Best Practices

What Is an Entrepreneurial Ecosystem, Really?

Published Sep 03, 2020 by Rob Williams
Growing Entrepreneurship_web

Breaking down the emerging term, what it is and who it comprises.  


Entrepreneurs are the lifeblood of local communities; they are the ones creating jobs and growing economies across the United States. In fact, the Kauffman Foundation reports that these new businesses account for a disproportionate amount of new job growth, creating nearly all net new jobs and almost 20% of gross job creation.

However, it’s not an easy time to be an entrepreneur, and now more than ever they need support from community and government leaders.  

Economic developers have long understood the value of growing a community of entrepreneurs in their respective communities, including job creation, wealth distribution, innovation and a sense of identity for their towns and cities across the United States. However, many economic development efforts are aimed at injecting money into communities to build accelerators, co-working spaces and the like, which is just a small piece of what entrepreneurs might need to be successful.

In our work at SourceLink, helping ecosystem builders nationwide, we’ve found that entrepreneurs as a whole need certain resources and conditions in order to succeed. Based on our more than two decades of work, we’ve discovered six imperatives for entrepreneurial growth:     

  1. Maximize entrepreneurial support resources
  2. Tell a strong story
  3. Create an innovation pipeline
  4. Build entrepreneurial talent
  5. Increase availability to capital
  6. Engage the corporate community

So, what is an entrepreneurial ecosystem?

There are a lot of definitions for what an “entrepreneurial ecosystem” is, and even more opinions about how to make one successful. The phrase was first coined in a Harvard Business Review article in the early 1990s but wasn’t used by economic developers or community advocates until more than a decade later. It's also worth noting that in the field, discussions about whether to use the ecosystem term is appropriate. Here at SourceLink, we've increasingly been using the term entrepreneurial infrastructure.

According to the Kauffman Foundation, “Entrepreneurial ecosystems drive local economic vibrancy and national economic growth by building fertile environments for new and growing companies to thrive.” Think of it as an interconnected network of support players – people who work to give entrepreneurs the access, tools and information they need to be successful.

This network often includes people, programs and services (referred to as entrepreneurial support organizations, or ESOs) that enable and advance the growth of entrepreneurs in a cohesive, self-sustaining and connected way. Building an infrastructure that helps you move from helping people one at a time to creating a system that moves the entire community forward should be the goal. Taking this systems-based approach can level the playing field, making opportunities, funding and success more visible and accessible for anyone who has a dream or wants to seed hope in a problem not yet solved.

At SourceLink, we see a wide variety of entrepreneurial networks in communities across the country, ranging in size, structure and type of support players, and varying levels of success for each. While no two ecosystems are alike, there are certain truths that define an network of support and give it a stronger chance for success.

First and foremost, people are the center of an entrepreneurial ecosystem.

It’s tempting to get caught up in chasing new ideas, building incubators and seeking funding, but without people who are devoted to building a network of ESOs, the ecosystem will remain stagnant. The people who drive this success have many titles: innovators, investors, policy makers and more. They grow out of organic passion, and can even be led by entrepreneurs themselves.

Even with a multitude of supporters, it’s important to remember no one organization or person “creates” an ecosystem. In fact, it’s even more important to recognize that an entrepreneurial ecosystem can’t actually be created or “owned” – but you can create the conditions—the entrepreneurship infrastructure—in which entrepreneurs are able to more easily innovate.

Entrepreneurial community assessment: are you ready for ecosystem building?

Many communities have some sort of support system for entrepreneurs, including small business groups, chambers of commerce, universities, meet-ups and even co-working spaces. By formalizing the infrastructure and parameters to allow for the sharing of ideas, open access to capital and resources and connecting small businesses with the necessary ESOs, you can transform your small business community into a thriving and sustainable ecosystem. 

If you think you’re ready to build the infrastructure to support your entrepreneurs and drive real growth in your community, take a quick assessment of your landscape. Ask yourself:

  • Who are your entrepreneurs?
  • What are their biggest needs?
  • Where do they go for help right now?
  • After they get help there, how do they find their next step? Their next resource?
  • Do your support organizations know one another and have coordinated access to offerings? Would your entrepreneurs agree?
  • What industries feed your region’s economy—and where are the ideas coming from that will drive new innovations that will grow the economy?
  • How many jobs do your entrepreneurs create?

If you can answer most of the questions above, congratulations, you may be ready to build a robust entrepreneurial ecosystem in your community. If not, you may benefit from better coordination of resources, identifying gaps and offering guidance across the ecosystem to gaining buy-in at the highest levels of government and measuring program success. The team at SourceLink works with our affiliates to build diverse, equitable and sustainable economies of all shapes and sizes.

Many of our friends and partners have produced content for further learning. Here are a few of our favorites:

Entrepreneurship Ecosystem Network Strength Scorecard

Talk to us today to take the first steps to building a stronger future for your community. If you'd like, we also have a 12-page assessment that you can give to yourself and partners, just drop Dara an e-mail to access our Entrepreneurship Ecosystem Network Strength Scorecard.



SourceLink Rob Williams

Rob Williams is the director of SourceLink where he puts the “serve” in customer service, always available as support to SourceLink clients who are often the unsung entrepreneurial champions in their communities.