The Cultural Governance of Entrepreneurial Ecosystems

Studying the interplay between cultural, social, and material attributes is key to understanding the larger role of entrepreneurial ecosystems within regional economies. Entrepreneurial ecosystems should not be defined simply as regions with high rates of entrepreneurship; this mistakes the effect for the cause. This would mistake the effect for the cause. Instead, there should be increased attention to the internal dynamics of ecosystems to better understand how they actually support the entrepreneurship process. This paper draws a distinction between munificent and arid ecosystems. In munificent ecosystems like Waterloo, the strong connections between attributes create a mutually reinforcing system in which the cultural outlooks that foster dense networks and effective public programs are themselves strengthened by these factors. In arid ecosystems like Calgary, the lack of these relationships contributes to an overall weaker ecosystem that is less able to cope with economic shocks or downturns in its local economy. Thus, the effects of entrepreneurial ecosystems do not exist in isolation but rather materialize through the combined influence of multiple attributes.

This relational perspective of cultural, social, and material attributes makes three contributions to the study of entrepreneurial ecosystems and the geography of entrepreneurship more broadly. First is the identification of various categories of elements that constitute an ecosystem. This provides a framework for future research methodologies that can analyze and compare entrepreneurial ecosystems to reveal the different ways in which they emerge, change over time, and act influence the entrepreneurship process. Second, it provides for an expanded view of entrepreneurial ecosystems, which acknowledges that the underlying attributes exist in many different regions, even those that do not appear to be traditionally successful entrepreneurial regions. This suggests that many regions contain the potential for a strong ecosystem but their attributes, particularly their cultural and social attributes, must be cultivated over a long period of time. It also demonstrates that high rates of entrepreneurship do not necessarily imply a well functioning entrepreneurial ecosystem or environment. Finally, the importance of relationships between the different attributes demonstrate that new material attributes such as entrepreneurial support organizations, state-financed startup investment schemes, or new university technology and knowledge transfer programs, are unlikely to succeed if they are not underpinned by complimentary social and cultural attributes. Regional entrepreneurial policy therefore should focus on building underlying support for these new programs rather than expecting the programs themselves to create entrepreneurial cultures and networks.

As research on entrepreneurial ecosystems continues to develop, there is a need for a detailed theoretical framework to understand the processes through which ecosystems emerge, change, and influence the activities of entrepreneurial actors within them. Without this, research on ecosystems risks devolving into simple description of successful regions that lacks any claim to more generalizable findings about ecosystem’s internal dynamics or its role in economic development. Identifying the attributes of entrepreneurial ecosystems and their relationships is the first part of a much broader research agenda. There is also a need for a dynamic perspective that seeks to understand how the structure and influence of ecosystems change over time in response to both external economic and social shocks as well to internal changes, such as entrepreneurial successes or the concerted philanthropic or organizational efforts of a few ‘ecosystem entrepreneurs.’ At the same time, researchers must develop metrics that can be used to identify the presence of the ecosystem attributes discussed in this paper and compare them between different regions. While some metrics, such as startup rates, VC investment, and the size of entrepreneurial exits are readily available, gathering comparable data on cultural outlooks or the effectiveness of social networks is much more difficult. These research developments will provide both a more nuanced and rigorous understanding of how entrepreneurial ecosystems affect the entrepreneurship process but will also enable more precise and reliable policy recommendations to strengthen existing ecosystems and develop them in regions without histories of successful entrepreneurial growth.

Without a strong theoretical foundation and clear metrics, the term ‘entrepreneurial ecosystem’ risks becoming a buzz word that encourages policy interventions that do little more than generate consultancy fees. But as a concept, entrepreneurial ecosystems provides several important insights into the nature of entrepreneurship within a community that makes it a valuable addition to the literature. It emphasizes the importance of the larger community in creating and sustaining supportive environments and highlights the fact that entrepreneurship is an interactive process involving a diverse array of parties rather than the act of a solitary entrepreneur. Therefore, the development of research on entrepreneurial ecosystems should focus not on the rates of entrepreneurship within a region but rather the development of supportive (or non-supportive) attributes and communities and the processes through which these affect the actions, outlooks, and practices of entrepreneurial actors.

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