Entrepreneurial Ecosystems and Entrepreneurial Activity

(1)

Master thesis

MSc Small Business & Entrepreneurship

Entrepreneurial Ecosystems and Entrepreneurial Activity

23/01/2017

by H. S. Nije s2174243 h.s.n.nije@student.rug.nl

Thesis supervisor – dr. C.H.M. Lutz Second assessor – dr. A.J. Rauch

Word count – 15.515

Faculty of Economics and Business University of Groningen

Duisenberg Building, Nettelbosje 2, 9747 AE Groningen, The Netherlands P.O. Box 800, 9700 AV Groningen, The Netherlands

(2)

Abstract

This research studies the factors that characterize entrepreneurial ecosystems and their influence on entrepreneurial activity. This is accomplished by developing a conceptual framework, describing the main factors in ecosystems, and their influences on entrepreneurial activity. The methods in this article consist of two phases. The first phase is a literature research to find relevant ecosystem factors, based upon five studies. The second phase tests the importance on these factors through in-depth interviews with four productive entrepreneurs. This leads to a new five-factor framework – consisting of support services, human capital, business culture, implicit knowledge and local governments – within entrepreneurial ecosystems, that influences entrepreneurial activity. This framework helps managers to rate the attractiveness of ecosystems for entrepreneurs and helps policy makers to establish a well-functioning entrepreneurial ecosystem.

(3)

4. METHODS ...20 4.1.METHODS OF RESEARCH ...20 4.1.1. Secondary data ...21 4.1.2. Primary data ...21 4.2.OPERATIONALIZATION OF CONCEPTS ...22 4.3.DATA COLLECTION ...24 5. RESULTS ...25 5.1.SUPPORT SERVICES ...25 5.2.ACCESS TO FINANCE ...26 5.3.HUMAN CAPITAL ...27 5.4.CULTURE ...28 5.5.KNOWLEDGE ...29 5.6.GOVERNMENTS ...30 6. DISCUSSION ...31 6.1.SUPPORT SERVICES ...31 6.2.ACCESS TO FINANCE ...32 6.3.HUMAN CAPITAL ...33 6.4.CULTURE ...34 6.5.KNOWLEDGE ...34 6.6.GOVERNMENT ...35

6.7.REFINING THE FRAMEWORK ...35

7. CONCLUSION ...36

7.1.PRACTICAL IMPLICATIONS ...37

7.2.LIMITATIONS ...37

7.3.FUTURE RESEARCH ...38

REFERENCES ...40

APPENDIX A; FIRM CONTINUUM AND SOURCES OF FINANCE ...46

APPENDIX B; SEMI STRUCTURED INTERVIEW GUIDE ...47

APPENDIX C; OPERATIONALIZATION OF THE FACTORS ...52

(4)

1. Introduction

Entrepreneurs play a crucial role in achieving economic growth (Schumpeter, 1934). Therefore the Dutch government tries to stimulate entrepreneurship in the society. A strong increase in the number of entrepreneurs is testimony to the growing popularity of entrepreneurship. This is possible because the number of opportunities in the market and because the Dutch are well developed in the field of knowledge and skills. Remarkably, this growth is sharply divided over different regions (CBS, 2012). Besides Amsterdam, Rotterdam, Utrecht and The Hague, which are large cities, there are also small villages like Westervoort and Beesel in the top 10 municipalities with the highest start-up ratios. There seems to be a difference in the attractiveness of regional areas related to entrepreneurship. This gives rise to questions on what factors differ among these regions that influence or facilitate entrepreneurship.

Entrepreneurship and its environment are interdependent. Van de Ven (1993) suggested that entrepreneurship does not emerge from the actions of just a few key individuals. Instead, it is ‘the accretion of numerous institutional, resources, and proprietary events involving many actors who transcend boundaries of many public and private sector organizations’ (Van de Ven, 1993). His study explains the importance of interacting factors in entrepreneurial systems, later on called entrepreneurial ecosystems. The stimulation of entrepreneurship does not only have to focus on the entrepreneur as an individual but also on the entrepreneurial environment in which the entrepreneur operates.

Spilling (1996), in addition, shows that the economic environment consists of many closely linked factors, such as the close links and established relationships between independent businesses. He concludes that these factors alone do not result in economic development; rather, they need to be seen in the context of infrastructure, public institutions and firms that can match together in advanced production systems (Spilling, 1996). This finding triggered the question whether there exists a generic framework consisting of the factors that interact in the entrepreneurial environment. Five studies were found to discuss this topic in greater detail.

Feldman (2001) was the first that studied the characteristics of entrepreneurial environments, in the context of the formation of a regional industrial cluster. His finding suggests that there are environmental factors that can lag and lead the formations of entrepreneurial developments. Leading factors are supportive social capital, venture capital, and entrepreneurial support services. These factors must be combined into a cluster in order to stimulate innovations and the rise of new businesses, especially to positively influence individual decision-making processes for becoming an entrepreneur (Feldman, 2001).

(5)

creation, with the outcome of job creation, wealth creation, business growth and economic prosperity (Neck et al., 2004).

Third, Qian, Acs and Stough (2012) investigated regional variation in entrepreneurial activity. They have highlighted important regional factors that influence entrepreneurship, namely universities, human capital and knowledge. The importance of these factors is derived from the model for regional systems of entrepreneurship, which is based upon the absorptive capacity theory of knowledge spillover entrepreneurship. This theory explains the relationship between knowledge spillovers and the process of recognizing and exploiting entrepreneurial opportunities (Acs et al., 2009).

Fourth, Autio et al. (2014) published an article regarding the context of entrepreneurial innovation. They examined the role of environments in stimulating entrepreneurial activity and other outcomes of entrepreneurship. In terms of entrepreneurial ecosystems, they propose to distinguish different types of contexts influencing entrepreneurial innovation, which are strongly interrelated with the success of a system (Autio et al., 2014).

Lastly, Stam (2015) constructed the first entrepreneurial ecosystem model. This model is developed through the integration of different aspects that are important for entrepreneurial ecosystems and results in a value adding output. This is the first research that provides a clear in-depth overview of the important factors of the entrepreneurial ecosystem, proposed in previous literature. It is a good starting point for future research, but contains some caveats, such as overlap between the ecosystem factors.

It is very noteworthy, that all the above-mentioned articles more or less try to identify the factors that are important for the entrepreneurial environment, but they do not refer to each other. The inconsistent findings indicate that the field of study on entrepreneurial ecosystems is in its infancy. The next step forward is the validation of these previous conceptual insights through answering the following research question.

Research question: What factors characterize entrepreneurial ecosystems and how do these factors influence entrepreneurial activity in the entrepreneurial ecosystem?

This study aims to find and test the key factors in entrepreneurial ecosystems that are important for realizing entrepreneurial activity. The research question is answered by building a new conceptual framework based upon two phases. In the first phase, secondary data is used to answer the first sub-question and in the second phase primary data is used to answer the second sub-sub-question.

Sub-question 1: What factors characterize entrepreneurial ecosystems according to (recent) literature?

(6)

an added value for starting entrepreneurs in a specific regional context. To determine its relevance, the conceptual framework is tested with primary data.

Sub-question 2: What do productive entrepreneurs in practice think about the relevance of the suggested ecosystem factors and how do these factors influence entrepreneurial activity?

The second phase empirically tests the conceptual framework, based upon in-depth interviews with four productive entrepreneurs. The ecosystem factors, suggested in response to the first sub-question, are tested to indicate the relevance of these factors on entrepreneurial activity. This data from the interviews provides new insights that affect the framework. The results of the two phases are compared in the discussion, where a new conceptual framework, based upon five ecosystem factors, is presented. The article is organized as follows. The next section discusses the theoretical development of entrepreneurial ecosystems. The third section describes the ecosystem literature research, where the first sub-question is answered. The fourth section explains the methodology to examine the conceptual framework with primary data. The fifth section presents the results of four expert interviews. The last section discusses the results of the two phases, where the main output, the new conceptual framework, is presented.

2. Theoretical development of entrepreneurial ecosystems

This section starts with defining and explaining the central concepts of the research questions, based upon literature. Next, the bodies of knowledge that led to the entrepreneurial ecosystem literature are explained.

2.1. Entrepreneurial ecosystems and entrepreneurial activity1

Entrepreneurial ecosystems are defined as the interacting components of entrepreneurial systems - interrelated actors and factors - coordinated so they enable productive entrepreneurship in a specific regional context (Van de Ven, 1993; Neck et al., 2004; Stam 2015). Productive entrepreneurship is about the entrepreneurial activities that increase the welfare of the economy (Baumol, 1993). These entrepreneurial activities are generally considered as the leveraging of resources and capabilities in the form of innovative start-ups, high-growth start-ups or entrepreneurial employees, to exploit the opportunities (Schumpeter, 1934; Ahmad and Seymour, 2008; Stam, 2015). Through integrating this information, it can be concluded that productive entrepreneurship increases the welfare in a specific regional context through innovative and high growth start-ups or entrepreneurial employees. This excludes the traditional indicators of entrepreneurship, such as self-employment or small businesses, because they are not necessarily innovative. The importance of innovation puts the innovative entrepreneur in the leading role of this research.

1_{The definitions - of entrepreneurial ecosystems, entrepreneurial activity and productive entrepreneurs - presented in this section}

(7)

2.2. The origin of entrepreneurial ecosystems

There are two bodies of knowledge that have led to the development of the entrepreneurial ecosystem approach; one from entrepreneurship in locational context, called cluster theories, the other from innovative research from an ecological perspective (figure 1).

Figure 1: The origin of entrepreneurial ecosystems

2.2.1. Cluster theory

Alfred Marshall (1920) is the first researcher that suggested benefits from co-locations such as skilled labour and knowledge. Later, this subject received new attention in literature as industrial clusters (Porter, 1990). Clusters are “the geographical concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, associated institutions in a particular economic field, that compete but also cooperate” (Porter, 1998; Porter 2000). Clusters have particular advantages such as agglomeration, co-location, concentration of talented resources and social embeddedness (Pitelis, 2012). Nowadays, a lot of clusters establish in the form of accelerators. These accelerators are concentrated interconnected companies that work together as a cluster, facilitated by an umbrella organization.

(8)

markets and ecosystems, to appropriate this value, develop these value strategies. The potential to capture value is developed by entrepreneurs that create markets and ecosystems to appropriate this value (Pitelis and Teece, 2010). This argument is interesting, because the entrepreneur is of main importance to start a business and therefore also for an ecosystem. It is striking that this important role of the individual entrepreneur is not included in previous literature.

Entrepreneurs choose for the ecosystem that has the best possible fit with the perceived advantages of the entrepreneurs and their entrepreneurial activity in terms of resources, transport, communications and institutions. These entrepreneurs also base their choice on the advantages of control and power, the dynamic transaction costs and the continuum between make-or-buy and the related strategies (Pitelis, 2012). It can be concluded that entrepreneurs want to choose a context that best suits their needs. For this reason, the context must understand the demands of entrepreneurial activities (Autio et al., 2014). This is where entrepreneurial ecosystems are born, to regulate the direction and quality of entrepreneurial activities.

2.2.2. National Systems of Innovation literature

The national systems of innovation literature states that the networks of institutions create and dissimilate new knowledge and new technologies, through their activities and interconnections (Freeman, 1995; Ács, Autio and Szerb, 2014). The countries innovative performance depends on the factors of collecting knowledge producing systems, such as research institutions and universities. The national systems of innovation literature focuses too much on the innovation capacity of institutions, while ignoring the contribution of entrepreneurship on innovations. Entrepreneurship is about the individual that identifies, selects and exploits innovative opportunities for creating new goods and services, which always occurs in a specific context (Shane and Venkataraman, 2000; Phan, 2004; Autio and Acs, 2010). This context is partly influenced by institutions, but there are also other factors that influence entrepreneurship with their related innovations. Therefore, this study focuses on what factors influence entrepreneurial activity in an entrepreneurial ecosystem.

3. Literature research

The literature research provides information to answer the first sub-question: What factors characterize entrepreneurial ecosystems according to (recent) literature? At first the ecosystem factors discussed in previous literature are presented. Thereafter, the factors are distilled in a conceptual framework.

3.1. Overview of relevant factors in the literature

After intensively searching the digital scholar systems there have been five different studies selected that explore and elaborate on main factors influencing the entrepreneurial ecosystem (this selection process is described in the method section). These influencing factors are briefly mentioned in the introduction, but are further elaborated below.

(9)

indicator for regional innovative potential. (2) Social capital is characterized by networks and by a supportive local culture (Ashiem, 2000). It is highlighted as the factor that facilitates entrepreneurial activity and firm formation in Silicon Valley. The proxy of this factor can be the government. (3) Support services are needed to ‘navigate a fledging company’ with the needed information, because small companies do not have the resources to perform this in-house. Feldman’s last environmental characteristic is (4) universities, because they provide technology transfers and new academic information.

Second, Neck et al. (2004) explored the new venture creation in entrepreneurial systems, based upon semi-structured interviews. They included the components in their taxonomy if founders or CEO’s mentioned these components several times during their empirical research. This resulted in five important components. (1) Incubators are important because they develop the skills and abilities of the entrepreneurs. (2) Formal and (3) informal networks are seen as an important factors for the growth and evolution of the organizations. The formal network consists of universities, governments, support services, capital sources, talent pools and large corporations. Informal networks consist of friends and family. The next component is (4) the physical infrastructure, because it influences the growth of entrepreneurial systems. The last component of Neck et al. (2004) is (5) culture that can attract entrepreneurs through its uniqueness.

Third, Qian et al. (2012) investigated the influence of regional variation on knowledge-based entrepreneurial activity. This explains the influence on opportunity recognition with its influences on entrepreneurship. The research is based upon the absorptive capacity theory and the knowledge spillover theory, which identified knowledge and human capital as important influencing factors. A clear link is made between knowledge and entrepreneurship, because more knowledge in a specific context leads to a higher level of entrepreneurship. Human capital is also important, because it is a determinant for knowledge production and for the absorptive capacity that is prerequisite for entrepreneurial action. In addition, universities are also important for entrepreneurial activity, because it appears to have a major influence on human capital.

Fourth, Autio et al. (2014) build an overarching framework, based upon six different contexts that influence entrepreneurial innovation. (1) Industry and technological context have an important effect on entrepreneurs, because of the bandwagon and imitation effects of entrepreneurs. (2) Organizational context includes business culture, knowledge, skill effects and experience. This context, which is largely about previous employment, influences entrepreneurship through knowledge and experience. (3) Institutional and policy context consists of formal and informal institutions. Formal institutions are for example support services and informal institutions are culture and social norms, with both their influences on entrepreneurship. (4) The social context is about the networks between the entrepreneurs and their stakeholders, to increase the acquirement of dispersed knowledge. (5) The temporal context highlights the evolving dimension of ecosystems. Lastly, (6) the spatial context, with the related geographical boundaries, influences entrepreneurship through governments, institutions and social norms.

(10)

conditions are the fundaments of an entrepreneurial ecosystem by human interaction: formal institutions, culture, physical infrastructure and demand. The systematic conditions and the interaction between these factors can result in entrepreneurial success. Networks and leadership are responsible for information flows and organizational direction. Finance is crucial for organizational activity. Human capital with talent ensures company growth. Knowledge is crucial for exploring opportunities and support services lower entry barriers. Combining these framework and systematic conditions results in entrepreneurial activity with entrepreneurial innovations as an outcome.

As mentioned in the introduction, it is confusing that these studies do not build upon each other. Therefore this study tries to summarize the literature about entrepreneurial ecosystems.

To integrally bring together all factors of the entrepreneurial ecosystems used in previous literature, an overview is made of all factors discussed in these researches (table 1). To make a good selection, the factors are assessed to determine the relevance for the entrepreneurial ecosystem, before they are placed in the next phase of model building.

Table 1: Relevant ecosystem factors due to previous literature

3.2. Pre-selection of ecosystem factors

The selection of factors is based upon its uniqueness. The four factors mentioned in only one study are discussed to determine their relevance, which are leadership, spatial context, demand and the evolutionary factor. The other factors used in multiple studies are discussed in the next sub-section.

(11)

Spatial context is only mentioned in the study of Autio et al. (2014). It is about the geographic location of the entrepreneurial ecosystem in terms of their global, national, regional and local distribution (Welter, 2011). This spatial context is very important for each factor to determine the spatial borders in which it can be affected. Therefore, the spatial context is examined per factor and is for this reason excluded from the framework.

Demand is also a factor only mentioned by Stam (2015). It is part of the framework conditions that include social and physical conditions enabling or constraining interaction (Stam, 2015). Although demand is an important factor for the success of a new company, it is not included in the framework. This decision is made because an entrepreneurial ecosystem cannot influence the demand for a new innovative product or service that does not exist yet. The entrepreneurial ecosystem is about the interacting factors that enable productive entrepreneurship, before the start of a company. Demand is a factor that becomes important after productive entrepreneurship is enabled, and is therefore not an interacting factor that enables entrepreneurship.

The evolutionary factor is about the lifecycle stage of the entrepreneurial ecosystem. This is important, because entrepreneurial activity is more likely in the early lifecycle stages due to imitation and bandwagon effects (Abernathy and Utterback, 1978; Anderson and Tushman, 1990; Kenney and von Burg, 1999). In later stages, it is more difficult for entrepreneurs to enter the market because the market is more saturated. Unfortunately, this is not an interacting factor that can be changed within the ecosystem and is therefore excluded from the framework.

Now, the most relevant factors from previous research are pre-selected. In the next sub-section, these selected factors are explained on basis of four components: the definition, their usage in previous literature, their influence on the entrepreneurial ecosystems, and their relative importance.

3.3. Elaboration of the main ecosystem factors of entrepreneurial ecosystems

Nine factors are elaborated in this section. After these elaborations the analysis can be made if these factors should be part of the new conceptual framework.

3.3.1. Support Services

(12)

The first argument that confirms the importance of support services in entrepreneurial ecosystems is the difference between large and small firms. Large firms have far more resources for realizing professional support services in-house. By providing support services in the external environment of small firms, it increases their internal capabilities and survival chances (Feldman, 2001). Second, Feldman (2001) and Neck et al. (2004) found support that regions with entrepreneurial support systems resulted in more regional success, because their specialism provides important information for start-ups. In the current economy, entrepreneurship has become a hot topic and therefore there is an increasing number of voluntary support services for entrepreneurs. For example, successful entrepreneurs that want to give something back by helping new entrepreneurs, and large firms that outsource services to start-ups for giving them a chance. Last, support services can indirectly lower the market entry-barriers for new firm formations and decrease the time-to-market of innovations (Zhang and Li, 2010). These support services can gather relevant information for entrepreneurs through their interactions with their specialized networks. In this way, they can broaden the entrepreneurial external search scope (Zhang and Li, 2010).

Support services have an important influence on entrepreneurial ecosystems, because they provide entrepreneurs with resources and information needed to run a business in a particular environment. Without this service, start-up costs and overall costs are much higher that can have catastrophic effects on (starting) companies. It can be concluded that support services are of main importance in entrepreneurial ecosystems to contribute businesses in every lifecycle stage. Based upon this, enough evidence is provided for including this factor in the conceptual framework.

3.3.2. Access to Finance

The second entrepreneurial ecosystem factor is the access to finance. Finance is a crucial lubricant for small businesses. Without finance – the lifeblood of a business – it is difficult for businesses to start, grow or survive. It can also be seen as a part of support services (Autio et al., 2014), but the access to finance is a crucial factor for the realisation of entrepreneurship and is therefore treated as an individual factor of entrepreneurial ecosystems.

(13)

Investments are essential in every stage of entrepreneurship (Malecki, 1997), and crucial in uncertain and long-term projects (Stam, 2015). Entrepreneurs feel that the availability of formal capital sources is necessary for starting a new business in a certain environment (Neck et al., 2004). Therefore, the availability of external sources of finance is important to stimulate entrepreneurship, which can be promoted by governments, for example through the provision of grants (Feldman, 2001). The providers of external sources of finance can also give organizational experience that can help developing new businesses in entrepreneurial ecosystems. Furthermore, the obtainment of finance is viewed as an indicator of the innovative potential of an entrepreneurial ecosystem and can therefore be attractive for potential entrepreneurs.

Access to external sources of finance can be very important for starting and growing entrepreneurial firms. The availability within entrepreneurial ecosystem can therefore be crucial for the exploitation and survival of entrepreneurial firms. Without external sources of finance, potential large firms will stay small, remaining a lot of potential value for businesses and society. This information provides enough evidence to include this factor in the conceptual framework.

3.3.3. Human Capital

Human capital is mostly defined as the unique set of knowledge, skills and abilities of individuals acquired from education and experience (Boeker, 1997). In addition, human capital can be defined differently as the intrinsic motivation, or cognitive abilities of an individual to acquire knowledge (Hambrick and Mason, 1984) and not necessarily the knowledge that is in the person. Concluding that in context of this research human capital is defined as follows: the unique set of skills, abilities and the willingness to acquire knowledge (Smith and Nicholson, 1887) within the body of an entrepreneur or its (potential) employees. This definition differs from knowledge, because knowledge is about the facts, information and skills outside the bodies of these individuals.

Human capital has a positive relationship with the success and survival of starting a new business (Davidsson and Honig, 2003; Bates, 1990; Cooper, Gimeno-Gascon and Woo, 1994) and the initial firm size of start-ups (Colombo, Delmastro and Grilli, 2004). This is strongly affected by the broader view of the individual's productivity, by its durability and by the rate of interests during any given point of time (Ben-Porath, 1967). Other articles argue that it is more the talent of people, (Neck et al, 2004; Stam, 2015) which is part of the abilities within the body of an individual (Smith and Nicholson, 1887).

(14)

With low talent available, entrepreneurs will choose other ecosystems to start their businesses (Neck et al, 2004).

Without human capital it is impossible to successfully start or grow a business. Therefore, the availability of human capital plays an important role when locating a company (Neck et al., 2004). In conclusion, this factor adds a lot of value to entrepreneurial ecosystems, because it attracts entrepreneurial activity and increases the succession chance of firms. Based upon this information this factor is integrated in de conceptual framework.

3.3.4. Culture

To develop an entrepreneurial ecosystem, the support of local culture is centrally placed in the ecosystem (Ashiem, 2000). It plays a key role in the discovery of opportunities and in the provision of graduates to companies. Geert Hofstede (1980) defines culture as “the collective programming of the mind that distinguishes the members of one group or category of people from others”. Culture includes social, formal and informal institutions and physical conditions that promote or inhibit human interactions. Formal institutions are the political constrains from the government and informal institutions are private constrains such as social as social norms and perceptions of legitimacy and social desirability (Williamson and Kerekes, 2011).

Culture can make an organization, industry, or nation unique (Mintzberg, Ahlstrand and Lampel, 1998), and therefore entrepreneurial ecosystems. Cultural support characteristics that make an entrepreneurial ecosystem attractive to entrepreneurs are tolerance for risk and failure, preference for self-employment, success stories and role models, focus on research, positive image on entrepreneurship and the continuous focus on radical and incremental innovations (Neck et al., 2004; Stam, 2015). These characteristics are very important for the attractiveness of entrepreneurial ecosystems (Neck et al., 2004). Therefore it is important to manage these characteristics carefully if an ecosystem wants to stimulate entrepreneurial activity. However, if this factor is mismanaged, it can also have counterproductive effects by shedding potential entrepreneurs and employees (Stephan and Uhlaner, 2010). Therefore it is of main important to manage the culture carefully.

The culture within an ecosystem can have supportive and stimulative effects on productive entrepreneurship. Therefore this factor is included in the conceptual framework.

3.3.5. Knowledge

(15)

cannot be expressed in verbal, symbolic and written form (Lee, 2001). Both are important for entrepreneurs in finding, exploring and exploiting opportunities. In addition, the type of knowledge endows entrepreneurs with different opportunities. This has differential effects on new firm formations (Autio et al., 2014)

The knowledge production function and endogenous theory perceive knowledge spillovers as an important input for innovations and economic development, but they do not explain knowledge spillovers as a mechanism (Acs et al., 2009). That is why Acs et al. (2009) started to build a bridge between knowledge and entrepreneurship in the ‘knowledge spillover theory for entrepreneurship’. This theory is based upon previous research about knowledge, as an important input for entrepreneurial opportunities. It is about the new knowledge creation that expands the set of technological opportunity (Acs et al., 2009). These knowledge spillovers can lead to internal or external spinoffs. Internal spinoffs are new initiatives within the organization and external spinoffs are new organizations based on these spinoffs. Therefore a strong relationship between new knowledge and entrepreneurship is suggested (Acs et al., 2009). This relationship is tested in the article of Qian et al. (2012). Although they found statistical evidence for the existence of the ‘knowledge spillover theory of entrepreneurship’, they did not find a relationship between new knowledge and entrepreneurship. This finding suggests cautiousness in accepting the suggested relationship by Acs et al. (2009). However, the regional level of human capital mediates this factor, which leads to productive entrepreneurship in a specific regional entrepreneurial ecosystem (Arrow, 1962; Grilliches, 1979; Jaffe, 1989; Romer, 1989). Since the entrepreneurial ecosystem is about interrelated factors, knowledge and human capital can be factors that complement each other. In addition, the acquirement of knowledge is of main importance for the development and survival of companies (Nonaka, 1994), for example because it includes information about customers, markets, research and development.

Although Qian et al’s (2012) found no statistic relationship between new knowledge and entrepreneurship, it still has echoing and crucial effects on entrepreneurial activity (Delgado, Porter and Stern, 2010; Porter, 1998). Without the recombination of new and existing knowledge it is impossible for the entrepreneur to find new entrepreneurial opportunities in the entrepreneurial ecosystem (Audretsch and Lehmann, 2005). Furthermore, the availability of knowledge within entrepreneurial ecosystems increases the development and successes of companies. Therefore, enough evidence is provided to include knowledge as a factor that characterizes the entrepreneurial ecosystem.

3.3.6. Government

(16)

policy-makers understand their influencing role and are now making more entrepreneurship-friendly environments, for example by focusing on both entry and post-entry behavior of entrepreneurs (Audretsch et al., 2007; Stevenson and Lundström, 2007; Storey, 2003). Another important governmental task is to provide businesses access to physical infrastructure that supports the development of an entrepreneurial ecosystem (Feldman, 2001).

The support of the government is crucial for entrepreneurial ecosystems, because of their power to influence these systems. The governments have to recognize the inter-dependencies between entrepreneurs and their environment, and their role as a feeder for new firms (Autio et al., 2014; Stam, 2015). They also have their duty to design the entrepreneurial ecosystem in such a way that all companies are treated equally and that no one is disadvantaged. This makes the government an important factor within the entrepreneurial ecosystem, which can have major influences on entrepreneurial activity. Therefore this factor is included in the conceptual framework.

3.3.7. Networks

Formal and informal networks are combined, because they are part of a broader factor, namely networks. “Networks are a set of nodes (e.g., persons or organisations) linked by a set of social relationships (e.g., friendship, transfer of funds, overlapping membership) of a specific type” (Laumann, Galaskiewicz and Marsden, 1978). This definition is largely used in the networks literature. Networks between entrepreneurs, trading partners, financiers, and incumbent firms have been a hot topic, because these networks influence the nature of entrepreneurship (Hoang and Antoncic, 2003; Dubini and Aldrich, 1991). This influence is high, because knowledge is widely dispersed among all participants in an economic ecosystem. The networks between these participants stimulate interactions and exchanges of knowledge, which is crucial for new knowledge production (Amin and Cohendet, 2000). The new knowledge may have a direct effect on new firm formation, echoing effects on entrepreneurship (Delgado et al., 2010; Porter, 1998) and is seen as a critical factor for entrepreneurial culture (Sweeney, 1987). Within the literature on entrepreneurial ecosystems, Feldman (2001) started to write about networks in the context of social capital. He stated that networks are important conditions to promote local cluster development, or growing entrepreneurial ecosystems. Networks are about the linkage between individuals that can advance industrial activity, but it also leads to regional evolvement and the accommodation of new demands (Feldman, 2001). Entrepreneurs use their networks a lot, for example to interact with their local environment, to adapt changing situations and to build and augment local institutions.

As mentioned previously, there are two forms of networks: formal networks and informal networks. Formal networks comprise all the various cooperative ties between and within formal authority organizations (Johnson et al., 1994; Krackhardt and Hanson, 1993; Brass et al., 2004). For example, networks with the government, universities, support services and capital venturers (Neck et al, 2004). Informal ties are voluntary cooperative relationships between organizational actors that are generated over time, not based on a formal structure and relationship (Brass, 1984). For example the connections with families, friends and other close networks.

(17)

exchange of resources and knowledge (Phan, Siegel and Wright, 2005). This increases the chance to produce new knowledge within the entrepreneurial ecosystem (Phan et al., 2005; Laredo, 1998). Without networks there would be no interrelation between the factors within the entrepreneurial ecosystem. However, the definitions of networks and entrepreneurial ecosystems are closely linked to each other. Networks are about nodes linked by relationships and entrepreneurial ecosystems are about interacting components in the ecosystem. Using networks as a factor in entrepreneurial ecosystems will cover the linkages with all other relevant factors, such as the linkages between entrepreneurs and support services, financial services and governments. Therefore, this factor is excluded from the conceptual framework.

3.3.8. Universities

There are different findings about the relationship between universities and entrepreneurial activity, but it has an important role in entrepreneurial developments (Leslie and Kargon, 1996; Neck et al., 2004). The first finding is about the knowledge that is produced and created through knowledge recombination at universities (Grilliches, 1979; Jaffe, 1986, 1989). With this new created knowledge, universities produce many technologies and innovations. If these spillovers are transferred from the university, as an incumbent, to a new created firm, then entrepreneurship occurs from the university. This is one of the most important roles, since universities are the largest incubator that host new innovative start-ups (Audretsch and Lehmann, 2005; Qian et al., 2012). That is why many nations and regions have adopted policies that promote university-based start-ups (Grimaldi et al., 2011). The second contribution of universities is the provision of well-educated human capital (Berry and Glaeser, 2005; Florida, Mellander and Stolarick, 2008), which positively moderates the relationship between universities and entrepreneurship (Qian et al., 2012). In other words, the provision of human capital increases the importance of universities for entrepreneurship. This human capital is important because it increases the succession chance of growing companies (Qian et al., 2012). Based upon these findings, it is likely that universities have a positive influence on entrepreneurial activity. Therefore universities are seen as a factor that can distinguish entrepreneurial ecosystems from each other, because it adds value in terms of human capital and knowledge. Additional stimulating influences are offering new programs, building bridges between talented students and commercial activity, encouraging faculty or student start-ups and providing the faculty as consultants (Feldman, 2001; Neck et al, 2004; Smilor et al., 2007).

Universities can have encouraging effects on entrepreneurial ecosystems, through the provision of human capital and new knowledge (Katz, 2003; Kuratko, 2005; Qian et al., 2012). Although its importance for entrepreneurial ecosystems, it has overlap with the factors human capital and knowledge. Since these two concepts are already two factors that are included in the framework, it is not necessary to add universities in the conceptual framework as the supplier of these two factors.

3.3.9. Incubators

(18)

The presence of incubators is very important for an entrepreneurial ecosystem. At first, incubators can provide talented pools of people who can become entrepreneurs (Neck et al., 2004). These employees spinoff new ventures with knowledge, resources and technologies acquired from their incubator. Second, incubators can also support the entrepreneurs during the start-up phase, in terms of noncommittal assistance and the use of their sources (Neck et al., 2004). Third, they can also provide facilities, finance and guidance in return of an equity stake (Collinson and Gregson, 2003), which increases the chance to success because of the financial interests in the starting company. Last, large firms can also set technological trends in an ecosystem, which can inspire entrepreneurs for finding new opportunities.

Incubators are seen as a potential source for entrepreneurs to gather knowledge and to discover opportunities in specific environments. However, the influence of this factor on entrepreneurial ecosystems is overlapped by the factors knowledge, human capital and support services. Therefore, this factor becomes irrelevant for the new conceptual framework. Nonetheless, the presence of incubators in entrepreneurial environments will add value and stimulate entrepreneurial activity.

3.4. Defining and integrating the ecosystem factors

Now that all the factors are elaborately explained and discussed, there is an opportunity to have another critical view on the factors before building the new conceptual framework.

There are a lot of factors in entrepreneurial ecosystems that can be important for entrepreneurial activities. However, some factors have much overlap with each other. Therefore, the overlap is reduced through excluding networks, universities and incubators from the conceptual framework. To improve the usability of the framework, it is thus important to define the factors in such a way that there is no overlap between the remaining factors. The definitions of the residual factors are presented in table 2.

(19)

3.5. Building the conceptual framework upon ecosystem factors

The conceptual framework is designed on basis of the most recent model with this topic, namely Stam’s model from his article written in 2015 (see figure 2). This is a very clear model and a good starting point for describing important factors in entrepreneurial ecosystems.

Figure 2: Entrepreneurial ecosystem model by Stam (2015)

Although this model looks complete, covering all-important factors on first sight, it has a few caveats that have a negative influence on the reliability and validity of the model. These caveats are that Stam’s model is based upon grey literature, the factors are not clearly defined, there is overlap between the factors and his model is not empirically tested. First, the use of grey literature – i.e. unpublished studies - increases the risk of using information that is not tested on its quality (Hopewell et al., 2007), which decreases the reliability of the study (Van Aken et al., 2012). For example, Stam (2015) used the source World Economic Forum - which is not published - as an important input for the factors within his model. Since this source is not tested on its quality (because it is not published), the results are less reliable (Hopewell et al., 2007). Second, not all the framework and systematic conditions are defined. Only the presence of the systematic conditions and their influence on the success of entrepreneurial ecosystems is marginally discussed. For example: “Knowledge, from both public and private organisations, is an important source for entrepreneurship” (Stam, 2015). Therefore, it is not possible to fully determine the meaning and influence of these factors, which decreases the reliability drastically. Third, there seems to be some overlap between factors, which decreases the managerial implications. For example, Stam (2015) included networks in his model, while all factors are about the networks between the factors in the entrepreneurial environment. Another example is leadership, which overlaps with talent or human capital. This overlap is sometimes hard to determine, because the factors are not extensively defined. Lastly, Stam’s model (2015) is not empirically tested, which is not in line with the components of theory development and the empirical cycle of mainstream research (Van Aken et al., 2012).

(20)

To come back on the first sub-question, there are six factors that characterize the entrepreneurial ecosystem according to (recent) literature, namely support services, access to finance, human capital, culture, knowledge and government. The conceptual framework is generated through integrating these factors (figure 3). The lower block outlines the entrepreneurial ecosystem with its related factors and the upper block is the entrepreneurial activity that should result from the interaction between the factors within the entrepreneurial ecosystem. This entrepreneurial activity eventually leads to the establishment of innovative and high-growth start-ups and the stimulation of entrepreneurial employees.

This conceptual framework is more reliable and validated compared to the model of Stam (2015), because this framework is based upon academic literature, with clearly defined factors without overlap. The next section designs the methodology to empirically test this conceptual framework on basis of primary data. This is done by the conduction of in-depth interviews with productive entrepreneurs.

Figure 3: Entrepreneurial ecosystem conceptual framework based upon secondary data

4. Methods

This section discussed the method of this research. It is divided into the methods of research, operationalization of concepts and the data collection.

4.1. Methods of research

The entrepreneurial ecosystem literature is in its infancy, because not a lot of researchers have systematically studied the factors within entrepreneurial ecosystems. There is need for order to build upon the current literature. Therefore, this research uses a qualitative case study to determine the influence of entrepreneurial ecosystems in practise. This research develops a new conceptual framework based upon different data sources, namely primary and secondary data. The use of these different research methods, also called triangulation, provides stronger substation of constructs and propositions (Eisenhardt, 1989).

(21)

4.1.1. Secondary data

The first phase exported and elaborated the literature field of entrepreneurial ecosystems. This study used systematic review methodology (Khan et al., 2003) to select the most appropriate studies for this research. This is a very extensive method that identifies the most relevant articles step-by-step. However, the literature about entrepreneurial ecosystems is in its infancy, and therefore a lot of steps are unnecessary for this research. Only the following four steps are used. First, the key words and search terms that are used in the search engine Web of Science for the syntax are: (a) ‘entrepreneurship’ or ‘entrepreneurial’ or ‘ entrepreneur’ or ‘self-employment’ or ‘innovation’ and (b) ‘ecosystem’ or ‘environment’ or ‘context’ or ‘clusters’ and (c) ‘activity’ or ‘productive’ or ‘influencing’ or ‘stimulation’ and (d) ‘factors’ or ‘elements’ or ‘antecedents’ or ‘components’ or ‘determinants’. This resulted in a list consisting of 16 potential articles. Second, after reading their abstracts, 7 articles were excluded because their abstracts indicated not relevant for this study. Third, the 9 remaining articles were scanned, which resulted in an exclusion of 4 articles. 2 articles were excluded because these were not about regional environments, 1 article was focussing too much on clusters and 1 article only elaborated the benefits of systems without mentioning the ecosystem factors. Last, the remained five studies have been selected that explored and elaborated the main factors influencing the entrepreneurial ecosystem. Thereafter, the factors mentioned in these studies are selected on their relevance and overlap with other factors. After integrating and defining the remained elements, the conceptual framework was developed that describes the characteristics of entrepreneurial ecosystems according to literature (figure 3, p. 20).

4.1.2. Primary data

This second part of this research is conducted on basis of a case study in order to validate how and why the factors in an entrepreneurial ecosystem influence entrepreneurial activity according to entrepreneurs in practice. The qualitative research data is gathered through conducting four semi-structured interviews, to gain in-depth information about entrepreneurial ecosystems. This method provides the freedom to further questioning and exploring the cases during the interviews.

The semi-structured interviews are conducted in the Netherlands. Nine entrepreneurs were contacted from the researchers network. From these nine entrepreneurs, four entrepreneurs were selected on basis of their innovativeness, which best suits to the characteristics of productive entrepreneurs with the related entrepreneurial activity. These entrepreneurs operate in different ecosystems and in different markets, to increase the amount of in-depth information (Eisenhart, 1989). Table 3 provides an overview of the cases. The focus is on the start phases of the companies, since entrepreneurial ecosystems have to enable entrepreneurial activity. The complete interview-guide, with open and closed questions, can be found in appendix B. The questions asked are derived from the variables of the factors that are identified in the literature, on basis of Emans method (2004). The operationalization of these factors is described in the next section.

(22)

to see the similarities and differences between the interviewed entrepreneurs (Eisenhart, 1989). After that, the data is compared to the literature research and discussed on basis of the findings. These discussions result in different propositions per factor, which eventually leads to the new conceptual framework, based upon primary and secondary data. Lastly, the conclusion is made with related managerial implications, research limitations and further research.

Table 3: Selected cases

4.2. Operationalization of concepts

In this section, the factors of the new framework are operationalized, in association with the thesis supervisor. The definitions from table 2 (p. 18) are used to operationalize the variables. Eventually the interview template can be made, based upon the classification of the factors. A summary of the operationalization of the factors with the related most important questions for the interviews can be found in appendix C, based upon Emans (2004).

4.2.1. Support services

There are different classifications for support services, such as legal, accounting, consulting and organisations that provide other inputs. These concepts have quite a broad sense and therefore need further explanation. First, legal services help businesses with legal issues, such as healthcare issues, real estate matters, customer and supplier issues and contracting. Lawyers or other advice groups usually do this. Second, accountants are professionals that are trained in bookkeeping and other accounting functions. Large firms usually have internal accounting departments, while small firms prefer to outsource their accounting issues. Third, consultants give professional advise about different particular areas, from strategy to security. Lastly, organizations that provide other inputs are mainly about all other inputs, such as suppliers. In order to measure support services, questions are asked about the influence, accessibility, availability, importance, and environmental borders of these support services within the entrepreneurial ecosystem (see appendix C, factor support services).

4.2.2. Access to finance

Start-ups and small firms are usually financed with internal sources, while growing and large firms make usually use of external sources. Internal sources of finance are personal money and money from friends and family, while external sources of finance are overdrafts, grants or subsidised loans, term loans, asset finance, credit cards, equity finance such as business angels and venture capitalists.

To measure the access to finance of the entrepreneurs, questions are asked about the influence, accessibility, availability, importance, and borders of the sources of finance within the entrepreneurial ecosystem (see appendix C, factor access to finance).

4.2.3. Human Capital

(23)

importance of the entrepreneurial ecosystem on the discovery of the opportunity, questions are asked about where, why and how the entrepreneur discovered the opportunity and the influence of factors from the entrepreneurial ecosystem (see appendix C, factor entrepreneurial human capital).

Employees’ human capital is determined by the capabilities of an individual, because it determines the skills, abilities and willingness of individuals to learn. This can be derived from general and specific education and past experience. Therefore, this study uses the need of entrepreneurs for employees that are educated and have particular experience as the indicators for employees’ human capital. Other indicators are individual productivity, durability and interests. To measure this factor, questions are asked about the influence, accessibility, availability, importance and the borders of employees’ human capital within the entrepreneurial ecosystem (see appendix C, factor employees’ human capital).

4.2.4. Culture

Culture is the collective programming of the mind that distinguishes the members of one group or category of people from others (Hofstede, 1980). Cultural support characteristics within an entrepreneurial ecosystem, which make that ecosystem attractive to entrepreneurs, are tolerance for risk and failure, preference for self-employment, success stories and role models, focus on research, positive image on entrepreneurship and the continuous focus on radical and incremental innovations (Neck et al., 2004; Stam, 2015). The value added to this factor is determined by accessing the existence, influence, importance and borders of culture within the entrepreneurial ecosystem (see appendix C, factor culture).

4.2.5. Knowledge

Literature distinguishes two types of knowledge: explicit and tacit knowledge. Knowledge is acquired through the information infrastructure, which is widely dispersed among heterogeneous agents (Chen and Dahlman, 2005). This factor is measured through assessing if and how often the entrepreneurs acquire both types of knowledge. The acquirement of knowledge for entrepreneurs and their firms depends on the transferability.

Explicit knowledge can be codified and is therefore is easy to transfer (Kogut and Zander, 1992). Companies can acquire this knowledge through the internet, literature, journals and lots of other sources. However, the transfer and acquirement of tacit knowledge is costly, slow and uncertain because it cannot be codified (Kogut and Zander, 1992). It depends upon the closeness between two partners (Tamer Cavusgil, Calantone and Zhao, 2003). One mechanism to increase tacit knowledge sharing is through clustering, because of the developed shared values, attitudes and interpretative schemes that has a positive relationship with interactive learning (Bathelt, Malmberg and Maskell, 2004). In order to measure the importance of explicit and tacit knowledge, questions are asked about the influence, accessibility, availability, importance and borders of both types of knowledge within entrepreneurial ecosystems (see appendix C, factor knowledge).

4.2.6. Government

(24)

governmental components is determined through measuring if the regional government adds value to productive entrepreneurs. In addition, questions are asked about the influence, importance and borders of this factor within entrepreneurial ecosystems (see appendix C, factor government).

4.3. Data collection

To increase the strength of the conclusion in qualitative research, researchers should consider three research-oriented quality criteria, namely: controllability, reliability and validity (Van Aken, Berends and Van der Bij, 2012). These criteria can be used to manage the quality of one’s own research and to evaluate research done by others (Van Aken et al., 2012).

4.3.1. Controllability

The data must be controllable, which is also a prerequisite for the evaluation of validity and reliability (Van Aken, et al., 2012). Controllability can also be used to check the data or to replicate the findings of other researchers (Van Aken, et al., 2012). To make the data highly controllable, this research extensively elaborates the process of data collection in order that somebody else can exactly imitate this research.

4.3.2. Reliability

A study is unreliable if it is not possible to depend upon it. On the other hand, it is reliable when the outcomes are independent of the particular characteristics (Van Aken et al., 2012). The study must be described in such a way, that other researchers can replicate the study and yield similar results. Literature makes a distinction between four biases: researcher, instrument, respondents and situation reliability. First, to increase the researcher reliability, this research is conducted with supervision of dr. C.H.M. Lutz. All research processes and findings are discussed between the researchers, which enhances the confidence of the findings (Eisenhardt, 1989). In addition, all interviews were recorded to increase the accuracy. Second, the instrument reliability is pursued by the use of triangulation (Yin, 1994), which is about the use of multiple research instruments that complement each other’s shortcomings. This study triangulates the data through gathering secondary data (literature research) and primary data (semi-structured interviews). Third, a list of guiding questions is developed beforehand, in consolation with the supervisor, to ensure respondents reliability. Last, four interviews with entrepreneurs operating in various markets at different locations are compared to pursue with situation reliability.

4.3.3. Validity

(25)

results and conclusions are generalizable and transferable, to be sure that the research results are externally valid (Van Aken et al., 2002). It is hard to generalize the conclusion of this study, since the data is gathered in the Netherlands, with only four entrepreneurs. Therefore, the new conceptual framework can be used as an overarching framework for future research. However, the above mentioned data collection method contributes to an increasing external validity.

5. Results

This research section provides the results to answer the second sub-question, namely: What do productive entrepreneurs in practice think about the relevance of the suggested ecosystem factors and how do these influence entrepreneurial activity? Each suggested ecosystem factor is explained on the basis of a table with a short overview of the interview answers. The case descriptions can be found in appendix D and the corresponding transcribed interviews are available upon request.

5.1. Support Services

Table 4: Short answers on the questions about support services

This sub-section provides the data (table 4) to answer the following question: Do support services characterize entrepreneurial ecosystems and how do they influence entrepreneurial activity?

(26)

in the entrepreneurial ecosystem did not influence the entrepreneurs to locate their company in their region. “No, these are things that happen by chance. We lived in this area and as a starting entrepreneur you have little choice”. – entrepreneur 1. In contrast to their previous answer, the absence of the support services in their entrepreneurial ecosystem would have consequences for three of the four companies; one company would have relocated and the other two do not think they would have survived. With good reason, because during the start-up phase of these companies, they really relied upon the specialisms of some support services, such as their coaches. Therefore, this factor is likely to be related to the ecosystem.

Based upon this data, it is indicated that support services characterize entrepreneurial ecosystems. In addition, they influence entrepreneurial activity by inspiring, motivating, unburdening and coaching the entrepreneurs.

5.2. Access to Finance

Table 5: Short answers on questions about the access to finance

This sub-section provides the data (table 5) to answer the following question: Does access to finance characterize entrepreneurial ecosystems and how does it influence entrepreneurial activity?

(27)

Based upon this data, it is indicated that access to finance does not characterize entrepreneurial ecosystems. Nevertheless, it is a necessary factor that stimulates and motivates entrepreneurial activity.

5.3. Human Capital

5.3.1. Entrepreneurial human capital

Table 6: Short answers on the questions about entrepreneurial human capital

This sub-section provides the data (table 6) to answer the following question: Do entrepreneurial ecosystem factors trigger entrepreneurial human capital to discover and exploit opportunities?

Two of the four entrepreneurs discovered the opportunity in the same environment as where they started the company. The other two entrepreneurs discovered the opportunity abroad. However, all entrepreneurs started their company in the environment where they lived. There are no factors from the ecosystem that affected the opportunity recognition, although entrepreneur 4 said: “The opportunity was staring me in the face and it was triggered when one of suppliers invited me to think about a problem”.

Based upon this data, it is indicated that there are no ecosystem factors that trigger entrepreneurial human capital to discover and exploit opportunities.

5.3.2. Employees’ human capital

Table 7: Short answers on the questions about employees’ human capital

This sub-section provides the data (table 7) to answer the following question: Does employees’ human capital characterize entrepreneurial ecosystems and how does it influence entrepreneurial activity?

(28)

Entrepreneur 3 also mentioned the other side of human capital: “Human capital has a positive influence on the company, because it keeps the company up and running, but the negative influence is that employees are expensive and they have an inhibitory effect on efficiency”. Some entrepreneurs found it difficult to find new employees with the human capital they need, but eventually they succeeded through others. They prefer employees from their own region, but if human capital is scarce they have to search beyond these regional borders. “We definitely look in our own region for new human capital, purely because of the physical distance” – entrepreneur 4. Finally, three of the four entrepreneurs were not influenced by the availability of human capital in their ecosystem when locating the company. Entrepreneur 3 was partly influenced with the availability of human capital: “Human capital was fairly important, but at the end everything just happens in and around Amsterdam, what attracts potential employees”. In addition, all entrepreneurs would have failed or moved to another ecosystem when human capital was not regionally available, because of the increasing costs with physical distance. Therefore this factor is very important for entrepreneurs.

Based upon this data, it is indicated that human capital characterizes entrepreneurial ecosystems. Furthermore, it influences entrepreneurial activity through motivating entrepreneurs and decreasing their costs.

5.4. Culture2

Table 8: Short answers on the questions about culture

This sub-section provides the data (table 8) to answer the following question: Does culture characterize entrepreneurial ecosystems and how does it influence entrepreneurial activity?

All entrepreneurs indicate that they are doing just the things they want without paying much attention to what others think. Therefore, three entrepreneurs do not see the importance of the general collective culture in their company. However, the entrepreneurial business culture in Amsterdam is really stimulating entrepreneurship, according to the entrepreneurs who are located in Amsterdam. “In my opinion, the Netherlands have a really entrepreneurial culture since everyone is approachable and open to assist. Over here it is much easier to get in contact with the CEO of a company, and then they also want to spend time to think with me extensively” – entrepreneur 4. Because of this experience, he perceives that the national business culture is stimulating and value adding to entrepreneurship. The

2_{The first three entrepreneurs were talking about the general collective programming of culture, while entrepreneur 4}

(29)

other entrepreneurs do not think that the Dutch culture motivates the ambition to become an entrepreneur. Therefore, three entrepreneurs were not influenced by the cultural ecosystem during the start of their company. However, the fourth entrepreneur is stimulated and motivated by the business culture in his environment. The business culture was an important factor when locating his company in Amsterdam. Although the most entrepreneurs consider culture as not important, its absence would have consequences for two entrepreneurs by influencing the speed of the developments of the companies.

Based upon this data, it is indicated that business culture characterizes entrepreneurial ecosystems. In addition, it influences entrepreneurial activity by motivating entrepreneurs and by increasing the speed of the development of the companies.

5.5. Knowledge

Table 9: Short answers on the questions about knowledge

This sub-section provides the data (table 9) to answer the following question: Does knowledge characterize entrepreneurial ecosystems and how does it influence entrepreneurial activity?

(30)

Based upon this data, it is indicated that tacit knowledge characterizes entrepreneurial ecosystems. It influences entrepreneurial activity by the provision of information to run a business and about developments in the market. Furthermore, explicit knowledge does not characterize entrepreneurial ecosystems, because of its global availability.

5.6. Governments3

Table 10: Short answers on the questions about governments

This sub-section provides the data (table 10) to answer the following question: Do governments characterize entrepreneurial ecosystems and how do they influence entrepreneurial activity?

The entrepreneurs have different views at the influence of the government. The first entrepreneur mentions that there was a low influence of the government on his company: “I had little to do with the government. Taxes have to be paid, so I just pay it. In addition, my product was revolutionary, so there were no laws and regulations that inhibited my company”. He sees the borders of the governmental ecosystem nationally. The second entrepreneur had a lot of trouble with local laws and regulations drawn up by the municipal council, which characterizes his ecosystem. Therefore, he sees the governmental borders locally. The other two entrepreneurs took advantage of the opportunities created by legislations and regulations. The third entrepreneur received different grants that had a motivating influence on his company. He considers the borders nationally. The last entrepreneur is more critical: “Overall the government has a retarding effect, but at the other side they really try to help. They just need to be more flexible to stimulate entrepreneurship”. He sees the governmental borders within Europe, because a large part of legislation and regulations, including grants, are derived from European agreements. At the end, the presence of the government in the ecosystem did not influence the entrepreneurs to locate their company in their region.

Based upon this data it is indicated that the local governments influence entrepreneurial ecosystems. They influence entrepreneurial activity for example by local legislation and regulations and the provision of grants.

To come back at the second sub-question, there are five different factors that characterize the entrepreneurial ecosystem according to the entrepreneurs. Only access to finance does not characterize entrepreneurial ecosystems, because of its availability outside the ecosystem borders. The

3_{In general, the entrepreneurs had a very simple one-dimensional view on the government, namely the legislation and}

Entrepreneurial Ecosystems and Entrepreneurial Activity