An ecosystem is a system whose members benefit from each other's participation via symbiotic relationships (positive sum relationships). It is a term that originated from biology, and refers to self-sustaining systems.

The bumblebee hive is an example of an ecosystem, highlighted in Bernd Heinrich's book, Bumblebee Economics. The bumblebees' hive is a living system with one goal, to gather enough energy to ensure the survival of the bumblebee's genetic information. Bumblebees (unlike most other species) live in colonies and depend on each other for survival. Bumblebees extract pollen for protein and nectar for their sole source of energy from neighboring plants. Plants, in turn, rely on bumblebees to inadvertently brush pollen from one plant to another, to enable the plants' reproduction process to begin. The relationship between the bumblebee and the plant is symbiotic, as each benefits from each other's participation. The bumblebee hive goes through a life cycle, through the year. Entering the fall the queen bee lays eggs that are fed a different diet. These eggs turn into virgin queens and males. When the frost hits, the remaining worker bees die as does the queen, the virgin queens and males fly off, mate, the males die and the inseminated queens seek shelter through the winter. The process then begins again.

As it applies to business, an ecosystem can be viewed as a system where the relationships established across different industries become mutually beneficial, self-sustaining and (somewhat) closed. This is clearly the case for Silicon Valley with the entrepreneurial industry, the venture capital industry needed to fund the entrepreneurial industry, and Stanford University, supplying the human capital needed to develop innovative/creative ideas and technologies. The goal of this ecosystem is to generate entrepreneurial ventures. Once an ecosystem is established, and is able to take first-mover advantage, it becomes very difficult for other regions to emulate. The region exhibits network effects and is able to establish lock-in since the switching costs associated with moving to another region are prohibitive. The collective costs of many moving out of the region (i.e. if another region tried to incentivize a large move) would be prohibitive. Thus current members have a clear incentive to remain, and new would-be entrepreneurs, venture capitalists and students interested in this industry have a significant incentive to relocate to this region.