Assessing the complex dynamics of entrepreneurial ecosystems: A nonstationary approach

The notion of entrepreneurial ecosystems (EEs) has received growing interest from scientists, practitioners and policy-makers over the past decade. Whereas previous research has predominantly focused on identifying the main components and attributes of different ecosystems, the understanding of how EEs evolve over time is still limited. In this study, we build on recent conceptualizations of EEs as complex adaptive systems and apply three methods from chaos theory, the Pointwise D2 (PD2), the Brock-Dechert-Scheinkman (BDS) test and Local Largest Lyapunov Exponents (LLLEs), to study the nonlinear dynamics of EEs. To illustrate our ideas, we analyze the development of the Singapore entrepreneurial ecosystem (SEE) from 1970 to 2018, using time series data on the monthly creation of new ventures. Our results suggest that the evolution of an EE can be considered as a nonlinear chaotic process that changes over time. Implications for theory and practice, as well as limitations and future research directions, are discussed. •The understanding of how entrepreneurial ecosystems evolve over time is still limited.•We apply three methods from chaos theory to study the nonlinear dynamics of the Singapore entrepreneurial ecosystem.•We identify the evolution of entrepreneurial ecosystems as a chaotic process.•An initial period of critical instability is followed by a continuing phase of order generation.•Dealing with the complex dynamics of entrepreneurial ecosystems requires an adaptive approach.