Entrepreneurial Ecosystems in European Union Regions

Abstract

Abstract While the entrepreneurship ecosystem literature has gone through a rapid expansion over the past decade, it is still in an early phase in terms of its theoretical and conceptual development. Complexity theory provides a suitable way to study the emergence of new structures, to describe the relationship among the system elements, and to examine the time-evolving dynamics of the constituents. In this chapter we provide a short, dynamic, complexity theory-based theoretical underpinning of the regional ecosystem measure, the Regional Entrepreneurship and Development Index (REDI). Moreover, we also enhance the REDI methodology by building on the Benefit of the Doubt (BOD) weighting technique. This weighting system reflects a value judgement on what are the optimal configurations of REDI constituents. This approach, based on homogeneous (across regions) and fixed (across pillars) weights, ignores region-specific heterogeneity, which may obscure policymaking processes. However, if policymakers are given objective, non-arbitrary information about the importance of REDI pillars, resource allocation should follow an economically meaningful process. Quantity improvements are ensured if additional resources are deployed, but for an equal quantitative change in the REDI score enhancements will be qualitatively superior if policymakers target a clear set of priorities. Based on the BOD enhanced REDI (REDI BOD) scores and the fourteen pillars of REDI, we provide REDI (BOD) scores for 124 European Union (EU) regions, conduct a grouping by cluster analysis, and offer policy suggestions for twenty-three large EU city-regions.