Entrepreneurial Ecosystems and Regional Policy: A Sympathetic Critique

The Dutch Entrepreneurial Ecosystem

• We create a dataset to measure Entrepreneurial Ecosystems in 273 regions in Europe. • We show how the elements of Entrepreneurial Ecosystems are interdependent. • An Entrepreneurial Ecosystem Index is created to qualify entrepreneurial ecosystems. • The Index predicts entrepreneurial output better than other indices. • Entrepreneurial Ecosystem metrics enable data-and-dialogue-driven policy. Despite the popularity of the entrepreneurial ecosystem approach in science and policy, there is a scarcity of credible, accurate and comparable metrics of entrepreneurial ecosystems. This is a severe shortcoming for both scientific progress and successful policy. In this paper, we bridge the entrepreneurial ecosystem metrics gap. Entrepreneurial ecosystems consist of the actors and factors that enable entrepreneurship. We use the entrepreneurial ecosystem approach to quantify and qualify entrepreneurial economies. We operationalize the elements and outputs of entrepreneurial ecosystems for 273 European regions. The ecosystem elements show strong and positive correlations with each other, confirming the systemic nature of entrepreneurial economies and the need for a complex systems perspective. Our analyses show that physical infrastructure, finance, formal institutions, and talent take a central position in the interdependence web, providing a first indication of these elements as fundamental conditions of entrepreneurial ecosystems. The measures of the elements are used to calculate an index that approximates the quality of entrepreneurial ecosystems. This index is robust and performs well in regressions to predict entrepreneurial output, which we measure with novel data on productive entrepreneurship. The entrepreneurial ecosystem approach and the metrics we present provide a lens for public policy to better diagnose, understand and improve entrepreneurial economies.

PurposeThe purpose of this paper is three-fold. The first objective is to contextualize and clarify the concepts of regional innovation systems and entrepreneurship, addressing their differences and complementarities and suggesting an analytical filter to enhance their understanding. The second aim is to question and analyse the challenges this renewed approach brings to the domain of territorial policy, namely, the role it may bring to local and regional development strategies, opening up the way for a set of public policy interventions on the fields of entrepreneurship and innovation promotion. Finally, the paper presents and analyses the example of Coimbra, a medium-sized city in Portugal, underlining both the role of academia and the Instituto Pedro Nunes-Incubator have had on these domains.Design/methodology/approachThe paper is based on a case study approach, with an in-depth descriptive and exploratory analysis of the Coimbra entrepreneurial ecosystem.FindingsThe paper acknowledged the role entrepreneurial stakeholders have on the fertilization of the innovation and entrepreneurial Coimbra ecosystem. The Instituto Pedro Nunes-Incubator, with a new generation of startups, mostly born on its infrastructure as university spin-offs, gradually introduced a more business-oriented perspective on the local innovation system which, alongside the creation of a thicker networking and more profound cooperation culture, with the growing involvement of other local stakeholders such as science parks (Coimbra iParque), has had a decisive role on upgrading urban competitiveness. These new knowledge-based startups also have important spill-over effects that are beneficial to the growth of other firms in the same locality. There is evidence that they also provide an important Schumpeterian stimulus within economies by increasing competition, promoting innovation and augmenting the efficient allocation of resources within economies. Besides the more traditional transactional forms of support (tax incentives, grants, etc.), there is now the recognition that relational forms of support such as network building, developing connections between entrepreneurial actors, institutional alignment of priorities, fostering peer-based interactions have been strategic to improve both the efficiency and the effectiveness of the entrepreneurial ecosystem.Research limitations/implicationsThere is, thus, a need for more profound theorization and empirical research that can produce additional comprehension into this domain of the cause-effect relationships between entrepreneurship, innovation and local and regional dynamics. Some authors suggest, in particular, that the existing work on entrepreneurial ecosystems within popular business literature and academic research still has a deficit of a solid theoretical foundation, making the entrepreneurial ecosystem approach somehow both ambiguous and immature concept and, thus, reducing its generalizability and policy applicability. Research that evaluates the relationship between entrepreneurial performance and the level of government participation as part of governance systems will also be of great significance over the near future as it will help researchers and policymakers to realize better where the different stakeholders can enhance entrepreneurship and where their intervention will possibly diminish positive outcomes.Practical implicationsThe main practical implications of this paper are associated with the need that urban and regional policymakers to formulate more business-led strategies to promote territorial innovation and entrepreneurship. The paper also offers conceptual tools that point out the need that innovation stakeholders, namely, universities, incubators and firms, have to assume more protagonism in promoting competitiveness and sustainability.Social implicationsThe entrepreneurial ecosystem approach constitutes both a theoretical and analytical useful tool to define competitive strategies for urban and regional economies. Urban and regional-innovation ecosystem construction is a representative method of realizing territorial development and competition enhancement, through sustainable job and wealth creation.Originality/valueThis paper analysis summarizes and integrates the increasing and scattered literature of both the regional innovation systems and of the entrepreneurial ecosystems and delivers new insights for the future development of this field, namely, in terms of renewal of policy formulation and implementation. The singularity of the case study is associated with the fact that Coimbra entrepreneurial ecosystem is still largely embryonic, having its roots on a paradigm strategic shift the University adopted towards a more proactive role in terms of city aand regional development.

The authors discuss economic development policy facing the burgeoning entrepreneurial ecosystem research. They aim to answer four questions. First, how are entrepreneurial ecosystems different from regional innovation systems and clusters, two related frameworks that had been vastly popular among economic development policy makers prior to the rise of entrepreneurial ecosystems? Second, what are the key findings in the entrepreneurial ecosystem research that can guide economic development policy making? Third, how should economic development policy be adjusted under the entrepreneurial ecosystem approach? Finally, what does the ongoing debate on the geographical boundaries of entrepreneurial ecosystems mean for economic development policy?

In order to achieve sustainable development of the country's economy, it is especially important to promote entrepreneurial activities by developing and implementing strategic state policies. Economic growth and progress is achieved by the development of production. In order to develop an effective entrepreneurial policy, it is necessary to study the definitions of terms. The understanding of the meaning of "entrepreneurial ecosystem" as a term is diverse and it has undergone changes over time. In order to understand its modern content, it is necessary to analyze the appropriate scientific literature. In general, entrepreneurship involves the process by which people take advantage of innovative opportunities. The concept of entrepreneurial ecosystem emphasizes that entrepreneurial processes take place among interdependent actors (Stam, 2015: 1761). In short, in this case, the term "ecosystem" should be understood as "economic system" and not as "ecological system". Later, Angelo Cavallo, along with other scientists, focused again on the biological definition of an ecosystem (Cavallo… 2018: 10). The term "entrepreneurial ecosystem" was first used in 2005-2006 by scholars Prahalad and Cohen to describe conditions where individuals, business representatives, government members, civil society and partners come together to support regional entrepreneurial activities that provide economic prosperity (Cohen, 2006: 3). The concept of entrepreneurial ecosystems is considered a promising field of research that promotes interconnected entrepreneurial activities (at different levels of analysis) and includes a wide variety of stakeholders and actors in the market (Simatupang... 2015: 394). The entrepreneurial ecosystem approach starts with the entrepreneurial individual (rather than the firm) but also emphasizes the role of the social and economic context surrounding the entrepreneurial process (Spigel… 2018: 3). Predecessors of entrepreneurial ecosystem researchers have different emphases in this direction, although common approaches and research conclusions can be seen between them. Even today, when there is a scientific study of such a complex issue as the entrepreneurial ecosystem, certain problems arise in the research process. According to various scholars, the concept of entrepreneurial ecosystem should be developed in three directions: first, the concept of entrepreneurial ecosystem and related empirical studies remained only at the theoretical level. Second, little is still known about which interplay of factors at different levels of analysis leads to the desired outcomes of economic development. Third, there is still a substantial, conceptual disagreement about what the desired outcome of an entrepreneurial ecosystem is and how to achieve that outcome (Simatupang... 2015: 389-390). It should be noted that the entrepreneurial ecosystem model is evolving. Therefore, it is clear that the entrepreneurial ecosystem is a very complex, multi-level "construction". At the regional level, it involves various stakeholders such as non-political decision-makers, government agencies, universities and industry associations. In the modern period, the entrepreneurial ecosystem is more and more in the focus of politics, but the impact of the ecosystem phenomenon on policy formation is still only theoretical (Autio... 2015: 1). At the same time, entrepreneurship and its role in the world economic order have a special role. Various scientists talk about the essential role of higher education and universities in the entrepreneurial ecosystem. For example, Eric Lehmann and other scientists identify higher educational institutions as the main component of the entrepreneurial ecosystem, however, they consider university autonomy as a necessary condition for this (Lehmann... 2020: 3). In essence, the term "entrepreneurial-university ecosystem" refers to the idea that universities act as entrepreneurs and contribute to the development of the regional and national economy. An entrepreneurial university involves expanding the traditional role of the university. In this way, for the formation of the entrepreneurial ecosystem, public and private sector communication is of great importance to promote an effective dialogue between educational, scientific, business and local government representatives. Based on the above, the concept of entrepreneurial ecosystem can be considered as a promising direction of research. The study of entrepreneurial ecosystems around the world has an important place in the process of policy formation. We definitely believe that practical recommendations should be developed in Georgia in the direction of the development of the entrepreneurial ecosystem according to the priority sectors of the country's economy. Entrepreneurial universities play an important role in the sustainable development of the country's economy, commercialization of knowledge and activation of other positive processes of entrepreneurial activity. However, we should not forget that for the formation of such universities and the entrepreneurial ecosystem in general, only the desire and the verification of the research results of scientists will not be enough. Many enabling environments and factors are necessary to ensure this, including: social, cultural, political, economic and regional factors. As complex as the concept of an entrepreneurial ecosystem, including an entrepreneurial university, the readiness of many components is necessary for its effective formation.

The “entrepreneurial ecosystem” metaphor is capturing attention in academia, industry, and government. The entrepreneurial ecosystem approach is used in corporate, national, or local contexts, and has grown in prominence given the vital need to transform economies around the creation of innovative ideas, products, services, and technologies. Entrepreneurial ecosystems involve a network, a system, of interactions of individuals and organizations, like financial intermediaries, universities and research institutions, suppliers and customers, multinational companies, or the government. The entrepreneurial ecosystem literature has thus mainly focused on identifying the relevant stakeholders like entrepreneurial firms and entrepreneurs and how they interact with other stakeholders within a more or less defined system. Despite the popularity of the entrepreneurial ecosystem approach, the literature has almost overlooked and largely ignored the governance of entrepreneurial ecosystems. This special Issue of Small Business Economics critically examines issues concerning the governance of entrepreneurial ecosystems.

Entrepreneurship plays a significant role in national economies around the world, including the Republic of Zimbabwe, which has largely focused on the socio-economic devolution program. The necessity for entrepreneurship and policymakers around the world currently is to advance the quality of the entrepreneurship outcomes rather than just increase the number of entrepreneurs. To strengthen the context of entrepreneurship and innovation, the authors suggested that governments need to move to what is called an entrepreneurial ecosystem approach. Isenberg's model for the entrepreneurial ecosystem is applied as a catalyst for building a robust entrepreneurial ecosystem under circular economies.

In the preceding two decades, blue entrepreneurship has emerged as a pivotal proposition for Europe’s coastal fishing communities, as these communities have sought to diversify and reinvigorate their local economies. The present paper seeks to shed light on the driving forces and obstacles to the development of blue entrepreneurship in fishing communities through an innovative entrepreneurial ecosystem approach. The results of a qualitative survey, conducted through a questionnaire addressed to representatives of 80 stakeholders (private companies, local authorities, development companies, Local Action Groups for Fisheries (FLAGs), organizations, NGOs, academic and research institutions) based in and around coastal fishing communities, are explored in order to identify the driving forces and barriers to the development of blue entrepreneurship. The research was conducted by selecting stakeholders from five distinct coastal regions of Greece. These regions are dependent on fishing and have local Community-Led Local Development (CLLD)/LEADER programs that were funded by the Operational Program Fisheries and Maritime Affairs 2014–2020 during the 2014–2020 programming period. Subsequently, adopting existing models through an entrepreneurial ecosystem approach, the driving forces and obstacles highlight the weaknesses of Greek blue entrepreneurial ecosystems in coastal fishing communities, focusing on the existing blue framework conditions and the existing blue systemic conditions. Finally, the primary conclusions of the research are emphasized, and policy proposals are advanced to encourage the establishment of blue entrepreneurial ecosystems in Greek coastal fishing areas.

This paper explores public policy’s role and capability in fostering the emergence and evolution of entrepreneurial ecosystems. While the entrepreneurial ecosystem approach has focused on the ingredients and essentials of entrepreneurial ecosystems, the policy-focused dimensions are lacking, and especially insights derived through the “real world” policy efforts to develop entrepreneurial ecosystems. This paper contributes to the discussion by focusing on various actors’ roles in supporting entrepreneurship and facilitating interaction and collaboration within entrepreneurial ecosystems by taking a participatory action research approach to study the case of ecosystem-based policy in Finland. Findings illustrate that public policy may incubate and facilitate entrepreneurial ecosystems through regionally embedded actors. Through well-designed, sustainable and leadership-based innovation services, entrepreneurs are linked to co-creation processes, data, infrastructure and competencies to support new ventures whilst benefitting also the regional ecosystem. However, the challenge lies in embedding the processes in other regional contexts in which the organisations and institutional settings may be different.

Entrepreneurial ecosystems in smart cities for tourism development: From stakeholder perceptions to regional tourism policy implications

This article discusses the importance and articulation of innovation policy from the point of view of the entrepreneurial ecosystem approach. The paper takes the form of a literature review. To this end, the authors describe the analysis of industrial policy based on the entrepreneurial ecosystem approach proposed by Stam (2018). The research finds that innovation policy plays a crucial role in a competitive entrepreneurial environment to achieve creative destruction. The Policy tries to solve the problems that hinder the interaction of the factors that make up the entrepreneurial ecosystem. Different policy tools should be developed to formulate policies for the entrepreneurial ecosystem. Additionally, successful innovation policy tools in one ecosystem could be applied in another ecosystem.

Covid-19 has significantly affected the sport industry particularly in terms of the way games are played and watched. This has meant major changes in the way sport entities including athletes, coaches and managers interact in society. As a result of this change an entrepreneurial ecosystem approach is advocated that enables sport stakeholders to communicate and interact regarding matters of change. This will enable the sport industry to bounce back faster than other industries due to the solidarity and mutual understanding shown by stakeholders within their entrepreneurial ecosystem. This chapter focuses on the ways sport entities can do this by taking a practical approach that embed an entrepreneurial ecosystem perspective.

This article discusses the importance and articulation of innovation policy from the point of view of the entrepreneurial ecosystem approach. The paper takes the form of a literature review. To this end, the authors describe the analysis of industrial policy based on the entrepreneurial ecosystem approach proposed by Stam (2018). The research finds that innovation policy plays a crucial role in a competitive entrepreneurial environment to achieve creative destruction. The Policy tries to solve the problems that hinder the interaction of the factors that make up the entrepreneurial ecosystem. Different policy tools should be developed to formulate policies for the entrepreneurial ecosystem. Additionally, successful innovation policy tools in one ecosystem could be applied in another ecosystem.

In its most abstract sense, an ecosystem is a biotic community, encompassing its physical environment, and all the interactions possible in the complex of living and nonliving components. Economics has always been about systems that explain differential output and outcomes. However, economics has generally ignored the role of entrepreneurship in economic systems, just as entrepreneurship studies have largely overlooked the role of systems in explaining the prevalence and performance of entrepreneurship. The entrepreneurial ecosystem approach has the promise to correct these shortcomings. Its two dominant lineages are the regional development literature and the strategy literature. Both lineages share common roots in ecological systems thinking, providing fresh insights into the interdependence of actors in a particular community to create new value. But studies of both regional development and strategic management have largely ignored the role of entrepreneurs in new value creation. In this paper, we will outline contributions to the entrepreneurial ecosystem approach and conclude with a promising new line of research to our understanding of the emergence, growth, and context of start-ups that have achieved great impact by developing new platforms.

Entrepreneurial ecosystems for developing the sports industry in European Union countries