Author Information : Hooman Abootorabi (Department of Entrepreneurship, Whitman School, Syracuse University)
Johan Wiklund (Department of Entrepreneurship, Whitman School, Syracuse University)
Alan Johnson (Nord University)
Cameron Miller (Department of Management, Whitman School, Syracuse University)
Year of Publication : Journal of Business Venturing, 2021
Summary of Findings : Our findings provide evidence that a top-down policy approach to create an entrepreneurial ecosystem does not seem viable.
Research Questions : How does an entrepreneurial ecosystem evolve?
How do different activities (entry, exit, growth & survival) within an entrepreneurial ecosystem interact with each actor?
How do different forms of resource provision (government grants, venture capital, business incubation) associate with the health of an ecosystem?
What we know : The entrepreneurial ecosystem (EE) perspective has become a popular topic among scholars, policy makers, and practitioners to describe the complex interdependencies of actors and activities that enhance entrepreneurial activity. However, there is a discrepancy between conceptual versus empirical studies in this area. Conceptual studies highlight dynamics of an EE, while empirical studies fall short in examining the dynamic process. In this line, our exploratory methodology in this paper allows identifying complex dynamics of an EE, and the co-evolution of different activities within an EE. We also provide empirical evidence on how government grants, business incubation, and venture capital (VC) support affect the development of an EE.
Novel Findings : We study nearly the entire population of Norwegian academic spin-offs (i.e., firms started to commercialize an invention created within universities) over a long period, combined with resource providers and ecosystem services. Our results are rich and detailed, and we offer deep explanations regarding how an academic spin-off (ASO) entrepreneurial ecosystem (EE) evolves. To provide some examples, we show that there is a tightly knit EE with collaboration and knowledge spillover. Many ASOs have extensive relationships with multiple resource provider organizations. Government grants play an important role in driving the number of new venture and exits. Many ASOs that received grants are non-productive and fail to survive when competition for resources intensifies. Regulatory changes introduce uncertainties and have unintended consequences that disrupt the ecosystem. Combining public grants with venture capital (VC) support appears to help create or shape a small number of firms that make a disproportionately large economic contribution to the ecosystem. On the contrary, by insulating ASOs from market pressure, business incubators do not seem to increase viability and productivity of new ventures in the long run. Overall, our findings provide evidence that a top-down policy approach to EEs does not seem viable.
Novel Methodology : In this study, we apply exploratory quantitative methods that help us identify dynamics of an entrepreneurial ecosystem (EE). Taking a holistic approach, we also concurrently analyze multiple activities (business entry, exit, growth & survival) within an EE. All these approaches are novel to the context.
Implications for Policy: Our analysis of findings has implications pertinent to policy and governance. Perhaps, the most important insight is that it is difficult to successfully implement large-scale top-down policies in support of EEs. That is mainly because it is hard to foresee what the outcomes will be, and unpredictable adaptations can emerge in response to such policies as the result of dynamic patterns of behaviors. Therefore, the goal should be building EEs that are capable of learning from failure and subsequently improving their support mechanisms iteratively with a bottom-top approach, rather than designing or creating impeccable EEs with a top-down approach.
Implications on Research: Our findings and our methodological approach have implications to future research and theory development. Our holistic approach and infusing concepts and nomenclature from ecology and evolutionary biology helps better theorizing EEs. We also apply exploratory quantitative methods that are novel to this context. Our methodological approach helps better design future studies, identify relevant research questions, and inform hypotheses. Based on our findings, future researchers need to be aware that blindly applying traditional statistical approaches may lead to biased conclusions. In fact, our holistic approach provides a picture that complement statistical methodologies.
Full Citations : Abootorabi, H., Wiklund, J., Johnson, A., Miller, C., (2021). A holistic approach to the evolution of an entrepreneurial ecosystem: An exploratory study of academic spin-offs. Journal of Business Venturing, 36(5), https://doi.org/10.1016/j.jbusvent.2021.106143.
Abstract : Our findings and our methodological approach have implications to future research and theory development. Our holistic approach and infusing concepts and nomenclature from ecology and evolutionary biology helps better theorizing EEs. We also apply exploratory quantitative methods that are novel to this context. Our methodological approach helps better design future studies, identify relevant research questions, and inform hypotheses. Based on our findings, future researchers need to be aware that blindly applying traditional statistical approaches may lead to biased conclusions. In fact, our holistic approach provides a picture that complement statistical methodologies.
Click here to access Full Paper
