Abstract
Research on entrepreneurial ecosystem evolution illuminates governance transitions but underspecifies the mechanisms that trigger them. Existing frameworks treat governance shifts as endogenous outcomes of ecosystem maturation, overlooking how political-institutional changes reconfigure the logic of state intervention. We theorize democratization as an institutional trigger that enables public-sector entrepreneurship to emerge, adapt under constraints, and specialize across ecosystem stages. Through longitudinal process tracing of Seoul's ICT ecosystem (1987-2026), we demonstrate how democratization enables dual-pathway public-sector entrepreneurship: the state simultaneously mobilizes incumbents for infrastructure investment while creating policy flexibility for challenger firms. Our three-stage framework reveals: (1) Digital Democratization-state risk-taking in digital infrastructure and spinout-enabling policies; (2) Mobilization - the IMF crisis forces institutional entrepreneurship through novel hybrid organizations; (3) Globalization - the state progressively specializes interventions as knowledge spillovers become self-sustaining. We also establish boundary conditions: the mechanism operates where developmental state capacity meets technologically capable incumbents. This framework contributes to ecosystem evolution literature by theorizing political-institutional triggers, extends public-sector entrepreneurship scholarship by specifying how state capacity adapts across stages, and advances democratization research by revealing mechanisms linking political transitions to economic dynamism.