Social media as a driver for local development: an entrepreneurial perspective from Ecuador

Abstract

This research seeks to analyze the positive effect of social networks in starting a small business. According to this paper, social networks is of great help, especially for the entrepreneur, because of their wide reach and ease of dissemination. A potential customer can be transformed by this impact, becoming a real consumer, just by the impression of social networks. This article describes social networks and their environment and defines them as a tool that helps to reduce the risk of failure in ventures. Its usefulness is especially noted at the time of the first investment, due to its low cost compared to traditional means of communication. For this purpose, two case studies were conducted on entrepreneurship in the artisanal food sector in the city of Guayaquil, showing an improvement in the profitability of these businesses thanks to the help of social networks. Additionally, consumers were consulted through a survey to determine the use and importance given to small food businesses through social networks and the impact they have. In general, the results indicate that: 1) consumers in the Ecuadorian context have a propensity to use social networks to follow small food businesses; 2) consumers have or receive some influence from posts and promotions to make their purchasing decisions; 3) social networks are a tool with potential positive impact to promote small businesses, which in turn, generate local economic development for communities. This positive impact occurs even if there is no professional use strategy.