In this paper we use Klepper's (2008) theory of the evolution of industrial concentrations to study the role of entrepreneurial activity in the evolution of the Irish biotechnology sector. Specifically, we study the characteristics of new entrants, and the relationships between new entrants and existing private firms and higher education institutes. Two distinct evolutionary processes involving, on the one hand, the university spin-offs and on the other hand private sector spin-offs are observed to have shaped the Irish biotech industry's development. We also add to Klepper's (2008) theory by relating the theoretical concept of inherited company traits to a different typology of spin-offs – university spin-offs versus private sector spin-offs.