Entrepreneurial network: Transforming research into practise

Structure of presentation

• From research into practise

• The IDEAS network session

• From practise into research

The Programme

Delivered at DSIC, , ,the programme comprises of three

interactive workshop programmes plus additional bespoke support for high-tech SME’s;

Customer Focused Value & Innovation May - June ‘09

Competitive Advantage through People and Processes Oct - Nov ’09

Beyond Networking, Creativity Collaboration and Growth Jan – Feb ’10

Each workshop programme consists of 4-6 sessions, cohorts of 15 -20 companies.

Workshop Program 3

Beyond Networking Creativity, Collaboration and Growth

Six Degrees of Separation

First mentioned in 1920’s by Frigyes Karinthy

in short stories called ‘Everything Is Different’

“Everybody on this planet is separated by only six other

people. Six degrees of separation. Between us and

everybody else on this planet. The president of the United

States. A gondolier in Venice… It’s not just the big names. It’s

anyone. A native in a rain forest. An Eskimo. I am bound to everyone on this planet by a

trail of six people…” John Guare's Six Degrees of Separation

First test: Stanley Milgram’s experiment

Stanley Milgram sent mails to random people in Kansas and Nebraska, and asked them to

readdress the mail to their acquaintance who may know the

‘target’ person in Boston. S. Milgram (1977) The Individual in a Social World

Second test: Erdos number

Paul Erdos is very famous mathematician who published

+ 1500 papers.

A person who writes a paper with him has Erdos Number of 1. A

person who writes a paper with a person whose Erdos Number is 1

has Erdos Number of 2. And so on.

http://www.oakland.edu/enp/Paul Erdős (1913-1996)

The results

Average number of intermediate people in

Stanley Migram experiment is 5.5

Erdos Number Distribution

0

10000

20000

30000

40000

50000

60000

70000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Erdos Number

Peop

le

The average Erdös number is 4.69 and the median is 5.

Third test: The Kevin Bacon game

Connect any actor to Kevin Bacon, by linking actors who have acted in the

same movie.

Oracle of Bacon website uses Internet Movie

Database (IMDB.com) to find the shortest link

between any two actors: http://oracleofbacon.org/

Just because a path exists, doesn’t mean you can easily

find it.

You don’t know all of the contacts whom your friends

know.

Only six people between me and ..... ??

How do businesses get benefits from the latest development of knowledge?

• Academic terms and concepts sometimes need to be translated into ‘business language’.

• People like to have FUN!!

Design activity:

SMEs mappedtheir networks

Organized by the SME in a way that makes sense to them

Geographical distance – spatial proximity

Network is local when most of contacts are

located in a close proximity.

Network is global /non-local when most of contacts are

located in a distant proximity.

Strength of ties – Relational characteristics

Strong ties are described as long-term and intense interactions between

entrepreneurs and their contacts.

Weak ties are described as infrequent and irregular

interactions between entrepreneurs and their contacts.

Heterogeneity – Social proximity

Heterogeneous means that entrepreneurs have contacts

that come from relatively diverse backgrounds.

Homogeneous means that entrepreneurs have contacts

that come from relatively similar backgrounds.

Government

Owner of a small business

Academic

Executive in a large company

Employed

Academic

Employed

Connectedness of networks – Structural characteristics

Tight or dense networks are networks in which everyone is

connected to each other.

Loose networks are networks in which not everyone knows

each other.

Benefits of networkKnowledge spillovers, reduce loneliness, etc

New information and Knowledge

Exchange of fine-grained Information and tacit knowledge, trust, etc

Access to new opportunities

Access to a variety of resources, experiences, and knowledge

Strong support in certain issues and share similar

value

Brokerage opportunities Cooperation, trust, credibility and transfer of tacit knowledge

How to make these people happy and back to their office with something real?

From practise into research

How business can benefit from their

network?

How to optimize network to reap the

benefits? How to find the

important node, the super network?

9 of 10 articles in networks use conventional techniques of data collection. Why not start something different?

- SMEs find it relevant- SMEs give the information that

we need for our research

• Guide SMEs to fill this questionnaire in an

interactive way.

• Contacts are divided into four categories:– Core contact– Contacts who help with

new ideas– Contact who could help

to test out ideas– Contact who could help

to bring ideas to market

Research on network

• Starting from my PhD work

• How do social networks influence the growth of university spin-offs?

To what extent, and under what conditions are the characteristics of social networks beneficial for growth?

• Research in Delft, the Netherlands and Trondheim, Norway (+/- 100 spin-offs)

Confused!!!!!• Network is complex!• Strong and weak ties, diversity,

geographical distance bring positive benefits to firms in different contexts.

Analyse the data collected from the workshop

Network characteristics

34

Level of interactions with contacts and

geographical distance

Level of interactions with contacts and overall networks

structure

Geographic distance and Level of interactions with contacts

Connectivity of contacts and Level of interactions with contacts

Network characteristics

•Local, mixed of strong ties, heterogeneous and loose.

Core

•Mixed of local and non-local, strong ties, heterogeneous and loose.

Create

Network characteristics

•Mixed of local and non-Local, mixed of strong and weak ties, heterogeneous and loose.

Test

•Non-Local, weak ties, heterogeneous and loose.

Market

In the workshop we worked with SMEs to…

Identify contacts that helped in the

past

Construct network for the future to solve specific problems

Future Problem

MixedPast Problem

Local, strong ties, heterogeneous and loose

Firms use different contacts to solve problems. However, the

presence of core contacts (local and strong ties) is still important.

More than one core contact always appears in the process of problem solving.

Two weeks after the workshop

SMEs receive a tailor-made

report

Be balanced, dynamic, and diverse

“The value of a social network is defined not only by who's on

it, but by who's excluded”Paul Saffo in The Economist

Thanks for your timeDr. Danny Soetanto MBA

IDEAS Research Associate