Expanding Opportunities in a Shrinking World: A Conceptual Model Explicating the Role of Social Networks and Internet-Based Virtual Environments in Social Entrepreneurship

Expanding Opportunities in a Shrinking World: A Conceptual Model Explicating the Role of Social Networks and Internet-Based Virtual Environments in Social Entrepreneurship

Avimanyu Datta (Washington State University, USA) and Len Jessup (Washington State University, USA)
DOI: 10.4018/jvcsn.2009092203

Abstract

The authors present a parsimonious theoretical model that illustrates how Internet-based virtual environments (such as social networking Web sites) moderate the relationship between social networks and social entrepreneurship. Social networks promote social entrepreneurship by means of (a) technology and knowledge transfer; (b) locating information; (c) generating entrepreneurial opportunities; (d) building entrepreneurial competency; (e) financing innovation; and (f) building effective networks for commercialization of innovations. Internet based virtual environments increase the velocity with which online social networks are formed and operationalized. They, thus, have a moderating effect in the relationship between social networks and social entrepreneurship. The authors also represent three concepts that are core to social networks: density, centrality, and heterogeneity. They posit that all three explain variance in social entrepreneurship and that Internet-based virtual environments moderate each of the relationships these three elements of social networks have with social entrepreneurship.
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Introduction

Social entrepreneurship (SE) has contributed to a worldwide transformation by enabling people to explore opportunities at distant locations, transform their energies into worldwide movement, and launch new organizations serving a multitude of social needs, thereby improving the quality of life and enhancing human development around the globe (Elkington & Hartigan, 2008; Lasprogata & Cotton, 2003; Leadbeater, 1997; Martin & Osberg, 2007; Zahra, 2005). Key to the success of SE is social networking (SN). These networks provide ways for individual companies and entities to gather information, deter competition, and even collude in setting prices or policies (Burt, 1992). Barney (1991), building on Wilkins work (1989), reasoned that while several firms may possess the same technology, the one that possesses relevant social relations, culture, and traditions, is best positioned to fully exploit and implement the technology successfully. Ways in which social networks create opportunities for SE are (a) enabling technology and knowledge transfer (Link, Siegel, & Bozeman, 2007); (b) locating information (Granovetter, 2003); (c) generating entrepreneurial opportunities (Anderson, 2008; Shane, 2008); (d) building entrepreneurial competency (Seppanen & Skaates, 2001); (e) financing innovation (Barringer & Harrison, 2000); and (f) building effective networks for commercialization of innovations (Datta, Jessup, & Reed, 2008).

Central to the concept of the social network are centrality and density. Entities that are central in a network enjoy more advantage over those that are not. In a perfectly dense network (all the nodes or entities are connected), no singular entity will have a comparative advantage (Gnyawali, He, & Madhvan, 2006; Klein, Rai & Straub, 2007). With the advent of Internet-based virtual environments and their ubiquity, the velocity and predication of social networks have increased (Marshall & Brynjolfsson, 2005; Wellman, Haase, Witte & Hampton, 2001). While the Internet has shrunk the world by breaking global boundaries, social networking sites like www.kiva.org. Indeed, one might argue that SE manifestations such as the kiva.org are not possible without the Internet. The relation between social networking and social entrepreneurship has received relatively lukewarm treatment in the literature while the impact that Internet based social networking has on social entrepreneurship is ignored for the most part by the Information Systems Research community.

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