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

Creating competition & mastering markets; New entrants, monopolists, and regulators in transforming public utilities across the Atlantic

This paper is on the transformation of network industries or public utilities in Western Europe and the United States (US). A network industry provides a public or basic service by operating a large infrastructure system whose main characteristics are strongly increasing returns to scale, high levels of capital intensity, deployment of long-lasting industrial assets, and of vital importance to the economy (e.g. telecommunication, energy, transportation systems, water distribution, postal services, broadcasting). The objective of this paper is to look at the transformation of utility markets and to investigate whether the (re-)engineering of utility markets has effectively produced new industrial structures and has generated alternative outcomes. And secondly, whether this deliberate process to stir up the competitive dynamic is thwarted by the combination of industrial predation (e.g. legacy systems and installed customer base) and incumbency power (market leadership, closeness to government, cross-subsidisation, information monopoly) favouring only modest and gradual change or by emergent and unexpected radical forces that have surprised both the omniscient market makers and those favouring the status quo. Introducing deregulation and liberalisation and engineering market dynamics in a utility world that is still characterised by partial competition and a persistent quasi-monopoly, is no easy matter. The process of de-monopolisation can be seen as the result of ongoing strategic and tactical interactions among incumbent operators and insurgent market players, tough bargaining between those firms and supervisory regulators, and difficult negotiations at the federal level of Washington and Brussels between the state administrations, their regulators and the transnational institutions. In order to create some form of dynamic rivalry in those "monopolistic" network-based industries, the emergence of new entry/exit and competition needs to be nourished and closely monitored and supervised: the emergence and persistence of competition needs to be engineered. The concept of engineering competition is somewhat ambiguous, since we should be both aware of the shortcomings of designing and managing markets and the limitations on and problems with self-organisation in regulation. Competition is a spontaneous process and is in the domain of human action, while "regulation" is a product of human design and contains instruments and toolboxes to intervene in a dynamic environment, and those two should not be mixed. Hence, despite the popularity of the term engineering competition, "engineering regulation", with a clear and intentional focus on devising an appropriate framework facilitating competition, is probably a better term

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

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

Clustering in ICT: From Route 128 to Silicon Valley, from DEC to Google, from Hardware to Content

One of the pioneers in academic entrepreneurship and high-tech clustering is MIT and the Route 128/Boston region. Silicon Valley centered around Stanford University was originally a fast follower and only later emerged as a scientific and industrial hotspot. Several technology and innovation waves, have shaped Silicon Valley over all the years. The initial regional success of Silicon Valley started with electro-technical instruments and defense applications in the 1940s and 1950s (represented by companies as Litton Engineering and Hewlett & Packard). In the 1960s and 1970s, the region became a national and international leader in the design and production of integrated circuit and computer chips, and as such became identified as Silicon Valley (e.g. Fairchild Semiconductor, and Intel). In the 1970s and 1980s, Silicon Valley capitalised further on the development, manufacturing and sales of the personal computer and workstations (e.g. Apple, Silicon Graphics and SUN), followed by the proliferation of telecommunications and Internet technologies in the 1990s (e.g. Cisco, 3Com) and Internet-based ap

Virtual Enterprises, Mobile Markets and Volatile Customers

Recently, several new mobile virtual network operators (MVNOs) have entered the European mobile telecommunications markets. These service providers do not own a mobile network, but instead they buy capacity from other companies. Because these virtual operators do not possess an infrastructure of their own, they have signed contracts with incumbent mobile operators with a network. The growth of these MVNOs which use leased network capacity from existing carriers, presents the incumbent mobile operators with a strategic dilemma. Network-based mobile operators have almost full control over their infrastructure but they may not know their customers well enough to fill the demand for cheaper and/or innovative services. New service-based operators may create affinity with the customer and introduce quickly all kinds of innovations and/or price discounts, but they still have to negotiate access terms and conditions with one of the domestic network-based operators. It has become important, and in some countries even urgent, to introduce regulatory measures concerning non-discriminatory access to the mobile telecommunications sector. This paper looks furthermore deeper into the entry and innovation strategies by MVNOs on the mobile market in the Netherlands, and its impact on competition

Kenniscampus als compensatie

Beleidsmakers willen een kenniscampus ontwikkelen als alternatief voor de sluiting van de onderzoeksafdelingen van MSD en Abbott. Echter, het ontbreken van een private of publieke onderzoeksfaciliteit maakt deze kenniscampussen onaantrekkelijk als vestigingsplaats voor innovatieve bedrijven. Voor innovatie is aansluiten bij bestaande campussen gunstiger

Science and Technology-based Regional Entrepreneurship in the Netherlands: Building Support Structures for Business Creation and Growth Entrepreneurship

In this contribution we develop a theoretical framework derived from the national system of innovation literature and the subsequent criticisms voiced by regional scientists and industry/technology experts who emphasize the importance of the intermediate subnational and sectoral levels to analysing science- and technology-based regional entrepreneurship in the Netherlands. The national system of innovation of the Netherlands, and its specifics and peculiarities, and the country’s general ent

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

Entrepreneurial Intentions of Teams: Sub-Dimensions of Machiavellianism Interact With Team Resilience

Machiavellians are often seen as manipulative people who contribute negatively to teams and ventures. However, recent work has shown that Machiavellians can also cooperate and act in pro-social ways in a team context. Thus, some aspects of Machiavellianism might be conducive for teams and team members’ intentions to start a business venture. Most studies in this area have failed to (a) assess the effect of Machiavellianism at the team level, (b) take into account the dimensional nature of Machiavellianism, and (c) assess moderators of these effects. We propose that the combination of Machiavellianism and resilience in teams predict team entrepreneurial intentions (EI). Moreover, we propose that different team level dimensions of Machiavellianism (amoral manipulation, desire for status, desire for control, distrust of others) are differentially related to EI. More specifically, we expect at the team level that amoral manipulation and desire for status are positively related to changes in EI (as teams high on these dimensions feel that they can use unethical practices that give them an advantage in being successful), whereas desire for control and distrust of others should be negatively related to changes in EI (as entrepreneurial teams usually work in less structured situations and need to closely work together). Furthermore, all sub-dimensions of Machiavellianism should interact positively with team resilience as resilience acts as a buffer that protects teams from potential negative effects of Machiavellianism. In a multi-wave study among newly formed teams engaged in entrepreneurship projects, controlling for psychopathy and narcissism, we found partial support for our hypotheses. Results supported our expectations for the “amoral manipulation” and “desire for control” sub-dimensions, but not for the “desire for status” and the “distrust of others” sub-dimensions of Machiavellianism, with distrust of others showing unexpectedly opposite effects. This study contributes to the literature by looking at the dimensions of Machiavellianism at the level of entrepreneurial teams in conjunction with the more positive team characteristic, resilience. Our results indicate that the relationship between Machiavellianism and EI is more complex than previously hypothesized, as the sub-dimensions are s