Unpacking Entrepreneurial Ecosystem Health: An Entrepreneurial Process Approach

What makes an entrepreneurial region stand out among the crowds? On the one hand, regional entrepreneurship literature highlights the impacts of regional context and structures on regional entrepreneurship, but fails to reveal the reciprocity between them, i.e., how regional entrepreneurship could in turn benefit regional context in order to sustain the new venture creation activities over time. On the other hand, although entrepreneurial ecosystem literature provides a new perspective to understand regional entrepreneurship in context by shedding light on the structures and building blocks of an entrepreneurial ecosystem, relatively less is known about what dimensions and factors contribute to the performance and competitiveness that signify the ecosystem’s ability to continuously create new ventures in the region. Hence, this research asks: how do we unpack the health of an entrepreneurial ecosystem? Following an inductive approach, a qualitative study on two exemplary entrepreneurial ecosystems – Silicon Valley, US, and Shenzhen, China – was conducted. For each ecosystem, its evolution over time was revealed first, highlighting critical events and start-ups in different lifecycle stages of the entrepreneurial ecosystem. Then the entrepreneurial processes of key start-ups – Fairchild-Intel, Apple, Google and Tesla in Silicon Valley and Huawei, Tencent and DJI in Shenzhen – as well as their interactions with the ecosystems were analysed. The primary data is mainly from semi-structured interviews with informants pertinent to different players in the ecosystems, as well as employees who are familiar with the entrepreneurial processes of the key companies identified. Primary data was complemented and triangulated with secondary data mainly from academic papers, archives, online articles from reliable sources, books and monographs, as well as biographies of key companies and their founders, etc. The findings show that entrepreneurial ecosystem health consists of six dimensions: ecosystem resources (supply-side, intermediary, and demand-side resources), entrepreneurial process (resource acquisition in opportunity and organisational creation stages, resource exploitation in organisational creation and technology set-up stages, resource feedback in market exchange and exit stages), ecosystem performance (regional economic impact and regional entrepreneurship performance), ecosystem robustness (resource replenishment and recycling), ecosystem adaptation (resource diversification and exit), and enabling conditions for resource dynamisms (three sets of conditions for resource replenishment and recycling, for resource diversification, as well as for resource exit, respectively). This dissertation also sheds light on how resource acquisition, exploitation and feedback in individual entrepreneurial processes contribute to the resource dynamisms in entrepreneurial ecosystems. With these health dimensions and resource dynamisms, an integrated process model revealing how a healthy entrepreneurial ecosystem continuously creates new ventures is provided. It is argued that, from the entrepreneurial process perspective, the health of an entrepreneurial ecosystem divulges its current performance in relation to new venture creation and the expectation of whether its ability to continuously create new ventures will be sustained or even grow. This dissertation seeks to contribute to entrepreneurial ecosystem literature with the conceptualisation of entrepreneurial ecosystem health. The resource dynamisms bridge the gap between individual entrepreneurs and entrepreneurial ecosystems and shed light on how resource-accessing behaviours in individual entrepreneurial processes contribute to the ecosystem-level resource dynamisms. The integrative process model contributes to the regional entrepreneurship literature by elaborating on the feedback impacts of regional entrepreneurship on regional resources. Finally, a resource-based view of entrepreneurial ecosystems is provided, which addresses the necessity of facilitating sufficient resource dynamisms within and outside of the ecosystems in pursuit of ecosystem health. This dissertation has implications for governments to guide their policy initiatives by informing them of the health of their regional entrepreneurial ecosystems in order to maximise the economic return and societal utilities. It also has implications for individual entrepreneurs in terms of their location choices and how to leverage resources of the ecosystem in which they reside