Networking for Competitiveness

Abstract

A policy innovation that has achieved widespread diffusion across national and sub-national governments in industrialized countries is the promotion of networks among small manufacturers as a means of promoting competitiveness. However, research and evaluations of formal networks formed in response to policy initiatives tend not account for the informal networks that small manufacturers routinely use in gathering information and business resources. This study examines the use of informal networks by 50 small manufacturing firms in rural and urban regions of northern Florida. The analysis is inductive and designed to provide a point of comparison to the growing literature on formal small manufacturing networks. Unlike formal networks, the links that comprise informal networks tend to be geographically and socially mixed. Small firms use informal networks to gather information on a mix of issues. Urban and rural firms have similar patterns of network use on issues affecting product development and competitiveness. But they have different patters of network usage for issues associated with exporting and labor problems. Informal networks draw upon local and non-local information resources that do not require significant amounts of interpersonal contact across actors. Proximity is not a factor in the effective use of informal networks for information purposes. Rather the emphasis is upon locating "tried-and-true" solutions that solve the business needs. There is little evidence suggesting that the informal networks that these small manufacturers use are gravitating towards or seeking the development of formal networks. Thus, policy prescriptions identifying barriers to networking among small manufacturers are borne out in this study.