Entrepreneurial ecosystems and public policy in action: a critique of the latest industrial policy blockbuster

Abstract

Efforts to develop entrepreneurial ecosystems (EEs) have proliferated in recent years, marking it out as the latest industrial policy ‘blockbuster’. This article reports the findings from the first comprehensive empirical analysis of EE policy approaches. It posits a basic typology of different policy frameworks deployed under the ecosystem rubric. The findings suggest the concept is fraught with conceptual ambiguity and is predominantly (and rather crudely) used to promote ‘more’ entrepreneurship. The research suggests the concept is a ‘messy metaphor’, open to wide-ranging misinterpretation and misuse by policymakers. In terms of recommendations, eradicating network failures, avoiding crude policy isomorphism and tailoring bespoke interventions to the specific nature of EEs are viewed as key policy lessons.

Some Causal Effects of an Industrial Policy

“…For example, the final column suggests that a 10 percent increase in subsidy spending leads to a 2.9 percent increase in manufacturing jobs and a 1.3 percent fall in area unemployment and no effect on non-manufacturing jobs. 25…”

“…Using the ln(total number of jobs) has a coefficient (standard error) of 0.353 (0.144) on NGE in this IV specification. 25 Since some of the subsidies (and their effects) could persist for longer periods of time after an area becomes eligible, we may be underestimating the longer-term effect as our dataset ends in 2004. 26 The structural funds are the financial tools the European Union uses to implement regional policy (see http:// ec.europa.eu/regional_policy/en/funding/).…”

An infatuation with building things: Business strategies, linkages, and small city economic development in Manitoba

“…First, much of the body of EE research has focused on the presence or absence of specific business components in a given region (Brown & Mason, 2017;Isenberg, 2011;Mack & Mayer, 2016). Concurrently, attention to interfirm and interregional connectivity related to firm growth (such as business partners and suppliers) has been limited (Brown & Mawson, 2016;Motoyama & Knowlton, 2016). More evidence is needed to build an understanding of how regional business clusters leverage connectivity strategies to grow.…”

“…EEs are powerful in large part because of the ecological analog to which they appeal: business clusters evolve based on regional endowments of a variety of business resources and nutrients (Moore, ). Although the EE literature has been subject to critique, including calls for better definition and more rigorous testing of the concept (Brown & Mason, ; Stam, ) and for having multiple and varying definitions (Brown & Mawson, ), the framework has also been widely accepted as a powerful conceptual and analytical tool for exploring the myriad functions and factors involved with regional innovation and growth (e.g., Feld, ; Isenberg, ; Kantis & Federico, ; Mack & Mayer, ; Malecki, ).…”

The Effects of Corruption in Entrepreneurial Ecosystems on Entrepreneurial Intentions

“…Stam (2015Stam ( , 2018, taking hints from the pioneering work of North (1991) and the literature on the topic, provided a rather complete description of the factors that can, together, affect entrepreneurship. He, therefore, made a distinction between framework conditions (formal institutions, informal institutions (e.g., entrepreneurial culture), demands for new goods and physical infrastructure) that are linked to the value creation process within EE, and systemic conditions (networks of entrepreneurs, leadership, finance, talent, knowledge and support services) that are specifically connected to the start-up process (Stam 2015(Stam , 2018Brown and Mawson 2019). Despite the distinctions briefly reported, the factors are intended to interact among themselves (Stam 2018;Singh et al 2019) and create aggregate value through virtuous circles (Faggian et al 2017), as interaction is a key, core element of the entrepreneurial ecosystem model.…”