Networks in Entrepreneurship

The value of networks as integral part of the explanation of entrepreneurial success is widely acknowledged. However, the network perspective lacks specification of the various dimensions of a network and their impact on the early development of a venture. We make a distinction between a Schumpeterian start-up pursuing a radical innovation and a Kirznerian venture on basis of an incremental innovation. This distinction is introduced as a contingency in the way networks contribute to the ability of the entrepreneur to discover opportunities, to get resources, and to gain legitimacy. In this explorative study three cases on high technology firms in The Netherlands provide empirical material to develop a number of propositions on the network effect on the survival or performance of start-ups

Network effects on Entrepreneurial Processes: Start-ups in the Dutch ICT Industry 1990-2000

The value of networks as an integral part of the explanation of entrepreneurial success is widely acknowledged. It is unclear, however, in what way certain networks influence the success of start-up companies. The question of this paper is: 'in what way does the entrepreneur's network contribute to the success of his start-up.' The network is important because it may contribute to three entrepreneurial processes, i.e. the ability of the entrepreneur to discover opportunities, to get resources, and to gain legitimacy. The networks of 30 ICT start-ups in the Netherlands were (re)constructed on the basis of in-depth interviews with the founders and desk research. A distinction was made between three types of initial network conditions. First, the more or less independent start-ups; secondly, spin-offs from established companies and lastly, start-ups in incubators. On the basis of the variations in the structure of the network and the type of relations we draw conclusions concerning the contribution of a particular network configuration to the ability of the start-up to survive and to grow

Realizing Innovations in Service Firms: new organizational forms and supporting processes

This paper describes a number of innovation forms that are of special relevance to firms in the service industry. Not only technological innovations but also organizational innovations have been distinguished. In the service industry organizational innovations seem to play a significant role. The literature on innovations makes little mention of new organizational arrangements in services. Based on the service management literature a scheme with three forms of organizational innovation and one form of technological innovation is developed. This scheme is illustrated and elaborated in ten case studies of firms in various service industries. The case studies shed some light on innovations in multi-unit forms, combinations of services and co-operation with customers. On a basis of the service management literature and the case studies some of the main processes supporting the (organizational) innovations are analysed

The Locus of Innovation in Small and Medium-sized Firms: The Importance of Social Capital and Networking in Innovative Entrepreneurship

Social networks matter in the innovation processes of young and small firms, since ‘innovation does not exist in a vacuum (Van De Ven, 1986: 601).’ The contacts a firm has could both generate advantages for further innovation and growth, and disadvantages leading to inertia and stagnation. In the first case the existing social network or the new business contact provides opportunities furthering eventual success, in the second case, the existing network or the new business contacts turns out to have a constraining or even detrimental effect on performance. The search and use of social capital is driven by goal-specificity: it only includes those ties that help the actor in the attainment of particular goals. Most of the research so far has been deliberately or unwillingly one-sided, by for instance only looking at entrepreneurial firms in dynamic industries (or more specifically, start-ups in the high-tech industries). Or selective attention has been paid to either the internal sources or the external contacts to trigger inn

Silicon Valley in the Polder? Entrepreneurial Dynamics, Virtuous Clusters and Vicious Firms in the Netherlands and Flanders

High-technology starters do not operate in a vacuum and innovation is not a solitary activity. The activities of technology-based firms are embedded in socio-economic networks with other companies, investors, universities, vocational institutions, etc. The geographical proximity of those institutions and infrastructural hubs will partly play a role in determine the location of ICT firms decision. Furthermore, many high-tech companies shape clusters around areas where their major customers are located. The topic of this paper is regional clustering Enright, 1992; Rosenfeld, 1997within the context of Internet and ICT technology. A dynamic model previously developed for the analysis of ICT-entrepreneurship and

The competitive advantage of nations: the importance of the national environment for strategic management in the EC

Summary: In this paper we investigate the usefulness for strategic management of Porter's framework of analysis of the competitive advantage of nations in particular regarding the importance of the changing national environment within the EC. It appears that Porter's framework - supplemented with contributions from the Industrial Organization field and with special attention to the growing importance of the service sector and the particular characteristics of services - can indeed contribute to our understanding of the importance of the national environment within the EC for strategic management. However, much research has to be done. In this connection, the paper proposes a few key questions for further research

Strategic Renewal in Large European Firms: Investigating Viable Trajectories of Change

European firms are confronted with major changes in their business environment because of specific European factors, such as the creation of a single European market, and because of global factors, such as the merging of industries. Firms in Europe therefore need to renew to cope with the changing environment. Renewal is presented as resulting from change processes that take place within organizations. Twenty-four ventures in three large European firms were analyzed to see how such dynamic processes lead to strategic renewal. The findings reveal that renewal trajectories depend on the organizational form, the market, and the strategy

The interplay of agency, culture and networks in field evolution

We examine organizational field change instigated by activists. Contrary to existing views emphasizing incumbent resistance, we suggest that collaboration between incumbents and challenger movements may emerge when a movement's cultural and relational fabric becomes moderately structured, creating threats and market opportunities but remaining permeable to external influence. We also elucidate how lead incumbents' attempts at movement cooptation may be deflected through distributed brokerage. The resulting confluence of cultural and relational "structuration" between movement and field accelerates the pace but dilutes the radicalness of institutional innovation, ensuring ongoing, incremental field change. Overall, this article contributes to the emergent literature on field dynamics by uncovering the evolution and outcomes of collaborative work at the intersection of social movements and incumbent fields