Up Next

Market-Based Solutions to Vital Economic Issues


Jan 22, 2021

Research Highlight: Policy and Ecosystem Evolution


We consider how policy might vary over the life cycle of an innovative ecosystem. This paper reviews the evidence on how ecosystems evolve over time as firms and institutions develop. For each stage of ecosystem development, we identify a set of organizational logics that prevail and present evidence about qualitative differences that characterize different stages. Understanding the factors behind the path of development and the process of changing from one phase to another is required for both theory development and policy advice. We argue that the role of policy, either state or local, plays a pivotal but underappreciated role in the creation and development of ecosystems. We differentiate between the role of sector-specific local policy and the role of sector-neutral local policies. Rather than mutually exclusive, we explore the ways in which the two policies may be used alternatively and complementarily in the different stages of the development of an ecosystem.

You may also be interested in: