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Chapter written by Dominique DESJEUX.
5
Business – Business Creation and Innovative Entrepreneurial Ecosystems
While the objective of economic theory is to explain the mechanisms of wealth creation, economists have only very recently raised the question of the location of companies and its impact on their development and vice versa. Moreover, although the entrepreneur was identified very early on as a major economic actor, the modalities of their capacity to innovate as an actor are still debated (Boutillier and Tiran 2016; Boutillier and Uzunidis 2016).
Since the beginning of the 20th century, many theories have been developed to formulate explanations to understand the economic dynamics of territories and the role of entrepreneurs. The business ecosystem (BE) (Moore 1993, 1996) is one of the most recent concepts in this field, broadly defined as a set of interactions between firms belonging to different fields of activity sharing a common strategic vision around a pivotal firm that imposes its technology. Moore gives the latter an important power to organize markets and industries. The ecosystem provides a relevant reading grid for understanding the strategies of firms in a given context, which is not reduced to territorial parameters alone, but includes a wide variety of stakeholders, who, in different ways, maintain exchange relationships, in a process of co-evolution.
The use of the ecosystem in the human and social sciences has grown considerably since the 1990s. It is easily used to explain many complex phenomena: entrepreneurship, innovation, business relations, etc. (Scaringella and Radziwon 2018). The BE and the entrepreneurial ecosystem (EE) have attributes in common, including the existence of synergistic relationships between various stakeholders. The BE and EE do not offer the same reading grid (Stam 2015; Brown and Mason 2017). The EE includes a territorial dimension that is not favored in the BE, as well as a public policy and entrepreneurship support dimension (Boutillier et al. 2016). However, although this borrowing from biology is widely criticized (Frery et al. 2012), the ecosystem remains no less relevant in explaining economic dynamics, primarily entrepreneurial ones concerning innovation in the broad sense of the term (product, process, organization), which should prompt us to take this metaphor seriously (Kuckertz 2019). This reference to biology is indeed rich in lessons (selection, adaptation, competition, cooperation).
5.1. The company, the territory and the ecosystem
Marshall (1885) is the essential reference in terms of territorial economy. “Industrial districts” and “industrial atmosphere” have long been part of the vocabulary of economists. But beyond a kind of alchemy supposed to operate between the territory (having a set of resources) and the entrepreneurs (with other stakeholders, such as the State, consumers, workers), the question arises of the nature of these synergistic relations and the modalities of their realization. These synergistic relations are materialized by exchanges of goods and services, raw materials, semi-finished products, technologies, knowledge, workers, etc. by a common vision that is shared by all, orchestrated by a pivotal firm. This territorial space is also homogeneous by virtue of the economic activities that develop there. In the same vein, Perroux (1950) distinguishes between commonplace and economic spaces. The “banal space” is defined in the geographical sense of the term; the economic space is defined at the level of the firm (generally large) that organizes and structures it. It also acts as a sort of force field between different actors. Under these conditions, Perroux breaks with the model of pure and perfect competition by developing the principle of a hierarchical market organization. Moreover, the exceptional success of certain sites, such as Silicon Valley, has also raised questions for researchers. Porter’s (1990) answer is that of the “cluster”, which has since been widely adopted by the scientific community, which he defines summarily as a group of firms and associated institutions linked by common elements and complementarities.
The BE (Moore 1993, 1996) forms a part of this trajectory of thought by sketching a new conception of competition: the (pivotal) firm organizes and structures the market in which it is positioned. In biology, the ecosystem is in fact a group formed by a community of living beings interacting with its environment. Its components develop a dense network of dependencies, exchanges, energy, information and various materials that enable life to be maintained and developed. The major interest of the ecosystem is to build a bridge between the micro and the macro (Roundy et al. 2018). Indeed, systemic analysis allows us to dissect the different components of a complex problem by highlighting nonlinear relationships. In spite of the criticisms made, the biological metaphor is not superficial; it cannot be reduced, as is often the case, to the image of a self-regulating system. Whether it is a biological or an entrepreneurial ecosystem, in both cases, it is necessary for an external actor to intervene to support this process of self-regulation, through appropriate public policy measures (Kuckertz 2019). For Moore (1993, 1996), the analogy with biology and the theory of evolution is obvious. It mobilizes all the tools of biological analysis. He even goes so far as to formulate the idea of an “ecology of competition” to explain that the survival of a firm depends on its capacity to evolve in its ecosystem, questioning itself in view of the transformation of its environment. A BE, like a biological ecosystem, is born, develops and transforms itself by adapting to new contingencies. Moore questions the nature of the relationship between the market and the firm by including a wide variety of actors, such as companies, the State, consumers and trade unions. The BE is an economic community supported by the interaction between a pivotal firm and different stakeholders. This community produces goods and services by bringing value to consumers. Over time, the skills and roles of the different stakeholders co-evolve and align their behavior with the pivotal firm (or several pivotal firms). The idea of co-evolution among BE stakeholders is widely favored. These companies will have a leadership role that can evolve over time. The function of the ecosystem leader is to bring value to the community, as they will engage stakeholders to act with a shared vision to adapt their investments and find mutually supportive roles. Moore thus favors cooperative relationships over competitive ones. The BE-based analysis shows that companies are not isolated entities, but develop their own strategies based on relationships of complementarity, cooperation and competition. These interactions, in turn, foster the creation and development of common skills and resources, sources of sustainable competitive advantages. A BE does not necessarily take place in a given geographical space; the stakeholders that make it up may be geographically close or distant.
5.2. From the business ecosystem to the entrepreneurial ecosystem: polymorphous innovation dynamics?
Although close, BE and EE reading grids are different, although, in essence, they both defend the idea of an innovation dynamic that is born from the interactive relationships between firms, entrepreneurs and institutions. The EE includes a territorial dimension, which is not favored in the BE. But this is not the only difference. The BE is said to have been born in 1995 (Roundy et al. 2018) following a study of Silicon Valley. Since then, it has been adopted by many researchers. A wide variety of definitions of the BE can be identified. These definitions focus on various aspects, depending on the researcher’s objectives. Interaction relationships between interdependent actors are frequently favored (Stam 2015). In addition to companies, other actors are involved, first and foremost institutions participating in the development of a “local entrepreneurial environment” (Masson and Brown 2014). The EE is also known for its capacity to support the creation of start-ups through open innovation strategies (Pustovrh et al. 2020). In this sense, an EE is not closed, while being marked by strong geographical and socio-cultural characteristics. The entrepreneur plays an
