1 Innovation networks and alliance management Lecture 7/ Assignment 2 Advice networks and Innovation

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 2 Innovation in Networks: course structure Part I: introduction and theory Part II: techniques of (social network) data analysis Part III: three empirical applications of social network analyses in innovation science and alliance management  [1] alliances between firms (GR)  [2] advice networks and innovation (UM)  [3] interlocked board networks of American firms (CS)

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 3 A Recap: Two Approaches to Network Analysis Complete Networks  The relations of all actors are taking into account  Existing data (archival)  Case study (f.i. a family or this class) Ego centered network  Network from the perspective of the actor  Extension of traditional survey instruments  Random sampling possible  Standard statistical analysis possible

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 4 The Assignment: We analyze What makes it more likely that an entrepreneur introduces a new product or service to the market?? the case: Uganda.

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 5 Uganda: 31 million inhabitants substantial natural resources, including fertile soils, regular rainfall, and sizable mineral deposits of copper and cobalt Agriculture most important sector of the economy, employing over 80% of the work force Christians made up about 84% of Uganda's population in 2002 young population, with a median age of 15 (!)years

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 6 Uganda: During , the economy grew because of  continued investment in the rehabilitation of infrastructure,  improved incentives for production and exports,  reduced inflation,  and gradually improved domestic security Growth for was solid despite continued decline in the price of coffee in 2004 Uganda's GDP per-capita reached $300, a much higher level than in the Eighties but still at half of Sub- Saharan African average income of 600 dollars per year

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 7 The Assignment Think of ways in which the ego-centerd network of an entrepreneur may influence - the likelihood of product or service innovation - Derive at least two hypotheses. Make use of ideas of Burt's (2001, 2004) theory of structural holes and of another social network theory. Test those hypotheses using the dataset we provide.  SPSS data set “entrepreneurs-2008.sav”:  File contains 724 cases (rows)  information about the entrepreneur, his/her demographic background, his/her ego-centered network characteristics, personality, and characteristics of the market.

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 8 The report report must resemble a scientific article  Introduction [10 points]  products and service innovation by entrepreneurs and why social networks might play a role in explaining them  Theory [30 points]  theoretical framework, derive at least two hypotheses concerning the effect of two ego-centered network characteristics on the emergence of innovating behavior  Method [15 points]  Describe the data, the measurements, and the statistical methods.  Results [25 points]  Present descriptives/the results of the analysis, by means of table/picture, and a verbal clarification of the table/picture.  Discussion/Conclusion [20 points]  What do the results say about your theory? Would it make sense to run other analysis? How could one improve this study? How valid/reliable are its results?

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 9 Read Burt (2004), can be found on the website Read earlier articles on social network theories Optional: look for additional articles/theories Formulate a (ego-centered) social network theory that explains why some entrepreneurs are more likely to innovate than others.  Be clear  Use sound arguments  Be creative The theory

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 10 Logistics You can work in groups of two or three students Plagiarizm will be punished DEADLINE: December 4, 13:00 (extension) WORD-ATTACHMENT (WORD 2003!) BOX Uwe Matzat I am available for questions: Pav. Q 1.09./

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 11 The data set Information about innovating behavior of 724 entrepreneurs in Uganda, demographic background, personality, market characteristics

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 12

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 13

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 14 INNOVATION

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 15 THE NETWORKS From time to time, entrepreneurs seek advice on important business matters. Looking back over the last six months– who are the people with whom you discussed an important business matter?

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 16 THE NETWORKS Please think about the relationships between the people you just mentioned. For each contact, ask if this contact is a STRANGER (S), CLOSE (K) OR ESPECIALLY CLOSE (EC) to the other persons. Maybe another way to calculate density makes more sense? (see SPSS job)

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 17  Select the dependent variable: INNOVATION (summary of IN1-IN4)  Calculate (compute) some network characteristics  Include a limited number of control variables (personality, demographics, characteristics of the market, etc.)

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 18 The data preparation You only have to work with SPSS! However, you definitely have to transform the given data set, for example by creating new variables with the “compute” command within SPSS. So a considerable amount of work consists of data recoding and data transformation to compute the appropriate network characteristics that you think are important. Have a look at the hints for measuring network characteristics: “network calculations” at the course website Have a look at examples of spss jobs Adjust them to your needs!

TU/e - Innovation in networks and alliance management, 0ZM05/0EE10 19 The assignment QUESTIONS?