How entrepreneurial ecosystems take form: Evidence from social impact initiatives in Seattle

Abstract

Research Summary: This research uses insights from field theory to explore the early moments of how entrepreneurial ecosystems form through everyday interactions. We examine the cultural-cognitive and material micro-dynamics of activities occurring in support of social impact entrepreneurs and businesses from 2000 to 2014 in the Seattle, Washington, region using archival and interview data sources. The pattern of results about what actors do and how interactions change over time supports a two-period model of ecosystem formation where initial distributed and disparate activity undergoes a phase transition to coalesce into a more coordinated and integrated social order. The findings point to endogenous sources of structuring, including language and interaction, rather than exogenous sources such as government action or instrumental policy goals. Managerial Summary: How do the ecosystems that support entrepreneurs form? Rather than being created through top-down actions of governments and other powerful actors, we argue that entrepreneurial ecosystems form through the everyday interactions of individuals striving to create shared meaning, resources, and infrastructure needed to support their new ventures. This is especially true in ecosystems focused on creating social impact, which do not always offer the high returns expected in a market-based capitalistic system. Our study shows how the initial activities of distributed, disparate individuals and groups rather suddenly coalesce into more coordinated, integrated, and durable patterns of social interaction, creating the methods, resources, and legitimacy needed for an entrepreneurial ecosystem for social impact businesses to coexist with or change existing conventions of market-based capitalism.