Management

Question
Write reflection and insights regarding the “Model of Entrepreneurial Ecosystem” Model of Entrepreneurial Ecosystem: The Dynamic Nature Model of Entrepreneurial EcosystemsThere are limits to the value of identifying generic features of entrepreneurial ecosystems. First, each ecosystem has emerged under a unique set of conditions and circumstances. Second, the time dimension is ignored. However, they are discussed as it they emerged fully formed and do not change. There is little understanding of how successful entrepreneurial ecosystems come into being and evolve (Feldman and Braunerhjelm, 2004). Thorny ‘chicken and egg’ questions are ignored. For example, if the availability of local finance is a key attribute, did it predate the emergence of businesses in which to invest, or did the businesses predate the finance, in which case how were the initial businesses financed? It also ignores questions around the trajectories of such regions –how do clusters get started? Why are some successful over a period of time, successfully adjusting to changes in technological paradigm, while other stumble and fail? As Feldman and Braunerhjelm (2004) argue, there is an evolutionary logic to cluster formation. The implication is that the temporal dimension has to be included in any discussion of entrepreneurial ecosystems. Indeed, it is the ability to reconfigure and adapt which marks successful ecosystems from those that are less successful. This discussion of the evolution of entrepreneurial ecosystems draws in part on the experience of Ottawa (Canada) which gained the label of ‘Silicon Valley North’ in the 1990s in recognition of its thriving technology sector (Mason et al, 2002; Harrison et al, 2004; Shavinina, 2004; Novakowski andTremblay, 2007, Mason, 2008). The first point is that entrepreneurial ecosystems do not emerge just anywhere. They need fertile soil. As noted in the previous section, entrepreneurial ecosystems have typically emerged in places that already have an established and highly regarded knowledge base which employs significant numbers of scientists and engineers. These organisations arethe source of the skilled personnel who start businesses. These knowledge institutions –research universities, public research laboratories and corporate R&D labs –perform several roles in seeding the cluster. First their research generates the scientific discoveries, technological advances, and advancement of knowledge that form the basis for the creation of new businesses. Second they are ‘talent magnets’, attracting talented individuals in the form of eminent scholars, gifted students and ambitious scientists and engineers, further boosting the technological capacity of the region and increasing the pool of individuals who might become future entrepreneurs and employees. Norton (2001) notes that most of the leading Silicon Valley entrepreneurs who pioneered the PC and Internet revolutions had moved from other parts of the USA. Entrepreneurial mobility is also confirmed in an analysis of the founders of the INC 500 from 2000-8, which showed that 75% had started their company in a different city from theone where they obtained their university degree, although only 37% moved to a different region. The high proportion of Indian-born and Chinese-born entrepreneurs in Silicon Valley has also been noted (Saxenian, 2002; Wadhwa et al 2012). The majority of entrepreneurs in Ottawa were attracted from other regions of Canada and overseas by jobs in the Federal Government R&D labs and at Bell Northern Research (later Nortel) (Harrison et al, 2004). In Cambridge (UK) the university has been the main attractor of talent (SQW, 1985; Keeble, 1989). Third, this research base attracts substantial government research funding. Government purchasing is also important. The role of defence spending in Route 128 and Silicon Valley’s early growth is well documented (Saxenian,1994; Leslie, 2000; Adams, 2011). But whether entrepreneurial businesses flourish in this fertile soil depends on wider technology and industry conditions. First, technological advances that are disruptive, thereby creating ‘discontinuities’, produce the most new opportunities. Second, the technological trajectory conditions the way in which the technology might be exploited. Third, the technology has to create market opportunities if entrepreneurs are to start businesses. The emergence of entrepreneurial ecosystems therefore depends on the development of markets for newer technologies. Industry conditions also influence the scope for spin-offs. In general spin-offs are more frequent in the emergent phases of industry, where no single product design has gained dominance (Rothwell,1989).
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