Levels of necessity of entrepreneurial ecosystems elements

Abstract

The literature emphasizes that interactions between biotic (the individual) and abiotic entities (the institutional environment) are central to entrepreneurial ecosystems. However, despite the importance of digital entrepreneurial ecosystem (DEE) elements, it might be questioned if all elements are equally necessary. Furthermore, different outputs might require different conditions. The same can happen with different levels of a given output. The answer to these questions is of particular concern from a policy perspective. By using necessary condition analysis (NCA) alongside with fuzzy-set qualitative comparative analysis (fs/QCA), this study advances understanding of the entrepreneurial ecosystems. While fs/QCA identifies only one necessary condition to produce digitally-enabled unicorns – market conditions – and none to unicorns and new business creation, NCA shows that all elements of DEE are necessary to produce digitally-enabled unicorns, and most of them are also necessary for producing unicorns. NCA also identifies formal institutions, regulations, and taxation and finance as necessary conditions for new business creation. Moreover, NCA shows that necessary conditions do not have the same degree of importance, and the necessity of a given condition does not automatically imply its highest level is required. For researchers, these results emphasize the importance of using NCA as a complement of fs/QCA. For practitioners, these findings can be used to optimize the allocation of policy resources, particularly targeting the elements that constitute bottlenecks. Plain English Summary Policymakers should target different levels of entrepreneurial ecosystem pillars performance to produce unicorns. Ambitious entrepreneurship is important for country competitiveness in the digital age. Digital entrepreneurial ecosystems can facilitate the rise of digitally-enabled unicorns, an extreme case of ambitious entrepreneurship. This study shows which conditions are necessary to produce this output; these conditions can be required at different levels. The comparison of country’s performance on each condition shows which of them constitute bottlenecks. Although all elements of digital entrepreneurial ecosystems are relevant for digitally-enabled unicorns, policymakers should target the ones that constrain the emergence of this output. This study identifies the levels that should be reached in each condition, not only for digitally-enabled unicorns, but also for unicorns in general. The results show relevant differences between the levels needed for these outputs. For example, knowledge creation and dissemination seem to be more important to boost digitally-enabled unicorns rather than unicorns in general. Thus, policymakers should consider specific levels of the conditions to optimize resource allocation.

Digital technology and national entrepreneurship: An ecosystem perspective

“…culture, formal institutions, and resource endowments) (Spigel 2017 ; Stam and van de Ven 2021 ), digital technology can be viewed as an important element of the entrepreneurial ecosystem in the digital era. Although a few studies have discussed the role of digital technology, they have focused on a specific ecosystem, the DEE (Du et al 2018 ; Elia et al 2020 ; Song 2019 ; Sussan and Acs 2017 ; Torres and Godinho 2021 ). The DEE is a subset of the two larger systems: the digital ecosystem and the entrepreneurial ecosystem (Sussan and Acs 2017 ).…”

“…Recent studies proposed a new framework, the digital entrepreneurial ecosystem (DEE), to explain the role that digital technology plays in entrepreneurship (Du et al 2018 ; Elia et al 2020 ; Song 2019 ; Sussan and Acs 2017 ). In a DEE, digital technology is considered a condition (Autio, et al 2018 ; Torres and Godinho 2021 ) because the DEE focuses on a specific type of entrepreneurship, digital entrepreneurship. Therefore the DEE is a subset of the entrepreneurial ecosystem (Sussan and Acs 2017 ), which may not reveal the general role of digital technology in an entrepreneurial ecosystem.…”

Untitled

“…So defined, productive entrepreneurship is predominantly captured as HGEs and unicorns that profoundly contribute to employment, value added, and innovation [Birch, 1995;Acs et al, 2008;OECD, 2007. Currently, one of the critical challenges in boosting EE studies is to clarify and specify the expected impacts from EEs and related measures [Wurth et al, 2021, Torres, Godinho, 2021. The present understanding of HGEs as productive entrepreneurship is often reduced to considerable and rapid size increases that ensure the referred macroeconomic outputs [OECD, 2007.…”

“…Therefore, recognizing types of governance and their outcomes is critical for theory and policy. Second, a research gap exists regarding the conceptualization and measurement of productive entrepreneurship [Wurth et al, 2021;Torres, Godinho, 2021]. Productive entrepreneurship is predominantly defined as high-growth enterprises (HGEs).…”

Exploring the Governance of Entrepreneurial Ecosystems for Productive High Growth

“…So defined, productive entrepreneurship is predominantly captured as HGEs and unicorns that profoundly contribute to employment, value added, and innovation [Birch, 1995;Acs et al, 2008;OECD, 2007OECD, , 2021. Currently, one of the critical challenges in boosting EE studies is to clarify and specify the expected impacts from EEs and related measures [Wurth et al, 2021, Torres, Godinho, 2021. The present understanding of HGEs as productive entrepreneurship is often reduced to considerable and rapid size increases that ensure the referred macroeconomic outputs [OECD, 2007[OECD, , 2021.…”