Spatial (In)equality and Entrepreneurial Ecosystem Policy: A Historical Analysis of the Scottish Highlands

We built a theory on how entrepreneurial ecosystem policy benefits some places within rural regions while leaving others behind. In a historical analysis of the Scottish Highlands and Islands, 1965 to 1990, we compared policies that attract external resources from outside the region with those that embed resources within local communities. We found that resource-attracting policies not only generated higher economic output but also concentrated opportunity, drained peripheral areas, and increased regional fragility. Resource-embedding policies produced lower aggregate output but greater spatial inclusion and resilience. Our historical analysis identifies spatial draining, disempowerment, and empowerment as mechanisms through which policy shapes ecosystem outcomes over time.