There is currently a rapidly growing interest in the issue of entrepreneurial ecosystems, of which this blog is one manifestation. The term is used to refer to the presence and interaction of a range of entrepreneurial support services, actors, and their environment in a particular place, with more abundant ecosystems being associated with better entrepreneurial outcomes, such as higher rates of firm formation, survival and growth. So it is a source of surprise that more consideration is not given to issues of place quality and spatial configuration in creating places with entrepreneurial ecosystems.
To use a biological metaphor to describe a policy support arrangement might seem at first glance strange. But the terminology makes perfect sense when placed in a longer intellectual tradition, to replace the idea of entrepreneurial support systems.
There has long been a realisation that support services for entrepreneurs do not operate in isolation, but rather they can interact in helping nascent entrepreneurs take the first tentative steps to market. You can get what look like well-trodden pathways for entrepreneurs – for example from technology transfer offices to incubators to venture capitalists – and it can make sense to think of them as a kind of pipeline or system.
But entrepreneurship is fundamentally about creativity and innovation, taking existing assets and doing something entirely new novel with them. So it seems slightly unsatisfactory to use a model based on regularity and reputation to understand a process that is unpredictable and organic.
In my reading, that is the value added of the ecosystem approach, understanding particular collections of entrepreneurs and support activities as creating niches which offer more or less better environments for the next generation of firm creators. And just as the challenge in building a real ecosystem is progressive, so the policy challenge for entrepreneurial ecosystems is in moving from a less fertile to more fertile entrepreneurial ecosystem.
In a ‘real’ ecosystem, barren sand dunes are settled by wild grasses, the soild level moves away from the sea, bushes can grow, and then lagoons may form, giving a ‘peak’ ecosystem through this succession. And likewise, for economic development policy-makers seeking to promote entrepreneurship, the aim is to promote the peak entrepreneurial ecosystem through a gradual accretion and succession process.
The way that different kinds of support services come together in places helps to change the quality of those places. But whilst research has tended to focus on the nature of the services (finance, technology, business advice, real estate, personnel, support services), rather much less consideration is given to the way the spatial layout of entrepreneurial support services in territories helps affect the overall ‘fertility’ of the entrepreneurial ecosystem.
The idea of spatial functions might sound abstract, but it is familiar to anyone who ever goes shopping in a busy city. The city has a clear functional division, shops cluster in particular places, transport connections bring shoppers to those places, and over time, people unselfconsciously behave as if the very purpose of those streets is to function as a ‘shopping centre’.
And to me, an urgent question that needs addressing in studies of entrepreneurial ecosystems is this issue of how can we configure special spaces to maximise their entrepreneurial fertility? How can we create new kinds of city districts and localities that unselfconsciously are highly supportive of entrepreneurs, and what kinds of planning models and policies can we adopt to stimulate more entrepreneurship?
If we think about archetypical entrepreneurial places, then one very simple tool that is used is an incubator; part of its entrepreneurial support effect is connecting new starters to support services. But another – and also equally appreciated – function is to create a community of entrepreneurs, who mutually reinforce, stimulate, support and cajole each other.
This needn’t necessarily be a formal function, but may play out in the canteens, coffee corners and common rooms of these shared entrepreneurial spaces. Indeed, there is a growing fashion for co-working spaces which emphasise primarily these peer support functions and provide less of the traditional entrepreneurship support services.
This raises the question of what would be the optimal physical structure and layout of an entrepreneurial city district, one in which its spatial form had coalesced into supporting an entrepreneurial function? Thinking of high-technology entrepreneurship in particular, we see in the new generations of university-business shared campuses – such as Kennispark in the Netherlands at my own university.
In these entrepreneurial science spaces, university academic groups, shared research infrastructures, high-technology firms, new start-ups and support services are collocated on high quality campus sites. But we still don’t know why – in an age when a colleague on the other side of the world is never more than a skype call away – why these places matter and how they acquire these general properties.
Entrepreneurship happens in places and entrepreneurial places are optimised to play a specialised function within wider territorial contexts. So if we are serious about studying entrepreneurial ecosystems, we need to understand the spaces and their structures as well as the institutions and activities we are all too accustomed to study.