Digital affordances and entrepreneurial dynamics: New evidence from European regions

The advent of digital economy has brought about major changes, and understanding their impacts on entrepreneurial dynamics is a challenge for managers and policymakers. We adopt Richard Florida's three Ts (talent-tolerance-technology) framework for a region and evaluate how the interplay between technology and digital affordances shape regional entrepreneurial dynamics. Using data on 112 European regions in 21 countries (2008-2015) we distinguish between the role that technology and digital affordances play on new business formation, survival and high-growth employment. We find that complementarities between digital, culture and human capital affordances within the 3 T framework serve as a conduit for a net entrepreneurial entry, while the complementarities between technology and human capital affordances reduce high-growth employment. Joint negative effect of a technology and human capital affordances on high-growth employment and business survival is seen as lack of required skills in high-tech industries to facilitate technology diffusion. Our findings offer policy and managerial implications.