreneurship in the 1980s and 1990s. Scholars

increasingly questioned the value of personality-based explanations of entrepreneurship in favor of investigations

into the broader social and economic structures surrounding the entrepreneurship process (Dodd & Anderson,

2007). As part of this shift, early works such as those of Dubini (1989), van de Ven (1993), and Spilling (1996)

explored the influence of regional social, cultural, political, and economic structures on the entrepreneurship pro-

cess. This stream of research conceptualized a social and economic context surrounding, supporting, and influencing

entrepreneurs (Malecki, 1997; Neck, Meyer, Cohen, & Corbett, 2004).

Two sources have driven the recent popularity of EE within practitioner and policy communities: Daniel Isen-

berg’s (2010) work in the Harvard Business Review and Brad Feld’s (2012) book Startup Communities. Both authors

highlight the importance of community in terms of the various actors that support the entrepreneur emotionally

and financially and the education, policy, and economic environments that provide resources for new ventures.

Groups such as the World Economic Forum (2013), the Kauffman Foundation (Motoyama, Konczal, Bell-Master-

son, & Morelix, 2014), and the OECD (Mason & Brown, 2014) have embraced this approach as a new economic

development strategy. This has been followed by a wave of academic research focused on establishing the attri-

butes of successful ecosystems and exploring how they support high-growth entrepreneurship (Acs, Autio, & Szerb,

2014; Alvedalen & Boschma, 2017; Audretsch & Belitski, 2016; Auerswald, 2015; Autio, Kenney, Mustar, Siegel, &

Wright, 2014; Mack & Mayer, 2015; Motoyama & Knowlton, 2016; Qian, 2016; Spigel, 2017; Stam & Bosma, 2015;

Stam & Spigel, 2016).

The main argument of this recent work is that the characteristics of a successful ecosystem enable entrepre-

neurs to identify untapped market niches and draw on the local resources, support, and financing to grow new

ventures into globally competitive firms. This differs from prior approaches to regional entrepreneurship policy,

which sought to increase the overall start-up rate rather than focus specifically on high-growth entrepreneurship.

152 SPIGEL AND HARRISON