THE ROLE OF ENTREPRENEURIAL NETWORKS : THE INFLUENCE OF GENDER AND ETHNICITY IN BRITISH SME ¡ ¦

The increasing use of networks for SMEs has been reported as a factor influential in the developmental process of entrepreneurial activity (Baines & Wheelock, 1998). It has been demonstrated that differences exist in the experiences of combining work and family, where these networks are established and maintained, on the basis of gender and ethnicity factors (Carter, 2000; Dhaliwal, 2000; Rana, 1999; Chell et el, 1991). The following paper will discuss preliminary findings of research on the usage of networks by and for Asian and white indigenous female entrepreneurs living in the West Midlands of the United Kingdom. The sample of female entrepreneurs comprises those working in the following sectors: clothing, jewellery, food, IT and management consultancy. The latter two sectors were particularly selected in order to reflect the emerging pattern of selfemployment amongst white and Asian women in non-traditional growth sectors at the turn of the century. In-depth interviews in focus group sessions will be conducted with Asian female entrepreneurs and also with white women-owned businesses in each of these sectors and groups in order to explore the following issues:η each groups awareness of relevant networks for their business η the use of existing networks for business purposes η the potential benefits as perceived by these two minority groups η gaps in the provision of networks as required by the groups η potential for new network development A working model is posited in order to reflect new and innovative directions for the development and progress of networks which address the needs and requirement of both Asian and white female entrepreneurs. Practical implications and suggestions for further research will be given which may aid those concerned with developing networks to support female entrepreneurs. Introdution Women Entrepreneurs and SMEs Most of the studies examining the demographic characteristics of female entrepreneurs, have done so in comparison with male business owners (e.g. Schiller and Crewson, 1997; Hagen et al, 1989). They have highlighted that the demographic predictors of entrepreneurial success have been identical for male and female entrepreneurs (Herron and Robinson, 1993). One substantial difference between business men and women is that women entrepreneurs often integrate multiple organizational roles and multiple dimensions of their lives, such as balancing work and home, together with a leadership role (Rana, et al, 1998). In the UK, South Asians account for only 2.7% of the population (South Asian Population Report for Great Britain, 1992), yet the participation rates of South Asian women in self-employment are higher than those of white women. Nevertheless, there is a tendency for some South Asian women entrepreneurs to be ¡¥invisible¡¦, not only in the business world, but also from a research perspective (Dhaliwal, 2000; Ram and Jones, 1997; Ram, 92; Phizacklea, 1990). The increasing use of networks for SMEs has been reported as a factor influential in the developmental process of entrepreneurial activity (Baines and Wheelock, 1998). Networks and SMEs According to Curran et al (1995), ¡¥networks¡¦ usually consist of firms, ownermanagers, support agencies, voluntary associations and other bodies through which small firms connect to the wider economy. The process of ¡¥networking¡¦ usually involves participants engaging in activities ¡§which brings the network into existence and sustains it through time¡ ̈ (op. cit.). Academics and policy makers have acknowledged that confusion exists over the meaning of the two terms in relation to small firms, this has resulted in a number of competing definitions and perspectives (e.g. Carter and JonesEvans, 2000; Grandori and Soda, 1995) It has been demonstrated that differences exist in the experiences of combining work and family, where these networks are established and maintained, on the basis of gender and ethnicity factors (Carter, 2000; Dhaliwal, 2000; Rana, 1999; Chell, 1991). The importance of networks in the survival and success of individual firms has been an area that has received very little research attention (Olm et al, 1988; Aldrich, 1989; Rosa and Hamilton, 1994; Baines and Wheelock, 1998). It has already been highlighted that gender differences exist in the way that networks are created and used, which in turn have an influence on certain aspects of the management process (Carter and Rosa, 1998). The impact of gender and ethnicity on networking for SMEs The limited research that exists on the experiences of networking has revealed that gender differences exist in the accessibility of these, for women in particular during different stages of their business (Brush, 1997). The obvious implications for female entrepreneurs in comparison to their male counterparts has been discussed by Omar and Tan-Wong (1997): ¡§unlike the old boys¡¦ network, there is also a shortage of peer support networks for women to support, encourage and advise women entrepreneurs. Even when women¡¦s business associations exist, women may not join them if they are overloaded with business and family responsibilities, as is often the case. Such isolation limits the women entrepreneur¡¦s ability to tap sources of peer financing and informal advice as well as the information networks needed for survival and growth¡ ̈. This reflects the long-standing tradition of male executives having access to associations, networks and clubs (business, social or sports clubs) where they discuss business and negotiate deals. Generally, women have been excluded from these influential ¡¥old boys¡¦ networks¡¦ and informal business networks and are therefore increasingly setting up their own networks. Findings from the OECD Issues Paper (2000) have highlighted that women have progressively learnt to use different types of networks, which serve different complimentary purposes. The following broad categories of networks have been identified: institutional networks; business networks; informational networks; scientific and technical networks; profession networks; user networks; friendship networks; and recreation networks (OECD, 2000; Conway, 1997). Increasingly, women entrepreneurs are forming associations in order to increase their access to technology, increase familiarity with business cultures in foreign markets and to access these markets more effectively (OECD, 2000). These associations also provide mentoring and training, and catalyse the process of building networks with government and corporate procurement officials. Networking/partnering can be an extremely valuable tool for expanding and internationalizing activities, it provides value added to women-owned businesses by increasing the flow of information. The combination of these developments assists in promoting a pro-active entrepreneurial culture for women. However, women entrepreneurs may not fully exploit the benefits that come from networking with other women entrepreneurs and owner-managers working in similar sectors and at different levels in the supply chain around the world. Research has highlighted that women network to build a support system. These networks are used as strategic alliances for specific purposes, including: to manage the business, to access resources, to develop ideas, and cultivate social support (Moore and Buttner, 1997). Networks are primarily used for sounding boards and support, as opposed to resource acquisition. Baines and Wheelock (1998) have identified ¡¥growth enthusiastic¡¦ groups of female entrepreneurs who have a high involvement and participation with network activities (co-ownership, formal employment, or daily practical support). Even though these networks have been reported to be very important to women entrepreneurs, they often feel they do not fit with the existing male networks. Networking activities have been found to affect the way in which organizations learn and increase their knowledge base. In particular, by having external collaborative links, there is a greater likelihood of future innovation taking place. Where women have become entrepreneurs after leaving their organizational careers, and have not established an extensive network, they feel isolated at the top, until a more appropriate network is established. The lack of networking opportunities for women has been predominantly highlighted as a problem for start-up businesses. This has also been found to affect established firms. Martin¡¦s (2001) study of women entrepreneurs highlights that the main barrier for female owner-managers to identify with existing business associations, clubs or networks, is the lack of time. Findings from her study also suggested that if these networks were developed, female entrepreneurs would perhaps gain significant competitive advantage over their immediate male-run counterparts (ibid). An area of contention amongst academics is the debate as to who benefits from networking more ¡V female or male entrepreneurs? Rosa and Hamilton (1994) point out that networking is more critical to female entrepreneurs than their male counterparts. In contrast, it has been argued by Aldrich (1989) that the networking levels of women are lower than those of men. A study that has specifically examined the influence of gender on networking has reported that the greatest differences in social networking activities are more attributed to the employment status, as opposed to being based on gender (Katz and Williams, 1997). Starr and Yudkin¡¦s (1996) review of research into entrepreneurial networks has concluded that differences between networking activities between women and men business owners are reflected in the composition of these networks. The issue that has not received adequate attention is how ( in terms of the the quantity and quality) women and men use these networks. It is these issues that the present research attempts to address, in relation to women coming from different cultural groups. Th