Introduction

Increasingly, social networks have become a major area of interest, importance and research within the entrepreneurship domain. For example, social network theory, based on the competitive advantage perspective, illustrates how networks can provide advantage (and disadvantage), particularly for “disadvantaged entrepreneurs” (Burt 2019). Granovetter (1985) and Aldrich and Zimmer (1986) viewed entrepreneurship as being embedded in networks of continuing social relations and are often credited as being the instigators of the social embeddedness perspective. Social capital is “broadly perceived as an asset that exists in social relations and networks” (McKeever et al. 2014, p. 455). De Carolis et al. (2009) identified two measures of social capital, which were social networks and relational capital (the type of personal relationship derived via network usage), while from a policy perspective, Fayolle et al. (2016) stressed the importance of providing formal networks for entrepreneurs.

The OECD 2017 Report on Missing Entrepreneurs highlights the increased potential for self-employment and/or entrepreneurial success via the utilisation of social networks, but the report lacks specificity regarding how to leverage the advantages and minimise the disadvantages of social networks. It is the ambition of this chapter to provide insight into this particular phenomenon, utilising recent surveys and qualitative empirical studies. The aim is to provide new knowledge regarding the unique social network usage and problems experienced by those within the various “missing entrepreneur” groups. Potentially this will spur research effort to advance ways to overcome social network disadvantage in the establishment and growth of an entrepreneurial venture or self-employment endeavour by people from minority or disadvantaged communities.

Missing Entrepreneurs and Social Networks

The term “missing entrepreneurs” can be applied to “groups that are under-represented and disadvantaged in the labour market” (OECD2017, p. 3), specifically, women, youth, seniors, immigrants, ethnic minorities, the disabled and unemployed.Footnote 1 There is also literature on missing entrepreneurs relating to additional disadvantaged communitiessuch as NEETs (Not in Education, Employment or Training), ex-offender communities (Galloway and Cooney 2012), indigenous entrepreneurs (e.g. Aborigine, Maori) (Wood et al. 2012), and Roma (Foley and Cooney 2017). An important obstacle for members of these groups is ‘Cultural habitus’ which according to Light and Dana (2013) acts as a powerful regulator.

If a group’s cultural capital does not support and endorse the selection of entrepreneurship as a vocation, then the group’s strong social capital will not encourage entrepreneurship of group members. (Light and Dana 2013, p. 616)

Barriers, for example, of gender, caste, language, accent, background and age, can create disadvantages in terms of limiting the potential for social capital and social network advantages.

If resource-poor, nascent entrepreneurs cannot access resource-rich social networks, they probably cannot overcome their initial disadvantages. (Light and Dana 2013, p. 611)

The focus of this chapter will thus be on social networks, given their importance and potential. According to Jack (2010), in her review of approaches to studying networks:

the network of an individual is … a series of sets of relationships. It exists as potential, all inter-connected but also inter-dependent. Moreover, a network includes both latent and active relationships that the individual maintains, consciously and unconsciously, in some fashion, and enacts to reflect his/her needs. (Jack 2010, p. 130)

A key component of social networks is often family-based networks, but some people within the missing entrepreneurs groups do not or cannot utilise family networks (e.g. some ex-offenders) (Brown and Ross 2010).Footnote 2 Family ties can be, for some, a strong component of an aspiring entrepreneur’s social network, providing direct resources and also sharing network ties. Arregle et al. (2015) distinguish three types of social networks as “business advice, emotional support and business resources” (p. 313) and find varying levels of family involvement in each. However, the advantage/disadvantage dichotomy of social networks is also very much apparent in relation to family-related social networks (e.g. Azmat and Fujimoto 2016). How can social networks be created, developed, utilised, enhanced and manipulated in a way that decreases the disadvantage inherently associated with being part of one or more of the missing entrepreneur groups? This is an important topic with financial, social and political implications at the individual, family, community and societal levels. As well as driving economic growth, entrepreneurship is increasingly viewed as emancipatory (Al-Dajani et al. 2015), thus advancing our knowledge of social networks holds potential in both areas.

Methodology

This study utilises the Web of Science database, with a search of the Social Science published academic papers for the years 2014–2019, using the Boolean format for social network(s), entrepreneurship or self-employed and the following description of groups: women/female, immigrant, migrant, refugee, senior, youth, disabilities, unemployed, returning citizen/ex-offender. The results comprise a representative group of the papers published on the topic. However, it is acknowledged that for a comprehensive review of academic papers, several databases, as well as a request to scholars in the discipline to assist with the search, would produce additional papers.

A total of 326 studies, across all groups, was identified in the 2019 Web of Science search. Each Abstract identified in the search was reviewed to determine if the focus of the research was on social networks, at the individual level (vs the firm), and that the topic was not a tangential focus. For example, many studies found in the search, reported on social capital in general, with only an occasional comment on social networks. In addition, only empirical studies, qualitative and quantitative, are included in the review. All studies included are from academic (reviewed) journals. The 48 relevant and robust studies, either quantitative or qualitative, are summarised in Table 1. The number of studies, by group in descending order, are as follows: migrant (18), women/female (15), immigrant (12), youth (excluding students) (2), and returning citizen/ex-offender (1). For the remaining missing entrepreneur groups, no papers were identified.Footnote 3 To maximise information on recent research findings, the extensive research on each group, included in both conceptual and review papers, has not been included in this chapter.

Table 1 Social network “missing entrepreneur” selected empirical papers 2014–2019
Full size table

Women and Social Networks

In five out of 15 of the studies that inquired into women and social networks, there was a comparison between men and women, of which three used survey methodology and two utilised interviews (see Table 1). Of the 10 studies that researched only women, six used interviews and four used surveys. The number of participants varied widely, as did the country, and almost all continents were represented. The focus of the research, in all instances, included social networks, but was not always the main research question. For example, research questions included: determinants of the gender gap, ownership structure, effects of gender hierarchy, how do female networks reinforce and challenge gender structures, why form a female-only network, gender differences in network formation, the impact of gender on entrepreneurship network and so forth. The conceptual focus included social networks, but also, for example, social capital, racialised women, team entrepreneurship, entrepreneurs’ satisfaction, commitment, venture performance, intersectionality, enablers, constraints, information communication technology (ICT) use and the resource-based view. The findings across studies which compared men and women included the following: social networks (especially parent or husband/partner personal network) was the strongest correlate for women selecting entrepreneurship. The studies suggested that females lacked social capital and networks, and used family ties more than men. In technology incubators, gender inequality and a lack of inclusivity for females was prevalent. In a study in Uganda, men were less likely to receive funding and males in a network more often financed females than males. Gender homophily was negatively related to accessing resources. Families were a frequent source of resources, but the downside was that the payback (reciprocity) happened in various forms.

In studies that looked at women only, most of which were business owners (entrepreneurs), the findings included that gender hierarchy reduced the legitimacy of female entrepreneurs and that women tended to team with family members rather than non-relatives. Embeddedness in context, plus social networking, furthers gender equality. A network of women entrepreneurs, speaking with one voice, was found to further networking, internationalisation and innovation. Nepotism was linked to success and a social network was critical, especially via one’s husband. Digital entrepreneurs found that social inequalities persist, plus social and cultural norms restrict encouraging females to become entrepreneurs. Females in early stages of entrepreneurship use homogeneity in networks, but as they advance heterogeneity occurs through a more diverse network. Family and community networks were positive, however, including men in power, led to negative effects. Gendering, racialisation and bureaucratic hierarchies exclude women from self-employment. Regardless of the country of the study, there are common social network themes that attest to the disadvantage of women regarding their self-employment and entrepreneurial efforts and success.

The conclusion that women, in general, are disadvantaged in comparison to men, in terms of venture-related social networks, is a common finding across current research. Studies attest to male advantage and female disadvantage in the existence, extent and usage of social networks. The cited causes of disadvantage are often gender hierarchy, interwoven with social and cultural norms. Future research might focus on the way women pursuing entrepreneurship can be advantaged via social networks. For example, building on research to date future studies might explore the critical role for women of family social networks. Additionally, formal networks, discussed later, especially those created to focus on advancing female entrepreneurship, might be an important driver of equalising the usefulness of social networks.

Immigrants and Social Networks

Twelve of the review studies concerned immigrants and social networks (Table 1). The methodology of the studies comprised six interviews, one a case study and five used surveys. The number of participants varied widely. Studies were conducted in Australia, Canada, Germany, Italy, Norway, Sweden, Spain and Singapore. The research questions included how to increase productivity and target non-co-ethnic clients, structural assimilation and transnationalism, embeddedness in social networks, networking practices, determinants of self-employment, gender and networks, dual embeddedness, transnational ties, identification of foreign markets, and how immigrant entrepreneurship emerges and develops. The conceptual focus of the studies included social networks, social ties, network relationships, family/relational/social embeddedness, transnational business networks, kinship, ethnic ties, ethnic entrepreneurship, transnationalism, push and pull entrepreneurship, and human capital.

Findings in relation to social networks across the immigrant group of studies found that for start-ups, a male spouse was critical, as was family social capital and networks. Accumulating financial capital and the capacity to learn and benefit from the experience of social networks was a fundamental enabler for breakout activity (non-ethnic client strategy). Personal networks were critical for structural assimilation, embeddedness, transnationalism, cultural and economic assimilation. Social networks were utilised more by third-generation immigrants. Network disadvantage was addressed by affective ties. Female immigrants were less successful converting network resources into an advantage. Integration into social networks within one’s host country and the transnationalism of dual embeddedness was highly advantageous for business. Their social network reputation within their former country also greatly assisted an immigrant’s network development in their new country. Social networks comprised relatives and friends in an immigrant’s homeland, in their new country of residence and in other countries where people in their networks had settled. Trust was strongest within social networks from their country of origin and within new region ethnic-based ties. Interestingly, kinship ties were less trusted. Also, social networks were found to differ by industry segment; for example, pizza restaurant owners valued local mimetic isomorphism, while ice cream store owners used social network transnationalism.

As indicated in the OECD2019 Report on Missing Entrepreneurs, despite being a member of a disadvantaged group, there can also be advantages in terms of social capital. For example, knowledge and experience of different cultures and business practices, speaking multiple languages, maximising dual embeddedness, are likely components for developing a strong social network. This was found to be the case across the immigrant group of studies reviewed. Additionally, family members’ social networks were mainly viewed as critical components for establishing and growing a business. Subsequent research might explore the positive and negative implications of utilising family social networks, particularly in relation to timing, and the issues around the trust aspects of the relationship. Additionally, the inability to maximise the advantage of social networks, is also a topic that deserves more research attention, due to the potential knowledge this might produce for all disadvantaged groups. A promising next stage for social network studies in general, would be to explore social networks by industry and avoid generalisations across industries.

Migrant, Displaced, Refugee and Social Networks

There are 18 studies within the migrant, displaced and refugee group, and this represents the largest number of studies by group (Table 1). The methodology of the studies comprised 11 using interviews, two used a case study and five used surveys. The number of participants in the studies varied widely. The countries in which the studies were conducted included Australia, the Caribbean, Chile, China, Danish islands, England, Germany, India, Lebanon, Japan, Jordan, Netherlands, Pakistan, Scotland, Slovenia, Spain, Sweden and the USA. The research questions included the role of intermediaries in entrepreneurship, use of bricolage, human and social capital and community trust, business modes of operation, migrant lifestyle, breakout strategies and social networks, propensity for self-employment, ethnic networks, transnationalism and type of networks, dual transnational embeddedness and family embeddedness. The conceptual focus of the studies included social networks, networking capability, social capital theory, transnational ties, opportunity creation, migration, entrepreneurship, migrant women, embeddedness, human and financial capital, ethnic minorities, phenomenography, network analysis, self-employment, breakout strategies, lifestyle migrants, new migration destinations, firm performance, emancipation, defiance and resistance.

The findings across the studies included the critical role of “secret production” networks. Sometimes these included networks set-up prior to displacement, whereby entrepreneurs would set-up clandestine networks which were critical for their supply chain and customers. Findings also revealed the conflicting roles of being patron-donors and client-contractors. Local rules constrained women versus men. Also, ethnic networks were essential for overcoming unfamiliar institutional contexts. A complex web of business networks was found to extend beyond traditional links with their homeland to multiple countries. The backgrounds and aspirations of the migrants were found to influence how and why they use local institutional networks. They use multiple local and transnational social networks for business purposes. In the decision to become self-employed, the ethnic network is vital, but not so important when more established and advancing to hiring others. Network closure is utilised to limit competition and dependence from co-ethnic migrants. Strong and weak ties were utilised for local and transnational social networks. Mixed embeddedness (Jones et al. 2014) is common, with the co-ethnic network and host-nation network equally important. Depending on the family culture, family-derived social networks were an enabler or an obstacle to female entrepreneurship. International networking capability was found to have a positive influence on business-related innovation, but a negative effect on financial performance. There was found to be a complex balance between solidarity, exploitation, trust and conflict in the social network of migrants.

Intriguingly, research studies for this group, allude to what one might call social networks based on self-interested realism. There appears to be a decisive, realistic perspective in the use of social networks, which include strong and weak, local and transnational ties, with mixed embeddedness. With the endgame of entrepreneurial success kept clearly in sight, there seems to be a timescale or time sequence, in relation to social network development and use. This leads to potentially important research questions to increase our knowledge of not just the “who” but also the “when” of social network composition and usage. Migrants, displaced people and refugees are currently, and will no doubt continue to be, increasingly prevalent groups, given the tumultuous times in which governments now preside and the associated economic, political, social and climatic challenges. Research into the time sequence in use of business-related local and transnational social networks is timely and highly warranted.

Returning Citizen/Ex-offender and Social Networks

There is a significant lack of recent studies on social networks and returning citizens/ex-offenders. However, the recent literature provides some insight in addition to the study identified in Table 1. Ex-offenders face formidable barriers re-integrating into society. Anazodo et al. (2019) found that formerly incarcerated individuals have a “unique awareness of the social stigmatization associated with their criminal record and incarceration history” (p. 564). These authors classified the various coping strategies they encountered as follows: “conditional disclosure, deflection, identity substitution, defying expectations, withdrawal and avoidance strategies” (p. 564). It is critical to consider this issue within the context of social networks and trust-based relationships since a major challenge on leaving prison is finding ways to rebuild family and social networks. To address this, Baskaran (2019) advocated for the creation of locally based “Economic Justice Incubators (EJI)” supplying social services, but also support networks to suit the needs of returning citizens, especially those returning citizens who want to start their own business. An EJI provides, for example, business start-up assistance, finance, customer referrals and legal advice.

Patzelt et al. (2014) researched a 20-week entrepreneurship training programme in a German prison, developing 12 case studies of male participants. Surprisingly, however, there is no mention that the topic of social capital or networks was part of the curriculum, which centred on mindset and opportunity recognition. Meanwhile, in a US maximum-security prison, Keena and Simmons (2015) studied an ice house entrepreneurship 12-week programme. The 7th life lesson that inmates learned was how to become part of a network of entrepreneurs and develop their own MBA (Mentoring Board of Advisors) from their community. Recognising that “old habits die hard”, most inmates wrote that they struggled with the possibility of creating a community of support with entrepreneurs who had made good choices and probably would not want to share their networks with ex-offenders, who had made poor choices. Ex-offenders, when viewed through the perspective of intersectionality (Liu et al. 2019b) comprise many different groups. Griffith et al. (2019) found that some groups of ex-offenders are additionally disadvantaged; for example, those of African-American descent have particular difficulties with regard to obtaining employment when they return to their community. Meanwhile, Brown and Ross (2010) discussed the distinctly gendered nature of women’s post-prison experiences. For women, their former social network is frequently perceived as a danger to them re-offending. Alternatively, they might have been cut-off from family and friends due to drug use and incarceration. Despite the considerable gap in the social network literature regarding returning citizens/ex-offenders, researching this group provides unique opportunities. For example, some returning citizens/ex-offenders might need to sever some, most or all existing members of their social network, and then develop additional or completely new social network ties. This provides a potential “greenfield study” along with an opportunity to employ a social network theory methodology.

Youth and Social Networks

Only two studies were found directly related to youth, social networks and self-employment or entrepreneurship. In Ghana, social networks were perceived by the interviewees as having advantages, but also disadvantages. In the study from Bangladesh, networks are essential for informal jobs. This is an area that, although difficult to research given the age of many of the potential participants, it has considerable potential for social networks, perhaps formal networks, to have a big impact on enhancing entrepreneurial opportunities for youth.

Formal Networks

Fayolle et al. (2016) suggested that creating formal networks for entrepreneurs might be a worthwhile initiative as a policy intervention tool. Roos (2019) advocated that a “process of embeddedness in context” (p. 279) can address the gender entrepreneurship challenge. Her ethnographic, rural study is of a Swedish government initiative to nurture start-up and growth of female-led businesses in a rural area, particularly the establishment and funding of women entrepreneurship networks. The programme reinforces gender norms, but also provides an opportunity to challenge the status quo via “embedding the network in their local context” (p. 288). Further support for the initiation of formal female networks is provided by Santos et al.’s (2019) study of female Portuguese wine producers. They found that formal networks were advantageous for:

sharing of knowledge and experiences and the level of internationalization and networking … the strategy of coopetition – being both competitors and partners – fosters unity among network members. (p. 315)

For regions struggling with unemployment and lack of economic growth, it seems a worthwhile endeavour, of relatively low cost, with the potential to reverse a highly prevalent area of disadvantage among large sections of the community. However, Leitch et al. (2016) found that “the benefits of formal network membership are indirect and longer term” (p. 180) with varying expectations by gender. However, it might be a first step in reversing the extreme disadvantage experienced by many aspiring entrepreneurs in these missing entrepreneur groups.

Conclusion

This study analysed quantitative and qualitative research studies from 2014 to 2019 regarding social networks and five of the missing entrepreneur groups. In terms of interest, it appears that the study of social networks for migrants, women and immigrants are very popular areas of research. Researchers have largely respected the advice of scholars in this area to conduct more qualitative studies to reveal the richness of the topic and capture the social embeddedness perspective (Jack and Anderson 2002). Geographically, few areas of the world have been omitted by researchers. The research questions have been varied and aimed at capturing the various nuances of social networks in relation to self-employment and entrepreneurship. These studies provide clues regarding where future studies might be situated in terms of theoretical foundation, conceptual focus and geographical area of interest. Findings also point to family social networks as having positive and also negative aspects (Anderson et al. 2005).

In terms of advancing existing knowledge of network theory in relation to missing entrepreneur groups, the literature is still at the early stages of building knowledge. According to Burt (2019):

current entrepreneurship research remains distant from network theory … because network structure is so rarely observed as networks are currently measured (respondent summary opinion about their network is a poor indicator of structure). (Burt 2019, p. 21)

Network theory can provide valuable insights about social networks for entrepreneurs. For example, Burt advanced several hypotheses regarding the type of networks that are a disadvantage or an advantage at different stages in the entrepreneur’s journey, as well as, for example, the role of network brokers. Burt also cited the:

documented positive effect of launching within a supportive closed network, [so] imagine the negative effect of launching within a denigrating closed network – as often happens to women recommended to stay in their place, or people in general with the wrong social origins. A denigrating closed network can crush a venture before it begins, or drag it down during its vulnerable infancy. (Burt 2019, p. 44)

A major conclusion from this review is that more research on social networks is needed and greater use of social network theory should be employed. In the short term, formal networks utilising the current network theory principles (as proposed for example by Burt 2019) might enhance the chances for the disadvantaged. However, formal networks are a long-term financial commitment and take time to effect. Based on a review of recent literature, there is no quick-fix to maximising the advantages and minimising the disadvantages of social networks for those within the various missing entrepreneur groups.