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The extant literature indicates that entrepreneurs believe social networking can compensate for scarce resources and structural holes in business models. A diverse network can enable social-capital creation, which can provide entrepreneurs with the information, moral support and expertise needed to build a business. Such networks are particularly relevant in emerging markets, such as Russia, which are characterised by a high degree of uncertainty. As innovative entrepreneurship is the most complex and indeterminate form of entrepreneurship, one might expect highly innovative start-ups to have entrepreneurs who are engaged in widespread networking. Thus, it seems relevant to examine differences in social networking among traditional and innovative enterprises. Since 1991, Russia has come a long way toward transitioning from the Soviet planned economy to market-driven relations. As such, Russia offers many examples of the rapid development of small businesses. Private entrepreneurship in Russia, which was originally treated as socially unacceptable, has become a highly desirable activity that is stimulated by the state. This is particularly true in the field of innovative, high-tech entrepreneurship. Thus, Russia serves as an appropriate context for analysing how social networking evolves in line with economic relations. The research had two aims. The first one was to identify the benefits, opportunities, costs and risks that social networking entails for small businesses by considering the development of entrepreneurship in Russia. The second one was to compare the social networking circles of traditional and innovative entrepreneurs. The research was designed to include documentary study and qualitative research. The former was based on the analysis of secondary data covering the period from 1991 to 2018 used to identify the stages of entrepreneurship development, and social and institutional contexts. The latter comprised a series of in-depth interviews with 66 entrepreneurs representing small businesses (44 – traditional; 22 – innovative) in different developmental stages conducted May-September 2017. The key conclusions are as the following. The role of social networking for small enterprises has changed: from being a key mechanism for the development of business in the 90's and early 2000's, to serving as a tool for supporting decision-making and risk management. Although informal social relations remain important in Russia, they complement formalised business management mechanisms rather than replace them. Traditional and innovative entrepreneurs build and govern their business-supportive social networks differently, which reflects the range and complexity of tasks they need to address. In the high risk, unstructured business environment that exists for innovative start-ups in Russia, entrepreneurs prefer to establish personal connections, which are seen as more manageable. Social networking focuses at building relations with people with similar mentalities and visions to uncover synergies between organisations rather than develop blat-based relationships.
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