Small Business Alliances: Professional Networks and Innovation Adoption (original) (raw)
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2013
A growing body of research acknowledges that inter-organizational networks greatly influence a firm's innovation performance. This study extends our understanding of this relationship by considering the effect of inter-organizational networks on innovation in small, knowledge-intensive companies. Based on a literature review, we formulate four propositions regarding the moderating effects of firm size and knowledge intensity on the relationship between inter-organizational networks and innovation, as well as the influence of these factors on the development of the inter-organizational networks themselves.
Interfirm Collaboration Networks: The Impact of Large-Scale Network Structure on Firm Innovation
T he structure of alliance networks influences their potential for knowledge creation. Dense local clustering provides information transmission capacity in the network by fostering communication and cooperation. Nonredundant connections contract the distance between firms and give the network greater reach by tapping a wider range of knowledge resources. We propose that firms embedded in alliance networks that exhibit both high clustering and high reach (short average path lengths to a wide range of firms) will have greater innovative output than firms in networks that do not exhibit these characteristics. We find support for this proposition in a longitudinal study of the patent performance of 1,106 firms in 11 industry-level alliance networks.
Entering a Network: The Case of a Science-Based Start-Up Company
Innovation and entrepreneurship can be the lifeblood of an economy and in many countries the transfer of academic science to new business ventures in the commercial sector represents an important means of sustaining economic growth and competitive advantage. Our interest lies in technology transfer and specifically the attempts by science-based entrepreneurial (start-up) firms to establish a position in a market, in a network and to initiate relationships with customers in that network. Challenges faced by any start-up company include establishing a customer base and building a reputation as a reliable supplier. These tests are particularly acute for a new venture seeking to launch its business in high technology product areas. Not only does a target customer have to be persuaded of the problem-solving ability of an unproven supplier but those customers will likely have to get to grips with unfamiliar products. Ruokalinen (2005) suggests that customer references are vital for a high technology business. A positive first customer reference makes a significant contribution to subsequent customer acquisition because it can provide a company with credibility, enhance its reputation and reduce the perceived risk of the customer.
This paper provides a brief overview of knowledge diffusion theory and how it has beenapplied to innovation. We question whether diffusion theory is appropriate in this context andsuggest that science commercialisation is a complex area for which linear diffusionapproaches are neither appropriate nor effective for examining knowledge exchange betweenresearch and industry network participants. Social network analysis (SNA) is adopted andqualitative analysis is used to explore how SNA might be useful to understanding successfulinnovation pathways. A case study from an Australian public research organisation (PRO),the Commonwealth Scientific and Industrial Research Organisation (CSIRO), is presented toexamine how a network analysis of participants can highlight the innovation trajectory taken by a biomedical product developed by CSIRO. The role of ‘weak ties’ as recruiters and key players in moving this project forward is highlighted.
Orchestrating networks in the biopharmaceutical industry: small hub firms can do it
Production Planning & Control, 2010
The biopharmaceuticals industry has been one of the most dynamic and promising sectors. The entry of Biotechnology start-ups in the 1980's led to the reconfiguration of the drug development value chain and the emergence of new competences. As the sector evolved, specialized firms appeared. As the industry matures, the production process becomes more specialized to support optimization of technological steps. Our case studies reveal that the coordination of networks can be specialized, with the emergence of Dedicated Coordinating Firms. Based on four case studies of European biotechnology companies within a business model approach, this article helps understanding how coordinating a network can be successful and how small hub firms can do it.