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Entrepreneurship & Regional Development
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The success and failure of policy-implanted interfirm network initiatives: motivations, processes and structure
Robert Huggins Available online: 09 Nov 2010

To cite this article: Robert Huggins (2000): The success and failure of policyimplanted inter-firm network initiatives: motivations, processes and structure, Entrepreneurship & Regional Development, 12:2, 111-135 To link to thisarticle: http://dx.doi.org/10.1080/089856200283036

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ENTREPRENEURSHIP & REGIONAL DEVELOPMENT, 12 (2000) , 111± 135

The success and failure of policy-implanted inter-® rm network initiatives: motivations, processes and structure
ROBERT HUGGINS
Department of City and RegionalPlanning , Cardi University, Glamorgan Building , Cardi CF10 3WA, Wales, UK; e-mail: Huggins@ cf.ac.uk

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This paper examines the processes and causes of inter-® rm network success and failure, de® ned in terms of the ability of networks to become a sustained and valued form of business activity for their members. The paper examines four di erent casestudy network initiatives: ( 1) a failed informal `new entrepreneurs’ network’ ; ( 2) a successful informal `local cluster group’ ; (3) a failed formal `defence contractors’ network’ ; and (4) a successful formal `small-® rm technology group’. It is shown that networks in business are often consciously developed and maintained by those managing directors who have recognized the importance ofco-operative activities for achieving competitive advantage for their companies. The best network support consisted of brokers who are able to mix and overlap the `hard’ business and `softer’ social interests of participants. The case studies indicate that it is formal groups that are the most potent form of inter-® rm network, but that it is through an initially informal structure that they are bestfacilitated. It is concluded that both economic and social rationalities are at play in the motivation of ® rms to join networks, and that their success is closely connected to pre-existing commonality between members. K eywords: inter-® rm networks; network brokers; social capital; trust; management.

1. Introduction Existing evidence suggests that the success or failure of public policy inter-®rm initiatives is related to a number key factors, such as the motivations and expectations of participants, coupled with the ability of initiative facilitators and brokers to create valued interaction and exchange between participants, and to instigate a `contact process’ within which trust relationships are generated (Chaston 1996 , Staber 1996 , Malecki and Tootle 1996 , 1997, Rosenfeld 1996,...