Abstract

An important line of inquiry bridging entrepreneurship and public policy are studies on industry agglomeration and business clusters which find evidence that these phenomena are common in regions experiencing increased economic development (Delgado, Porter, & Stern, 2010; Porter, 1990; Saxenian, 1994). However, apart from studies on university knowledge spillovers and venture capital, less is known about the interplay of other economic development agents that also attempt to stimulate entrepreneurship. This study uses complexity theory (Anderson, 1999) to study whether the agglomeration of business incubators and similar economic development services results in increased entrepreneurship rates and job growth.

Complexity theory views environments as comprised of a large number of agents that have many interactions with one another. Because agents make decisions according to the observed decisions of other agents, the behavior of the complex system can be difficult to predict and nonlinear. These assumptions give rise to the possibility that small changes in decisions can dramatically impact the behavior of the system and vice versa (Anderson, 1999). Thus, this study blends the logic of complexity theory with the formation of entrepreneurial ecosystems to study whether the entry of new economic development agents results in positive regional economic outcomes.

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