Entrepreneurial Ecosystems in Unexpected Places

Examining the Success Factors of Regional Entrepreneurship

Veneta Andonova, Milena S. Nikolova, Dilyan Dimitrov

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN:
  9783319982182
• eBook ISBN:
  9783319982199
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

This book sheds light on one of the biggest development issues of our time: how the rise of entrepreneurship and the associated mindset is likely to unfold in unexpected places and change socio-economic and political fortunes. Focusing on the Balkan Peninsula, the authors explore the early success of young entrepreneurial ecosystems in the region and highlight the dangers of direct comparison with more mature entrepreneurial centres. Offering fresh insights, this brand new book presents an analytical overview of the entrepreneurial domain that enabled Bulgaria to become the start-up capital of the Balkans. With empirical data gathered from over 80 interviews and case studies, the authors address the needs of decision-makers and managers in many countries which are on the path towards nurturing entrepreneurial ecosystems.

Part IEntrepreneurial Ecosystems in Numbers and Quotes

© The Author(s) 2019

Veneta Andonova, Milena S. Nikolova and Dilyan DimitrovEntrepreneurial Ecosystems in Unexpected Placeshttps://doi.org/10.1007/978-3-319-98219-9_1

Begin Abstract

1. What Is an Entrepreneurial Ecosystem?

Veneta Andonova¹ , Milena S. Nikolova² and Dilyan Dimitrov³

(1)

School of Management, Universidad de Los Andes, Bogotá, Colombia

(2)

American University in Bulgaria, Blagoevgrad, Bulgaria

(3)

Sofia, Bulgaria

Veneta Andonova (Corresponding author)

Milena S. Nikolova

Dilyan Dimitrov

End Abstract

Introduction

This book tells the story of the young Balkan startup ecosystem and the mindset change that was provoked by its pioneers. It celebrates entrepreneurship by showing how it can be embraced as a value and a way of thinking in societies with limited entrepreneurial traditions. The text offers insights and an analytical overview of the processes that occurred after 2000 and the factors that enabled Bulgaria to become the startup capital of the Balkan region. It also outlines some of the factors that will be critical to sustaining this success in the future in the complex global and European context.

One of the key contributions of the book is to identify the achievements of the regional ecosystem that go beyond the financial numbers: this perspective is essential to an understanding of the profound change brought to countries with a newly discovered entrepreneurial spirit. In this, the book uncovers the role that the leading accelerator venture funds played in the creation of a vibrant regional community of entrepreneurs. The book also features remarkable real-life case studies and insights from many of those involved in regional startups as well as programmes and investment funds in the region.

In telling the story of how the young entrepreneurial ecosystem in the Balkans started and has continued to grow, this book offers lessons learned that will be invaluable to would-be entrepreneurs and decision makers in other countries which are now on the path of designing and nurturing entrepreneurial ecosystems. It also provides insights into the relevant measures of success that capture benefits beyond the usual monetary indicators, which are typically applied in more mature ecosystems but which are not as meaningful in younger ecosystems, where importance should be placed on celebrating a new entrepreneurial mindset and changing values. It also addresses the need of existing ecosystem participants to better understand their role and to prepare them for the future.

What Is an Entrepreneurial Ecosystem?

The construct of entrepreneurial ecosystems has grown in popularity, appealing to the imaginations of consultants, policy-makers, educators, investors, influencers, researchers, opinion leaders and entrepreneurs alike. However, it is probably only academic researchers who would seek to clarify the construct before answering questions or sharing their views about a specific entrepreneurial ecosystem or about this phenomenon more generally. Therefore, a very intriguing situation arises: on the one hand, most people identifying themselves as participants in an entrepreneurial ecosystem would feel confident when talking about it, while most rigorously trained academic outsiders, on the other hand, would refer to the concept as a ‘fad’, a ‘chaotic’ or ‘fuzzy’ construct, or dismiss it altogether, arguing that it lacks conceptual limitations, rigour or differentiation from other already well-established and equally popular concepts (Martin, 2015). The middle ground is taken by those who believe that entrepreneurial ecosystems are ‘highly variegated, multi-actor and multi-scalar’, so that the best scholarly researchers can do is to describe different experiences because comparing, extrapolating and transposing policies and experiences would not be pertinent (Brown & Mason, 2017).

The lack of a commonly accepted definition of the term ‘entrepreneurial ecosystem’ has not been a problem for practitioner communities, whilst policy reports using the term have also proliferated. It would appear that the characteristics of entrepreneurial ecosystems in these communities typically include various actors, processes and institutions, which are blended together and put into a specific cultural, geographical and time context.

Moreover, practitioners and policy influencers have not only agreed that the construct of the entrepreneurial ecosystem is a useful one, but they have also developed insights and best practice to enable and effectively nurture them. Ideas such as ‘Think big, start small, move fast’ and ‘Avoid artificially segmenting the community of entrepreneurs’ have been advanced as practical avenues for building vibrancy in entrepreneurial ecosystems (Auerswald, 2015).

How Can the Construct of Entrepreneurial Ecosystem Be so Clear and Empowering to Insiders but so Elusive and Vague to Outsiders?

Part of the answer to this question lies in the sheer complexity of the concept and the ability of different stakeholders to deal with it. In entrepreneurial ecosystems, the entrepreneurs are the central actors, with a leading structuring role in entrepreneurial activity, which can really only be understood from a holistic and systemic perspective (Borissenko & Boschma, 2016), in that different layers of contexts interact and shape entrepreneurship. This is because it takes place in a community of interdependent actors (Stam, 2015) who belong to the broader cultural environment within which entrepreneurial expectations are shaped (Schmutzler, Andonova, & Díaz-Serrano, 2018) and entrepreneurial ventures operate (Mason & Brown, 2014). The social, institutional and relational aspects of the limited location in which a particular entrepreneurial ecosystem operates are the most significant explanatory variables for understanding the degree of entrepreneurial activity both for academic researchers and practitioners. Moreover, most of them will agree that the antecedents of the entrepreneurial ecosystems are deeply embedded in past historical and institutional choices and therefore are markedly path dependent (Feldman & Braunerhjelm, 2007).

The direction we take in this book is inspired in part by the practitioner approach to the concept of entrepreneurial ecosystems. We are attracted to the type of systemic thinking that describes how actors, institutions and processes blend in unique combinations to create multiple equilibria and beautiful chaos, which is fertile ground for business experimentation and triggers inspiring success stories. At the same time, we complement this enthusiasm and drive for story-telling with a well-structured, data-driven research strategy that takes a measured and scientific approach to this domain, thereby conceptually enriching the concept of entrepreneurial ecosystems. To this end, we try, as far as possible, to structure the available information into frameworks that will be familiar to scholarly oriented observers.

We analyse an entrepreneurial ecosystem in the light of the interactions that take place between six domains and their pertaining actors: (i) entrepreneurial finance —never the most important ingredient of an entrepreneurial ecosystem, but it is a necessary contributor to experimentation, scaling and ultimately positive economic outcomes and exits that make headlines; (ii) both government programmes and agencies support and shelter the entrepreneurial spirit against volatile market trends and fashions, giving stability and ‘flow’ to the system; (iii) academic and research institutions as well as R&D transfer capabilities ensure that a healthy flow of marketable innovations arrive at the product–market fit phase, from where scaling up is possible; (iv) market-supporting institutions and the degree of sophistication of the competitive strategies and business processes in the private sector represent a measurement of how fertile the local soil is for the germination of a grassroots success story locally. The strategic thinking of business leaders seems to be complementary to the entrepreneurial insights that emerge in entrepreneurial ecosystems (Zahra & Nambisan, 2012). This, together with (v) the infrastructure —physical, legal and human—represents the most tangible elements that nurture entrepreneurial activities. However, it is (vi) the entrepreneurial mindset shaped by local specificities that brings to life and shapes the new venture creation process. It is as much the proximate environment, comprised of family members and role models, as the distal cultural environment that reflects social norms and ...

Table of contents

• Cover
• Front Matter
• Part I. Entrepreneurial Ecosystems in Numbers and Quotes
• Part II
• Part III. Conclusions
• Back Matter