Network diversity structure, closeness and innovation of South African micro-entrepreneurs

Eliada Wosu Griffin-El

doi:10.4102/sajems.v17i3.415

Eliada Wosu Griffin-El

Open Access

https://doi.org/10.4102/sajems.v17i3.415

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Abstract

This study qualitatively explores the embeddedness of the innovation process of South African microbusinesses by investigating how small local entrepreneurs in the Greater Johannesburg area utilise their social networks to source entrepreneurial value. A comparative grounded theory analysis enabled the original conceptualisation of Network Diversity Structure and formulates the central proposition that the network dimensions of diversity and closeness enable the innovation process among manufacturing microbusinesses more so than in service microbusinesses. Furthermore, the study proposes that both a structural and relational/experiential dimension of closeness, enables micro-entrepreneurs to create meaning and knowledge collaboratively with other entrepreneurs and actors. This socially facilitated process of exchanging ideas, information, and resources is central to the innovation process of firms traditionally limited by both their size and historical social institutions.

Highlights

Micro-sized but formally registered businesses of the South African entrepreneurial landscape occupy a particular place on the country’s development agenda
The analysis has revealed a nuanced conceptualisation of relationships beyond the simplification of bonds, bridges, and linkages in order to capture the contextual features within which the innovation process is embedded
Data described an innovation process that goes beyond the conceptualisation of design

Summary

Introduction

Micro-sized but formally registered businesses of the South African entrepreneurial landscape occupy a particular place on the country’s development agenda. As micro-enterprises, they face the well-known challenges of achieving scale and productivity levels; yet, as formally registered businesses, they serve as a bridge between the central and peripheral markets that both constitute the South African economy. With their failure rates presumed to be high, yet their success presumed to be important, understanding how they facilitate their entrepreneurial process while having limited capacity becomes a question of both intrigue and development implications for economic inclusivity. The purpose of this study is to explore the structural embeddedness of South African microbusinesses – and to better understand how they have engaged with the social relationships in which they are embedded in order to advance and support their entrepreneurial activity. The study provides a conceptualisation of the diversity relational types and entrepreneurial value they contribute

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