Myths, Visions and Realities
Edited by Marina van Geenhuizen and Peter Nijkamp
Chapter 10: Social Capital’s and Absorptive Capacities’ Impact on New Ventures’ Growth
Danny P. Soetanto, Mozhdeh Taheri and Marina van Geenhuizen INTRODUCTION Newly established, high-technology firms are seen as essential ingredients for a city to improve its position as a knowledge city or knowledge region (Etzkowitz and Klofsten, 2005; Cooke and Schall, 2007). Different from many large firms, new ventures are better able to generate novel ideas and to bring them to market. They also have a larger capability to absorb new knowledge and diffuse it into the city and region, and eventually act as ‘gatekeepers’, thereby introducing global knowledge and greater opportunities for innovation in the city and region (Bathelt, 2007; Graf, 2010). Most young high-tech ventures, however, are facing a lack of resources constraining their potentials for survival and growth; for example, young university spin-off firms in technology fields in the Netherlands are often short of market-related and management-related knowledge (Van Geenhuizen and Soetanto 2009), whereas in other countries, notably the US, shortage is mainly in investment capital (Roberts, 1991; Lockett et al., 2005). These situations urge university spin-off firms to search for resources through external networks. Networks may provide social capital, an intangible asset, that supports small firms in gaining knowledge on and access to resources not available in-house (Hite, 2005). The role of social capital in supporting economic and social processes has been studied extensively since the 1980s, for example by Coleman (1988), Granovetter (1985) and Nahapiet and Goshal (1998). In studies on agglomeration economies and advantages in clusters and learning regions, some ideas of social capital theory...
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