The evolutionary dynamics of entrepreneurial ecosystems

Entrepreneurial ecosystems (EE) consist of interacting components, which foster new firm formation and associated regional entrepreneurial activities. Current work on EE, however, focuses on documenting the presence of system components, which means there is little understanding of interdependencies between EE components and their evolutionary dynamics. To address these issues, the objective of the present study is to develop an evolutionary framework of EE development that integrates important components from prior work and describes how critical elements of an entrepreneurial system interact and evolve over time. The value of this framework in understanding the evolutionary dynamics of EE will be demonstrated by profiling the EE of Phoenix, Arizona. The evolutionary perspective developed is valuable because it provides a sense of how history, culture and the institutional setting impact EE. It also provides stakeholders with action points to help maintain or propel an EE to the next level. This is a distinct improvement over static approaches that provide a list of EE ingredients with no sense of their relative importance over time. The proposed framework may also be used in a comparative context to compare and contrast the evolutionary trajectory of EE to better understand why particular places remain trapped in a specific phase of growth or continue to evolve over time.