Business networks, social capital and the economic performance of creative and cultural industries: The case of Indonesia

Abstract

This study examines the ways in which networking characteristics and practices influence the economic performance of creative and cultural industries. The notion of social capital is used to conceptualise the complex nature of networks, including both professional and social relationships that occur on multiple levels. This qualitative study is set in the context of Indonesia, in which two cases are examined: creative apparel entrepreneurs in Bandung and batik producers in Surakarta. The results show that regional environments provide opportunities for creative industries to find specialist suppliers, to gather market information and, importantly, to find and cross‐fertilise new ideas. Although regions provide these opportunities, the firms’ internal social capital is crucial in being able to internalise and transform the knowledge from the environment into innovative values embodied in their products.