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 Capital of 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

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