Entrepreneurial ecosystems are dynamic, localized systems of interconnected actors (entrepreneurs, investors, support organizations, research centers, local public actors, and others) that foster productive entrepreneurship. These ecosystems exist worldwide in various forms and sizes, from urban tech settings to rural environments. They are vital not only for the success of individual entrepreneurs—enabling resource interactions and facilitating coordination—but also for fostering local economic development.
Beyond Geographic Boundaries: Exploring Multiple Dimensions of Proximity
Traditionally, the success of entrepreneurial ecosystems was thought to depend on geographic proximity. However, recent research challenges this view, emphasizing that while geographic closeness is beneficial, it is not the sole determinant of a thriving ecosystem. My study, published in the Journal of Business Venturing Insights, explores how other forms of proximity—cognitive, social, organizational, and institutional—are equally crucial in shaping resource interactions and coordination within entrepreneurial ecosystems.
Cognitive proximity: Shared knowledge bases and expertise that allow actors to communicate, understand, and process new knowledge effectively.
Social proximity: Trust-based relationships embedded in social networks that facilitate tacit knowledge exchange and collaboration.
Organizational proximity: Shared relational and knowledge spaces within organizational structures that enable interaction and coordination.
Institutional proximity: Shared formal and informal rules, norms, and regulations that provide stability and reduce uncertainty.
Understanding proximity is essential because it influences how actors within an entrepreneurial ecosystem interact, collaborate, and innovate.
The Role of Digitalization in Transforming Proximity Dynamics
Digitalization is not merely a tool for entrepreneurs; it fundamentally alters how entrepreneurial ecosystems operate by reshaping the various forms of proximity. Digital platforms and tools enable entrepreneurs to collaborate remotely, access global markets, and tap into diverse talent pools, thereby transforming traditional proximity dynamics. For example, digitalization allows entrepreneurs to participate in virtual accelerators, where cognitive proximity is built through shared online learning experiences and collaborative projects, even if participants are geographically dispersed.
This transformation means that geographic proximity, while still relevant for trust-building and complex negotiations, is less critical for routine interactions. In addition, entrepreneurs can now leverage digital tools to maintain strong relationships and coordinate activities across borders, creating more flexible and adaptable ecosystems.
What Does This Mean for Entrepreneurs, Ecosystem Orchestrators, and Policymakers?
Entrepreneurs: Embrace multidimensional proximity in hybrid spaces. Consider and nurture various forms of proximity beyond geographic closeness. Actively foster cognitive proximity through shared knowledge and mutual understanding and strengthen social proximity by developing trust-based relationships. Pursue these efforts across both physical and virtual spaces. Engage in global virtual networks to broaden connections and participate in periodic in-person events to deepen ties and enhance collaboration.
Ecosystem orchestrators (where they exist): Orchestrate for connection, not just co-location. Orchestrating entrepreneurial ecosystems is about enabling meaningful connections and fostering shared mindsets, both online and offline. Facilitate structured interactions, such as accelerators, training programs, and mentoring, and create informal opportunities like networking events, workshops, or virtual communities. These efforts help build and sustain social and cognitive proximity among diverse ecosystem actors.
Policymakers: Rethink support strategies for entrepreneurial ecosystems. Policies should move beyond purely place-based approaches. Supporting entrepreneurs isn’t just about building co-working spaces or tech parks; it’s about creating the conditions for connections and collaboration, both online and offline. Invest in digital infrastructure that enhances access to resources and networks. Develop regulatory frameworks that encourage coordination among ecosystem actors and foster an environment where entrepreneurs can thrive, whether locally or through broader partnerships. Balance local support with openness to external opportunities, ensuring ecosystems remain dynamic and resilient.
The Bottom Line: Proximity Is Multidimensional and Evolving—And This Matters for Actors Within Entrepreneurial Ecosystems
Successful entrepreneurial ecosystems are hybrid, blending physical and virtual connections. Understanding and managing different forms of proximity—cognitive, social, organizational, and institutional—is key for building resilient, inclusive, and dynamic entrepreneurial environments.
Read the full paper here to find out more: https://www.sciencedirect.com/science/article/pii/S2352673425000083
Author Bio
Olivier Lamotte is Professor of International Economics and Strategy at EM Normandie Business School (France). His research focuses on international business, entrepreneurship, innovation, and emerging economies. Throughout his career, he has undertaken consulting and research assignments for various public and private organizations. He has also held several visiting researcher positions abroad, including in Japan, the UK, and the USA.
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