The Role of Founders' Human and Social Capital in the Success of Ethnic High-Tech Start-ups

Abstract

The study examines the characteristics of social capital and human capital of successful ethnic (Arab) and non-ethnic (Jewish) entrepreneurs in Israel. These factors are associated with the ability to penetrate and survive the challenges of high-tech industries. The research sample consist of 901 high-tech start-ups (96 Arab Start- ups, and 805 Jewish start-ups) from the two industries, Life-Science (LS) and Information-Technology (IT). The results show that successful Arab technological entrepreneurs have higher human and social capital measures in the LS in comparison to the IT industry and in comparison, to the Jewish entrepreneurs due to entrepreneurial challenges and constraints. Therefore, the signalling associated with social and human capital, required for the success of the Arab entrepreneur in the LS industry, are higher than in IT. Implications and directions for future research are discussed.