The role of communities on entrepreneurship and innovation…

Over the past decade, the role of community gathering has gained growing attention in scientific literature (Uusi-Kakkuri, 2017; Singh et al. 2017 or Gálvez-Rodríguez et al. 2017). The social capital dimensions, such as collaboration, social trust, the fear of failure or shared value economy, are among factors that drive or prohibit economies or companies within their entrepreneurship dynamics. While drawing attention to internal stress factors for business development, it is worth accentuating creativity systems, innovation climate, intrapreneurship conditions or creative leadership at individual, teams’ and organizational level; while external stress factors are related to communication and co-operation technologies, synergy effects among stakeholders, R&D transfer mechanisms, and new emerging patterns of shared value economy. Moreover, some cultural and social norms-related factors, such as social trust, attitude/ perception of capabilities and opportunities recognition are significant for both internal and external environments.

Young researchers of Vilnius University Business School (Pečiulytė et al., 2018), while referring to Piccione and Rubinste (2007), compared the community gathering process to Jungle Equilibrium Model, where division of power for the purposes of protecting the living environment from animals, for hunting or adapting to the climate change (through playing specific social roles) can be implemented in modern corporate world: the power could correspond to the authority, the ancient tools could refer to resources and techniques, and behind all these aspects, the young authors emphasize social trust and synergy effects among community members. Countries with huge fear of failure (such as Lithuania, Latvia, Poland or the United Arab Emirates) might fail in unleashing their intrapreneurship potential due to the above mentioned social capital dimensions.

As for instance, Lithuania with one of the highest numbers of intrapreneurs worldwide (GEM, 2012), pays a special attention to entrepreneurship enhancement centres in both the Capital region and more periphery areas, such as Alytus or Šiaulai (Enterprise Lithuania, 2016). Entrepreneurship centres, knowledge and technology transfer centres, business accelerators and many other R&D transfer forms are among the most important factors which differentiate innovation-driven economies from efficiency or factors-driven economies: they should be related not only to encouragement of opportunity recognition or knowledge-sharing, but also to community gathering and social trust building (via new technologies and innovation climate facilitation tools).

Given high uncertainty avoidance and severe fear of failure indicators, community gathering with a well-developed innovation climate and modern communication might mitigate unpleasant risks and raise self-esteem and social trust levels among community members, which might contribute to higher entrepreneurship rates, along with more intentions to start business (Seok-Woo et al. 2013). Such outcome might be related to the increasing number of key strategic partnerships within the growing community network. Nevertheless, according to the authors this process is somehow smoother among loyal community members or people who do no represent specific minorities. Therefore, GILE experts suggest that tolerance is another important precondition for growing sustainable and psychologically healthy community via divergent thinking, leveraging local and foreign resources, as well as showing respect to local culture and recognizing global market trends and opportunities.

Vilnius University Business School researchers (Peciulyte et al., 2018), under supervision of Prof. Lauzikas (2018), conducted pilot semi-structured expert interviews with 3 entrepreneurs from Lithuania (efficiency-driven country) and 3 entrepreneurs from the United Arab Emirates (innovation-driven country) with the purpose to investigate what role community gathering plays on entrepreneurship dynamics, in particular, on entrepreneurship processes. Based on GEM data (2014, 2016/2017), although the selected countries belong to different development stages, they both have high fear of failure rates (in 2016, 54.3% of adult population of the UAE was constrained from starting business due to the fear of failure; the fear of failure in Lithuania reads 44,7% in 2014) ; therefore, it is value-adding to compare these economies in terms of social capital dimensions.

Entrepreneurs from efficiency-driven Lithuania emphasized the social value-added, related to socially vulnerable groups through society engagement in entrepreneurial projects (young people on maternity or paternity leave, people with physical disabilities or socially excluded members of society); while entrepreneurs from the Innovation-driven United Arab Emirates do not fully support the argument that community gathering might significantly contribute to entrepreneurship dynamics, as entrepreneurship is a more individual/ personal characteristic, which should be reshaped via education, rather than community activities. This could be explained by the fact that efficiency-driven economies are still building innovation enhancement processes: they need to catch up and implement many changes to transit to innovation-driven stage.

Although the effects of environment improvement are emphasized by scholars (such as Călin and Leo-Paul, 2018), the experts from Lithuania and the United Arab Emirates argue that communities are more efficient in solving environmental problems of local regions (thanks to the most accurate knowledge related to the environmental challenge, better understanding of the local context, and society engagement); however, the community-building does not create any significant competitive advantage at the national or international level. It is in line with a clear inclination of entrepreneurs from the United Arab Emirates to live in a less competitive society, where successful business contributes to social status and respect and create social value-added for communities (GEM, the UAE 2016/2017). In addition to insufficient contribution to national competitiveness, limited financial reward systems discourage local creative leaders, which is not fully in line with social entrepreneurship paradigm (Peciulyte et al. 2018).

Experts agree that modern communication technologies play significant role in leveraging the innovation potential of local communities, particularly where social trust is broken. Based on Lyons’ (2015) investigations, technology is important, but not a sufficient precondition to boost innovation levels: a necessary environment should be created to unleash and enhance citizens’ talents and encourage entrepreneurship projects. The interrogated experts from the United Arab Emirates agree that community is important for creating such innovation environment, while Lithuanian respondents draw more attention to team-level, where it is easier to recreate social trust and communicate, in spite of limited divergent thinking.

During the learning trip in Sicily ‘Culture, service development and innovation: peculiarities of family business in Sicily’ (September 2nd-9th, 2018, with 12 top managers from various industries), GILE Experts identified two additional preconditions for unlocking the community potential in entrepreneurship and innovation processes: the first is community philosophy, along with the cultural and social norms, values and ethical standards ( community members should feel home, encouraged and engaged); the second precondition is related to strategic orientation (community members should be involved in the decision-making process while having similar strategic expectations and supporting the chosen action plans or expected outcomes). Based on the project experience, the participants are happy with project outcomes, if their expectations are met and they are involved in activities, which unite the community and create social trust.

Although it is impossible to equally engage and motivate everyone, risk management models should incorporate alternative scenarios B, anticipated actions plans (if the behaviour of community members does not correspond to the expected behaviour patterns) as well as various stress and conflict management techniques, if necessary. Social impacts are an expected outcome of the majority of communities; however, the interactive seminars in Scilly revealed that many social entrepreneurs do not apply innovative marketing strategies within their communities and underestimate financial, technology-based or strategic tools, such as crowd-funding or international projects with other partners. Their insufficient orientation to B2B clients limits the potential community growth and jeopardises the social value-added.

All in all, community gathering emerges as an important precondition for shared value economy:  it is more difficult to reach synergy effects if stakeholders do not agree on strategic expectations, their responsibilities or allocation of resources. Thus, cultural and social norms play a catalyst role in value creation. Globalization changes the Jungle Equilibrium due to new emerging forms and types of communication technologies and new organizational players: within big data management world, it is getting critical to understand what to do and how to behave, while abundant information might bring more uncertainty and aggravate the challenge of social trust in the economies and communities with high fear of failure. Therefore, the use of technology should fit well the culture of communities, and facilitate processes instead of making them more confusing.

Bibliography

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