|
Description
This article develops theory relating to how differences in the human capital of academic entrepreneurs influence their ability to develop social capital that can address the barriers to venture development. We examine the development of social capital by three types of academic entrepreneurs with differing levels of entrepreneurship experience: nascent, novice, and habitual entrepreneurs. Using a longitudinal study, critical differences are observed between the structure, content, and governance of their social networks. We propose that entrepreneurs with prior business ownership experience have broader social networks and are more effective in developing network ties. Less experienced entrepreneurs likely encounter structural holes between their scientific research networks and industry networks. Support initiatives help attract industry partners for novice entrepreneurs from engineering and the material sciences but academics based within biological sciences encounter greater difficulties building such ties. Regardless of academic discipline, business ownership experience appears essential to learn to build relationships with experienced managers and potential equity investors.
Introduction
Technology-based academic entrepreneurs are attracting increasing attention as a consequence of the noncommercial environment of the universities from which they typically emanate (Siegel, Waldman, & Link, 2003). Such entrepreneurs face a number of significant barriers in creating and sustaining new ventures (Vohora, Wright, & Lockett, 2004). First, the venture is generally based upon a technological breakthrough that may have multiple commercial applications (Shane, 2000). Second, the entrepreneur may not have the skills or knowledge to recognize opportunities (Venkataraman, 1997). Third, the entrepreneur is unlikely to possess the skills or knowledge required to exploit an opportunity (Franklin, Wright, & Lockett, 2001). Fourth, the traditionally noncommercial environment of universities poses serious issues regarding the level of support available to create and develop such ventures (Lockett & Wright, 2005; Siegel, Waldman, Atwater, & Link, 2003). The debate about how to overcome these barriers has focused on the human capital shortages of the entrepreneurs. Studies have increasingly distinguished between the general and specific nature of entrepreneurs' human capital (Davidsson & Honig, 2003). Entrepreneurial experience adds to specific human capital by providing direct learning and episodic knowledge about the entrepreneurial process.
Typologies of academic entrepreneurs have typically not considered the heterogeneity of the entrepreneurs' experience as an entrepreneur (Mustar et al., 2006), the implicit assumption being that they are creating a venture for the first time. Yet there is growing recognition of the heterogeneity of entrepreneurial experience (Westhead, Ucbasaran, & Wright, 2005; Westhead & Wright, 1998). There is an absence of systematic studies that identify the extent to which habitual entrepreneurs exist in universities. Academics seeking to commercialize a radical innovation may need to accumulate broader legitimacy through accessing social capital (Delmar & Shane, 2004). The human capital of entrepreneurs may be influential in developing social capital (Adler & Kwon, 2002).
In contrast to entrepreneurs in commercial environments, the traditionally noncommercial environment of universities likely means that academic entrepreneurs face major challenges in developing social capital, especially if they remain within the university (Mustar et al., 2006; Nicolaou & Birley, 2003). However, we know little about the development of social capital by academic entrepreneurs with different human capital derived from entrepreneurial experience. Understanding these differences is important since unlike the private sector context, the process of developing greater social capital from ownership experience may not be straightforward in an academic entrepreneurship context. First, academic entrepreneurs face challenges in moving from scientific networks to commercial networks (Vohora et al., 2004). Second, support mechanisms may be weak and beset with conflicts of interest regarding academic entrepreneurs (Lockett & Wright, 2005). Third, differences in human capital emanating from the academic discipline base and prior industrial experience of academic entrepreneurs may interact with human capital from differences in business ownership experience to influence the extent and nature of social capital development (Corrolleur, Carrere, & Mangematin, 2004).
This study represents the first attempt to consider the role of different academic entrepreneurial experience in developing social capital. In general, human capital models have developed separately from social capital models, but in the academic entrepreneurship context the two are not easily disentangled (Bozeman & Mangematin, 2004). We address the gap in the literature using an inductive theory building empirical approach. Specifically, we examine the broad research question: How do differences in the human capital derived from the entrepreneurial experience of academic entrepreneurs influence their ability to develop social capital?
We utilize a longitudinal study of academic entrepreneurs. Adler and Kwon (2002) propose that longitudinal studies are necessary to develop understanding of the dynamic interplay between human and social capital; yet few studies adopt this approach. Similarly, Hoang and Antoncic (2003) in calling for an increased focus upon the relationship between network development and entrepreneurship argue that longitudinal analysis is required to understand the contextual factors at play.
Consequently, we identify a group of technology-based nascent, novice, and habitual academic entrepreneurs and observe the development of their social capital over an academic year. Nascent entrepreneurs are individuals considering starting their own businesses (Ucbasaran, Wright, Westhead, & Busenitz, 2003). Novice entrepreneurs are individuals who have created a venture for the first time and habitual entrepreneurs undertake multiple entrepreneurial ventures (Westhead & Wright, 1998). To enable comparisons, academics were selected who were engaged at a similar stage of their most recent venture development at the start of the period of study. Respondents were chosen from applicants for intervention schemes designed to assist early stage venture development.
This article is structured as follows. The following section situates our study within the entrepreneurial human capital and social capital literatures. We then outline our methodology and data collection. The fourth section presents the findings of a case study investigation of 24 academic entrepreneurs. The fifth section builds upon the case material to develop a theoretical framework and provide propositions to guide future research. Finally, conclusions and implications are presented.
Theoretical Perspectives: Human and Social Capital
We draw on two separate literatures. First, we draw on the literature relating to the link between the human capital derived from entrepreneurs' business ownership experience and their behavior. Shane (2000) found that prior knowledge of markets and ways to serve markets in order to address customers' problems influence the discovery of opportunities. Venkataraman (1997) argues that the ability to connect specific knowledge and a commercial opportunity requires a set of skills, insights, and circumstances that are neither uniformly nor widely distributed. Within the university environment, Kassicieh, Radosevich, and Umbarger (1996) found significant differences between entrepreneurs and non-entrepreneurs in terms of factors such as the level of involvement in business activities outside the laboratory.
Leading academic researchers may be entrepreneurial in identifying new research areas and sources of funds but they may have difficulties identifying opportunities with commercial market applications (Lockett, Wright, & Franklin, 2003). It is an empirical question whether leading scientists are homogeneous with regard to their ability to identify commercial opportunities (Wright, Birley, & Mosey, 2004).
The phenomenon of habitual entrepreneurs is widespread (Westhead & Wright, 1998). This has implications for understanding the behavior of habitual entrepreneurs versus novice entrepreneurs. Moreover, consideration of the specific needs of nascent entrepreneurs is also necessary to further encourage entrepreneurship (Ucbasaran, Wright, et al., 2003; Westhead et al., 2005).
To gain an insight into barriers faced by nascent academic entrepreneurs, we also draw upon the social capital literature. Bozeman and Mangematin (2004) argue that social mechanisms underpin the production of knowledge and are critical for its subsequent distribution and use. We propose that social capital is important for the creation of ventures based upon university research Yet the social network of academics is typically constrained to a narrow scientific research network. Academics may have close or strong ties with team members in their department leading to the creation of bonding social capital. However, many academics may only have loose or weak ties with actors located outside their department (Granovetter, 1973) An academic seeking to address a barrier to venture creation may develop their ties to gain access to valuable information that would otherwise be difficult or costly for them to obtain (Cooper & Yin, 2005). Weak ties between an academic actor and industrial actors may lead to bridging social capital (Adler & Kwon, 2002). Academics who access industrial actors may subsequently develop their social and entrepreneurial skills, which can ensure mutually successful relationships with a variety of nonacademic actors.
The human capital profiles of academics may be enhanced by focusing on weak ties with industry actors (Davidsson & Honig, 2003). Moreover, weak ties can sometimes develop into strong ones, leading to relationships based on mutual trust that in turn can enable resources to be accessed (Mayer & Schooman, 1993).
Hoang and Antoncic (2003) consider three aspects of social networks. First, is the network structure, defined as the patterns of relationships between actors in the network. Second, is the network content, defined as the nature of the resources exchanged between actors. Third, is the network governance, defined as the mechanisms that govern relationships between actors. These three aspects provide a framework within which to explore more specific elements of the broad research question stated in the Introduction.
The academic entrepreneurship literature has not considered the role of prior entrepreneurial experience but has implicitly assumed that scientists are starting a business for the first time. However, academic entrepreneurs may be heterogeneous with respect to their previous entrepreneurial experience. Experienced entrepreneurs in a commercial environment likely build new weak ties to identify new opportunities (Burr, 1992; Ucbasaran, Wright, et al., 2003) and strong ties with experienced managers and employees within their ventures that are necessary to the venture's resources, distinctive capabilities, and social capital (Vohora et al., 2004). The traditional university environment raises questions about whether and how the human capital of inexperienced and experienced academic entrepreneurs is related to the development of social capital. At present we know little about these relationships. Thus we pose the following research questions (RQs):
RQ1a: What structural social capital is in place at the start of new venture development for academic entrepreneurs with different levels of prior business ownership experience?
RQ1b: What new ties are developed during the early stages of new venture development by academic entrepreneurs with different levels of prior business ownership experience?
Considering social network content, experienced entrepreneurs in a commercial environment likely have access to more diverse resources through their social network (Callon, Laredo, & Mustar, 1997). By contrast, less experienced entrepreneurs with more limited social networks may lack access to seed finance, industry knowledge to recognize opportunities, or access to investment finance (Mosey, Lockett, & Westhead, 2006). Hence:
RQ2: What is the nature of the resources gained through the social networks of academic entrepreneurs with different levels of prior business ownership experience at the early stages of venture development?
Considering network governance, experienced entrepreneurs in a commercial environment likely will have built relationships based upon trust that may enhance the quality of resource flows through social networks (Larsson & Starr, 1993). Trust and other more "open-ended contracts" enforced by loss of reputation are particularly desirable when developing technology-based ventures where the route to market and development timescales are inherently unpredictable (Yli-Renko, Sapienza, & Hay, 2001).
Through prior business ownership experience, entrepreneurs can establish such relationships and have a positive reputation and credibility with key actors (Delmar & Shane, 2004). Less experienced entrepreneurs are less likely to have an established reputation and may be unsure how to build one. They may have difficulties communicating with actors from outside the scientific research network due to differences in knowledge, goals, and assumptions (Davidsson, 2002).
Universities may offer a context where the development of trust relationships and reputation are different and problematical. Universities have introduced technology transfer officers (TTOs) designed to bridge structural holes between research and industry networks. However, some authors question their effectiveness (Clarysse, Wright, Lockett, Van de Velde, & Vohora, 2005; Lockett & Wright, 2005). An alternative mechanism is the use of surrogate entrepreneurs, that is, experienced managers that can help... |
More articles from Entrepreneurship: Theory and Practice
Entrepreneurship and human capital: evidence of patenting activity fro..., November 01, 2007
Building a better rat trap: technological innovation, human capital, a..., November 01, 2007
Note to instructors: building a better rat trap., November 01, 2007
Radha Jalan and ElectroChem, Inc.: energy for a clean planet.(Wilson G..., November 01, 2007
Note to instructors: Radha Jalan and ElectroChem, Inc.: energy for a c..., November 01, 2007
Looking for additional articles?
Click here
to search our database of over 3 million articles.
|
