Measure twice, cut once: entrepreneurial ecosystem metrics

An entrepreneurial ecosystem comprises a set of interdependent actors and factors that are governed in such a way that they enable productive entrepreneurship within a particular territory. While the entrepreneurial ecosystem approach is useful to think about regional economies, it currently lacks full-fledged metrics to enable policy. In this paper, we bridge this gap by quantifying and qualifying regional economies using the entrepreneurial ecosystem approach. We operationalize ten elements of entrepreneurial ecosystems for 274 regions in the 28 countries of the European Union. The ecosystem elements show strong and positive correlations between them, confirming the systemic nature of entrepreneurial economies, and the need for a complex systems perspective. Our results show that formal institutions and physical infrastructure take a central position in the interdependence web, providing a first indication of these elements as fundamental conditions of entrepreneurial ecosystems. We then use the elements to calculate an index that measures the quality of entrepreneurial ecosystems. This index is robust and performs well in regressions to predict entrepreneurial output, which we measure using novel data on productive entrepreneurshi