An embarrassment of riches

Over the past few weeks, a whole host of new articles have come out on entrepreneurial ecosystems and related concepts. I think it's getting to the point where it's hard for one person to have read everything on the topic, if that was even possible. It's really great seeing the field develop over the past few years. Without further adu, here are some papers that I think are worth checking out. I haven't read all of them yet, but I think I'll be citing a lot of these papers in the future.

Towards a Process Theory of Entrepreneurial Ecosystems

“Entrepreneurial ecosystems have recently emerged as a popular concept within entrepreneurship policy and practitioner communities. Specifically, they are seen as a regional economic development strategy that is based around creating supportive environments that foster innovative start-ups. However, existing research on entrepreneurial ecosystems has been largely typological and atheoretical and has not yet explored how they influence the entrepreneurship process. This article critically examines the relationships between ecosystems and other existing literatures such as clusters and regional innovation systems. Drawing on this background, the article suggests that a process-based view of ecosystems provides a better framework to understand their role in supporting new venture creation. This framework is used to explain the evolution and transformation of entrepreneurial ecosystems and to create a typology of different ecosystem structures.”

Why I think this is interesting: A bit of a cheat, since I wrote this. But you should read it! The point of this article is to really think about what we study when we study ecosystems. Richard and I argue that we should really look at the practices entrepreneurs use to get resources within an ecosystem rather than the ecosystem itself.

Hierarchical and relational governance and the life cycle of entrepreneurial ecosystem

“In this paper, we explore the way the evolution of entrepreneurial ecosystems is shaped by different governance designs. We propose a theoretical framework in which we discuss what type of governance design would best fit the needs of an entrepreneurial ecosystem throughout its evolution. We also provide argumentations concerning the mechanisms that may explain the evolution through the different governance configurations. The conceptualization of a new framework has allowed us to specify a set of propositions, which we have tested on one single empirical setting, represented by Turin’s entrepreneurial ecosystem. The paper introduces some important policy implications. It highlights the need for a more complex relational form of governance for the growth of an entrepreneurial ecosystem, which could be obtained by means of a systemic and participative approach rooted in shared cooperative norms and informal routines.”

Why I think this is interesting: I'm always a fan of careful mixed-methods case studies of individual ecosystems. Anything that combines network analysis and longitudinal study are going to go to the top of my reading pile.

Take-up and variation of advice for new firm founders in different local contexts

“Although business advice has been linked to entrepreneurial outcomes, it is subject to information asymmetries and market failure. We argue that the knowledge concerning from whom to take advice before starting a new firm is more easily accessed in areas with high start-up rates which therefore ameliorates market failure. The study is based on surveys of 599 new firm founders in England and 381 new firm founders in Catalonia. A series of probit and heteroskedastic probit models are employed to investigate not only the probability of taking advice but also the variance in that probability, which reflects uncertainty. Supporting our view, the findings show that the taking of advice in the places with higher start-up rates exhibit less variation compared to other localities. We also find differing effects of place on the take up and variation of private sector and public sector advice. Implications from the findings are discussed”

Why I think this is interesting: Why I think this is interesting: Part of my evolving thinking about ecosystems is that they are primarily about entrepreneurs learning about entrepreneurship. However, this only works if entrepreneurs are actually open to learning about entrepreneurs. So, I've been trying to understand how open entrepreneurs actually are to learning from others and actually changing what they do.

The behavioural foundations of urban and regional development: culture, psychology and agency

“Urban and regional development theory is largely rooted in explanations based on the location, agglomeration and organisation of firms, industries and capital. Contemporary economic geography theory, however, is moving towards a (re)turn to addressing the role of human behaviour in determining urban and regional development outcomes. This article focuses on the concepts of culture, personality psychology and agency in order to understand how these behavioural factors interact and result in development differentials across cities and regions. It is proposed that psychocultural behavioural patterns provide a basis for understanding the type and nature of human agency within cities and regions. Furthermore, it is argued that such agency is based on a rationality that is spatially bounded, and intrinsically linked to the nature, source and evolution of institutions and power. It is concluded that the integration of human behavioural aspects into urban and regional development theory offers significant potential for exploring and explaining long-term evolutionary patterns of development.”

Why I think this is interesting: At the end of the day, ecosystems is just the newest way of thinking about the tension between structure and agency within the entrepreneurship process. I'll always read any article that tries to figure out what the balance between these two forces (though I'm a bit salty they didn't cite my article on the topic in ERD). 

Laboratory of the Precarious: Prototyping Entrepreneurial Living in Shenzhen

“Making has been envisioned as an enabler of an entrepreneurial self that prototypes hopeful interventions into precarious work and life conditions. This article unpacks how Shenzhen, a city in the south of China, was transformed from a site of low-quality production into the ideal laboratory for this subjectivity of entrepreneurial living. It shows how prominent and mostly male actors began experimenting with professional identity and expertise in design and engineering by articulating their engagement with Shenzhen through feminist and postcolonial critiques. Because these critiques only figured implicitly and were unacknowledged, the potential to build more democratic worlds was undermined.”

Why I think this is interesting: A bit of a deep cut here. It's not exactly about ecosystems, but I think this will be a useful critique of who we think of as the typical 'ecosystem entrepreneur.' We need to make sure we're critiquing the concepts and categories we're using.

Accelerator Expertise: Understanding the Intermediary Role of Accelerators in the Development of the Bangalore Entrepreneurial Ecosystem

“To understand the intermediary role of accelerators in the developing regional entrepreneurial ecosystem of Bangalore, we analyze data from 54 interviews with accelerator graduates, accelerator managers, and other ecosystem stakeholders, and from 49 websites, 13 online video interviews, 26 online news sources and 301 pages of policy documents. Specifically, we adopt a socially-situated entrepreneurial cognition approach to theorize how accelerator expertise, existing at a meso-level, intermediates between (micro-level) founders and the (macro-level) ecosystem. In our model, four types of accelerator expertise—connection, development, coordination, and selection—together increase stakeholders’ commitment to the entrepreneurial ecosystem, leading to venture validation (success or failure) and ecosystem additionality. These findings indicate that accelerators contribute to ecosystems in a way that is distinct from, but supportive of, building individual ventures.”

Why I think this is interesting: Not going to lie, I'm a bit salty this paper didn't cite me too. But I'm so desperate for good research articles on ecosystems from outside the UK and Western Europe I'm willing to overlook that party foul.

How Entrepreneurial Ecosystems Take Form: Evidence from Social Impact Initiatives in Seattle

“Research Summary This research uses insights from field theory to explore the early moments of how entrepreneurial ecosystems form through everyday interactions. We examine the cultural-cognitive and material micro-dynamics of activities occurring in support of social impact entrepreneurs and businesses from 2000 to 2014 in the Seattle WA region using archival and interview data sources. The pattern of results about what actors do and how interactions change over time supports a two-period model of ecosystem formation where initial distributed and disparate activity undergoes a phase transition to coalesce into a more coordinated and integrated social order. The findings point to endogenous sources of structuring, including language and interaction, rather than exogenous sources such as government action or instrumental policy goals. ”

Why I think this is interesting: Every third person I've talked to about ecosystems has said they're doing something on social enterprise ecosystems, but this is the first paper I've actually seen on it in the wild. I've got my own poker in this fire, but it's good to see that others are exploring this issue.

Article of the Week: The Ecological Fallacy in National Cultural Research by Brewer and Venaik

I'll try a new experiment, a short note about an interesting paper I've read in the past week or so. Hopefully in an entertaining way, but I can't promise anything: it's really hard to punch up regression tables or structural equation models. I can't even promise it'll stay an article of the week, I'll be lucky if I can keep to an article a fortnight. Paul Brewer and Sunil Venaik's new paper in Organizational Studies provides a real valuable service to entrepreneurship and organizational studies people who want to look at culture. I think you'd be hard pressed to find anyone who doesn't at least agree that culture has a huge impact on how organizations operate. But the chief stumbling block in studying it is quantification. How power oriented is the culture? Can we measure it to the second decimal place?

Geert Hofstede came up with a great solution to this problem. Throughout the 1970s, he surveyed thousands, eventually over 100,000, IBM workers about psychological and leadership issues. Through the magic of component analysis and (one of my favourite mathematical terms) verimax rotations, he came up with 5 dominant cultural factors and generated scores of them for over seventy countries. Researchers love using this as a basis for work to explain national differences in things such as startup rates, innovation, and economic development. It's a really neat way of connecting something as nebulous of culture with something as important as economic growth through rigorous statistical methods.

So now, Hofstede's work has been criticized from a number of sources — the basic theoretical underpinnings, the methodology, the results, but one aspect has been really overlooked but is present in almost everything that uses this work (and other similar measurements of cultural attitudes). That is the ecological fallacy. This is when you use statistical evidence about an entire population to make judgements about an individual. The paper has a great table showing the problems this causes.

In essence, the authors argue that there are huge problems with taking the 'average' cultural values of an entire country (a country which might have a very heterogeneous population made up of natives and immigrants) and then saying that everyone in that society has cultural values exactly identical to this average. This hides all the variation within a country's cultural outlooks, leaving little room for nuance or variation.

At the end of the day, this kind of outlook contributes to what Duncan (1980) called the reification of culture. This was a criticism of how cultural geographers viewed culture as a real, objective 'thing' that could be examined, measured, and understood. But it's not: it's a weird thing that is maybe part of our basic neurochemistry and is also maybe a complete social construct that is produced and reproduced by the powerful echelons of society. But when we reduce it to a number for a nation, we forget all this complexity in return for empirical parsimony. Brewer and Venaik's paper is a good and timely reminder that it's very hard to simply very complex things.