Network diversity structure, closeness and innovation of South African micro-entrepreneurs

Abstract

This study qualitatively explores the embeddedness of the innovation process of South African microbusinesses by investigating how small local entrepreneurs in the Greater Johannesburg area utilise their social networks to source entrepreneurial value. A comparative grounded theory analysis enabled the original conceptualisation of Network Diversity Structure and formulates the central proposition that the network dimensions of diversity and closeness enable the innovation process among manufacturing microbusinesses more so than in service microbusinesses. Furthermore, the study proposes that both a structural and relational/experiential dimension of closeness, enables micro-entrepreneurs to create meaning and knowledge collaboratively with other entrepreneurs and actors. This socially facilitated process of exchanging ideas, information, and resources is central to the innovation process of firms traditionally limited by both their size and historical social institutions.