The Ecosystem Either Amplifies Success—or Isolates It
For an EU or US start-up, the resources needed for scale are distributed across a place: investors, skilled workers, research organisations, suppliers, support services, and customers. This chapter examines what that local ecosystem adds beyond a firm’s own balance sheet and whether the first successful scale-up changes the behaviour of firms around it. The evidence supports a conditional judgment: a rising superstar can be a powerful signal, but its effects depend on the density and connectivity of the surrounding system, the type of success, and the outcome being measured.
An Ecosystem Is a Local Set of Interfaces
A firm does not experience an ecosystem as an abstract ranking. It encounters people who can join, investors who can finance a later round, research organisations that can provide knowledge, suppliers that can support delivery, and customers or partners that make expansion possible. These relationships reduce the cost of assembling capabilities that no start-up can own entirely. They also create pathways through which one firm’s decisions affect other firms.
The OECD study defines an entrepreneurial ecosystem as an interconnected set of firms, investors, skilled workers, universities and other research organisations, support organisations, markets, and formal and informal institutions. Its central idea is complementarity. Capital is more useful when experienced managers are available to deploy it. Research is more useful when firms can commercialise it. Talent is more valuable when companies, investors, and institutions can match it to a growth opportunity. A local ecosystem is strong not because it has one impressive component, but because these components can connect during the moments when a start-up’s constraints intensify.
The study measures the local environment through Functional Urban Areas, or FUAs. An FUA includes a core city and the surrounding municipalities that form a shared labour market through commuting. That geography is more informative than an administrative boundary for questions about hiring, knowledge exchange, investor access, and supplier relationships. A firm may be registered in one municipality but depend on workers, universities, and customers across the wider urban area.
The EU–US density contrast is large. The EU comparison covers 493 FUAs with nearly 400,000 start-ups, or roughly 807 per FUA on average. The US covers 263 FUAs with more than 750,000 start-ups, nearly 2,886 per FUA. About 11.56% of EU FUAs host at least one rising superstar, compared with 25.48% of US FUAs. For growth-oriented firms, the corresponding shares are about 34.08% and 67.30%.
The concentration within FUAs differs as well. EU FUAs average about 0.68 rising superstars and 3.43 growth-oriented firms, while US FUAs average about 5.03 rising superstars and 30.46 growth-oriented firms. These averages are calculated across the relevant FUA groups in the report’s table, so they should not be read as the expected experience of every city. They do, however, show a much denser and more concentrated environment around US scale-ups.
The local unit changes the interpretation of the EU–US comparison. A national average can make a large number of firms look connected even when the relevant investors, laboratories, and specialised workers are scattered far apart. An FUA brings the geography closer to the interactions that make scaling possible.