The strength of strong ties in the creation of innovation (original) (raw)
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Does social capital determine innovation? To what extent?
Technological Forecasting and Social Change - TECHNOL FORECAST SOC CHANGE, 2002
This paper deals with two questions: Does social capital determine innovation in manufacturing firms? If it is the case, to what extent? To deal with these questions, we review the literature on innovation in order to see how social capital came to be added to the other forms of capital as an explanatory variable of innovation. In doing so, we have been led to follow the dominating view of the literature on social capital and innovation which claims that social capital cannot be captured through a single indicator, but that it actually takes many different forms that must be accounted for. Therefore, to the traditional explanatory variables of innovation, we have added five forms of structural social capital (business network assets, information network assets, research network assets, participation assets, and relational assets) and one form of cognitive social capital (reciprocal trust). Based on the survey data administered from April to June 2000 to 440 manufacturing firms of diverse industries in a region in the southwest of Montréal, we have found that 68.5% of the firms have developed product or process innovations during the 3 years preceding the survey. Assuming that innovation is not a discrete event but a complex process, we have modeled the decision to innovate as a two-stage decision-making process: in the first stage, the firms deal with the decision about whether to innovate or not whereas, at the second stage, the firms that have decided to innovate must make a decision about the degree of radicalness of the innovation to undertake. In a context where empirical investigations regarding the relations between social capital and innovation are still scanty, this paper makes contributions to the advancement of knowledge in providing new evidence regarding the impact and the extent of social capital on innovation at the two decision-making stages considered in this study. Regarding the decision to innovate or not that firms must initially make, we have provided strong evidence that diverse forms of social capital influence this decision and, more importantly, that marginal increases in social capital, especially in social capital taking the forms of participation assets and relational assets, contribute more than any other explanatory variable to increase the likelihood of innovation of firms. As for the decision to be made at the second stage concerning the magnitude of radicalness to bring in the development of new product or process innovations, this paper contributes to the advancement of knowledge by supplying the strongest evidence that diverse forms of social capital determine the radicalness of innovation, and more importantly, that social capital taking the form of research network assets contributes more than any other explanatory variable to explain the radicalness of innovation. The second variable that exerts the strongest impact on the radicalness of innovation is the number of different advanced technologies employed by firms for production.
2009
Social networks matter in the innovation processes of young and small firms, since 'innovation does not exist in a vacuum (Van De Ven, 1986: 601).' The contacts a firm has could both generate advantages for further innovation and growth, and disadvantages leading to inertia and stagnation. In the first case the existing social network or the new business contact provides opportunities furthering eventual success, in the second case, the existing network or the new business contacts turns out to have a constraining or even detrimental effect on performance.
Social Networks: Effects of Social Capital on Firm Innovation
Journal of Small Business Management, 2010
This paper aims to introduce some specific insights regarding social networks and the geographical proximity of firms in order to investigate factors involved in the innovation of firms. In particular, this study reviews ideas from the industrial district literature by analyzing the role played by the dimensions of social capital, that is, social interactions, trust, shared vision and involvement of local institutions, in the process and product innovation of firms inside the district. This paper draws on an analysis comparing district members and nonmembers based on a sample of 220 manufacturing firms in the Valencia Region (Spain). Findings suggest a positive association between district affiliation, social capital and involvement of local institutions and innovation that can offer relevant prescriptions for policy makers and individual entrepreneurs.
How social capital and knowledge affect innovation
Journal of Business Research, 2011
This research analyzes the effects of interorganizational links on radical innovation using a comprehensive framework that integrates three research streams: social capital, the knowledge-based view and innovation. Incorporating data from 143 companies of innovative manufacturing and service industries, our results show that while knowledge complexity per se exerts a clear influence on radical innovation, the effect of knowledge tacitness appears only in combination with social capital. Similarly, the mere existence of strong cooperation agreements (relational social capital) does not guarantee more radical innovations, only when combining high levels of social capital with tacit knowledge does this antecedent produce more radical innovation.
Networks and Innovation: The Role of Social Assets in Explaining Firms' Innovative Capacity
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The claim of a positive association between a firm's social assets and its innovative capacity is a widely debated topic in the literature. Although controversial, such an argument has informed recent innovation policy across Germany, increasingly directed to cluster formation. In the light of the growing attention and financial efforts that cluster-based innovation policies are receiving, it is worth answering two main questions. First, are firms with a relatively high level of social capital likely to be more innovative? Second, do companies pursuing innovation in partnership innovate more? This paper empirically answers these questions by exploring a cross-sectoral sample of 248 firms based in the Jena region. On the one hand, the extent to which a firm is integrated in its community life does not contribute to an explanation of its innovative performance. On the other hand, directed cooperation with the specific goal of innovating shows a positive impact on innovative performance. However, the correlation between the extent of the network of co-innovators and firms' innovative capacity presents an inverted U-shaped relation: there is a threshold in the number of co-innovators justified by the costs of innovating by interacting. A policy lesson can be drawn from these findings: cluster-based policies are to be treated with caution as firms face costs of networking and not merely benefits.
TMT social capital, network position and innovation: the nature of micro-macro links
Frontiers of Business Research in China, 2019
Employing a sample of 1476 firms and 5130 firm-years in China, we examine the relationship between social capital and macro organizational innovation. Based on the relational view and social capital theory, this study investigates how the top management team (TMT) inside an organization bridges and bonds social capital to influence innovations combined with organizational network position. Through empirical tests based on listed companies in the whole network of the interlocking directorate using the dataset of listed companies in China from 2008 to 2014, the study finds that: (1) TMT global social capital has an essential positive effect on innovation, (2) TMT overseas social capital has significant positive consequences on prestige and power (network position), (3) network position mediates the relationship between TMT overseas social capital and innovation, and (4) TMT bank social capital has a moderating effect on the relationship between network position and innovation.
Strategic Management Journal, 2007
This paper employs comparative longitudinal case study research to investigate why and how strong dyadic interfirm ties and two alternative network architectures (a 'strong ties network' and a 'dual network') impact the innovative capability of the lead firm in an alliance network. I answer these intrinsically cross-level research questions by examining how three design-intensive furnishings manufacturers managed their networks of joint-design alliances with consulting industrial design firms over more than 30 years. Initially, in order to explore the sample lead firms' alliance behavior, I advance an operationalization of interorganizational tie strength. Next, I unveil the strengths of strong ties and the weaknesses of a strong ties network. Finally, I show that the ability to integrate a large periphery of heterogeneous weak ties and a core of strong ties is a distinctive lead firm's relational capability, one that provides fertile ground for leading firms in knowledge-intensive alliance networks to gain competitive advantages whose sustainability is primarily based on the dynamic innovative capability resulting from leveraging a dual network architecture.