Article

The Antitrust Bulletin

2016, Vol. 61(4) 564-573
Applying the Ecosystem ª The Author(s) 2016
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DOI: 10.1177/0003603X16676162
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Uses and Abuses

Daniel J. Isenberg*

Abstract
This article uses a comparison of the generic features of natural ecosystems and the popular use of the
term ‘‘entrepreneurship ecosystems’’ and identifies five mistakes in the way the ecosystem metaphor is
applied from the natural sciences: the creation mistake, the centralized control mistake, the geography
mistake, the intention mistake, and the entrepreneur-centrality mistake.

Keywords
entrepreneurship, entrepreneurship ecosystems, entrepreneurship policy, economic development,
economic policy

I. Introduction
Since the appearance of How to Start an Entrepreneurial Revolution1 in the Harvard Business Review
six years ago, the use of the term ‘‘entrepreneurship ecosystem’’2 has become commonplace: A
January 2016 Google search yielded 10 million results.3 The World Economic Forum has published

1. Daniel Isenberg, How to Start an Entrepreneurial Revolution, HARV. BUS. REV., June 2010, at 51–60. See also Daniel
Isenberg, What an Entrepreneurship Ecosystem Actually Is, HARV. BUS. REV., May 2014, https://hbr.org/2014/05/what-an-
entrepreneurial-ecosystem-actually-is.
2. Sometimes also called an ‘‘entrepreneurial ecosystem.’’ In my view, entrepreneurship ecosystem is preferred because the
ecosystem is itself not ‘‘entrepreneurial’’; rather, it fosters entrepreneurship. But the terms are used interchangeably.
3. See Collin Mason & Ross Brown, Entrepreneurial Ecosystems and Growth Oriented Entrepreneurship (Org. Econ.
Cooperation & Dev. Background Paper, 2014), http://www.oecd.org/cfe/leed/entrepreneurial-ecosystems.pdf; and Erkko
Autio & Jonathan Levie, Management of Entrepreneurial Ecosystems (Imperial College Bus. Sch. Working Paper, 2015)
(on file with author).

*Babson Executive Education, Wellesley, MA, USA; Columbia Business School, New York, NY, USA; and Harvard Kennedy
School Center for International Development, Cambridge, MA, USA

Corresponding Author:
Daniel J. Isenberg, c/o Babson Executive Education, Babson Park, MA 02457, USA.
Email: disen@babson.edu
Isenberg 565

special reports on entrepreneurship ecosystems.4 The Organisation for Economic Co-operation and
Development (OECD) has sponsored entrepreneurship ecosystem reports and conferences.5 The
Kauffman Foundation has recently begun a program of research to learn how to measure entre-
preneurship ecosystems.6 Foundations and universities now hold educational programs on how to
foster entrepreneurship ecosystems.7 On a daily basis, media from Indiana to India describe
entrepreneurship ecosystems or regional activities in creating entrepreneurship ecosystems:
‘‘Entrepreneurial ecosystem urged to promote entrepreneurship’’ in Pakistan;8 ‘‘[t]he workshop
[in Iowa] will focus on creating an ‘entrepreneurship ecosystem,’ a term borrowed from the guest
speaker for the event, the Ewing Marion Kauffman Foundation [sic]’’;9 ‘‘[t]he [National Entre-
preneurship Network of India] team has over the years worked tirelessly and has shown immense
passion in creating a vibrant entrepreneurship ecosystem in India’’;10 ‘‘Cornell [University] has a
robust entrepreneurship ecosystem across many different disciplines’’;11 ‘‘[Global Entrepreneur-
ship Week] has grown as a movement from just a one week of activities, to a year-round platform
of programmes and initiatives aimed at creating one global entrepreneurial ecosystem [in Swazi-
land]’’;12 and ITU Seed of Turkey has ‘‘entrepreneurship ecosystem’’ on the website of its Early
Stage Incubation Center.13
Because the ecosystem metaphor implies the existence of a largely self-organizing, self-
sustaining, and, to some extent, self-regulating system, it may be useful in the development of
procompetition policies. The application of the ecosystem metaphor to entrepreneurship implies
that there can be a socioeconomic system in which equilibrium or quasi-equilibrium is attained by
actors’ pursuit of their interests or satisfaction of their needs, with relatively little control of the
specific processes from the outside. These ecosystems, similarly to markets in some views, may
be influenced by policies that establish frameworks within which the actors interact; but it is
intrinsic to the concept of an ecosystem that most overall value for the actors and for the system
is derived when the system is relatively independent of central control. Extending the metaphor a
bit, it is precisely the (again, relatively) self-organizing and self-sustaining character that distin-
guishes an ecosystem from a farm: A farm is almost completely controlled by external intention
applying outside force.

4. WORLD ECONOMIC FORUM, ENTREPRENEURIAL ECOSYSTEMS AROUND THE GLOBE AND COMPANY GROWTH DYNAMICS (2013), http://
www3.weforum.org/docs/WEF_EntrepreneurialEcosystems_Report_2013.pdf.
5. Mason & Brown, Entrepreneurial Ecosystems and Growth Oriented Entrepreneurship, supra note 3.
6. JORDAN BELL-MASTERSON & DANE STANGLER, MANAGING AN ENTREPRENEURIAL ECOSYSTEM (2015), http://www.kauffman.org/
what-we-do/research/2015/03/measuring-an-entrepreneurial-ecosystem.
7. Examples include Babson College’s ‘‘Driving Economic Growth Through Entrepreneurship Ecosystems,’’ MIT’s
‘‘Regional Entrepreneurship Acceleration Program,’’ and Kauffman Foundation’s ‘‘Metro Summit for Entrepreneurial
Leaders.’’
8. Mansoor Ahmad, Entrepreneurial Ecosystem Urged to Promote Entrepreneurship, T HE N EWS (Nov. 1, 2013),
www.thenews.com.pk/Todays-News-3-348689-Entrepreneurial-ecosystem-urged-to-promote-entrepreneurship.
9. Christie Smith, Rezoning of Breckenridge Property Postponed, Entrepreneurship Workshop Scheduled, IOWA ST. DAILY
(Nov. 10, 2015), http://www.iowastatedaily.com/news/politics_and_administration/city/article_448292e8-8812-11e5-
b778-bb58f216be12.html.
10. National Entrepreneurship Network (NEN) Bags ‘‘IWFCI-INDIA AWARD,’’ BUS. WIRE INDIA (Oct. 31, 2015), http://
businesswireindia.com/news/news-details/national-entrepreneurship-network-nen-bags-iwfci-india-award/45954.
11. Foundation Grants $4.5 M to Spur Entrepreneurship, CORNELL CHRON. (Oct. 23, 2015), http://news.cornell.edu/stories/
2015/10/foundation-grants-45m-spur-entrepreneurship.
12. Manqoba Makhubu, It’s Global Entrepreneurship Week from Monday, SWAZI OBSERVER (Nov. 11, 2015), http://
www.observer.org.sz/business/77114-it%E2%80%99s-global-entrepreneurship-week-from-monday.html.
13. ITU SEED, ISO AND ITU ARI TEKNOKENT WILL FIND ‘‘INDUSTRIALIST COACHES’’ FOR THE ENTREPRENEURS (Nov. 5, 2015), http://
www.itucekirdek.com/en/news/iso-and-itu-ari-teknokent-will-find-industrialist-coaches-for-the-entrepreneurs.
566 The Antitrust Bulletin 61(4)

As I argue below, it is in their discussion of laissez faire versus statist or intentional intervention that
users of the entrepreneurship ecosystem metaphor stray from its intrinsic characteristics. Indeed, the
use of the ecosystem metaphor in entrepreneurship has drifted so much that it is used almost exclu-
sively to refer to formal and intentional mechanisms (such as incubators) to create more entrepreneur-
ship, in particular, more startups. As will be shown, each the five terms—formal, intentional,
mechanism, create, and startup—is problematic when applying the ecosystem metaphor to
entrepreneurship.

II. Natural Ecosystems

To understand the challenges of applying the ecosystem metaphor to entrepreneurship, it is
necessary to revisit the use of the ecosystem metaphor in the natural sciences, particularly
because, as will be shown, the metaphor in the context of entrepreneurship has strayed fairly
far afield. A common definition of a natural ecosystem is ‘‘a community of living organisms in
conjunction with the nonliving components of their environment (things like air, water and
mineral soil), interacting as a system.’’14 Natural ecosystems are both biotic and abiotic. A
simple version of the ecosystem of a deer tick (responsible for Lyme disease) is illustrated in
Figure 1.
There are several features intrinsic to the concept of a natural ecosystem, including the following:

 It has numerous parts, such as animals, bacteria, flora, nutrients, and toxins, some of which
interact dynamically, such as ticks and their hosts, and some of which are less interactive, such
as climate and soil.
 It is physically coherent and circumscribed—for example, a cedar swamp has boundaries, and
we know more or less when we are in the swamp and when we are outside it.
 It has parts that are not necessarily biological—the cedar swamp has, of course, bacteria,
peepers, trees, fish, water, and birds, but it also has shade, climate, soil, and a few old car
fenders.
 It has parts that interact or coexist in quasi-equilibrium (constancy) even if the equili-
brium itself is likely dynamic—the cedar swamp, for example, does not change very
rapidly.
 It has parts that exhibit multiple and multidirectional influences on each other—the bacteria are
both a cause and a result of the rotting, which gives the frogs a good place to hide, which gives
the hawks something to catch, and so on.
 It has organisms with different, even conflicting, drives or motivations or ways of satisfying
their needs or competing with each other for resources—a human being worried about mosquito
bites has a level of satisfaction different from that of a frog that eats mosquitos. The ecosystem
is multicentric and multiperspective. The swamp means one thing for a person interested in
oxygen, something different for a person trying to sleep at night with peepers in mating season,
and something completely different altogether for a mosquito, even though the parts and
relationships among them overlap.
 Not least significantly, even though certain parts or actors within the ecosystem might have
intention (a beaver looking for a dam site, for example, has intention, but soil does not), none of
them exercises control or ownership over the entire ecosystem. Thus, the ecosystem as a whole
lacks ‘‘intention.’’

14. Ecosystem, WIKIPEDIA, https://en.wikipedia.org/wiki/Ecosystem (last visited June 20, 2016).

Isenberg 567

Figure 1. A natural ecosystem example.

Source: CHARLES J. KREBS, ECOLOGY: THE EXPERIMENTAL ANALYSIS OF DISTRIBUTION AND ABUNDANCE 464 (5th ed. 2001).

Humans are unique ecosystem actors because we can perceive our environments more broadly than
can other actors, and thus we can have more complex intentions and influences. Perhaps unsurpris-
ingly, ‘‘ecological restoration’’ methodologies have been developed—‘‘intentional activit[ies] that
initiate[] or accelerate[] the recovery of an ecosystem with respect to its health, integrity and sustain-
ability.’’15 For example, residents interested in providing more potable water for their community from
a swamp whose contribution to the water table is decreasing may change the flora, fauna, and physical
infrastructure to produce additional potable water. Whether this is a renewed or stronger or more
beneficial ecosystem will depend, among other things, on the extent to which the new level of potable
water is self-sustaining.

15. SOCIETY FOR ECOLOGICAL RESTORATION, SER INTERNATIONAL PRIMER ON ECOLOGICAL RESTORATION (2004), http://www.ser.org/
resources/resources-detail-view/ser-international-primer-on-ecological-restoration. See also Peter Fletcher, Aimlee
Laderman, & Pamella Polloni, Restoration and Revitalization of the Sharon Great Cedar Swamp (Sharon Conservation
Comm’n 2012), http://www.townofsharon.net/sites/sharonma/files/file/file/sharongcs_progress_report_june2012
absfinal.pdf.
568 The Antitrust Bulletin 61(4)

III. Misuse of the Ecosystem Metaphor in Entrepreneurship

Part of the current appeal of the ecosystem metaphor can be attributed to the zeitgeist, in which we look
favorably upon many things ‘‘eco,’’ but there are also tangible social and resource benefits of eco-
systems. The self-sustaining feature is one benefit. Almost by definition, a system in which one part
produces the resources required by another part is more resource efficient, certainly in contrast to a
system that is sustained only by a continual flow of resources from the outside. The self-regulating16
feature is another. A system that weeds out inefficiencies and maintains interactions in which more and
more member parts have more and more of their needs satisfied is intrinsically less susceptible to
capture by external forces. Nevertheless, it is possible for human intention to affect an ecosystem
without destroying its ecosystem qualities, as ecological restoration shows.
Another aspect of the appeal of the ecosystem metaphor, specifically applied to ‘‘entrepreneur-
ship,’’ can be attributed to the emergence of visible geographical concentrations of entrepreneurship
that seem to have evolved naturally, without any centralized intention, and are largely self-organizing17
and self-sustaining. Under a certain set of conditions, entrepreneurship seems to just ‘‘happen’’; and once
it happens, it keeps happening until it achieves a noticeable density; and this happens, or is more visible,
in certain locations more than in others. Given the benefits of systems that are self-organizing and
sustaining, policy makers and civic-minded leaders interested in economic development have begun
using the entrepreneurship ecosystem terminology.
From these understandable motivations, however, its application has drifted far from its original
intent. From the examples in the opening of this article, we can extract some of the common dis-
connects between natural ecosystems and the application of the metaphor to entrepreneurship:

 The creation mistake: As the term ‘‘ecological restoration’’ implies, ecosystems are not typi-
cally designed, created, established, or built. Rather they can be affected, influenced, facili-
tated, and occasionally restored. But because they are self-organizing and self-sustaining, the
notion of establishing or creating them is problematic unless there is an explicit intention that
they eventually become independent of external intention and control. Despite this fact, almost
all reports of entrepreneurship ecosystems refer to creating them. The mistake is not just
semantic, in my view: The primary reason for this error is that these observers are conflating
a particular institution or organization (such as a mentor network) with the ecosystem, thereby
implying that external control is required to create the ecosystem in the first place.
 The centralized control mistake: Related to the creation mistake, ‘‘creating’’ an ecosystem
implies that a creator controls, governs, manages, or even owns the ecosystem. People can
create, control, and own farms and gardens, and they can own and control elements of ecosys-
tems (land, houses), but they cannot own and control the ecosystems themselves. Control is
inherently contradictory to the notion of ecosystem.
 The geography mistake: When applied to entrepreneurship, ecosystems are often wrongly
viewed in broad geographic, typically national, terms such as ‘‘India’s entrepreneurship eco-
system.’’18 But there is no particular rationale for arguing that ecosystems closely adhere to
national boundaries or other administrative demarcations, except perhaps very small and

16. I use the terms self-regulating and self-organizing interchangeably, even though there may be nuanced differences between
the two.
17. The use of the term ‘‘largely self-organizing’’ should not be seen as inconsistent with the views of MARIANA MAZZUCATO, 1
THE ENTREPRENEURIAL STATE: DEBUNKING PUBLIC VS. PRIVATE SECTOR MYTHS (2013), one of the more visible recent voices
arguing that government and government policies are essential both in directly creating innovative assets that entrepreneurs
can use and in creating policies that make the use of these assets more effective.
18. GOVERNMENT OF INDIA PLANNING COMM’N, CREATING A VIBRANT ENTREPRENEURIAL ECOSYSTEM IN INDIA (June 2013), http://
planningcommission.nic.in/reports/genrep/rep_eco2708.pdf.
Isenberg 569

homogeneous ones. In fact, it has been observed that the variation of entrepreneurship within
countries can be greater than that between countries.19 Nevertheless, the reference to national
ecosystems for entrepreneurship, and the use of the nation as unit of analysis, is quite frequent;
some reports go further and use supranational regions as the units.20
 The intention mistake: A fourth common implication of creating broad, centrally influenced or
controlled entrepreneurship ecosystems is that the intention of one or a small set of actors is
relevant or causal. Applying the natural ecosystem metaphor, this would be tantamount to
describing the cedar swamp ecosystem only by its cedar trees and, maybe, water. Yet as
discussed below, to the same extent that it is impossible for soil, water, or climate to have
intention, certain essential elements of entrepreneurship ecosystems—such as social norms
supporting wealth creation or risk taking—may be necessary even in the absence of intention
with respect to entrepreneurship.
 The entrepreneur-centrality mistake: Sometimes observers analyze entrepreneurship ecosys-
tems primarily or even exclusively from the perspective of the entrepreneur, implying that the
entrepreneur is the central element of the entrepreneurship ecosystem21 and that entrepreneurs’
perceptions are paramount. Furthermore, entrepreneurs’ perceptions of the immediate environ-
ment, such as the scarcity or abundance of capital, are (1) taken as evidence of the presence of
financial resources or (2) considered to be more important than investors’ perceptions. To use an
acting analogy, this is tantamount to viewing the star as the play, whereas the latter could not
exist without a large infrastructure. Perhaps the star is most visible, but take away the producer,
director, casting director, and so on, and the appearance of the star is irrelevant.

IV. The Startup-Equals-Entrepreneurship Challenge

Entrepreneurship is more often than not equated with startups, typically newly registered firms,
sometimes those with at least one employee, occasionally described using additional criteria. The
equivalence of entrepreneurship and startups has been explicitly and implicitly promoted22 and has
influenced the emergence and visibility of startup movements as overt elements in economic policy at
the federal, state, and municipal levels. Because entrepreneurship and startups are seen as one and the
same, the main variable of interest when discussing entrepreneurship ecosystems is the number of new
companies formed. Therefore entrepreneurship ecosystems are viewed primarily in terms of their
value to policy makers in spawning increasing numbers of startups, the assumption being that startups
create economic growth and prosperity (despite the possibility, discussed below, that large numbers of
startups and large numbers of growth firms in the same region may be mutually exclusive).
The equation of entrepreneurship with startups poses conceptual and empirical challenges.
Empirically, although the number of newly registered companies tends to be large, it is difficult
for those new companies to grow,23 and few startups show employment or revenue growth of any

19. Hector Rocha & Rolf Sternberg, Entrepreneurship: The Role of Clusters—Theoretical Perspectives and Empirical Evidence
from Germany, 24 SMALL BUS. ECON. 267 (2005).
20. WORLD ECONOMIC FORUM, ENTREPRENEURIAL ECOSYSTEMS AROUND THE GLOBE, supra note 4.
21. See, e.g., ENTREPRENEURSHIP ECOSYSTEM INSIGHTS, http://www.ecosysteminsights.org/ (last visited June 14, 2016).
22. See, e.g., Press Release, Kauffman Foundation, Majority of U.S. States See Resurgence of Startup Activity in 2015,
According to Annual Kauffman Foundation Report (June 4, 2015), http://www.kauffman.org/newsroom/2015/06/
majority-of-us-states-see-resurgence-of-startup-activity-in-2015-according-to-kauffman-index; and Press Release, Office
of the Press Secretary, The White House, White House to Launch ‘‘Startup America’’ Initiative (Jan. 31, 2011), https://
www.whitehouse.gov/the-press-office/2011/01/31/white-house-launch-startup-america-initiative.
23. Daniel Isenberg, Focus Entrepreneurship Policy on Scale-Up, Not Start-Up, HARV. BUS. REV., Nov. 2012, https://hbr.org/
2012/11/focus-entrepreneurship-policy.
570 The Antitrust Bulletin 61(4)

significance.24 As Decker et al. report: ‘‘[T]he sustained contribution of business startups to job
creation stems from a relatively small fraction of high-growth young firms.’’25 The empirical
literature has also reported contradictory findings, such as that most net job creation is seen in
high-growth firms, the majority of which are quite old. As Acs et al. report, high growth firms are
‘‘on the average 25 years old . . . [,] represent between 2 and 3 percent of all firms, and . . . account
for almost all of the private sector employment . . . growth.’’26 Dun and Bradstreet report that
while small firms employ the largest share of the country’s workforce, middle market companies
with $10 million to $1 billion in revenues created 2.1 million, or 92%, of the nearly 2.3 million
net new jobs added during the past seven years.27
Second, after founding, startups also show steady job shedding after their first year.28 Almost all of
the net job gains attributed to startups occur in the first year. Third, there is evidence that both the
salary and skill level of jobs in startups are poor. One finding, for example, is that the average six-year-
old firm generates about £23,000 ($35,000) in revenue,29 which suggests low income to the owners. A
recent study in Denmark has parsed the relative contribution of startups to net creation of different
types of jobs, finding that incumbent firms, compared with startups, are associated with a dispropor-
tionate creation of highly skilled jobs.30
Conceptually, if new company formation were an antecedent to regional economic growth, one
might expect that the more startups there were, the more large firms there would be—that is, there
would be a positive correlation between startups and midsize firms. According to my analysis of the
Kauffman Startup Index31 and the Dun & Bradstreet Mid-Market Power Index,32 the correlation
between the two is about –.4, highly statistically significant. Montana, Wyoming, and North Dakota
have much higher startup measures than California, Massachusetts, New York, Texas, and Colorado.33
But numbers of midmarket companies per capita, using midmarket companies as an imperfect proxy
for growth (because in order to be midmarket, one would have to have grown) is led by Wisconsin,
Illinois, and Massachusetts. Similar findings are reported by the OECD.34 Startup indices also appear
to be uncorrelated with the amount of venture capital invested per state, contrary to expectation were
startups related to growth.35 And last, in economic development terms, there are few studies showing

24. Ross Brown, Collin Mason, & Suzanne Mawson, Increasing the ‘‘Vital Six Percent’’ (NESTA Working Paper 14/01, 2014).
25. Ryan Decker, John Haltiwanger, Ron Jarmin, & Javier Miranda, Where Has All the Skewedness Gone? The Decline in High-
Growth (Young) Firms in the U.S. (Nat’l Bureau of Econ. Research Working Paper 21776, 2016).
26. Z OLTAN A CS , W ILLIAM P ARSONS , & S PENCER T RACY , H IGH -I MPACT F IRMS : G AZELLES R EVISITED (2008), http://
www.massmac.org/newsline/0902/high_impact_firms.pdf.
27. DUN & BRADSTREET & AMERICAN EXPRESS, THE MIDDLE MARKET POWER INDEX: CATALYZING U.S. ECONOMIC GROWTH 3 (2015),
https://business.americanexpress.com/us/business-trends-and-insights/growing-smart/middle-market-index.
28. Antonio Davila, George Foster, Xi He, & Carlos Shimizu, The Rise and Fall of Startups: Creation and Destruction of
Revenue and Jobs by Young Companies, 40 AUSTL. J. MGMT. 6 (2015).
29. See SHERRY COUTU, THE SCALE UP MANIFESTO (2014), http://www.lse.ac.uk/publicEvents/pdf/2014-MT/20141118-
ScaleUpManifestoPPTs.pdf. See also Erik Hurst & Benjamin Pugsley, What Do Small Businesses Do? (Nat’l Bureau of
Econ. Research Working Paper No. 17041, May 2011); and Johann Kuhn, Nikolaj Malchow-Moller, & Anders Sorensen,
Job Creation and Job Types: New Evidence from Danish Entrepreneurs (Rockwool Foundation Paper 100, 2015), http://
da.rff.rw-fonden.inforce.dk/files/RFF-site/Publikations%20upload/Arbejdspapirer/Study%20paper%20100_WEB.pdf.
30. Kuhn, Malchow-Moller, & Sorensen, Job Creation and Job Types, supra note 29.
31. EWING MARION KAUFFMAN FOUNDATION, INDEX OF STARTUP ACTIVITY, http://www.kauffman.org/microsites/kauffman-index/
rankings/state (last visited Apr. 10, 2016).
32. DUN & BRADSTREET & AMERICAN EXPRESS, THE MIDDLE MARKET POWER INDEX, supra note 27.
33. EWING MARION KAUFFMAN FOUNDATION, INDEX OF STARTUP ACTIVITY, supra note 31.
34. See Flavino Calvino, Chiara Criscuolo, & Clara Menon, Cross-Country Evidence on Startup Dynamics (Org. of Econ.
Cooperation & Dev. Science, Technology & Industry Working Papers 2015/06, 2015), http://dx.doi.org/10.1787/
5jrxtkb9mxtb-en (showing data suggesting that Belgium has the lowest OECD startup rate but the highest number of
growth companies).
35. Analysis available from author.
Isenberg 571

the economic impact of policies to stimulate startups, and questions are being raised about the
justification for the sometimes large public investments.36
In sum, the use of ‘‘startup’’ as a variable related to economic development is problematic, and a fair
amount of both logic and evidence suggest that the importance of startups as an output of the entre-
preneurship ecosystem cannot be taken for granted.

V. The Entrepreneurship Ecosystem

Several conceptual representatives of entrepreneurship ecosystems have been offered,37 including that
shown in Figure 2.
As a static system, the figure represents the elements in the entrepreneur’s environment that are
believed to promote entrepreneurship. However the figure can also be seen to represent a more
complex and dynamic theory of how entrepreneurship develops as an ecosystem. The six
domains—finance, culture, human capital, markets, policy, and supports—are posited to interact in
ways that make entrepreneurship more likely, prevalent, and self-sustaining. Some of the elements are
equivalent to the biotic in natural ecosystems—people, such as educators and bankers. Other elements
are abiotic, such as infrastructure or culture.
To address some of the challenges of equating entrepreneurship with startups and the inconclusive
findings about the relationship between startups and economic growth, I posit that the essence of
entrepreneurship is growth. Its presence or absence is proven through the sustained, unusual growth
(more than expected by market conditions) that occurs when business actors create extraordinary
value for customers and capture extraordinary economic value for themselves, whether from recom-
bining assets, repurposing existing assets, acquiring new assets, or creating new assets.38 Whether right
or wrong, this approach is consistent with some empirical treatments of entrepreneurship,39 as well as
with case studies of interventions in entrepreneurship ecosystems guided by it.40 It does not assume a
direct relationship between the number of startups and the number of firms that actually exhibit
unusual growth.
The entrepreneurship ecosystem is characterized by multidirectional causality and high order
interaction. For example, instances of growth entrepreneurship in a region are an output of the
ecosystem, but they are also inputs and part of a feedback loop that might inspire others to succeed.
In addition, successful ventures might interact with personal networks or social norms that value
financial success to accelerate the feedback loop. Social media, published case studies, and university
classes that study and disseminate these examples might stimulate entrepreneurship directly, through
changing levels of aspiration, or indirectly, through reinforcing social norms of financial success. As
success occurs, the wealth created by entrepreneurs might become available for future entrepreneurs.
The more profit is made from investment in entrepreneurship, the more providers of capital will

36. Nitasha Tiku, New York’s Expensive Startup Initiative Only Created 76 Jobs, THE VERGE (Apr. 10, 2015), http://
www.theverge.com/2015/4/10/8384259/startup-new-york-governor-andrew-cuomo-jobs.
37. WORLD ECONOMIC FORUM, ENTREPRENEURIAL ECOSYSTEMS AROUND THE GLOBE, supra note 4; Mason & Brown, Entrepreneurial
Ecosystems and Growth Oriented Entrepreneurship, supra note 3.
38. DANIEL ISENBERG, WORTHLESS, IMPOSSIBLE AND STUPID: HOW ENTREPRENEURS CREATE AND CAPTURE EXTRAORDINARY VALUE
(2013).
39. ACS, PARSONS, & TRACY, HIGH-IMPACT FIRMS, supra note 26. See also Ross Brown & Suzanne Mawson, Trigger Points and
High Growth Firms, 20 J. SMALL BUS. & ENTERPRISE DEV. 279 (2013); and Press Release, Endeavor, Endeavor Insights
Spotlights Scaleup Ecosystems in Bangladesh and Uganda (Mar. 24, 2015), http://www.endeavor.org/research/endeavor-
insight-spotlights-scaleup-ecosystems-in-bangladesh-and-uganda/.
40. Daniel Isenberg & Vincent Onyemah, Fostering Scale Up Ecosystems for Growth: The Cases of Manizales-Mas and Scale
Up Milwaukee, in INNOVATIONS: TECHNOLOGY, GLOBALIZATION, GOVERNANCE (forthcoming 2016); Daniel Isenberg & S.
Perkins, Manizales-Mas: Believe, Create, Grow (Babson College No. BAB226, 2015).
572
Figure 2. Domains of the entrepreneurship ecosystem.
Source: Daniel Isenberg & Vincent Onyemah, Fostering Scale Up Ecosystems for Growth: The Cases of Manizales-Mas and Scale Up Milwaukee, INNOVATIONS: TECHNOLOGY,
GOVERNANCE, GLOBALIZATION (forthcoming 2016).
Isenberg 573

channel their capital in that direction. The catalytic effect of networks and the communication of
success stories or of other elements of the ecosystem, such as availability of capital, business partners,
and mentors, are among the causes of the geographic concentration of entrepreneurship.
In addition to geographic specificity, other characteristics of this view of entrepreneurship ecosys-
tems are also consistent with those of natural ecosystems. Entrepreneurship ecosystems exhibit a lack
of central control, multiple sources of intention, and multiple means of satisfying participants’ needs.
At some level of interaction among the domains themselves and among the domains and the output
variables, the ecosystem organizes and, to some extent, sustains itself because it satisfies the needs of
those required to sustain it. Educators invest in entrepreneurship because it addresses their needs
(research, intellectual property, donations, reputation, attraction of students and faculty). Financers
invest in entrepreneurship because it addresses their needs (deploying capital in ways that increase
return on assets or investment). Service professionals invest in entrepreneurship because it addresses
their needs (broadening their client base and therefore revenues). Media representatives invest in
entrepreneurship because it addresses their needs (more compelling content, which attracts readers
and advertisers). Corporations invest in entrepreneurship because it addresses their needs (giving them
better access to talent, innovation, supply chains, markets, and acquisitions). Elected officials invest in
entrepreneurship because it addresses their needs (creating quality jobs, which helps politicians
become popular and get reelected.)
As illustrated above, the causal pathways can be very complex and involve, as with natural eco-
systems, ‘‘abiotic’’ elements such as social norms, which may be essential elements in the pathway.

VI. Conclusion
This article has presented a concept of the entrepreneurship ecosystem that uses a metaphor taken from
the natural sciences. This metaphor, in my view, is often applied in inappropriately to the field of
entrepreneurship. The alternative is to characterize entrepreneurship as extraordinary growth, with the
entrepreneur potentially benefiting from that growth. If this alternative view is more consistent with
the natural ecosystem metaphor, then it is possible that other, intervention-oriented methodologies
used to change natural ecosystems (such as ecological restoration) might also be applied to entrepre-
neurship ecosystems. That is beyond the scope of this article, but there have been attempts to do so,41
and it is my hope that more attempts will be made and used to stimulate further research, debate, and
experimentation.

Author’s Note
I wish to thank Diana Moss and Stuart Read for their helpful comments on an early draft of this article and the
participants in the American Antitrust Institute 2015 Symposium in Washington, D.C.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication
of this article.

Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.

41. Isenberg & Perkins, Manizales-Mas, supra note 40.