An analysis of informal social networks by industry

Social networks are becoming increasingly important to entrepreneurs as they use them to obtain market access, information, technology, and other resources. Through networks, new firms can more quickly establish trust, reciprocity, and cooperation, and in certain industries, networks and contacts provide an indication of an entrepreneur's standing and reputation. This study builds upon previous work on social networks in entrepreneurship by examining the sources of advice used by successful business owners in three industry sectors (services, construction, and "other industry") in six European countries. Particularly, this study analyzes the proportion of entrepreneurs who seek out advice from family and friends and professional acquaintances when starting a new business. The results show that entrepreneurs in these three sectors rely on these sources to varying degrees.