**4. An Economic Ecosystems-Based Framework for Transitions to SUD in Africa**

In respect of transitions, this study draws on multi-level perspective on transitions theory (MLP), as a basis for developing this framing, as it specifically focuses on sociotechnical transitions to sustainability, which are clearly of great relevance in the African context given its high infrastructure deficits and stark urban divide. It is important to acknowledge, however, that the MLP has largely been developed in and for developed world contexts and may not adequately address the contextual specificities of developing world contexts.

The multi-level perspective on transitions to sustainability (MLP) conceptualizes transitions as socio-technical systems (STSs) (see Figure 2 below), where transitions are multi-level in respect of micro (i.e., niche), meso (i.e., regime) and macro (i.e., landscape) levels [26,60,61]. At the meso-level, regimes comprise a whole system and its normative features, that is, policy, regulatory, institutional, societal, structural, processual, economic, social, physical (i.e., infrastructural and technological), cultural, environmental and so forth. This constitutes a socio-technical system that is recognizable and which is dynamically evolving. At the macro-scale, landscapes refer to the greater context (and scales) in which regimes reside (e.g., regional, global). Landscapes exert exogenous landscape pressures on regimes that force regimes to adapt, primarily because regimes have little or no direct control over landscape pressures. Landscape pressures act as forcing factors that drive change in regimes. This change is facilitated by the ability of the regime to reconfigure its internal structures, processes, functions and identity (i.e., its adaptive capacity), as well as by the absorption and amplification of niches that occur at the micro-level (i.e., its transformability) [62]. As landscape pressures exert pressures on a regime, this creates opportunities for niches to accumulate, gain momentum and penetrate at the regime level spurring transition to new modes of operation at the regime level.

**Figure 2.** Illustration of the multi-level perspective on transitions. Adapted from [60] (p. 1263).

Niches are typically innovative on a range of different levels [62]; they can be discursive and policy oriented, technology and/or systems solutions oriented, or they may involve the establishment of strategic intermediaries that bridge activities that would otherwise be conducted in silos (e.g., urban coalitions, laboratories, management agencies). They are key to bringing about transformative change or transition at the regime level. This study theorizes that niche activities, as conceptualized in the MLP, can be further elaborated in the African context by embracing the notion of local and local–regional scale economic ecosystems, an old conceptual framing [27] that has enjoyed a recent revival [25].

Economic ecosystems theory has its roots in Malcolm Marshall's 1920 eighth edition of *Principles of Economics* [27], where he argues for an approach towards economics that acknowledges two key insights. First, the use of the mechanistic metaphor accommodates complexity to a lesser degree than the biological metaphor in appreciating the adaptive evolution of economic systems. Second, localization of economic activity has profound commensurate benefits, particularly for knowledge co-creation and transfer, innovation and normalizing participation in trade and entrepreneurship at local levels. These insights have recently been mobilized by Auerswald and Dani [25] to formulate a comprehensive theoretical framework of economic ecosystems.

In this respect, Auerswald and Dani define an economic ecosystem as "(a) dynamically stable network of interconnected firms and institutions within a bounded geographical space" [25] (p. 362). In their framing, economic activities and innovations are geographically localized and characterized by innovation in ecosystems. They are densely interconnected and characterized by "speciation" (p. 374) between firms. The speciation of each firm is characterized by its "production algorithm" (p. 368), which serves as its differentiator in the broader "fitness landscape" (p. 369). Interconnectedness drives "biparental reproduction" (p. 366) as the progenitor of chance mutation in this fitness landscape, enabling Schumpeterian innovation and entrepreneurship to harness relationships to improve fitness. Firms proceed along the fitness landscape by leveraging their learning curves to proceed through learning and adaptation, adapting to changes as they occur and charting a way forward based on the new position achieved along the fitness landscape. This mirrors how complex systems maintain stability far away from equilibrium by harnessing feedbacks to "self-correct" to maintain stability through an "adaptive walk" (p. 369) of sorts. In this sense, the firm's resilience is enhanced by its ability to adapt as well as the "DNA" (p. 368) that underpins its production algorithm, which provides it with the fallback mechanisms to adapt and self-organize [25].

Adopting a Schumpeterian perspective characterized by creative disruption—where innovation results from "a constant process of differentiation among firms, based on their abilities to innovate because of different internal routines and competencies" [1] (p. 41) this study theorizes that the potential for creative destruction (or disruption) at the regime level can best be achieved through catalyzing and organizing niche activities that produce social innovations in economic ecosystems at local and local–regional scales in African cities. That is, social innovation-based niches that respond to local demands (e.g., for goods, services, food, infrastructures and technology solutions, as well as skills development, financing, micro-credit) in service of sustainability transitions at local scales.

In this respect, an economic ecosystem perspective enables several key advances to be made that enable niche-level activities in the MLP to be organized for greater impact. First, it enables a heterodox economics perspective to be actualized. This is particularly suited to the African urban context as the prevalence of dual formal–informal systems negates the direct adoption of neoclassical economic models of development. Second, and related to the former, it enables a systems perspective, in which the false dichotomy between formal and informal systems can be transcended [6], enabling an inclusive, "organizing from the street" [63] perspective to be leveraged in service of in situ development in slums, informal settlements and informal trade, service provision, employment, production and the like. Third, an economic ecosystem perspective enables a unit of analysis and scale of implementation that is focused at the local and local–regional scales (this coheres with Mazzucato's [1] (p. 43) perspective, whose focus is on the "network", stating that, "from the meso perspective the network is the unit of analysis (not the firm). The network consists of customers, subcontractors, infrastructure, suppliers, competencies or functions and the links or relationships between them"), which is precisely where the need for infrastructure and technology provisions, service provisions, goods, skills development, reduced export dependence, cash flow and employment arises in African cities.

Hence, an economic ecosystem perspective brings a particular set of advantages when navigating urban development in African cities. Importantly, by leveraging a systems and heterodox economics perspective that is rooted in biological metaphor(s), it enables an understanding of what creates and drives adaptive and transformative capacity in local systems, i.e., what yields fitness and enables navigation of fitness trajectories on the fitness landscape. In this perspective, the economic ecosystem as a process becomes the unit of analysis in multi-level transition and not the production algorithm of firms, or their "DNA". This enables a multi-scalar perspective on the accumulation of niches that penetrate at the regime level to be actualized. Individual firms' fitness is predicated on their individual "DNA" (which is the unit of analysis at the firm level) and capacity for selforganizing in relation to other firms, as well as in response to exogenous and endogenous changes (e.g., in demand) in the environment. Local–regional economic ecosystems are constituted by the networked assemblage of firms that is organized into ecosystems and where self-organization and adaptive capacity yields fitness at the (economic) ecosystem scale. This in turn can catalyze niche penetration at the regime scale. In this casting, economic ecosystem fitness is not so much a product of *accumulation* of niches [26,61] as much as it is a product of networking, organization, adaptation and consolidation, i.e., *organization and institutionalization* of niches. Social innovation-based economic ecosystems hence become the enabling systems [1] that are directed by the entrepreneurial state (see Section 5.2).

Moreover, embracing an economic ecosystem perspective enables a valuable multiscalar perspective to be actualized on the (object of and) unit of analysis. This extends down to the individual firm's "DNA" (i.e., the firm as a single system understood through a biological metaphor where its essential traits are encoded throughout the system and informs its form, as well as function), to the local "ecosystem" level (i.e., a networked, selforganized and adaptive system) and all the way up to the large scale enterprises that come to dominate regime level normativity (networked, ubiquitous, normative, i.e., *institutional)*. In other words, an economic ecosystem framing enables a multi-scalar perspective to be envisaged on the question of transitions to SUD, one which extends from local to the broader national and regional scale transitions (see Section 5.2).

#### **5. Discussion: Enabling the Entrepreneurial State**

#### *5.1. Economic Ecosystems and Multi-Scalar Transitions to Sustainability*

In theorizing the broader scales of transitions that can be underpinned by seeding and catalyzing local urban economic ecosystems on the continent, several levels of broader scale transition can be envisaged. First, building on the growth of local economic ecosystems in cities, niche development and evolution can be catalyzed through organization, increasing the potential for niches to penetrate at the regime level and bring about national scale transitions. Second, when considering that the majority growth is occurring in small to intermediate scale cities and that these cities typically occur along corridors that link larger cities, that considerable potential for strengthening rural–urban linkages and catalyzing national scale transitions can be harnessed. Third, extending this rationale, this study also speculatively theorizes that—because some of these urban corridors typically span across national boundaries (e.g., the Greater Ibadan, Accra, Lagos corridor in West Africa) that transnational regional scale transitions can also be catalyzed to some extent in these regions. In these respects, local economic ecosystems can potentially play a key role in multi-level and multi-scalar transitions to sustainability, while boosting economic growth and diversification at the same time.

At each scale, different governance considerations may need to be made. For example, at the firm scale, it is the "DNA" and production algorithm of the firm that is important. At the local economic ecosystem scale the networked interaction of linked niche activities is important to organize, catalyze, support and shape/direct. At greater scales—particularly national scales—the institutions that govern how clusters of local economic ecosystems and their interconnectedness with other clusters in other cities across county/provincial and national boundaries become important.

At national scales, cities are key drivers of growth, innovation, economic diversification, skills development and socio-cultural change. Cities, hence, impact national policies and planning for transition as a result of their primacy in generating new and diverse offerings and ways of doing, particularly with respect to social innovation that responds to global and local sustainability challenges facing them [21]. In turn, at transnational regional scales, cities can engender networked cross-scale responses that coordinate key functions of cities, even adapting them to absorb impacts and alleviate regional scale damage (e.g., in the case of disasters). Hence, cities are also of key importance to regional governance bodies that oversee key policy and planning decisions, which accommodate the role of cities in regional development.

#### *5.2. Entrepreneurial State for SUD in Africa*

The entrepreneurial state is a term that has been popularized by Mariana Mazzucato [1], who refutes the discursive notion that innovation-led growth is purely an outcome of "'market-driven' mechanisms (p. 1), empirically emphasizing the large role that public investment programs plays in underwriting and absorbing the risk of early state innovation that underpins growth instead. Importantly, Mazzucato argues that the role of the entrepreneurial state "does not necessarily have to take place at a national level (although it can)" (p. 80). Hence, in the casting adopted in this study, the role of the state—whether at national, city or local scales/levels of governance—is to engage in shaping, catalyzing and supporting local economic ecosystems that foster sustainable local and local–regional diversification and growth. Additionally, she specifically argues for "pushing" (i.e., versus nudging) (p. 121) to catalyze green industrial transitions through building "green innovation ecosystem(s)" that are symbiotic and not parasitic (p. 176), where the flow and diffusion of knowledge and ideas serves as a basis for innovation (p. 43).

This study embraces the entrepreneurial state as playing a key role at local scales by shaping and facilitating organization of economic ecosystems and establishing the institutions for cooperation, adaptive capacity, competitiveness and sustainability of economic ecosystems. Enhancing niche-driven economic ecosystem fitness is the priority in this framing. In turn, local scale economic ecosystems drive broader urban transitions and the

role of the state is to direct and shape them (as well as clusters of economic ecosystems that may emerge). This perspective coheres with that of Lee et al. [64] in rationalizing how to respond to the fourth industrial revolution.

Moreover, the entrepreneurial state has a strong role to play in supporting social innovation for SUD through shaping the objectives and providing support to the hybrid processes (i.e., top-down and bottom-up) [20] that underpin social innovation. These hybrid processes typically entail bottom-up direct social innovation initiatives drawing on support from interventions by "institutions, civic organizations or companies (top-down)" (p. 63), where progress can be incremental. Critically, the entrepreneurial state has a critical role to play in managing the complexity of scaling social innovation processes that reside in economic ecosystems. As Manzini [20] puts it, "(t)he hybrid nature of these social innovation processes becomes increasingly evident as the scale of change to be achieved increases" (p. 63) and that "as highly dynamic processes" they "go far beyond" traditional views on participatory design, "becoming complex, interconnected and often contradictory processes" (p. 65). This points to the need for the entrepreneurial state to play a coordinating role as a strategic intermediary or supporting strategic intermediaries that help bring greater coordination and direction to social innovation in economic ecosystems, particularly with respect to hybrid social innovation. In addition, the entrepreneurial state has a role to play in grappling with the complexity of these "complex, interconnected and often contradictory processes" [20] (p. 65) by providing direction, helping mitigate risk and uncertainty and supporting local authorities to be able to deliver effectively on social innovation in respect of the required scale, target and mode of intervention. The entrepreneurial state also has a role to play in supporting the more *radical* "creative and proactive activities" [20] (p. 65) underpinning social innovation and participatory design, as it entails experimentation and, hence, navigating higher levels of risk that wholly independent and/or private sector organizations may be less likely to undertake (indeed, this is the role that the entrepreneurial state has historically undertaken through public venture capital [1] (p. 68)). Hence, in sum, it can be argued that the entrepreneurial state has a key role to play in (1) incremental and radical, as well as (2) top-down, bottom-up and hybrid social innovation activities [20] (p. 57).

The role of the entrepreneurial state in the African context is about more than simply shaping markets and providing directionality to them that responds better to local needs. The entrepreneurial state also has a key role to play in mitigating against both private sector and NGO led sustainable innovation activities in Africa, where public participation is teleological, that is, where communities are skillfully guided towards preconceived solutions that "usurp community autonomy" [23] (p. 3), underpinned by how tacit power dynamics play out. In this respect, it is not merely inclusion that the entrepreneurial state needs to be focused on, it also needs to overcome the formal–informal sector dualism that governs both state and private sector led approaches in Africa (see next section). Moreover, private sector and civil society led social innovation tends to emphasize "finding and scaling" solutions and offerings, where indigenous communities can be "overpowered by outside ideas and processes" [23] (p. 3). In this study, the proposition differs in that scaling transitions to SUD is the objective and not scaling social innovations themselves, precisely because the focus is on economic ecosystems.
