Why Entrepreneurial Processes Enable Value Creation in Entrepreneurial Ecosystems

Abstract

There is increasing interest in entrepreneurial ecosystems, which are a system of elements (social, political, economic, and cultural), that produce the synergistic outcomes of value creation through entrepreneurial activity. Because an ecosystem is a set of elements that produce an effect that is not inherent in any one of them (Davis & Marquis, 2005; Hernes, 1998), understanding the mechanisms through which elements are integrated to create value is of prime importance to entrepreneurial ecosystems research that interests scholars, practitioners, and policy makers. Helpfully, work to date has explored the who, what, where and how questions related to entrepreneurial ecosystems, with less attention focused on why such systems are able to produce value. We apply analogical process theorizing (e.g., Chan, 1998) and the creation view of opportunity exploitation (Alvarez & Barney, 2007; Sarasvathy, Dew, Velamuri, & Venkataraman, 2003) to develop theory to explain why entrepreneurial processes help to integrate discrete systems (rational, natural, and open systems) into superordinate systems (i.e., entrepreneurial ecosystems). Our theorizing offers novel explanations for why entrepreneurial ecosystems flourish despite having to integrate discrete, often orthogonal systems.