As any complex organism, to grow and thrive you need to live in (or migrate into) a place capable to supply you all required nutrients for your growth. These places, in ecology literature, are defined as Ecosystems.
<aside> 🔄 “an Ecosystem is a geographic area where plants, animals, and other organisms, as well as weather and landscapes, work together to form a bubble of life.” - National Geographic
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Startups too do not grow in a vacuum. They require an ecosystem to grow.
The ecosystem metaphor in business was first coined back in the ‘90s by Moore, who stated:
“Business ecosystems condense out of the original swirl of capital, customer interest, and talent generated by a new innovation, just as successful species spring from the natural resources of sunlight, water, and soil nutrients.” (Moore, 1993)
To have a chance to survive and grow, startups require fertile soil to sprout, as also continuous feeding from the surrounding environment to put down roots, grow. As you might imagine, without an environment capable to supply the right resources, barely nothing can happen.
Entrepreneurial Ecosystems therefore represent the web of interconnected actors, organizations, institutions and processes which combine, cooperate and connect within a local entrepreneurial environment.
A more polished and clear-cut definition has been given by Erik Stam:
<aside> 💡 Entrepreneurial Ecosystems are a “set of interdependent actors and factors coordinated in such a way that they enable productive entrepreneurship (to emerge)” (Stam, 2015)
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The most famous Entrepreneurial Ecosystem of the world is the Silicon Valley in California. Homeland of companies such as Apple, Google, Facebook, as also of some of the biggest and most successful Venture Capital firms in the world (Sequoia, Accel, a16z). Since 1970, this area of the world saw and increasingly dense ensemble of startups, corporations, talent, research labs, and capital ending up concentrating in the region.
Looking at the success of Silicon Valley, other regions soon started to questioning whether the Silicon Valley model was replicable in their places.
Unfortunately, it is extremely unlikely to replicate Silicon Valley model elsewhere, due to the inherent nature of any ecosystem.
Mechanisms that drive the development of such (eco)systems differ from Complicated System. While for Complicated systems it is possible to identify cause and effects and relationship among actors and factors, in Complex Adaptive Systems it is more complicated since outcomes strongly depend on quality and quantity of interaction between participants. As in any ecosystem, the behavior of agents can change in reaction to the behavior of other participants of the system, thus pattern of past behavior strongly influence what can happen in the future.
This phenomena (called path dependence), together with other properties of Complex Systems, makes extremely unlikely for any region to become as “entrepreneurial” as the Silicon Valley.
Luckily the topic of regional development is converging on findings that suggest that sometimes, when the local mix of organisms meet each other and find fertile soil to collaborate (thus do not try exploit or compete for resources), new ecosystems CAN emerge.
I explicitly highlighted CAN since it is almost impossible to predict how ecosystems evolve over time, even when the right conditions are present.
What is then required to try to kick-start the development of a thriving entrepreneurial ecosystem? Research shows that different mixes of factors and different mechanisms can lead to the development of entrepreneurial regions (for a comprehensive review of such mechanisms see Wurth et al, 2023).