Comparative Analysis of Entrepreneurial Networking and Its Implications for Japanese Industry in the Internet Era

Abstract

The aim of this study is, based on intensive comparative case studies, to analyze structure and process of entrepreneurial networks in the internet communication era. We then imply general insights on entrepreneurial networks, some of which suggest solutions to urgent problems concerning industry restructuring in Japan. Although during the long-term recession in Japan the value of entrepreneurship has been widely recognized, the number of business startups, however, has not readily increased, in spite of various efforts by many public institutions at developing support programs. On the other hand, it has been observed recently that some internet-based entrepreneurial networks have emerged spontaneously, which let business startups help each other and acquire Internet potential. This paper begins with proposing a conceptual typology for positioning various entrepreneurial networks on it. We then analyze two cases intensively by examining their emergence process and characteristics, guided by the conceptual framework. One is an internet-based entrepreneurial network to help business startups in Japan while the other is a non-internet-based entrepreneurial network that has been in the United States for fifteen years. We conducted participated observation in the former case for two years while we carried out interviews and material-based research for the latter. Finally, we derive general insights on entrepreneurial networks from the case studies. The major findings of this study are as follows: (1) Network polarity, loose and tight, is determined by two primary variable, i.e., expectations and membership. (2) Inter-personal networks can provide the infrastructure of inter-firm networks. Especially loose inter-personal networks tend to generate cooperative and tight inter-firm network, because a wide variety of members naturally enjoy opportunities to encounter potential business partners there. (3) We find different aims in inter-personal networks and inter-firm networks. The former is primarily for mutual aiding while the latter is for dealing with businesses. (4) The internet communications can simultaneously make networks both looser and tighter. (5) Loose inter-personal networks facilitated by the internet communication should have power to reorganize old industry structure in Japan by creating new business and new business relationship if the government support it with minimum intervention and maximum understanding.