Complement or substitute? Productive and sustainable entrepreneurship in the innovation ecosystem

Innovation ecosystems are increasingly expected to foster entrepreneurial activity that simultaneously supports economic growth and addresses pressing societal and environmental challenges. Yet, while prior research has examined productive and sustainable entrepreneurship largely in isolation, little is known about whether innovation ecosystems can enable both forms of venture creation and how their underlying logics interact. This study explores how innovation ecosystems enable two distinct entrepreneurial outcomes: productive entrepreneurship and sustainable entrepreneurship. Drawing on a unique dataset of 30 Italian smart city projects spanning 2011–2023, we examine ecosystem-level factors influencing each type and investigate whether the two forms can coexist and reinforce one another. Our findings suggest that innovation ecosystems could conducive to both forms of entrepreneurship, albeit through different mechanisms. Industry structure plays a stronger role in fostering productive entrepreneurship, while digital and technological infrastructure is more supportive of sustainability-oriented ventures. Moreover, we identify an asymmetric relationship between the two forms of entrepreneurship. Productive entrepreneurship is positively associated with sustainable entrepreneurship, but not the reverse. These results contribute to the innovation ecosystem literature by showing how economic and societal value creation interact within the same ecosystem. The study offers insights for scholars and policymakers interested in designing ecosystems that support both innovative and sustainability-driven entrepreneurship.