How Firms Capitalize on Social Assets
Chapter 4: Turning Public into Private: How Geographically Bound Social Capital Amplifies Entrepreneurs’ Network for Innovation
4. Turning public into private: how geographically bound social capital amplifies entrepreneurs’ network for innovation The approach taken in this chapter is to illustrate how social capital impacts on firm’s innovation. The basic argument here is that two approaches to social capital – that is the individual approach and the structural approach – can be identified, and that they both can be used to explain firm’s innovation. It is well-known that entrepreneurs access resources and knowledge for innovation from external sources including users, suppliers, competitors, universities and so on (Rosenkopf and Nerkar, 2001). Innovations most often require the simultaneous use of different skills and knowledge which may not be available within the firm boundaries (Rosenberg, 1982). The early Schumpeterian idea of the solitary entrepreneur producing innovations has been overtaken by representations of multiple actors working together on iterative processes of trial and error (Freeman and Soete, 1997; Schumpeter, 1942/1987; Shan et al., 1994; von Hippel, 1988). As Van de Ven (1986: 591) argues, ‘while the invention or conception of innovative ideas may be an individual activity, innovation (inventing and implementing new ideas) is a collective achievement’. This argument is in line with the open innovation paradigm that states that openness fosters the introduction of new products by combining the efforts and resources of a large and varied pool of individuals with access to heterogeneous and complementary knowledge. Previous research shows that entrepreneurs use social capital to access resources and knowledge (Baron and Markman, 2003; Stam and Elfring, 2008), and capitalize on social...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.