Entrepreneurial Ecosystems: Dynamics and Metrics

Martin Bliemel & Deepa Subhadrammal

Renu Agarwal, Chris Bajada & Sancheeta Pugalia

James Francis

• introduction and aim: Introduction to the study, its objectives and/or hypotheses

The concept of Entrepreneurial Ecosystems (EEs) combines Aldrich’s (1990) ecological perspective of entrepreneurship with Audretsch’s (2015) work on the strategic management of place. The dominant underlying perspective of EEs is economic geography (e.g., Stam, 2015; Spigel, 2017; Spigel & Harrison, 2015). This perspective offers flexibility in the unit of analysis, allowing a national or regional analysis levels (Isenberg, 2010) or a local perspective (Roundy et al, 2018; Bliemel et al, under review). Much of the previous EE research tends to emphasize the entrepreneurial outputs and outcomes of the regionally bounded system.

While the EE approach conceptually recognizes the importance of social relations, there is still a lack of an understanding or empirical validation of the complex interactions within the EE. For instance, Spigel notes “An entrepreneurial ecosystem is not simply a region with high rates of entrepreneurship; this mistakes the effect for the cause. Instead, ecosystems are defined by the connections between the attributes that produce them and the benefits they provide to entrepreneurs” (2017: 66). Similarly, Stam defines EEs as a “set of interdependent actors and factors coordinated in such a way that they enable productive entrepreneurship” (2015, p. 5). These relationships are particularly evident for policy makers, since “effective [EE] policy has to deal with a large number of variables interacting in highly complex and specific ways” (Isenberg 2011, p.7).

This aim of this project is to adopt a mixed-methods approach to pilot a methodology for assessing the ‘health’ of entrepreneurial ecosystems. This entails a coordinated approach to (i) qualitatively validating the interactions and dynamics within the ecosystem and (ii) quantitatively assessing the magnitude and completeness of the ecosystem.

In comparison to this study, prior research is limited to theoretical frameworks that list factors or ingredients in ecosystems, but lack detail of their interconnections. Industry reports such as the Startup Genome rankings or StartupMuster’s count of startups also fail to qualitatively appreciate the interconnections within the ecosystem and the dynamics of how ecosystems support lifecycles of firms (birth, growth, decline, death, and recycling). A more comprehensive systems view is required to inform research, policy and practice.

• research methodology: Methods used and/or approach taken

The qualitative micro-level study of ecosystems is guided by identifying members of the ecosystem following Stam’s (2015) list of factors and the actors who represent them. For every type of actor, we interview them regarding (i) basic profile information about the organisation, (ii) value-adding functions they perform, (iii) interactions with others to create value. As an exploratory research, this study employs open ended questions, with the aim to prepare for developing a structured interview protocol.

The quantitative analysis of ecosystems is guided by the results of these interviews and by publicly available resources to quantify the actions and interactions of actors in the ecosystem (e.g., estimating numbers of actors of each actor type, their frequency and intensity of interaction, and probabilistic outcomes of those interactions).

Using this mixed-methods approach, move from a conceptual framework to a theoretical model with which to simulate or forecast ecosystem impact and dynamics.

• results and implications: Results and/or arguments summarised

This pilot project has implications for a common methodology to study entrepreneurial ecosystems across regions and time. This is relevant to the national group of ecosystem researchers in Australia (EED R&P Network) and directly analogous to the Canada-wide Innovation Systems Research Network (ISRN), of which one of the authors was a core member of the Vancouver team. With this national network, the robustness of the approach being piloted in this study can be gauged through a process of cross-examination and validation at other sites. The method developed here, is a more concrete operationalisation of the conceptual methodology which has emerged over three national EED R&P Network meetings in Adelaide.

In the short-term, the results from this pilot study will also be useful to the startup community (incl StartupAus and policy makers).

• conclusion: Main outcomes of the study

This research aims to make three contributions by addressing these overarching research questions:
1. Methodological: How can entrepreneurial ecosystem health be assessed (via qualitative profiling or quantitative metrics)?
2. Theoretical: Are there ecosystem-level capabilities that enable them to adapt to new and changing circumstances?
3. Practical: How can this profile or metric inform industry associations such as StartupAus, policy makers, entrepreneurs and other actors to ‘future-proof’ their ecosystem?