The Relevance of Social Networks for Ethnic Entrepreneurs Essay

The Relevance of Social Networks for Ethnic Entrepreneurs - Essay Example Scholars emphasise evidence that demonstrates the capacity of personal networks or social capital to consolidate important resources for the development of ethnic entrepreneurship (Etemad & Wright, 2003). This essay discusses the relevance of personal networks among ethnic entrepreneurs in the current business environment. The discussion emphasises the significance of social capital in surpassing major challenges to entrepreneurship. Several researchers exploring ethnic enclaves have reported that social capital largely contributes to the business success of ethnic entrepreneurs. These researchers have a tendency to place emphasis on the importance of social capital as an alternative to dealing with established political and financial entities rather than on how dominant development resources and community may work together (Cavinato, 2012). The primary finding is that several ethnic or immigrant groups are quite successful in their use of personal networks to attain economic success es. It is a fact that ethnic entrepreneurs require skills, financial resources, and social support in order to survive and thrive. Personal networks can have favourable economic outcomes by enhancing other community resources. One of the greatest relevance of social capital to ethnic entrepreneurship is in the arena of public policy, policymaking, and political institutions (Cavinato, 2012). For instance, social capital has indirectly influenced development of financial resources by first influencing public policy and political perspective. Social capital can influence development of physical resources. It has the capacity to affect public policies associated with human capital and wages, like livelihood policy (Light & Bonacich, 1991). And it can influence the market policies that oversee business development and entrepreneurial prospects. Beginning with the research on ethnic economies, social scientists and entrepreneurship scholars have placed emphasis on several core variables that seem to partly explain the consolidating attributes of ethnic entrepreneurs and communities into enclaves. In this field, analysis of behaviour unavoidably includes descriptions of personal networks, social embeddedness, and social capital (Saegert, Thompson, & Warren, 2005). Lately there has been heightened emphasis on the importance of exploring the dynamics of ethnic entrepreneurship and how its economic mechanisms are attached to governance, cultural, religious, and social forces that finally determine the characteristic of an ethnic community. Personal Networks, Social Capital, and Ethnic Entrepreneurship Ethnic entrepreneurship emerges today in various societies and cultural contexts. Nowadays, ethnic entrepreneurs are a part of a business environment in almost all nations across the globe, drawing much scholarly interest. Enclaves of ethnic entrepreneurs can be seen in the United Kingdom and other Western countries. Ethnic entrepreneurship is generally regarded an import ant component in the economic structures of Western countries and the revitalisation of the small business community (Piperopoulos, 2012, p. 84). However, it would be misleading or inaccurate to lay down a single, strict definition of the concept of ‘ethnic entrepreneurship’ or ‘ethnic entrepreneur’. Ethnic entrepreneurs are commonly defined in the literature as â€Å"sojourners who work harder, save money, spend less by living frugally, have preferential access to