Prolific networkers are more likely to experience entrepreneurial success – The Economist
New research released today by The Economist Intelligence Unit (EIU) finds that informal professional networks and communities are more important for entrepreneurial success than formal structures such as incubators and accelerators. The research, Informal Innovation: Entrepreneurship and Informal Communities sponsored by Infocomm Media Development Authority, is based on a survey of 1,000 entrepreneurs across ten cities with reputations as innovation hubs.
Today, entrepreneurs are avid digital networkers. Over half of the survey group (58%) take part in business-oriented social networking groups on global platforms such as Facebook or LinkedIn. Entrepreneurs in Ho Chi Minh City are the most prolific, with 39% taking part in more than ten groups. Singapore and San Francisco entrepreneurs are almost as active, with 34% and 32% of respondents respectively.
The survey also sheds light on how real-world interaction complements digital networking. In Tel Aviv, New York and London, for instance, meeting fellow entrepreneurs in informal physical settings is the single most important source of support, even ranking ahead of financial institutions. Although informal communities are not equally vibrant, with Seoul having the lowest engagement with global digital networks and the fewest young entrepreneurs among cities surveyed, the research nevertheless reveals that the greater the number of networking activities entrepreneurs engage in, the more likely that they will deem themselves stronger than their competitors.
In Singapore, entrepreneurs currently place most importance on business associations and other formal structures but most (78%) entrepreneurs in the city believe this will change as Singapore continues to develop as a hub for entrepreneurs and more informal communities develop.
Governments also play a role in enabling informal communities, according to the research, but any support should be at an arm’s length. Experts opined that governments should provide indirect funding of space and logistics, while allowing the ecosystems to grow organically.
Charles Ross, the editor of the report, said: “It’s difficult to overstate the value of entrepreneurs’ face-to-face interaction over cocktails, lunches and in other types of informal settings, but they are also avid online networkers. Here they get advice on practical matters such as solving technology challenges, where to search for particular specialists or identifying sources of government support.”