Measure Twice, Cut Once: Entrepreneurial Ecosystem Metrics (original) (raw)
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Appendix A. Brief discussion of empirical work that identifies systemic and framework conditions of entrepreneurial ecosystems. Institutions play an important role both for the prevalence of different types of entrepreneurial activity and for economic development (Baumol, 1990; Hall & Sobel, 2008; North, 1990), and physical infrastructure enhances human interactions and increases connectivity, reducing costs, helping not only individuals to recognise entrepreneurial opportunities (Audretsch, Heger, & Veith 2015), but more general, economic activity as well. To conclude the framework conditions, the level and variety in demand for goods and services also acts as pull mechanism for entrepreneurship and economic activity, whereas active networks of entrepreneurs provide information flows, enabling opportunity recognition and resource allocation (Aldrich & Zimmer, 1986). When it comes to the systemic conditions, entrepreneurs are seen not only as an output of the system but also as creators (or leaders) of the system by Feld (2012). Leadership within the entrepreneurial ecosystem approach should be seen as having certain role models or otherwise visible entrepreneurs (Stam, 2018). Accessible financing for entrepreneurs was shown to be an important condition for entrepreneurs' ability to grow and to sustain competitiveness, and ultimately for economic development as well (Kerr and Nanda 2009; King & Levine, 1993), whereas the supply of talent or human capital in the form of high skilled and creative individuals is important for entrepreneurial activity and economic development (Acs & Armington 2004; Lee et al. 2004). The creation and the growing stock of knowledge form important sources of spillovers for entrepreneurial opportunities (Audretsch, 1995; Audretsch & Lehmann, 2005). And lastly, the presence of intermediate and support services was shown to be important in assisting new entrepreneurs and increase the efficiency of the economy.
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There is a growing interest in ecosystems as an approach for understanding the context of entrepreneurship at the macro level of an organizational community. It consists of all the interdependent actors and factors that enable and constrain entrepreneurship within a particular territory. Although growing in popularity, the entrepreneurial ecosystem concept remains loosely defined and measured. This paper shows the value of taking a systems view of the context of entrepreneurship: understanding entrepreneurial economies from a systems perspective. We use a systems framework for studying entrepreneurial ecosystems, develop a measurement instrument of its elements, and use this to compose an entrepreneurial ecosystem index to examine the quality of entrepreneurial ecosystems in the Netherlands. We find that the prevalence of high-growth firms in a region is strongly related to the quality of its entrepreneurial ecosystem. Strong interrelationships among the ecosystem elements reveal th...
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