Networks, trust, and innovation: The social dimensions of entrepreneurship in Tanzania's manufacturing sector

This dissertation examines the business networks among manufacturing firms in Mwanza, Tanzania, and assesses their influence on innovation and industrial development processes. Networks and the social orientations of manufacturers in Mwanza were explored using in-depth interviews and discussions with 41 business managers that focused on issues of trust and the means through which these individuals use business relations in their production activities. In the data analysis phase, manufacturers were divided into three groups—minimalists, pragmatists, and maximalists—based on a businessperson's social orientation, and correlations between social variables and levels of innovation and performance were computed.; The analysis leads to a number of noteworthy findings. First, networks best facilitate innovation when they are structurally dense and spatially extended and when the businesspeople (agents) participating in them are willing to create strong bonds in their local communities and build social extensions or bridges to outsiders from other communities and regions. Second, an individual's social orientation and ability to trust is an important factor that contributes directly to the responsiveness and innovativeness of his or her firm. Third, that scholars can better understand the process of innovation and industrial development by embedding the economic activities of firms in the social contexts available to the individuals managing them.; The study more generally improves our understanding of the processes driving businesspeople to interact socially. An institutional framework is developed that deconstructs the dynamics behind network construction, maintenance, and modification. This conceptualization demonstrates that there are competing and overlapping “logics” behind or reasons for inter-firm relations. This approach also contributes to our understanding of social capital by identifying both the patterns of behavior reflecting its presence and the processes leading to its creation.; For local manufacturing to become more successful in East Africa, policymakers and planners must foster a broader sense of trust. Major reform of legal systems, the police, and municipal governments are needed and policies that encourage dialogue between the state and business must be encouraged. If levels of trust and accountability can be increased, more risk-taking (i.e., innovation) by businesspeople may result. Such initiatives may embed Sub-Saharan Africa's industrial development process in healthier and endogenously created institutions.