The Role of Innovation Ecosystems on Sustainable Startup Development: An Empirical Study for the Baltic States and Spain

The promotion of rapidly scaling technology startups has become a major policy priority. Sustainable startups are increasingly viewed as potential contributors to resilient and environmentally responsible economies, as they may combine economic growth with environmental and social objectives. Based on entrepreneurial ecosystem theory, the resource-based view, and Schumpeterian creative destruction, this study identifies innovation ecosystem conditions associated with sustainable startup growth. Turnover growth is used as a proxy for the economic pillar of the Triple Bottom Line framework and as a measure of startup scaling capacity. K-means clustering is applied to identify distinct growth profiles. To analyse relationships between startup growth and innovation ecosystem variables, the study employs a multi-method semiparametric framework. The results show multifaceted associations between ecosystem factors and startup growth. Market access and human capital are positively associated with global business models and innovation, while sectoral relatedness and knowledge spillovers may show negative associations, potentially through stronger competition and higher talent acquisition costs. Venture capital is positively associated with startup growth, whereas public R&D investment and direct government funding show no consistent positive relationship. The study is limited by using financial growth as a proxy for economic sustainability and by focusing on four European innovation ecosystems.