Musings on Entrepreneurship and Innovation
Sunday, May 04, 2003By casting the economic development dialog in terms of local versus distributed, the constraints and opportunities inherent in emerging modular process networks are neglected.
According to the Journal of Economic Geography, the study of the links between economic activity and place has taken a "relational turn." If so, it's most welcome, if belated. (Oft-cited Stanford sociologist Mark Granovetter has noted the "recent" turn with apparent bemusement, since he figures he's been working on relational economic geography for 25 years.)
In a paper in the journal's April 2003 issue, Harald Bathelt and Johannes Glückler argue, "Economic actors and their action and interaction should be at the core...of economic geography and not space and spatial categories." They go on to propose an emphasis on organization, evolution, innovation, and interaction. They believe that the tide has turned in favor of a socially constructed, actor-centered, and process-oriented geography.
A host of authorities have underscored the importance of effective personal networks to the process of entrepreneurship. However, there is much to learn regarding the dynamics of such networks. In a paper titled Entrepreneurship in a Network Perspective, Bengt Johannisson notes some of the problems associated with such inquiry:
- On the one hand, networks are very often taken for granted and, therefore, not fully appreciated.
- On the other hand, an entrepreneur may be well aware of the value of the personal network, but may be reluctant to confess dependence.
- There is a problem with attribution. We tend to internalize success and externalize failure. Consequently, the value of connections made through a network are very quickly internalized, and the value of the network is, as a consequence, understated.
- Networks represent risk as well as opportunity. It has become popular to emphasize the social capital that emerges from the reciprocal relationships across personal networks, there is also potential liability. One can learn from a network, but there is also the risk of exposing proprietary knowledge.
So, while effective networks are deemed essential to entrepreneurial success, there is evidence that they are undervalued by individual entrepreneurs. It would seem, therefore, that entrepreneurial networks are a "public good" in the same general category as education. No surprise, then, that most networking efforts in recent years have been initiated by public or quasi-public organizations such as local economic development agencies. However, most, in my view, have been largely ineffective. I suspect that a lack of credibility and trust are the culprits.
Our own experiences with Pioneer Entrepreneurs have lead to a greater appreciation of the challenges, as well as the potential impact, of cultivating more effective personal networks. Centralized approaches have limited appeal. Consequently, our emphasis is on developing tools and methodologies that focus on individual members: grow the network from the individual outward rather than creating ready-made networks for an individual to join. A challenging road, but one that we believe holds more promise.