Glossary and Resources Glossary Facebook Linkedin Twitter Many definitions for the work of ecosystem building are still evolving, and their meanings are sometimes imprecise. The working definitions for some key terms used in this playbook are presented below. Economic Development: The work to “create the conditions for economic growth and improved quality of life by expanding the capacity of individuals, firms, and communities to maximize the use of their talents and skills to support innovation, lower transaction costs, and responsibly produce and trade valuable goods and services.”37 Ecosystem Builders: Individuals who focus their work on building a system of support and resources for entrepreneurs in their communities or industries. Entrepreneurial Ecosystem: A network of people supporting entrepreneurs, and the culture of trust and collaboration that allows them to interact successfully. The speed at which talent, information, and resources move through the ecosystem can affect entrepreneurs at each stage in their lifecycle. Entrepreneurs: The makers, doers, and dreamers in our society. Inclusive Economy: An economy “in which there is expanded opportunity for more broadly shared prosperity especially for those facing the greatest barriers to advancing their well-being.”38 National Resource Providers (NPRs): Organizations that provide training, programs, and funding to ecosystem builders across the U.S. and beyond. Small Business: The U.S. Small Business Administration defines a small business as “an independent business having fewer than 500 employees.”39 For the industry-level definitions of small business used in government programs and contracting, see www.sba.gov/content/small-business-size-standards. Endnotes Facebook Linkedin Twitter Discuss 1. Wendy Guillies, president and CEO of the Ewing Marion Kauffman Foundation, notes in her 2015 State of Entrepreneurship Address [PDF], for example, that the prime time television show “Shark Tank” attracts seven million viewers every week, and Mattel has introduced an Entrepreneur Barbie. 2. Ewing Marion Kauffman Foundation, “The Importance of Young Firms for Economic Growth,” Entrepreneurship Policy Digest, September 14, 2015. John Haltiwanger, Ron S. Jarmin, and Javier Miranda, “Who Creates Jobs? Small versus large versus young,” The Review of Economics and Statistics, May 2013, 95(2): 347–361. 3. Startup density measures the number of startups (firms less than one year old and employing at least one person) per 1,000 employer businesses. Bureau of Labor Statistics BDS data are used for the years up until and including 2014. An estimate of startup density for 2015 and 2016 is created using data from the Business Employment Dynamics (BED) available through the Bureau of Labor Statistics. See Ewing Marion Kauffman, “2017 Kauffman Index of Startup Activity [PDF],” May 2017, p. 41 for methodology. 4. Ewing Marion Kauffman Foundation, “Zero Barriers: Three Mega Trends Shaping the Future of Entrepreneurship,” State of Entrepreneurship 2017, February 16, 2017. V. Hwang, S. Desai, and R. Baird, “Access to Capital for Entrepreneurs: Removing Barriers,” Ewing Marion Kauffman Foundation: Kansas City, 2019. 5. Robert Fairlie, Sameeksha Desai, and A.J. Herrmann, “2017 National Report on Early-Stage Entrepreneurship, Kauffman Indicators of Entrepreneurship,” Ewing Marion Kauffman Foundation: Kansas City, 2019. 6. American Association of University Women, “The Simple Truth about the Gender Pay Gap,” Spring 2018. 7. Mariko Chang, “Women and Wealth: Insights for Grantmakers,” Asset Funders Network, 2015. Thanks to Melissa Bradley of Project 500 for sharing these statistics with us. 8. Kimberly Weisul, “Venture Capital Is Broken. These Women Are Trying to Fix It,” Inc. Magazine, November 2016. 9. Kathryn Finney with Marlo Rencher, “The Real Unicorns of Tech: Black Women Founders,” The #ProjectDiane Report, digitalundivided, February 2016. 10. Carolyn Sun, “They’re Doing It: Awe-Inspiring Black Female Entrepreneurs,” Entrepreneur Magazine, February 15, 2018. 11. Ewing Marion Kauffman Foundation, “Zero Barriers: Three Mega Trends Shaping the Future of Entrepreneurship [PDF],” State of Entrepreneurship 2017, February 16, 2017. 12. Ewing Marion Kauffman Foundation, “Zero Barriers: Three Mega Trends Shaping the Future of Entrepreneurship [PDF],” State of Entrepreneurship 2017, February 16, 2017. 13. See the following papers for a broader discussion of these trends: John Haltiwanger, “Top Ten Signs of Declining Business Dynamism and Entrepreneurship in the U.S. [PDF],” paper written for the Kauffman Foundation New Entrepreneurial Growth conference, August 2015.Ryan Decker, John Haltiwanger, Ron Jarmin, and Javier Miranda, “Declining Business Dynamism: Implications for Productivity? [PDF],” Hutchins Center on Fiscal & Monetary Policy, The Brookings Institution, September 2016. 14. Approximate years for the previous economic eras are from the following sources: Smithsonian National Museum of Natural History, “What does it mean to be human?” 2016; Graeme Barker, The Agricultural Revolution in Prehistory: Why did Foragers become Farmers? (Oxford: Oxford University Press, 2006), p. 1; Joerg Baten, A History of the Global Economy: 1500 to the Present (Cambridge: Cambridge University Press, 2016), p. 13. 15. Thomas L. Friedman argues that a new era began in 2007 in a talk to Google employees about his 2016 book, Thank You for Being Late. In 2007, he explains, the iPhone was released, Facebook went global, Twitter went global, the software Hadoop was created, GitHub was launched, Google purchased YouTube and launched Android, the Kindle was released, IBM launched Watson, the internet reached 1 billion users (late 2006), growth of solar power “took off,” the cost of generating a megabyte of data dropped to a little over $2 while data speeds increased, “The Cloud” was launched, and Intel began using non-silicon materials. Thomas L. Friedman, “Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations,” Talks at Google, January 26, 2017. See also Thomas L. Friedman, Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations (New York City: Farrar, Straus, and Giroux, 2016).Ben Sasse makes a similar argument in a 2017 article in The Wall Street Journal. Ben Sasse, “The Challenge of Our Disruptive Era,” The Wall Street Journal, April 21, 2017. 16. Pew Research Center, “By 2055, the U.S. Will Have No Racial or Ethnic Majority Group,” September 23, 2015. 18. Ten Year Project. First Round Capital. 17. United States Census Bureau, Quick Facts. Thanks to Melissa Bradley of Project 500 for sharing these statistics with us.18. Ten Year Project, First Round Capital. 19. Ewing Marion Kauffman Foundation, “2017 Kauffman Index of Startup Activity,” May 2017. Fairlie, Robert, Sameeksha Desai, and A.J. Herrmann, “2017 National Report on Early-Stage Entrepreneurship, Kauffman Indicators of Entrepreneurship,” Ewing Marion Kauffman Foundation: Kansas City, 2019; Kauffman Foundation, “The Economic Case for Welcoming Immigrant Entrepreneurs,” September 8, 2015. 20. Ewing Marion Kauffman Foundation, “Zero Barriers: Three Mega Trends Shaping the Future of Entrepreneurship [PDF],” State of Entrepreneurship 2017, February 16, 2017. 21. Victor H. Hwang and Greg Horowitt, The Rainforest: The Secret to Building the Next Silicon Valley (Los Altos Hills, California: Regenwald, 2012). 22. This phrase was first published in part of the title of Alice H. Amsden’s 2001 book, The Rise of “The Rest”: Challenges to the West from Late-Industrializing Economies. Fareed Zakaria later used the phrase as part of the title of his 2009 book, Post-American World and the Rise of the Rest. Steve Case has more recently used the term as the title of a new entrepreneurial support initiative called Revolution’s “Rise of the Rest,” described as a “nationwide effort to work closely with entrepreneurs in emerging startup ecosystems.” See here for more information. 23. Robert D. Putnam, “Bowling alone: America’s declining social capital,” Journal of Democracy 6:1, 1995, p. 67. 24. David Rock and Heidi Grant, “Why Diverse Teams Are Smarter,” Harvard Business Review, November 4, 2016. 25. Alec Whitters, CEO of the startup, Higher Learning Technologies. “With new funding, tech team, Higher Learning Technologies plans to release more apps,” The Gazette, Cedar Rapids, Iowa, January 21, 2014. 26. J.D. Adams, “Theorizing a sense of place in transnational community,” Children, Youth and Environments, 23(3), 43-65, 2013. 27. See Michael J. Gelb and Sarah Miller Caldicott, Innovate Like Edison: The Five-Step System for Breakthrough Business Success (New York: Penguin, 2007). 28. Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City (Hoboken: John Wiley & Sons, 2012), p. 25. 29. Peter Block, Community: The Structure of Belonging (San Francisco: Berrett-Koehler Publishers, 2008), p. 25. 30. Peter Block, Community: The Structure of Belonging (San Francisco: Berrett-Koehler Publishers, 2008), p. 52. 31. Greg Tehven, executive director and co-founder of Emerging Prairie, emphasizes the need for “a radically inclusive culture that has an extraordinary speed of trust.” Melanie D.G. Kaplan, “Inside Fargo, America’s Most Undervalued Tech Hub,” Fortune, December 18, 2015. See also Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City (Hoboken: John Wiley & Sons, 2012), pp. 27 and 47. 32. Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City (Hoboken: John Wiley & Sons, 2012), p 63. 33. See, for example, Silicon Florist in Portland, Oregon; Emerging Prairie in Fargo, North Dakota; Hypepotamus in Atlanta, Georgia; Technical.ly in the East Coast; and Tech.co throughout the country. 34. From Tim Williamson, co-founder and former CEO of The Idea Village, New Orleans. 35. Brad Feld, “StartupVille,” Kauffman Sketchbook, Ewing Marion Kauffman Foundation. 36. Everett Rogers presented the theory of innovation diffusion in his 1962 book, Diffusion of Innovations. Geoffrey Moore adapted this model to include the chasm in the technology adoption lifecycle in his 1991 book, Crossing the Chasm. The graphic presented here is based on a design by smithHOUSE for a blog series about models for predicting the future. Everett Rogers, Diffusion of Innovations, 5th edition, Simon and Schuster: 2003. Geoffrey A. Moore, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, New York: HarperCollins, 2002, p. 17. Matt Smith, “Models for Predicting the Future: Geoffrey Moore’s ‘Crossing the Chasm.’“ 37. Economic Development Administrative Fiscal Year 2016 Annual Report. 38. Chris Benner and Manuel Pastor, “Inclusive Economy Indicators,” The Rockefeller Foundation, December 2016. 39. “Frequently Asked Questions about Small Business,” U.S. Small Business Administration Office of Advocacy, August 2018. Additional Resources Facebook Linkedin Twitter Discuss Auerswald, Philip, “Enabling Entrepreneurial Ecosystems: Insights from Ecology to Inform Effective Entrepreneurship Policy,” Ewing Marion Kauffman Foundation, October 2015.Application of the lessons from evolutionary biology and ecology to the creation of entrepreneurial ecosystems. The paper offers a framework for data gathering and analysis of entrepreneurial ecosystems’ vibrancy and proposes strategies for policymakers seeking to foster entrepreneurial activity. Block, Peter. Community: The Structure of Belonging. San Francisco: Berrett-Koehler Publishers, 2008.An exploration of the ways that fragmented communities can be rebuilt to create healthy communities. The book outlines six kinds of conversation that will foster communal accountability and commitment and discusses the physical spaces and structures that promote a sense of belonging. Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda, “Declining Business Dynamism: Implications for Productivity?” [PDF], Hutchins Center on Fiscal & Monetary Policy, The Brookings Institution, September 2016.Exploration of the fall in business dynamism in the U.S. and its implications for productivity growth. The paper explains that the gap in productivity between the most and least productive firms has widened over time, especially in the information sector. And it finds that there is now a weaker link between a firm’s labor productivity and its rate of employment growth. Deming, W. Edwards. The New Economics: For Industry, Government, Education. Cambridge: MIT Press, 1994.Proposal for a new management style based on cooperation rather than competition. The book argues that the prevailing competitive management style is destructive and suggests that cooperation within a system leads to greater learning and fulfillment, as well as long-term success. Doss, Henry H. and Alistair M. Brett. The Rainforest Scorecard: A Practical Framework for Growing Innovation Potential. Los Altos, CA: Regenwald, 2015.A concise guide to assessing and quantifying the elements of an organizational culture in terms of its capacity for innovation. The book offers a framework and tactics for culture building, as well as metrics to manage the process. Ewing Marion Kauffman Foundation, “Zero Barriers: Three Mega Trends Shaping the Future of Entrepreneurship,” [PDF], State of Entrepreneurship 2017, February 16, 2017.Analysis of three megatrends that are reshaping entrepreneurship in America: the diversity gap in entrepreneurship; the changing geography of entrepreneurship; and the new nature of entrepreneurship that allows companies to grow in revenue without increasing jobs at the same pace that they did in the past. The report also presents the Foundation’s new Zero Barriers to Startup initiative. Fairlie, Robert, Sameeksha Desai, and A.J. Hermann. “2017 National Report on Early-Stage Entrepreneurship,” Kauffman Indicators of Entrepreneurship, Ewing Marion Kauffman Foundation: Kansas City, 2019.Analysis of four indicators that track trends in early-stage entrepreneurship activity in the United Staes: the rate of new entrepreneurs, the opportunity share of new entrepreneurs, the startup early job creation, and the startup early survival rate. The report also presents the Kauffman Early-Stage Entrepreneurship (KESE) Index, a summary index that combines these indicators. Feld, Brad. Startup Communities: Building an Entrepreneurial Ecosystem in Your City. Hoboken: John Wiley & Sons, 2012.A guide to building entrepreneurial ecosystems and increasing their breadth and depth. The book is based on venture capitalist Brad Feld’s experience in Boulder, Colorado, and other entrepreneurial communities. Feldman, Maryann and Ted D. Zoller. “Dealmakers in Place: Social Capital Connections in Regional Entrepreneurial Economies.” Regional Studies, Vol. 46.1, pp. 23–37, January 2012.Examination of the role of dealmakers in regional economies – those who have strong ties and work to make connections, build relationships, and facilitate startup creation in the community. The paper analyzes twelve regions in the U.S., finding a correlation between the presence of strong local dealmakers and high start-up rates. Gelb, Michael J. and Sarah Miller Caldicott. Innovate Like Edison: The Five-Step System for Breakthrough Business Success, New York: Penguin, 2007.Discussion of Thomas Edison’s comprehensive approach to innovation. The book explains Edison’s development and use of innovation best practices and then applies his five “competencies of innovation” to contemporary business and innovation. Glaeser, Edward. Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. New York: Penguin, 2011.Discussion of the history of cities, the factors that shape their success, and the reasons the author sees them as humanity’s greatest invention. Haltiwanger, John. “Top Ten Signs of Declining Business Dynamism and Entrepreneurship in the U.S. [PDF],” paper written for the Kauffman Foundation New Entrepreneurial Growth conference, August 2015.Summary of trends related to the decline in measures of business dynamism and entrepreneurship in the U.S. in the last several decades. Harrington, Ken. “Is Your Entrepreneurial Ecosystem Scaling? An Approach to Inventorying and Measuring a Region’s Innovation Momentum.” Innovations: Technology Governance Globalization. 11(1-2): 126-142. January 2016.Presentation of an entrepreneurial ecosystem framework. The framework includes an ecosystem inventory that can be used to assess a regional entrepreneurial ecosystem and measure its growth, as well as different approaches to measuring entrepreneurial ecosystems that focus on economic outcomes, cultural and social factors, and ranking methodologies. The author applies the framework to the St. Louis ecosystem to explain its history and evolution. Hasso Plattner Institute of Design at Stanford, “An Introduction to Design Thinking: Process Guide,” [PDF].Introduction to the five modes of the design thinking approach to problem solving: empathize, define, ideate, prototype, and test. Hwang, Victor H. The Rainforest Blueprint: How to Design Your Own Silicon Valley: Unleash an Ecosystem of Innovation in Your Company, Organization, or Hometown. Los Altos Hills, California: Regenwald, 2013.A short, practical guide to applying the theories from The Rainforest: The Secret to Building the Next Silicon Valley in businesses, organizations, and communities. Hwang, Victor H. and Greg Horowitt. The Rainforest: The Secret to Building the Next Silicon Valley. Los Altos Hills, California: Regenwald, 2012.An explanation of the nature of complex innovation ecosystems and why certain communities generate innovation while others fail. The book uses the example of rainforests and other biological systems to explain the complexity of entrepreneurship and innovation. Bringing together research from a wide range of disciplines, it emphasizes the importance of culture to these ecosystems and explains the development of this culture in Silicon Valley. Hwang, Victor, Sameeksha Desai, and Ross Baird. “Access to Capital for Entrepreneurs: Removing Barriers.” Ewing Marion Kauffman Foundation, April 2019.Survey of the knowledge landscape on access to capital with an eye toward mechanisms to support systemic improvements in capital access for entrepreneurs in the United States. The report concludes with five key questions to shape a call for action and to guide future thinking on access to capital for entrepreneurs. Isenberg, Daniel, “What an Entrepreneurship Ecosystem Actually Is,” Harvard Business Review, May 12, 2014.A true-false test elucidating misconceptions regarding entrepreneurship ecosystems and the relationship between entrepreneurship and economic development. Mason, Colin and Ross Brown. “Entrepreneurial Ecosystems and Growth Oriented Entrepreneurship.” Background paper prepared for the workshop organized by the OECD LEED Programme and the Dutch Ministry of Economic Affairs on Entrepreneurial Ecosystems and Growth Oriented Entrepreneurship, January 2014.Discussion of the entrepreneurship ecosystem approach to creating distinctive types of supportive environments for high growth firms. The paper also emphasizes the role of policy in supporting entrepreneurial ecosystems and presents general principles for policymakers to follow. Meyers, Maria E., and Kate P. Hodel. Beyond Collisions: How to Build Your Entrepreneurial Infrastructure. United Staes: Wavesource LLC, 2017.A framework for building entrepreneurial ecosystems from the leaders of SourceLink, one of the early innovators in the field. Teh book outlines how to identify entrepreneurial assets, connect them to entrepreneurs, measure their impact, and fill gaps in the entrepreneurial ecosystem. Moore, Geoffrey A. Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. New York: HarperCollins, 2002.Strategies for marketing in high-tech industries and for bringing new high-tech products to progressively larger markets. The book focuses on the particular challenge of reaching mainstream buyers for high-tech products. Morrison, Ed. “‘Strategic Doing’: A New Discipline for Developing and Implementing Strategy within Loose Regional Networks.”New approach to strategy for regional development that emphasizes transparency, agility, and experimentation. The article suggests that this approach, called “Strategic Doing,” is more effective than the traditional, linear process of strategic planning in the open, loosely connected networks that support growth in regional economies. Ostrom, E. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press, Cambridge, UK, 1990.Exploration of models for governance of natural resources used by many individuals in common. The book argues that neither the state nor the market have been consistently successful in solving these problems and that voluntary organizations can sometimes maintain common resources for long periods. Saxenian, AnnaLee. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge: Harvard University Press, 1996.Comparison of the business success of California’s Silicon Valley with the decline in business along Route 128 in Massachusetts in the 1990s. The book argues that despite similar origins and technologies, Silicon Valley saw greater success because it developed a regional network-based industrial system that was collaborative and was characterized by dense social networks and open labor markets that promoted entrepreneurship and experimentation. The Route 128 region, by contrast, was dominated by independent, self-sufficient corporations and had a regional culture of stability, secrecy, self-reliance, and corporate loyalty. Smyre, Rick and Neil Richardson. Preparing for a World that Doesn’t Exist Yet: Framing a Second Enlightenment to Create Communities of the Future. Alresford, Hants, UK: John Hunt Publishing, 2016.A new approach for the increasingly fast-paced, interconnected, interdependent, and complex society that is now emerging. The book discusses the new capacities in local communities that will be necessary for success in this new environment, as well as the changes to come in higher education, health, government, and the economy. Stangler, Dane and Jordan Bell-Masterson. “Measuring an Entrepreneurial Ecosystem,” The Kauffman Foundation, March 2015.Proposed measurement system for entrepreneurial ecosystems. The paper focuses on the overall performance of the ecosystem in terms of outcomes and vibrancy, suggesting four indicators: density, fluidity, connectivity, and diversity. For each category, the authors propose different measures and possible statistical sources for them. Wilson, David Sloan, Elinor Ostrom, and Michael E. Cox. “Generalizing the core design principles for the efficacy of groups,” Journal of Economic Behavior & Organization, Volume 90, Supplement, June 2013.Discussion of Ostrom’s eight design principles that enable groups of people to manage common resources (such as irrigation systems, forests, pastures, and fisheries) sustainably – without privatization or top-down regulation. The article shows how the design principles follow from foundational evolutionary principles and how they apply to a nearly all situations in which people must cooperate and coordinate to achieve mutual goals and can be used as a practical guide for increasing the efficacy of other groups of people.