The Role of Entrepreneurs’ Human and Social Capital In Knowledge-Intensive Business Services

KIBS are defined as services involving economic activities intended to result in the creation, accumulation and dissemination of knowledge. They are characterized by the ability to receive information from outside the company and transform it, together with firm-specific knowledge, into services useful to its customers, who operate in both private and public industries. KIBS thus feature a strong knowledge and professional base, and an extended network of partners and clients, through which new knowledge and service innovation are generated. We hypothesized that entrepreneurs of KIBS firms are a major source of knowledge and relationships, and that their experience and professional skills (human capital), and their contacts (social capital) leverage their firm’s growth and profitability, particularly during the early stages of the organization’s development. We conducted a survey on a sample of 424 Italian KIBS firms, representative of the business world operating in the Veneto, a region in north-east Italy. The results of regression analyses suggest that an entrepreneur’s human capital plays a major part in sustaining a firm’s growth, especially during the early stages of the organization’s development. Later on, during the expansion stage, social capital substitutes human capital in sustaining the firm’s performance. Mature firms ultimately rely very little on the entrepreneurs’ personal resources for their further growth.