Principal Topic

Entrepreneurial research has moved from the identification of characteristics towards an appreciation and examination of the entrepreneurial process. This study addresses one aspect of the process, the role of social capital. Typically new small business are resource poor, they lack or have limited financial capital, experience or expertise. Yet they face the same competitive pressures as established businesses. One recognised method to overcome these deficiencies is to tap into the extended reservoir of knowledge, experience and resources lying outside the business by the use of networks. Whilst there is an increasing appreciation of the role of networks as facilitators of enterprise, little work has been directed to understanding the operation of these networks. Thus issues such as how do entrepreneurs become embedded in networks are interesting elements of such an understanding. One significant aspect is social capital, since social capital is said to have two roles. First as the structural component which binds the network and gives its form; secondly as the more individualistic cognitive quality which facilitates the operation of networks. However this intriguing duality presents research difficulties since social capital is a relational good, existing between economic actors rather than a resident quality or attribute. Nonetheless it seems an important element of the entrepreneurial process and worthy of investigation

Method

To tap into this relational artefact an ethnographic approach was chosen to address the question: “Can social capital be identified and how does it operate?” The activities of ten entrepreneurs operating within the Highlands of Scotland were explored, looking at the connecting mechanisms of social embedding. The data were gathered using participant observation and extended interviews and analysed with the formal analytic methods of Grounded Theorising.

Implications

The research is very much “in progress” but already some interesting aspects are emerging. First we found that the respondent’s operationalising of social capital was much more complex than initially anticipated. Furthermore, there are a number of stages to this process; each of which is negotiated before progressing. These stages seem to consist of discovering potentials, identifying commonality and exploring congruencies. However, they are created through affinity, shared interests, intentionality and exchange. These stages appear to be contingent upon both the context and the individual. Findings so far indicate that social capital is both the glue that binds and creates a network and the lubricant which eases and energises networks. The concept of “enactment” also provides an alternative analytical framework.