Entrepreneurial Ecosystems and Structural Change in European Regions

Abstract

The process of structural change is investigated in six European regions that were recently confronted with a severe decline in manufacturing jobs. Entrepreneurs are key actors in this process, as they are the agents driving creative destruction that is needed to transform the economy. The entrepreneurial ecosystem of each of the regions is analysed using ecosystem metrics and case study methods. Having a strong entrepreneurial ecosystem helps regions to be resilient to shocks, such as a decline in traditional industries or closures of large focal firms. Institutions, knowledge, and skilled labour play key roles in a successful economic transformation. Formal institutions can provide the leadership and investment needed to quickly adapt to shocks, as shown in the West Midlands (UK), Eindhoven (NL), and Oulu (Finland). The cases of Sofia, Bulgaria, and the Ruhr region, Germany, show however that a strong ecosystem does not guarantee a swift structural transformation. To explain these exceptions, it is important to consider the economic history and regional context. For example, a strong dependence on one industry or firm can create a lock-in effect that prevents resilience in the face of shocks. When diagnosing ecosystems to inform policies, it is therefore crucial to combine metrics with a thorough understanding of the regional context.