[su_pullquote align=”right”]By Christina Theodoraki[/su_pullquote]
Based on the article “A social capital approach to the development of sustainable entrepreneurial ecosystems: an explorative study” published in Small Business Economics, 51(1), 153-170.
The creation of sustainable entrepreneurial ecosystems is at the heart of public policy concerns. This type of ecosystem is composed of interconnected actors, within a territory, committed to facilitating the creation of new sustainable businesses. In this context, many questions need to be asked: Is it possible to replicate Silicon Valley’s success? Should governments continue to ‘infuse’ the ecosystem eternally with financial endowments or can the ecosystem reach a maturity threshold that allowed it to self-finance itself to evolve? What action plan must be considered to reach this maturity threshold? The social capital perspective is an interesting integrative framework that deserves to be analyzed to answer these questions.
The context and its evolution
The evolution of the entrepreneurial environment reinforces these questions. The economic crisis, the decline in public funding, the increase in the number of actors who revolve around the entrepreneur, competition between public, semi-public and private actors, the emergence of new entrants are new factors that threaten the survival of existing actors and force them to review their economic model or their contribution to the proper functioning of the ecosystem.
Thus, the university is one of the historical and founding actors of entrepreneurial ecosystems. The contribution of universities to the sustainability of the entrepreneurial ecosystem is important. They contribute to the creation of knowledge that they transfer to students in order to prepare them to integrate the entrepreneurial ecosystem. In parallel, the establishment of academic incubators promotes technology transfer, commercialization and value creation through the creation of spin-offs and young innovative companies. These incubators are intermediate actors who build the bridge between the supported companies and their external environment. Their objective is “to act as a neutral coordinator to promote the interests of academic entrepreneurs, remove barriers to their success, and connect them to entrepreneurship support mechanisms both inside and outside the university” (Hayter 2016, p. 651-652).
However, even if the role and contribution of some actors in the ecosystem seems obvious, current research fails to explain why some ecosystems are more “sustainable” than others. The synthesis of studies in this field distinguishes three characteristics to promote a sustainable ecosystem: (i) the consideration of territorial specificities; (ii) the effect of a supportive entrepreneurial culture; and (iii) the continuous interaction and interdependence of its components. The social capital perspective represents the configuration of a sustainable entrepreneurial ecosystem.
The key role of social capital
Social capital is composed of tangible and intangible elements grouped into three dimensions: the structural one, the cognitive one and the relational one (see figure 1). The structural dimension describes the properties of the ecosystem (the number of ties between members, the configuration of these ties and their stability); the cognitive dimension refers to the shared culture within the ecosystem (shared goals and language, shared narratives); the relational dimension refers to the behavior of members (the norms to be respected, the members’ obligations, the identification of each member – who does what -, and the trust they build between them). Combining these dimensions promotes the optimal configuration of the ecosystem and contributes to its sustainability.
We can therefore assume that if we have devoted resources to structuring the ecosystem, creating a shared culture and languages, and fostering stakeholder relationships with norms and obligations of members, our ecosystem will be sustainable. Unfortunately, it is not enough to only build the structural, cognitive and relational dimensions of the ecosystem. These dimensions are interconnected, and their interactions promote the adaptation of the ecosystem to the specificities of each territory and each ecosystem.
The key ingredient for the well-functioning of the ecosystem is to consider the interactions of its dimensions. It is important to build bridges between these dimensions to promote exchanges and the interconnectivity of the elements. It is this interconnectivity that is the key to the success of a sustainable entrepreneurial ecosystem.
Figure 1: The Social Capital Perspective of the Entrepreneurial Ecosystem
Managerial applications in different contexts
This study provides a better understanding of the composition of the entrepreneurial ecosystem and proposes a framework (through the social capital perspective) for configuring a sustainable ecosystem. Despite the focus of this study on academic incubators, our results are applicable in different sectors and contexts. In order to build a sustainable entrepreneurial ecosystem, it is advisable to: 1) create dense and strong relationships between members to compensate for the scarcity of resources; 2) develop a common culture and values within the ecosystem to ensure solidarity among members; 3) develop trust and rules respected by members to strengthen a climate of security conducive to value co-construction; 4) create bridges between mechanisms to fluidize and make flexible the evolution of the ecosystem.
The qualitative method using multiple case studies was conducted in Montpellier between 2013 and 2014 on 3 academic incubators. The choice of these incubators met four selection criteria: (i) proximity and commitment to an academic university, (ii) access to university services, (iii) transfer of scientific knowledge and support for the creation of new innovative businesses, (iv) geographical area. In total, we conducted 48 semi-directive interviews with all members of the entrepreneurial ecosystem (incubator managers, staff, incubatees, academic partners, funding entities, other types of incubators, etc.). This collection of ecosystem data with various groups of stakeholders allowed us to have a holistic view of the observed phenomenon, to cross-reference different points of view and to generate results by triangulation. The interviews were conducted using an interview guide, recorded, transcribed and coded to provide a synthesis of the results.
Co-authored by Christina Theodoraki (Professor, TBS Business School), Karim Messeghem (Professor, University of Montpellier, co-director of the Jacques Cœur Chair at Labex Entreprendre), and Marc P. Rice (Provost at Babson College).