Unicorns are startups that rapidly achieve a market value of at least one billion USD. Recently, they are increasingly seen as a key outcome of thriving entrepreneurial ecosystems. However, it remains unclear what elements of entrepreneurial ecosystems contribute to the goal of increasing the number of such companies. In this article we identify the driving factors of entrepreneurial ecosystems associated with the emergence of unicorns.
We compare the association between elements of entrepreneurial ecosystems for the occurrence of unicorns and startups, as well as an additional benchmark derived from the location of headquarters of large innovative companies. The study sample includes data for all locations with the presence of unicorn companies (159 cities in 47 countries). Analytical explorations involved LASSO regressions, fsQCA and cluster analysis.
The emergence of unicorns relates to the proximity to leading R&D organizations, venture infrastructure and investments, as well as digital infrastructure. Based on these indicators, we identify four types of entrepreneurial ecosystem configurations, each leading to different outcomes in terms of the number of unicorn companies. The results show that the highest number of unicorns is observed in cities with a full-fledged set of these factors.
The conducted study is the first to empirically demonstrate the distinct necessary conditions for the creation and attraction of unicorn companies compared to regular startups and large technology firms. This result highlights the need to consider additional urban development factors that go beyond the traditional parameters of the venture market.
