Examining the influence of institutions in entrepreneurial ecosystems: an entrepreneur-resource perspective

Paul Lassalle
Sheffield Hallam University

Allan O'Connor
The University of Adelaide

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Andrew Johnston
Sheffield Hallam University

Abstract
Introduction and aim

Starting with the contribution of Isenberg (2010) on "how to start an entrepreneurial revolution", academics are taking wider interest in entrepreneurial ecosystems (EE), which have introduced a variety of external factors to the process of new venture creation. Recent developments of the concept aligns with policy-makers' interest in performance of entrepreneurship, with the aim of improving innovation, job creation, knowledge transfer, productivity and growth. As both innovation and growth require a favourable environment (Adner & Kapoor, 2010), the EE is a relevant unit of analysis for policy-making. The concept of EE originates (or derives) from previous research on contextual entrepreneurship (Garud et al., 2014; Welter, 2011; Zahra et al., 2014), on innovation systems (Cooke, 2001) and knowledge spillovers (Acs et al. 2014; Agarwal et al. 2007; Audretsch & Feldman, 2004; Håkanson, 2005). However, it brings a novel perspective to those debates because of its dynamic, interactive as well as its complex multi-dimensional nature. In order to capture the importance of these components on entrepreneurial activity, scholars have organised those factors in domains or attributes (Isenberg, 2011; Stam 2014; 2015), and have identified bottleneck factors (Acs et al., 2014).
More recently, an increasing focus has been given to the relational nature of EE, re-emphasising the importance of social capital, networks, but also highlighting the role of mediating institutions in connecting entrepreneurs to networks and sources of financial capital (see for instance Ben Letaifa and Rabeau, 2013; Mason & Brown, 2014; Spigel, 2015; Stam, 2015). Therefore the focus of these authors is on the relational and interactive nature of the different components of EE. Indeed, in an increasingly networked and globalised economy, the notion of interdependences between actors is (even more) crucial, and has also been central to the developments of the concept of EE in the academic debate.

Research approach

For the increasing attention given to EE research, somehow the crucial importance of entrepreneurial action (including the process of opportunity creation and recognition as discussed by Sarasvathy, 2011; or Alvarez & Barney, 2013) and the limiting factor of access to resources in entrepreneurship support policies has been somewhat overlooked. This paper thus draws on the crucial question of access to resources to propose a new theoretical lens on EE. In order to keep the entrepreneur in the centre stage of future work on EE, this paper adopts a conceptual approach to look at the role played by institutions, such as universities, incubators, accelerators, university spin-offs and support agencies in enabling entrepreneurs to access resources for growth, innovation, and internationalisation. We however also add institutional theories (North 1990; Scott 1987) that comprise the political, social, and legal contextual ‘rules’ that contribute to the landscape of new venture creation, opportunity, support and legitimacy, shaping and influencing the mental models of actors (Denzau & North 1994). We thus propose a conceptual model of the entrepreneur-resource nexus in which we particularly draw attention to the crucial institutions as mediators and moderators in the entrepreneurial process and on the role they play at the interface of entrepreneurs and resources.
Although conceptual, this paper builds on previous recent studies conducted by the authors in South Australia, in the UK, and in Malta on the types of support (and hence access to resources) provided to entrepreneurs and SMEs within bounded EE (O'Connor & Reed, 2015; Johnston et al. 2016; Lassalle & Yamamura, 2016).

Results and implications

From the entrepreneurs' perspective, those research projects point out the differences of perception, awareness and access to the different institutions among various groups of entrepreneurs (sub-groups, entrepreneurs at different stages of their venture development, industry, or patterns of internationalisation). As such, that there is no one-size-fits-all type of support as entrepreneurs require different resources (networks, finance, and advice) depending on their characteristics.
EE plays an important role in entrepreneurship activity as it provides a structure through which resources - such as knowledge or finance - can be accessed and acquired by entrepreneurs and firms, thereby leading to the identification and the exploitation of different types of opportunities, in domestic or international markets. Mediating institutions enable entrepreneurs to access resources from the EE but their actions and agenda also moderate and impact on entrepreneurial actions. Building on analysis of previous literature on EE and drawing upon recent research focussing on access to resources in EE, this paper makes a contribution to the developments of the concept of EE. By focussing on the role played by institutions in enabling and mediating entrepreneurs’ access resources in a given EE, the paper proposes to draw attention to the specific bridging role played by those institutions, while ultimately considering entrepreneurial action.

Conclusion

The outcome of this paper is an explicit conceptualisation of the role of institutions and how they influence the actions of entrepreneurs and the outcomes they pursue. We systematically examine the various institutions to offer propositions regarding institutional roles with respect to their various mediating and moderating influences within an EE on entrepreneurial action.