Social Capital, Knowledge Processes and Entrepreneurial Success

~Sharada B.

Entrepreneurship

The story of the entrepreneurial process is one of the entrepreneur recognizing and acting on unexploited opportunity.

Opportunity frequently exists in a crowded space of knowledge creating institutions, networks and venture capitalists.

Key Resources

Finance Human Capital Social Capital Knowledge

Resource based theory of the firm

Competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm’s disposal.

Valuable Rare In-imitable Non-substitutable

Central proposition of Social Capital Theory

Networks of relationships constitute a valuable resource for the conduct of social affairs,providing their members with “the collectively –owned capital, a ‘credential’ which entitles them to credit,in various senses of the word.

Bourdeiu,1986

Definition of Social capital

The sum of actual and potential resources embedded within ,available through,and derived from the network of relationships possessed by an individual or social unit.Social capital thus comprises both the network and the assets that may be mobilized through that network

(Bourdieu ,1986 ; Bur ,1992)

3 dimensions of social capital

Structural

Relational

Cognitive

Structural

Properties of the social system Properties of the network of

relations as a whole Impersonal configuration of linkages

between people or units Overall pattern of connections

between actors i.e who you reach and how you reach them

Relational Dimension

Relational embeddedness describes the kind of personal relationships that people have developed with each other through a history of interactions.

Respect and friendship Personal and emotional attachments Those assets created and leveraged

though relationships

Cognitive Dimension

Providing shared representations, interpretations, and systems of meaning among parties

Degree to which an individual shares a common code and systems of meaning within a community

Types of knowledge in a high technology venture

Technical knowledge

Market Knowledge

Internal organizational knowledge

Primary Knowledge sources for a young firm

Young Firm

Venture Capitalist

Consultation

Competitor firms

Customer

Past experiences of founders

State of Technology

Knowledge Processes in an Organization

Creation Acquisition Transformation Utilization

Social Capital, Knowledge Processes and Entrepreneurial Success

Knowledge Processes of firm

Social Capitalof firm

Knowledge Creation

/Acquisition

Knowledge Transformation

Knowledge Utilization

Entrepreneurial Success

High Technology Ventures

Research intensity (ratio of R&D Number of scientific/technical types would be another indicator of a high expenditures to sales);

Total R& D expenditures Sales growth. technology firm. External sources ( the extent to which the venture uses

strategic alliances, acquisition, licensing agreements or outright purchase of technology).

The degree of radicality of innovation Intellectual property (patents, copyrights, trademarks, or

trade secrets)

THE FOUNDATIONS OF HIGH TECHNOLOGY START-UPS: THE WHO, WHERE, WHEN, AND WHY Timothy M. Stearns, California State University, Fresno Kathleen R. Allen, University of Southern California

Thank You