Academic journal article Journal of Small Business Strategy

Business Incubators: Leveraging Skill Utilization through Social Capital

Academic journal article Journal of Small Business Strategy

Business Incubators: Leveraging Skill Utilization through Social Capital

Article excerpt

ABSTRACT

This study examines the role that social capital among tenant companies of a business incubator plays in the acquisition and utilization of business skills by those companies. Social capital is a resource derived from the structure and content of social relations among individuals or groups. Questionnaire data were gathered from 53 managers (primarily owners) of tenant companies in five incubators established by the State Privatization Office of the Turkish Republic. As hypothesized, relational social capital and cognitive social capital each had a significant unique and positive relationship with skill utilization. Contrary to a hypothesis, structural social capital did not have a significant unique relationship with skill utilization. These results indicate that incubator tenant companies' skill utilization is enhanced by social capital generated from the content of relations between the companies such as whether they trust and identify with each other and whether they share a common language and perspective.

Keywords: social capital, business incubation, small business networks

INTRODUCTION

A business incubator is a collective of young companies that nurtures the companies during the early phases of their life by providing them with handson management assistance, business and technical support services, shared office space and equipment, access to financing, and opportunities to network both with other new companies within the incubator and with external parties such as university faculty, industry contacts, and consultants (Bollingtoft & Ulhoi, 2005; Hackett & Dilts, 2004; Peters, Rice, & Sundararajan, 2004). The ultimate objective of an incubator is to increase the likelihood that tenant companies will survive their formative years (Allen & Rahman, 1985). An important way that incubators benefit tenant companies is by offering an institutional and policy framework that supports the acquisition and utilization of relevant business skills. Incubator tenant companies may have a compelling idea for a unique product or service, but often are deficient in fundamental skills in areas of business development such as human resources, marketing, distribution, assembly, and financial management that are necessary to make their ventures viable (Rice, 2002). Incubators seek both to strengthen the existing skills of tenant companies and to enrich their skill base by facilitating the transfer of relevant information and knowledge to the companies.

The purpose of the study reported here is to examine the role that social capital among incubator tenant companies plays in the acquisition and utilization of skills (hereafter referred to collectively as skill utilization) by those companies. Social capital, which is a resource derived from the structure and content of social relations among individuals or groups, has been shown to be an important factor in explaining actors' success in areas such as product innovation (e.g., Cooke, Clifton, & Oleaga, 2005; Subramanian & Youndt, 2005), managerial performance (e.g., Moran, 2005; Wu, 2008), and organizational performance (e.g., Acquaah, 2007). Scholars have proposed that social capital fosters an environment that is conducive to the exchange of information and knowledge, such as that pertaining to business skills (e.g., Anderson, 2008; Inkpen & Tsang, 2005; Maurer & Ebers, 2006; Nahapiet & Ghoshal, 1998; Walter, Lechner, & Kellermans, 2007; Yli-Yenko, Autio, & Sapienza, 2001). The current study tested relationships between three separate forms of social capital among incubator tenant companies - structural social capital, relational social capital, and cognitive social capital - and skill utilization, using questionnaire data gathered from tenant companies of five incubators established by the State Privatization Office of the Turkish Republic. In the context of tenant companies in an incubator, structural social capital relates to the overall pattern of social relations among tenant companies; relational social capital concerns the affective nature of the social relations among tenant companies; and cognitive social capital addresses the extent to which tenant companies share a common language and perspective (Bolino, Turnley, & Bloodgood, 2002; Nahapiet & Ghoshal, 1998). …

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