Dynamic Capabilities and Entrepreneurial Ecosystems: The Micro-Foundations of Regional Entrepreneurship

Abstract

In pursuit of the beneficial outcomes of entrepreneurship, governments and regional development organisations enact policies to stimulate entrepreneurial activity. A growing focus of policymakers in emerging and developed economies is the promotion of entrepreneurial ecosystems: the interconnected system of forces that generate and sustain regional entrepreneurship. Despite intense interest in entrepreneurial ecosystems, the topic is under-theorised. Studies draw attention to the positive effects of entrepreneurial ecosystems on the creation and functioning of early-stage ventures; however, the specific mechanisms through which ecosystems influence entrepreneurs are not clear. To address this issue, we build on dynamic capabilities theory to create a theoretical framework that identifies a set of forces through which ecosystems influence entrepreneurship. We propose that in vibrant entrepreneurial ecosystems entrepreneurs are more able to sense, seize and reconfigure resources and opportunities. Our theory contributes to entrepreneurship research, has implications for policymakers and practitioners, and suggests directions for future studies.