University Entrepreneurial Developments – The role of Social Networks

The road to success for most of the entrepreneurial venture goes through the extent of innovation it does and the level of uncertainty it is capable of managing. A recent work  by Dennis P.Leyden, Albert N. Link and Donald S. Siegel has highlighted the importance of social networks in this aspect. The model is based on the notion that an entrepreneur is searching for knowledge and that key to the acquisition of knowledge is access to social networks. When the entrepreneur acquires more knowledge, there is a greater probability that his/her innovative activity will be successful. The probability of a successful innovation can be correlated with the size of the region to be searched for knowledge. The entrepreneur's ability to increase the size of this region depends on the expansiveness and heterogeneity of his/her effective social network. The experiential knowledge yielded from this social network complements the innovation process. It has been an established fact that a key determinant of a university's ability to generate start ups is the vastness of its academic social networks. The many forms of university-industry relationships like consultancy, contract research, joint research, training, licensing has played a great role in developing into a success parameter for an entrepreneur. It has been observed that some of these forms like joint research are more conductive to fostering social networks than the others such as licensing. To that extent, policies that focus on these relationships will surely be of much greater value. For example research partnerships are generally more attractive to university faculty members than research service contracts. Star academic scientists with a strong entrepreneurial orientation have been in the center of the objectives while framing different policies to stimulate academic entrepreneurship. Bringing a star scientist on board potentially secures access to the social network of that scientist which not only has large implications in terms of entrepreneurial process but also plays a great role in attracting additional financial support for research and commercialization. Another important implication is that success of a venture needs more than good ideas, sufficient resources, outstanding business plan and intelligence. A high level of alertness about the opportunities in terms of outcomes, with whom they work and how they manage the network is of real importance. Leading entrepreneurship scholars have found that social networks are especially important in the start up process at universities because these networks include graduate students, post doctoral researchers, current and former colleagues and associates who are capable of providing advice, expertise and also access to financial sources.

 Finally, it will not be incorrect to say that social networks constitute a mechanism for the entrepreneur to create and exploit such opportunities.

The link to the paper A theoretical analysis of the importance of social networks in entrepreneurship can be found below.
http://bae.uncg.edu/assets/research/econwp/2013/13-22.pdf

Rupak Jana (Exchange Student)