Enabling the Entrepreneurial Ecosystem

This article is written by Munira Hussein, a Contributor Author at Startup Istanbul.

Did it ever occur to you that there would be so much chemistry between biology and the economy? Biology is hugely considered the maker of economy. Biology and ecology have advanced considerably. This is drawn from the literature in economy.

 In the ecological ecosystem, there is an initial phase of exploitation. Here, you will think of ecosystem as a region and a market. In the initial exploitation phase, there is a wide open space. Consider when trees have fallen, when there has been a storm in the forest or when forest fire has occurred. These disasters are usually followed by new sprouts and a lot of growth occurs which is really exciting in the context of the entrepreneurial ecosystem.  We see this in the economy too.

However, in the entrepreneurial ecosystem, there is so much emphasis on the digital technology. There are two major reasons for this.  First, digital technology is a powerful tool but the other reason is because they are not owned by any incumbent business interests. We don’t see nearly as many innovators around the world in fertilizer and cement for example. It is not that these companies can’t benefit from entrepreneurship or improvement and efficiency. It is because they are locked up by incumbent business interest that simply will not allow new entry whereas digital markets allow for new entrants, constant improvements and disruptions.

Exploitation phase is where ideas grow. With the analogy of the biological ecosystem, it is the region where ideas mate and reproduce.  It is considered the climax phase. This means that everything is at the maximal complexity. Silicon Valley is in that stage and there are many other entrepreneurial ecosystems that are in this stage. When businesses models and businesses that have been successful collapse in on themselves, there is a collapse in the ecosystem. This is considered a disaster but we all know it is an inherent part of the vital functioning of an ecosystem. It is also a moment of tremendous opportunity for growth and development of other smaller businesses as well as the collapsed system.

 There is also the phase of reorganization and retrenchment. Here, collapsed businesses pick and start over with better understanding of how to meet the market needs. After this phase, the business cycle then goes back to the exploitation phase.

 In measuring and entrepreneurial ecosystem, there are a number of questions that come up. Just how much activity, fluidity, connectivity and diversity is there?  Each of these are measurable on region by region level. They are mapped numbers around how ecosystem is evolving. One dimension is being led by Endeavor partners to map a hundred cities in five years. This will help in determining the factors as per regions and consider their relationship.

The cycles within the entrepreneurial ecosystem are therefore important in the sense that they keep things flowing, allowing for the death of the old and growth and development of the new.

─ March 29, 2020