Social Capital, Networks, and Economic Determination (3)

Influence of Bridges and Bonds on Enterprise Gestation

Many entrepreneurs report inadequate support in the early stages of their business development (Westlund and Bolton, 2001). Furthermore, there is little research into how social capital influences the course of new firms (Suseno & Rattan, 2007). From a bonds and bridges perspective, the value of bridges seems obvious, however, in the gestation phase, bonds may be peculiarly advantageous.

Gestation-Critical Resources Provided by Classical Bond and Bridge Connections

The Dyson study (Jones and Conway, 2004) illustrates that the period of innovation gestation/enterprise incubation presents an inconsistency. Bond ties, which are emotionally rich and thereby permit transmission of solidarity, provide a high value input during this period.

Bonds and bridges are oppositional by definition, yet in terms of gestation-critical resources, there is plausible convergence on “empathy” (arguably others too). The Dyson study shows that on the gestation-criticality criterion, bonds provide more and can thus be considered the more significant of the two during the gestation/incubation phase.

Gestation-Critical Resources Provided by Dyson’s Bond and Bridge Connections[1]

Although Dyson’s bridges and bonds provided overlapping resources, the number of resources provided by bonds in the gestation phase exceeds that provided by bridges.[1] Of interest is Dyson’s strong dependence on friends and family (bonds), who provided him with finance and knowledge – resources classically identified with bridges – during the gestation phase.[2] (Aldrich et al, 1987 reported similar findings.)

If Dyson’s scenario is representative, enterprise failure is more probable when the innovator’s bond network is small, or perhaps lean in provision of resources. Bridge connections supply constructive business expertise, but bonds bolster the psychological wellness of the entrepreneur, presumably enabling him/her to exploit that expertise.[3] 

[1] Reported in Against The Odds: An Autobiography by James Dyson, 1997.

[2] This observation challenges Putnam’s dichotomization, but the nature of the study denies it reliable extensibility. A sociogram depicting Putnam’s classification of connection types is provided in A.6.   

[3] Several of Dyson’s bonds acted as bridges. See A.5. and A.8.