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

The 'recycling' of people, capital, and ideas within an entrepreneurial ecosystem is a key process driving high-growth entrepreneurship. Skilled workers who leave firms after successful exits or firm collapse bring knowledge and insights that they can use to start new ventures or work at existing scale-up firms. This makes large anchor firms important actors in attracting workers who may subsequently recycle into the local 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 using career history data to track 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, instead entering the ecosystem as technology employees at high-growth scale-up firms. This was aided by the region's increased institutional capacity to match skilled workers with new ventures, ensuring the continued success of the ecosystem over time. These findings provide a more nuanced understanding of the role of anchor firms in entrepreneurial ecosystems and how recycling affects the dynamics of entrepreneurial ecosystems.