The Role of Social Capital in the Business Start-Up and Entrepreneurial Development

Read Complete Research Material

SOCIAL CAPITAL

The Role of Social Capital in the Business Start-Up and Entrepreneurial Development

The Role of Social Capital in the Business Start-Up and Entrepreneurial Development

Introduction

The field of entrepreneurship is amongst the areas of research which have experienced greatest development in the past years. There are several reasons behind this growth, the most prominent amongst which is the identification of novel businesses, which served as a key mechanism for employment generation and as a principal driver of the economic development of nations. This was possible as the mechanism transmitted prosperity and dynamism to a region and facilitated it to get accustomed to the structural variations which it was experiencing internally. The establishment of a new business is a challenging procedure which entails the amalgamation of assets for the purpose of starting the venture and also for initiating the various tasks. The entrepreneur, in the initial stages of a business's establishment analyzes the assets and determines which of them are less or more significant to the business on the basis of their anticipations for the future of the business. If this analysis is carried out with appropriate efficiency and efficacy, it can result in the business achieving considerable competitive advantages can even enhance the chances for the survival of that business in the initial years of its establishment.

Literature review

The global economy at the end of the twentieth century began undergoing some particular variations which posed a critical impact on some aspects like the economic growth and the generation of wealth. Past years have been identified by the growing significance of the role of insubstantial organizational assets. Therefore it is widely declared in the research that the present trend is for the companies and firms to place more emphasis on the indefinable assets compared to the material assets while seeking competitive advantage and that the companies which have sufficient intellectual capital have an enhanced prospect for survival and progress. The idea of social capital was employed for the first time by John Kenneth Galbraith in the year 1969 in a letter to Michael Kalecki (Yli-Renko, et.al, 2001, pp. 587-613). Nevertheless, the same idea of popularized by Tom Stewart in the year 1991. Social capital may be illustrated as the associations with the partners and customers, efforts for innovation, the organizational infrastructure, and the skill set and knowledge of the organizational members. It is also indicated in research that knowledge may be converted into prospective revenues and it encompasses resources like informative programs, processes, designs, technologies, inventions, and ideas. Social capital everything, which is not physical; however it is capable of earning money for the business (Witt, 2004, pp. 391-412). In is significant to emphasize that, several alternatives in the recent years have been suggested for the categories comprising intellectual capital. There are three dimensions of social capital which would be discussed in this paper; relational dimension, structural dimension, and human resource dimension. All these three dimensions would be reviewed and discussed in detail, in view of the relevant aspects discussed in the research, which must ...
Related Ads
  • Entrepreneurship
    www.researchomatic.com...

    The social capital and networks have much ...

  • Koyo Jeans
    www.researchomatic.com...

    In today's world, entrepreneurship and ow ...