Topic 2: The importance of entrepreneurial relations

As mentioned, the entrepreneur’s network is comprised of independent businesses, family contacts, and other links that reinforce familiarity and provide opportunities (Subrahmanyam, 2019). It is important to highlight this last point. According to Johannisson (2009), networking is about the creative organisation of people and resources in view of an opportunity. 

Thus, a social and business network constitutes a mechanism for the entrepreneur to create and exploit opportunities (Leiden, Link & Siegel, 2014). These opportunities bring positive outcomes and benefits. For that reason, networking is not seen any more as a tool that helps disadvantaged people, but rather as something that increases competitiveness and flexibility in firms (Johannisson, 2009). 

The benefits associated to networking are very varied. One of the most important is the access to information and knowledge. In a globalised world in which technology plays a determinant role, entrepreneurs can only be benefited from gathering information through networks (Alam & Hossan, 2003). This applies especially if this network involves failed or successful entrepreneurs, who can provide relevant insights in overcoming difficulties and how to avoid them. In terms of economic performance, they may get deeper market insights and profit advice (Subrahmanyam, 2019). 

Material benefits are also quite relevant, as well. Engaging in a business-related network often involves costs, such as paying royalties, or related fees, in order to establish relations with bigger partners. Yet, this may be cheaper than producing by yourself, and assuming all the costs of production. When there is transfer of materials, patents, and technology through a network, the general costs of production are reduced (Alam & Hossan, 2003).