It’s well known that our social networks are a crucial part of the success of any entrepreneurs, but the coronavirus pandemic has made establishing and maintaining these networks harder due to the various policies that have limited our movements and socializing in an attempt to slow the spread of the virus. These restrictions have been especially disruptive for the cross-border networking that drives modern entrepreneurship.

New research from Columbia Business School highlights the damage that these restrictions could be doing to global innovation. The researchers surveyed nearly 4,000 people who had worked in the United States before then returning to 98 different home countries.

The analysis reveals that there are three core forms of knowledge transfer at play as a result of this movement of people:

1. Novel knowledge, which is the kind of knowledge that is new to a particular market. This form of knowledge allows the returnee to spot gaps in their home market that may have passed by natives.

2. Complex knowledge, which is the kind of knowledge that is more tacit in nature. It’s a form of knowledge that allows returnees to gain a comprehensive understanding of the way various pieces of knowledge fit together.

3. Relevant knowledge, which is the kind of knowledge that can be applied in a market environment. It’s a form of knowledge that enables returnees to immediately use their knowledge to create a startup.

International knowledge

The data clearly shows that returnees were more likely to start a business in their homeland, with this likelihood even greater when the returnees had connections abroad they could tap into. Equally, these returnees with a strong global network were more likely to create businesses that trade internationally, especially if the overseas market has similarities to the United States in terms of its institutions.

The researchers believe that by restricting migration, nations are cutting off a key source of entrepreneurship that could greatly hinder the chances of making an effective economic recovery from the pandemic.

Obviously it remains to be seen just how prolonged the travel restrictions will be as a result of the Covid-19 pandemic, but it is perhaps right to forewarn of the possible side effects should the travel restrictions in place last for any extended period of time.