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The relational organization of entrepreneurial ecosystems
Citation for published version:
Spigel, B 2017, 'The relational organization of entrepreneurial ecosystems', Entrepreneurship Theory and
Practice, vol. 41, no. 1, pp. 49-72. https://doi.org/10.1111/etap.12167
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10.1111/etap.12167
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Entrepreneurship Theory and Practice
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1
The Relational Organization of Entrepreneurial Ecosystems
Entrepreneurial ecosystems have emerged as a popular concept to explain the persistence
of high-growth entrepreneurship within regions. However, as a theoretical concept ecosystems
remain underdeveloped, making it difficult to understand their structure and influence on the
entrepreneurship process. The paper argues that ecosystems are composed of ten cultural, social,
and material attributes that provide benefits and resources to entrepreneurs and that the
relationships between these attributes reproduce the ecosystem. This model is illustrated with
case studies of Waterloo, Ontario and Calgary, Alberta, Canada. The cases demonstrate the
variety of different configurations that ecosystems can take.
1. Introduction
Entrepreneurial ecosystems have become a popular tool in the study of the geography of
high-growth entrepreneurship. Ecosystems are the union of localized cultural outlooks, social
networks, investment capital, universities, and active economic policies that create environments
supportive of innovation-based ventures. They are seen within the academic (Feldman et al.,
2005; Acs et al., 2014), policy (Isenberg, 2010; World Economic Forum, 2013) and popular
business literature (Feld, 2012; Hwang and Horowitt, 2012) as a critical tool for creating resilient
economies based on entrepreneurial innovation. But research on ecosystems is under-developed
and under-theorized. Ecosystems represent more of a conceptual umbrella encompassing a
variety of different perspectives on the geography of entrepreneurship rather than a coherent
theory about the emergence of sustainable communities of technology entrepreneurs. This fosters
a tendency amongst policymakers to import best practices from thriving ecosystems without
regard to the underlying local economic and cultural attributes on which their success depends
(Harrison and Leitch, 2010). This is in part due to the tendency for research on entrepreneurial
ecosystems to focus on individual cultural, economic, and policy elements while ignoring how
the interdependencies between these elements create and reproduce the overall ecosystem
(Moyoyama and Watkins, 2014).
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This paper addresses this gap by examining the attributes constituting entrepreneurial
ecosystems, the relationships between them, and how they influence the competitiveness of new
ventures. In order to be an effective theoretical construct, entrepreneurial ecosystems need to be
more than a label for regions with high rates of entrepreneurship. Rather, ecosystem theory
should focus on the internal attributes of ecosystems and how different configurations of these
attributes reproduce the overall ecosystem and provide resources to new ventures that they could
not otherwise access. This helps differentiate the outcomes of a successful ecosystem — high
rates of entrepreneurship — from the internal processes and governance strategies that create and
sustain them. It also emphasizes the fact that there are multiple ways an ecosystem can develop.
Illustrative case studies of Calgary and Waterloo, Canada are used to explore the different
possible configurations of entrepreneurial ecosystems and how this affects the types of resources
entrepreneurs can draw to start and grow their firms. Calgary’s ecosystem is driven by its strong
local oil and gas market, which creates numerous opportunities for new ventures and attracts
highly skilled workers and financial capital to the region. Waterloo’s ecosystem is driven by an
underlying entrepreneurial culture that fosters strong networks of entrepreneurs, advisors, and
investors and well-performing public entrepreneurship training and support programs. Despite
their different configurations, both confer significant benefits to new ventures, suggesting they
are supportive of entrepreneurial ecosystems.
The following section reviews existing theories about entrepreneurial ecosystems and
related concepts of clusters, regional innovation systems, and networks. Ten core cultural, social,
and material attributes of entrepreneurial ecosystems are identified. Section three moves on to
discuss the relational structure of these attributes within an ecosystem. The paper argues that
successful ecosystems are not defined by high rates of entrepreneurship but rather how the
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interaction between these attributes creates a supportive regional environment that increases the
competitiveness of new ventures. This is illustrated in sections four and five by case studies of
entrepreneurial ecosystems in Waterloo, Ontario and Calgary, Alberta. These case studies
demonstrate the different possible configurations of entrepreneurial ecosystems and the
implications this has for the entrepreneurship process within them. The paper concludes in
section 6 with a discussion of the implications of this new perspective of entrepreneurial
ecosystems and suggestions for directions for future research.
2. THE STRUCTURE OF ENTREPRENEURIAL ECOSYSTEMS
2.1 The Attributes of Entrepreneurial Ecosystems
Entrepreneurial ecosystems are combinations of social, political, economic, and cultural
elements within a region that support the development and growth of innovative startups and
encourage nascent entrepreneurs and other actors to take the risks of starting, funding, and
otherwise supporting high-risk ventures. As originally defined by Dubini (1989) ecosystems (or
as she called them, environments) are characterized by the presence of family businesses and
role models, a diverse economy, a strong business infrastructure, available investment capital, a
supportive entrepreneurial culture, and public policies that incentivize venture creation. Others
like Spilling (1996), Neck et al. (2004), and Kenney and Patton (2005) highlight features such as
skilled workers, lawyers and accountants specializing in the needs of new ventures, and large
local firms or universities to act as talent attractors and spinoff generators. More recent work by
Isenberg (2010) and groups such as the World Economic Forum (2013) have argued that
accessible local and international markets, available human capital and financing, mentorship
and support systems, robust regulatory frameworks, and major universities are the most
important pillars of an ecosystem.
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Thinking about entrepreneurial ecosystems draws on a heterodox literature that includes
work on clusters (Marshal, 1920; Porter, 1998; 2000; Delgado et al., 2010), innovations systems
(Cooke et al., 1997; Fritsch, 2001), economic geography (Malecki, 1997; Feldman, 2001), and
social capital (Westlund and Bolton, 2003) and networks (Sorenson and Stuart, 2001; Stuart and
Sorenson, 2003). While these approaches differ in their methodological and conceptual outlooks,
they share a common belief that certain attributes exist outside the boundaries of a firm but
within a region that contributes to the competitiveness of a new venture. In general, these
perspectives emphasize three main regional resources that contribute to increased
entrepreneurship and growth. First, shared cultural understandings and institutional environments
that ease inter-firm cooperation and normalize practices such as knowledge sharing and firm
mobility (Henry and Pinch, 2001; Gertler, 2003), or act as barriers to this kind of activity
(Saxenian, 1994; Staber, 2007). Second, social networks within regions create pathways for
knowledge spillovers between firms and universities (Owen-Smith and Powell, 2004), help
spread information about entrepreneurial opportunities (Arenius and de Clercq, 2005), and
connect entrepreneurs with financiers (Powell et. al., 2002). Finally, government policies and
universities can help support these cultures and networks by removing institutional barriers to
entrepreneurs, training skilled workers and entrepreneurs, and funding specific support programs
such as networking events and incubation facilities (Feldman and Francis, 2004).
There is an obvious harmony between the concepts of entrepreneurial ecosystems,
clusters, and regional innovation systems (RIS). Each argues that a major part of firms’
competitive advantage is related to the resources found within the region rather than residing
solely within the firm (Porter, 2000; Asheim et al., 2011). These regional resources may include
access to a shared regional labor pool, local knowledge spillovers, or connections with nearby
