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Economic development has something to learn from — and teach — ecosystem building

• Traditional economic development hunts for economic winners and big infrastructure, while ecosystem building focuses on stitching together many disparate parts, yet practitioners increasingly note they have much in common.
  
  
• The two approaches are converging under “entrepreneurship-led economic development,” with certifying bodies adding courses and professionals code switching between the terms to build broader coalitions.
  
  
• Tensions persist — some grassroots efforts are dismissed as “nice to have,” and some ecosystem builders scoff at “fusty” marketing — but history suggests new disciplines mature by setting standards and proving outcomes.

Rob Williams remembers an unusual family dinner-table debate from his childhood. 

His botanist father insisted that ecosystems were strictly natural phenomena. His small business-advocate mother argued that economic development could learn deeply from nature’s interconnectedness. They each had a point. 

Today, Williams is the founder and director of SourceLink, a category-defining nonprofit software platform spun out of Kauffman Foundation research. It is among the first in a constellation of tools that introduced the “ecosystem building” metaphor to traditional state and local economic development, a big, boring and quietly influential discipline around creation of jobs, business and regional output. 

Williams has an unusual balance. He’s among the earliest definers of entrepreneurship ecosystem building, and he also has traditional economic development training. 

“We can't thrive as economic developers without placing entrepreneurship and innovation at the heart of our strategies,” Williams said. 

Williams is part of an industry transformation, and like other professional and academic changes before, it takes time to sort out standards. In the 1830s, sociology emerged from political philosophy to better understand the “social physics” of how culture shaped individuals. In the 1980s, behavioral economics began as a splinter group before later shaping the entire field. In both and many other cases, individuals obsessed over a narrow set of differences within a larger, more established discipline long enough that those differences became their own field of study. 

Local entrepreneurship boosters who identify as “ecosystem builders” are attempting something similar.

In the 2010s, community organizers, startuppers and post-Great Recession economic activists formed coalitions around the country. Stewarded by funders led by the Kansas City-based Kauffman Foundation, these business and economic types took hold of the ecosystem metaphor. Then the post-COVID entrepreneurship boom gave ecosystem building its primetime moment.

“The pandemic showed us the fragility of some of our systems and the power of local entrepreneurship to build resiliency,” Williams said.

Today about 1,000 people list “ecosystem builder” as a job title on LinkedIn. Overwhelmingly they are entrepreneurs, small business advocates and self-identified connectors. In 2010, Technical.ly published the word "ecosystem" about 100 times. Last year, we did so over 1,000 times, a 10x increase in 15 years. A similar, if lagging, surge followed in books.

Dating to those childhood debates between his parents, Williams understands better than most the nuance of the ecosystem metaphor: Many overlapping, differently-sized, independent species interact in unexpected ways to support each other. Traditional 20th century-style economic development focuses on economic winners (established businesses) and top-down investments (industrial policy and big infrastructure projects). As set down by the Kauffman Foundation, ecosystem building focuses on nascent entrepreneurs and stitching together many disparate parts of a local economy.

Economic development is the big-game hunter storming the bush. Ecosystem building is the botanist carefully handling a butterfly.

These differences can present discomfort. Politics are an obvious one: standard economic development has been a bastion of American-style conservative capitalism, whereas ecosystem building adopted progressive concepts of mutual aid and, quite literally, environmentalism. 

Rather than an obstacle, Williams and others see this as an opportunity for coalition building. One of the only ideals that unites Americans across the political spectrum also unites progressive ecosystem builders and conservative economic development leaders: entrepreneurship.

‘Entrepreneur-led economic development’

The work of integrating ecosystem building into the larger and more-established economic development can now focus on terminology and process.

The International Economic Development Council, the trade’s primary certifying body with more than 4,500 members, is a natural leader, introducing courses and certifications. 

The group received more than 100 applicants for its director of entrepreneurship position, according to LinkedIn, a role that Williams’s own mother held. IEDC CIO Dell Gines, who spoke this month at the Technically Builders Conference, is a long-standing ecosystem-building champion, dating to his time at the Federal Reserve Bank of Kansas City. He has helped incorporate ecosystem building tenets into established economic development.

Williams too. For example, Williams adopts IEDC’s preferred phrase of "entrepreneurship-led economic development” (or ELED in the industry jargon) when speaking with more establishment economic development leaders. Other times, he relies on the “ecosystem building” term. Insiders cite subtle differences but on the whole, they’re becoming interchangeable.

“We have so much in common that it’s more about language differences,” Williams said. “You’re code switching depending on who you talk with.”

The merging isn’t complete. At our storytelling-focused Builders Conference, one longtime ecosystem builder sneered on-stage at fusty economic development marketing. On the other side, a traditionally-trained economic development leader confided in me earlier this year that much grassroots “ecosystem building” seems like “a lot of Millennial bullshit.” For her, the small gatherings and resource mapping strike her as nice to have but not critical in her budget-constrained reality. 

The lesson from past discipline changes is that both approaches have something to teach, and to learn. 

Ecosystem building can sound faddish, and so years of establishing best practices and outcomes are welcome. Williams credits the 2017 book “Beyond Collisions” as an example. Inspired by this, Technically has put forward a data-backed case for the economic outcomes of storytelling, another demonstrably important but squishy-sounding concept. 

Likewise, though, traditional economic development can overlook the real-world actions of individual humans. 

Entrepreneurs don’t choose places to start companies. Entrepreneurs choose places to live and then start companies there. Place-based economic development needs humanity. 

“It’s like a Venn diagram but there’s a lot more in the middle,” Williams said. “There's no entrepreneurship-led strategy that's sustainable without a healthy ecosystem around it, and no ecosystem-building initiatives can work sustainably without critical economic development-led supports.”