Small scale entrepreneurship – understanding behaviors of aspiring entrepreneurs in a rural area

Abstract

Purpose

Networking and being a part of an established business network supports the process of translating new ideas into marketable solutions and acquiring customers. The purpose of this paper is to investigate how aspiring entrepreneurs in a Danish rural area setting manage to get embedded into relevant business networks. Before the literature background on social capital and regional development, the authors use the embeddedness approach in explaining whether weak or strong ties are most beneficial to get the business started and how lacking strong ties can be compensated.

Design/methodology/approach

This paper takes an economic sociology perspective on social capital and is empirically based on a case study. The sample consists of a group of young aspiring entrepreneurs, living in the rural area of Southern Jutland, who are all committed to an organization which supports regional start-ups.

Findings

The authors found that aspiring entrepreneurs have different needs depending on their development status and type of innovation. Founders, who are developing or have developed new product innovations, seem to have an increased need for “strong ties” with consultants and those with knowledge about building up a professional network. Founders, who are developing or have developed a significantly improved service, have strong ties with former fellow students and researchers at the university.

Originality/value

This study illustrates that aspiring entrepreneurs connected to a regional entrepreneurship center gained access to a wider relevant network. Depending on their level of embeddedness, they could build new strong relationships and exploit information stemming from new “weak ties” and as such harness more benefits. The study shows that less privileged start-ups can substitute strong ties, especially through the support of professional managers of startup-supporting organizations. Finally, a model explaining the impact of social capital on the entrepreneurial sphere of regional business networks and on its innovativeness is deduced.

Citation

Gretzinger, S., Fietze, S., Brem, A. and Ogbonna, T.(T).U. (2018), "Small scale entrepreneurship – understanding behaviors of aspiring entrepreneurs in a rural area", Competitiveness Review, Vol. 28 No. 1, pp. 22-42. https://doi.org/10.1108/CR-05-2017-0034