STARTUP PERFORMANCE AND ENTREPRENEURIAL ECONOMIC DEVELOPMENT: THE ROLE OF KNOWLEDGE RELATEDNESS
G.
Page West III, Wake Forest University
Terry W. Noel, Wichita State University
Principal Topic
The present study explores the relationship between entrepreneur’s knowledge resources and new venture performance. Three types of knowledge are considered to be important: 1) tacit industry-specific knowledge, 2) tacit process-specific knowledge about creating, building, and harvesting new ventures, and 3) explicit knowledge articulated through networks and mentoring. We develop hypotheses regarding the impact on the success of startups as a result of these types of knowledge and of their interaction. We further discuss the implication of this perspective on the development of industry clusters or niches in communities engaged in entrepreneurial economic development.
Method
Founders of new ventures were surveyed to discover the presence of the different types of knowledge and levels of firm performance. Interviews with founders further articulated subdimensions of knowledge types that are held to be important. New ventures in two U.S. communities comprised the sample a medium-sized Midsouth U.S. city that traditionally relied on textiles and tobacco, and a Midwestern U.S. city that traditionally relied on airplane manufacturing.
Results and Implications
New venture performance is associated with more general, rather than industry-specific, types of knowledge resources. Knowledge developed through previous experience in planning and administering startup activities and informal knowledge developed through networks and mentoring is important in new ventures. Startup knowledge or mentored knowledge rarely came from within the same or similar industries. Whereas niche or cluster development may occur when a high rate of industry-related knowledge transfer occurs, the other dimensions of knowledge-relatedness suggest broader possibilities for local economic development as well as an evolutionary model for cluster development.
CONTACT: G. Page West III, Wake Forest University, Winston-Salem NC 27109-7285; (T) 336-758-4260; (F) 336-758-6133; westp@wfu.edu
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