A Model of Surrogate Motherhood of Entrepreneurship and Network Evolution

I develop the ‘surrogate motherhood’ model of entrepreneurship and network evolution. This model suggests that incumbent firms may gestate new spin-off firms by entrepreneurial employees when certain firm-specific and network conditions apply. Additionally, I suggest that the spin-offs keep their cohesive ties to the ‘surrogate mother’ firm well beyond resource dependence arguments would convey. Thus, I argue that the emergence of a network is essentially an endogenous entrepreneurial process of detecting opportunities in a co-evolving environment. This process is constrained by previous relationships, and designed within the ‘surrogate mother’ firm’s position in the industry, technology, and market boundaries. I conclude that the study of network evolution is valuable to the study of entrepreneurship, and location of economic activity (clusters). Finally, I highlight several avenues for future research in the convergence of networks, entrepreneurship and strategy.