If you are here you are probably seeing the following error in Parallels in macOS 11 Big Sur and you haven't found anything working:

Network initialization failed
Your virtual machine will continue working normally but will have no network connection.

Network initialization failed

The fix

  1. Go to Parallel's Network preferences and click "Restore to Default". This will update the entire config file which is important and remove errant configurations.
    Network Panel
  2. Quit Parallels, and open up the Activity Monitor and search for any Parallels tasks and quit them as well.
  3. Go to /Library/Preferences/Parallels/network.desktop.xml with a text editor like Visual Studio Code, Atom, Sublime, BBedit, Webstorm etc that's permissions aware or use the terminal if you're comfortable, and use sudo nano /Library/Preferences/Parallels/network.desktop.xml. Locate the UseKextless entry and set its value to one. Save (depending on the application you're using it'll warn you that you need to use sudo to edit the filea and bring up a dialog. If using Nano, besure to ctrl + x and when prompted, answer yes to save changes).
    Network Panel

Now relaunch Parallels. The eror should go away and networking should be restored.