Fostering conditions for digital entrepreneurship: The role of institutional entrepreneurs in driving FinTech ecosystem development

This paper explores the role of institutional entrepreneurship in developing Digital Entrepreneurial Ecosystems (DEE). With much of the literature on DEE focused on organisational-level analysis, there is a need for further research that includes system-level analysis, and specifically research that explores how ecosystem actors support Digital Entrepreneurship (DE) by facilitating adaptation of the institutional environment. We analyse a single longitudinal case study of the Danish FinTech ecosystem, a DEE that developed in the context of a traditional, highly regulated industry and a turbulent global FinTech scene. FinTech DEEs have emerged across the world as a response to a global reshaping of financial institutions that resulted from the global financial crisis and ongoing technological shifts. We use this case to explore two questions: “what institutional forces influence the development of the DEE?”, and “how do institutional entrepreneurs facilitate institutional changes to develop a DEE?” We find the development of the Danish FinTech DEE was enabled and shaped by changes to institutions that support: (i) new collaboration dynamics and mechanisms, particularly between incumbent firms and start-ups, (ii) adaptations to the regulatory framework, and (iii) the development of global connections. Institutional change required collective efforts, depending on different institutional entrepreneurs at different times. Neutral leadership of institutional entrepreneurs became crucial for institutional change. Furthermore, both system and organisation-level agencies influenced institutional change during the development of the DEE. As such, this study contributes to a better understanding of DEE development and, therefore, the conditions that foster DE in the FinTech field.