Meeting its Waterloo? Recycling in entrepreneurial ecosystems after anchor firm collapse

The ‘recycling’ of people, capital, and ideas within an entrepreneurial ecosystem is one of the key processes driving its support for further high-growth entrepreneurship. Skilled workers who leave firms after successful exits or firm collapse bring with them new knowledge and insights that they can use to start their own new ventures or work at existing scale-up firms. This makes large anchor firms important actors in attracting workers to the region who may subsequently recycle into the ecosystem. However, there is limited empirical research on recycling into an ecosystem after the loss of an anchor firm. This paper develops a novel methodology to gather career history data on the employees to track rates of recycling into ecosystems. The paper develops a study of Waterloo, Ontario, home to the smartphone manufacturer Blackberry, whose decline in 2008 represented a significant shock to the local entrepreneurial ecosystem. We find that alumni of this firm engaged in very little high-growth entrepreneurship themselves, but many employees entered the ecosystem as technology employees at high-growth scale-up firms. This was aided by the increasing institutional capacity of the region to match skilled workers with new ventures, helping ensure the continued success of the ecosystem over time. These findings allow for a more nuanced understanding of the role of anchor firms in entrepreneurial ecosystems and how recycling affects the dynamics of entrepreneurial ecosystems.