MscBA Master Thesis
The Effectiveness of Intermediary Involvement in Collaborative Innovation
among Small and Medium Sized Enterprises.
H. (Haddo) Brouwer
University of Groningen
Faculty of Economics and Business
Department of Innovation Management and Strategy
University Assessor: Dr. F. (Florian) Noseleit
University Co-Assessor: Dr. T.L.J. (Thijs) Broekhuizen
Msc Business Administration
Strategy and Innovation
| 2 PREFACE
This study is the final piece of my long life at the University of Groningen. Throughout my education, I’ve always had a special interest in SMEs and innovation. Since they are limited in terms of resources, being innovative urges them to be creative. Especially under economic circumstances such as the last couple of years, the sheer effort SMEs make to be innovative is inspiring. Since collaboration with other firms is an important strategic tool to overcome these limitations SMEs need to deal with, it was only a small step to decide to write a master thesis on this topic.
Throughout the process of writing my thesis, I was warned by friends that after a couple of months the topic would become boring and it would be a struggle to stay motivated. None of this happened to me. Even though it took quite some time to finish this thesis, at the end I’m still fascinated by the topic and enthusiastic about the collaborative innovation opportunities available to SMEs.
Finally, I would like to thank some people that assisted me in writing my thesis, as well as supporting me during the process. First of all, I would like to thank my supervisor, Dr. Florian Noseleit. I appreciate his contributions and the suggestions he gave me when the outcomes were different than expected and the focus of the study was slightly changed. Next, thanks to Dr. Thijs Broekhuizen and Elke van Lamoen for reading my thesis and providing me with useful commentary to come to the final results. I would also like to thank all the nine interviewees for their time and input. A big “Thank You” to my parents for supporting and encouraging me. Last, but not least, I would like to thank my girlfriend, Rosalinde Vijn, for her support and understanding throughout the entire process.
| 3 ABSTRACT
The goal of this research is to assess the effectiveness of the involvement of intermediaries in collaborative innovation processes among competing SMEs. Throughout the literature, it was found that there is large potential in collaborating with competitors. However, the risk of opportunistic behavior and competitive positioning are causes why competitors are not often collaborating. The involvement of an intermediary could help SMEs in overcoming these challenges. For this study, five different intermediaries were interviewed. Next to that, a multiple case study was performed, which involved four SMEs in a collaborative innovation project under the guidance of one of the five intermediaries. The findings from the interviews with the managers of the SMEs were then linked to the findings from the literature and the interviews with the intermediaries.
Several intermediaries indicated that a lot of competing firms are indeed collaborating. However, the informal and often unknown nature of these interactions makes it difficult to target these firms. The findings of this study suggest that the involvement of an intermediary can be an added value to a collaborative innovation project. The managers of all SMEs that were interviewed have stated that they feel the IPC project could not have been successful without the involvement of TCNN.
| 4 TABLE OF CONTENTS 1. INTRODUCTION --- 06 1.1. Problem Definition --- 07 1.2. Research Questions --- 08 2. LITERATURE REVIEW --- 09 2.1. Alliances --- 09
2.1.1. Alliance Goals & Motives --- 10
2.1.2. Partner Selection --- 11 2.1.3. Alliance Contract--- 13 2.2. Knowledge Transfer--- 13 2.2.1. Absorptive Capacity --- 15 2.2.2. Trust --- 16 2.3. Knowledge Brokers --- 17
2.3.1. Tasks, Roles & Requirements --- 18
2.3.1.1. Tasks --- 18 2.3.1.2. Roles --- 19 2.3.1.3. Requirements --- 20 2.4. Governmental Policy --- 21 2.4.1. OECD --- 22 2.4.2. Innovation Vouchers --- 24
2.4.3. Innovation Performance Contracts --- 24
3. RESEARCH METHODOLOGY --- 26
3.1. Research Design --- 26
3.1.1. Preliminary Descriptive Study --- 27
3.1.2. Primary Case Study --- 28
3.2 Data Collection Methods --- 29
3.2.1. Exploratory Phase --- 29
3.2.2. Multiple-case Study --- 29
3.3. Validity --- 30
3.3.1. Construct Validity --- 30
| 5
4. RESULTS --- 31
4.1. Intermediaries --- 32
4.1.1. Governmental Influence --- 32
4.1.1.1. National Government Innovation Policy --- 32
4.1.1.2. Regional Government Innovation Policy --- 35
4.1.2. Collaborative Innovation & Competition --- 35
4.1.3. Role of the Intermediary Organizations --- 37
4.1.4. Intermediary Collaboration --- 39 4.2. SMEs --- 41 4.2.1. IPC Collaboration --- 42 4.2.2. Knowledge Transfer --- 45 4.2.3. Intermediary Involvement --- 47 4.2.3.1. IPC Project --- 48
4.2.3.2. Previous Intermediary Involvement --- 49
5. CONCLUSION --- 51
5.1. Research Questions --- 51
5.2. Implications and Recommendations --- 52
5.2.1. Implications --- 55
5.2.2. Managerial Recommendations --- 55
5.2.3. Policy Recommendations --- 55
5.3. Limitations and suggestions for Future Research --- 56
6. REFERENCE LIST --- 58
| 6
1. INTRODUCTION
This research will focus on collaborative innovation among small, - and medium-sized enterprises (SMEs). Several authors have labeled SMEs as one of the most important sources of innovation and technological progress (Forrest, 1990; Oakey, 2007; Mazzarol & Reboud, 2008). However, being important sources of innovation, SMEs face a couple of important barriers to fully exploiting their innovative capabilities. Due to their size, they have to deal with a lack of resources and capabilities which keeps them from pursuing multiple or larger innovation projects (Huggins & Johnston, 2009). In such instances, often the idea is put on hold for future development. However, it might be interesting to explore the opportunity to collaborate with another firm to be able to develop the invention and commercialize it. Within the firm’s business environment there are various actors one can collaborate with. Most common is collaboration with a supplier or customer (Huggins & Johnston, 2009). However, according to Gnyawali & Park (2009) there are several economic conditions under collaborating with a competitor could prove to be very interesting. For instance when a company is faced with a larger competitor, when the market is in the early stages of maturity or when technology is developing rapidly (Gnyawali & Park, 2009). These authors furthermore argue that co-opetition, cooperating whilst competing at the same time, can be very interesting for SMEs because they face similar challenges and possess similar resources and capabilities.
| 7 considered in the literature to be the most important reason why competitors are not working together that often (Gnyawali & Park, 2009; Soekijad & Andriessen; 2009) Might such interactions do occur, they often come with very elaborate contracts and a high degree of formality to prevent these unwanted side-effects (Oakey, 2007). In such circumstances, collaborating could be very hard. According to Cohen & Levinthal (1990), knowledge transfer and learning effects are best suited in environments with a lot of informal contacts, socialization and trust. Elaborate contracts and very formal interactions are often a signal of a lack of trust among both organizations (Reuer, Ariño & Olk, 2010).
Visser & Atzema (2008) argue that independent intermediaries could assist SMEs in setting up clusters with other organizations. With the help of an independent intermediary, the level of trust among the SMEs could be improved. Next to that, Kirkels & Duysters (2010) state that intermediaries fulfill the need to effectively guide firms in complex environments, such as collaborating with competitors. Furthermore, since intermediaries have a broad network of organizations to their disposal, they are also able to connect organizations and set up collaboration projects that the SMEs themselves would not have been able to develop. Arguably one of the most important tasks and intermediary can fulfill is preventing the opportunistic behavior by SMEs over each other. Acting as a mediator can resolve issues and bring organizations closer together (Visser & Atzema, 2008). Being faced with increasing globalization and technological development, SMEs often need to make crucial decisions related to their survival in the competitive landscape or increasing their competitive position. Collaborating with a competitor might be a very interesting option and with the help of intermediaries, this option might become more realistic.
1.1. Problem Definition
| 8 The goal of this research is:
To investigate the opportunities and barriers for competitors to jointly undertake innovation projects and to assess the effectiveness of intermediary involvement.
1.2. Research Questions
This goal leads to the following main research question:
To what extent is the active involvement of intermediaries contributing to the effectiveness of collaborative innovation between competing SMEs?
This main research question is further divided in the following sub questions:
What are the main motivations to engage or not engage in collaborative innovation with a competitor?
Which intermediary firms are available to assist SMEs in these challenges and what range of services do they offer?
| 9
2. LITERATURE REVIEW
2.1. Alliances
Reuer et al. (2010:6) define an entrepreneurial alliance as: ‘an agreement under which two or more independent organizations work together under an incomplete contract to access, discover or exploit opportunities for future goods and services’. This alliance may take several forms, varying in the degree of integration they take. At the extremes two extremes of this continuum, the authors distinguish between market transaction and full integration. As intermediary forms, they define an equity based alliance and a non-equity based alliance. The non-equity-based alliance differs from the non-non-equity based alliance with respect to the establishment of a separate business entity (Reuer et al, 2010). Van Gils & Zwart (2009) provide an alternative alliance typology, based on the strategic goals both firms have when entering an alliance. Similar to the typology Reuer et al (2010) propose, these authors opt for the loose and tight integration structures as the extreme options. However, in between they opt for a division between tactical and strategic alliances. In this division, the tactical alliance offers a more short-term gain based on scale economies, whereas the strategic alliance has long-term knowledge and asset sharing to improve both firms’ competitive position (Van Gils & Zwart, 2009). For this specific research, the strategic alliance and the non-equity based alliance are the starting point. An alliance, in this research, is defined by combining both definitions as:
“A long-term, non-equity based cooperative agreement, in which two or more organizations work together under an incomplete contract to improve their competitive position.
| 10 willingness to develop extensive interactions with competitors, even though most firms prefer to limit the level of interdependence and knowledge sharing. These interactions primarily related to joint research and development and knowledge sharing (Van Gils & Zwart, 2009). Regarding the nature of alliances, Reuer et al (2010) argue that the character of alliances is shifting towards forming alliances with direct competitors.
2.1.1. Alliance Motives
As mentioned in the section above, strategic alliances among competitors are increasingly used as a strategic tool (Reuer et al., 2010). Firms often have varying reasons to become involved in alliances. Besides strategic motives, environmental pressures like globalization and rapid technological development are prevalent (Kirkels & Duysters, 2009; Reuer et al, 2010). These challenges are faced by all companies independent of their size. Small companies face some additional challenges and often suffer from what is referred to in literature as a ‘liability of smallness’ (Freeman, Carroll & Hannan, 1983; Segarra & Callejón, 2002). These authors discovered that the performance of SMEs after-market entrance is significantly lower compared to larger firms or diversifying existing firms. These findings related to organizational death rates are important, since these are real challenges especially SMEs need to deal with (Segarra & Callejón, 2002). Compared to larger companies, SMEs suffer from lack of resources and personnel. Priority is given to current business and innovation is often used as an additional activity when the existing orders and tasks are fulfilled (Major & Cordey-Hayes, 1999). Liability of smallness in this instance closely relates to the ‘liability of newness’. The latter refers to the lack of resources, lack of legitimacy and insufficient access to markets and relationships (Reuer et al, 2010). Freeman et al (1983) mention that these two liabilities are often used interchangeably. However, they indicate that both size and newness can be reasons for organizational decline. Engaging in alliances is a potential strategic tool that is increasingly used by SMEs to overcome their current limitations related to smallness and newness (Forrest, 1990).
| 11 rapid technological development (Forrest, 1990; Reuer et al, 2010). When firms collaborate, their combined resources give them the opportunity to pursue larger innovation projects (Reuer et al, 2010). Teece (1986) argues that firms need to have access to complementary resources in order to successfully benefit from innovation and increase innovative performance. These resources can be accessed through alliances with other actors within the business environment. These actors can range from suppliers, to customers and even competitors. 37% of the companies involved in a study in the Netherlands state that innovation was their main motivation to enter an alliance (Rutten & Oerlemans, 2009). Due to the increasing competitiveness, innovation is a possibility for firms to access new markets and improve their competitive position (Hamel, 1991). 33% of the same sample by Rutten & Oerlemans (2009) indicated that access to external knowledge was considered very important. Knowledge transfer is essential for organizational learning and development (Pinch, Henry, Jenkins & Tallman, 2003). Finally, new firms can benefit from collaborating with established firms by referring to their existing reputation and making use of their networks to develop their business (Teece, 1986; Reuer et al, 2010)
2.1.2. Partner Selection
| 12 not favored by companies because of the risk of knowledge leakage and opportunistic behavior (Gnyawali & Park, 2009; Singh, Kale & Perlmutter, 2000; Soekijad & Andriessen, 2009). On the other hand, competitors offer a whole range of opportunities other external partners cannot offer and companies increasingly acknowledge these opportunities (Gnyawali & Park, 2009; Reuer, 2010). Direct competitors often deal with similar knowledge bases and offer opportunities to share complementary resources (Gnyawali & Park, 2009). With regard to the knowledge base, Cegarra-Navarro (2005) argues that an alliance with a competitor provides an ideal learning opportunity for organizations. Next to that, Tether (2002) exemplifies that there are a lot of situations where collaboration with a competitor can provide very useful insights. Firms often have a couple of product lines, which offers the possibility to collaborate on one product and compete on another. Next to that, within the industry there are a lot of common problems, such as government regulations, which can be solved together without harming ones competitive position. Despite these advantages, companies are still inclined not to exploit these opportunities because of the risks related to opportunism. Since companies are also each other’s direct competitors, there is an incentive to break agreements and try to capture the core capabilities and skills that give the partnering company its competitive advantage (Gnyawali & Park, 2009; Singh et al, 2000).
| 13 (Reuer et al, 2010). Therefore it is very important to clarify the reasons of entering an alliance for both parties. In doing so, organizations can significantly reduce the risks of opportunistic behavior (Gnyawali & Park, 2009).
2.1.3. Alliance Contract
There are two types of contracts: incomplete and complete contracts. A complete contract covers all possible legal situations in the world the alliance can face. An incomplete contract offers more flexibility (Reuer et al, 2010). According to Reuer et al. (2010), alliances are based on incomplete contracts. Alliances function better under an incomplete contract because environmental uncertainty requires flexible agreements between partners. On top of that, the costs of setting up a complete contract and the possible costs of legally enforcing that contract are very high (Reuer et al, 2010). Next to complete and incomplete contracts, one can also distinguish between formal and informal agreements (Bosch-Sijtsema & Postma, 2010). More formal contract offer more control and inherently reduce the risk of opportunistic behavior. Informal contracts, on the other hand, stimulate the development of trust and commitment (Bosch-Sijtsema & Postma, 2010). Depending on the goals each company has with the alliance, the arrangements in an alliance contract are more formal or informal (Reuer et al, 2010).
The process of negotiating a contract is also used by companies as an opportunity to get to know each other (Reuer et al, 2010). In this stage, the motives of both companies become clear to each other and companies can make an initial judgment of the intentions with regard to possible opportunistic behavior. Depending on the negotiation process, a more formal or informal contract is negotiated (Bosch-Sijtsema & Postma, 2010; Reuer et al, 2010). Formal contracts require more monitoring and enforcement, whereas an informal contract is using implicit mechanisms to promote cooperation and interaction to develop a mutual understanding and trust (Reuer et al, 2010). Mazzarol & Reboud (2008) argue that government policy should focus on guiding companies in this process and provide the management team with support in the alliance negotiation process.
2.2. Knowledge Transfer
| 14 and share with others. Explicit knowledge on the other hand is written down and can be found in manuals and reports, making it easier to diffuse among others (Nonaka & Takeuchi, 1995). The methods that can be used to transfer knowledge depend on the nature of the knowledge. Explicit knowledge is rather easy to transfer, because it is found in formal and written reports. However, the exchange of tacit knowledge is a process that takes a lot of time and effort, because it requires a process of socialization or internalization to acquire the knowledge (Nonaka & Takeuchi, 1995; Van Gils & Zwart, 2004).
In Figure 1, four possible ways to converse knowledge and to capture it from external sources are presented (Nonaka & Takeuchi, 1995). Since tacit knowledge is the main source of value, companies are most eager to find ways to acquire this type of knowledge. Socialization is related to group processes and the key to acquire tacit knowledge in this way is through experience (Nonaka & Takeuchi, 1995).
Companies also use internalization techniques to obtain new tacit knowledge. This technique is often shaped by apprenticeships making use of observation and practice (Nonaka & Takeuchi, 1995; Van Gils & Zwart, 2009; Reuer et al, 2010). Externalization and combination are practices to convert to explicit knowledge. The transfer of explicit knowledge is often arranged through formal mechanisms and modern communication methods (Cegarra-Navarro, 2005; Pinch et al, 2003). However, these mechanisms are insufficient to transfer tacit knowledge. In these instances, informal/social mechanisms are more helpful (Cegarra-Navarro, 2005).
| 15 Major & Cordey-Hayes (1999) state that effective innovation requires the transfer of knowledge. As explained in section 2.1.1., 33% of the respondents in a study of Rutten & Oerlemans (2009) stated that the access to external sources of knowledge was their main motivation to collaborate with other firms. This behavior is supported/originated by the liability of smallness. Because SMEs lack the internal resources and capabilities to pursue larger projects, they try to source this externally (Reuer et al, 2010). Tacit knowledge is especially valuable to SMEs, since they lack the resources and personnel to actively scan the environment for new knowledge (North, Smallbone & Vickers, 2001). A process of effective collaboration can ensure the transfer of tacit knowledge between firms through social constructed learning (Harris, 2008). Through this process, Harris (2008) argues that SMEs can overcome the unwanted leakage of knowledge and create explicit knowledge within the network, which is easier to share. According to Inkpen (1998), when the risk of knowledge leakage to alliance partners with high competitive influences (such as competitors) is undesirable, social constructed learning might be a helpful initiative.
The willingness of companies to share knowledge is a good starting point for effective collaboration. However, effectively managing the knowledge transfer process requires the ability to capture the knowledge that is offered for exchange (Cohen & Levinthal, 1990). Next to that, a high level of trust among the partners in an alliance is an important prerequisite for effective knowledge transfer (Mazzarol & Reboud, 2008; Bosch-Sijtsema & Postma, 2010; Soekijad & Andriessen, 2010). The issues and methods that are needed to effectively manage the transfer of knowledge are discussed in the following sections.
2.2.1. Absorptive Capacity
In order to acquire knowledge from an external source, firms need to develop their absorptive capacity (Cohen & Levinthal, 1990). Absorptive capacity is determined by the existing knowledge base of the firm and refers to the ability to gather, assimilate and utilize external knowledge (Cohen & Levinthal, 1990). The more up-to-date and diverse this knowledge base is, the greater the likelihood that the knowledge available from other actors can be absorbed.
| 16 granted and applied without further consideration of additional processes that influence the ability of firms to source external knowledge. Next to that, Lane et al (2006) criticize Cohen & Levinthal (1990) on a number of limitations. For instance, the assumption that relevant prior knowledge is the determinant of the level of absorptive capacity is reconsidered due to the importance of the process knowledge. Process knowledge refers to the knowledge needed to assimilate and apply scientific and technical knowledge (Lane et al, 2006). Furthermore, the notion that the existence of external knowledge is sufficient to develop absorptive capacity is criticized. Lane et al (2006) argue that the existence of spillovers can slow down the development of absorptive capacity, because the knowledge is considered a public good.
Belderbos et al (2004) performed a study on the effects of incoming knowledge spillovers on R&D cooperating firms. They have found that for R&D intensive firms, the incoming knowledge spillovers are of a weaker (compared to with other actors), yet positive influence on organizational performance. This positive effect was explained by the absorptive capacity and existing knowledge level at R&D intensive firms. Even though the effect was weaker due to unwanted external knowledge leakage to competing organizations, this positive effect still indicates that collaboration with a competitor can have a positive influence on the overall organization performance.
2.2.2. Trust
An important part of successfully cooperating with any other actor is the amount of mutual trust among these partners (Hamel, 1991; Mazzarol & Reboud. 2008; Reuer et al, 2010). Bradach & Eccles (1989:104) define trust as ‘a type of expectation that alleviates the fear that one’s exchange partner will act opportunistically’. According to Kaufmann & Tödtling (2002), developing trust might reduce the level of protectiveness between firms. Protectiveness over one’s own resources is limiting the accessibility of alliance knowledge (Inkpen, 1998). Firms limit this access because of the fear that the partner might act opportunistically. Multiple authors argue that increasing levels of trust reduces the chance of opportunistic behavior (Bradach &
| 17 When the contracting and communication between partners in an alliance is very formal, this is often signaling of a lack of trust. Partners attempt to protect their own resources by using elaborate rules and procedures that often can be legally enforced (Bosch-Sijtsema & Postma, 2010; Reuer et al, 2010). When legal enforcement of an alliance contract would be required, there is a real opportunity that this is crucial to the survival of the alliance (Reuer et al, 2010). Building on this line of reasoning, Singh et al (2000: 218) argue that firms should develop relational capital, which they define as ‘the level of mutual trust, respect and friendship that arises out of close interaction at the individual level between alliance partners’. When stimulating close interaction and informal communication methods, the level of trust increases and the probability that the alliance will become successful increases significantly (Rutten & Oerlemans, 2009). As mentioned earlier, the duration of an alliance is also of influence on the level of trust among partners. When firms have cooperated before or intend to do business for a longer period of time, there is a greater incentive to invest in the relationship (Reuer et al, 2010). Primarily, the risk of opportunistic behavior is reduced because of the long-term intentions. This stimulates the development of mutual trust (Kaufmann & Tödtling, 2002).
Overall it can be stated that the development of trust is a very important aspect of managing alliances. Furthermore, the interventions meant to stimulate the development of trust also contribute to the overall success of the alliance in other ways. For example, the acquisition of tacit knowledge is best achieved through intensive and informal contact between members of both organizations (Kaufmann & Tödtling, 2002; Nonaka & Takeuchi, 1996; Singh et al, 2000). When these informal contacts are put into practice, the level of trust will increase which in turn stimulates the sharing of tacit knowledge (Bosch-Sijtsema & Postma, 2010).
2.3. Knowledge Brokers
| 18 Lente, Hekkers, Smits & van Wavere, 2003). The term ‘broker’ originates from the need for firms to connect (Kirkels & Duysters, 2010). However, in the literature there are many different terms to describe firms that connect other firms, such as intermediaries and advisory/support agencies. In this context, the term ‘broker’ will be used to describe organizations or individuals that function as a contact between separate companies. Brokers are able to connect firms that otherwise would not have been connected due to structural holes in a network (Kirkels & Duysters, 2010). Structural holes refer to the gaps of value between firms within a network (Burt, 2000). Brokers connect these firms and encourage the flow of information between both firms. Such professional advisory services are not frequently used by small firms (Kent, 1994). SMEs generally lack the time, resources or incentive to look beyond their short-term needs (Major & Cordey-Hayes, 1999). These findings contribute to the author’s recommendation to identify and target SMEs on an individual basis and encourage SMEs to form links with other companies and intermediaries (Major & Cordey-Hayes, 1999).
As described in previous sections, organizations are inclined to take more than they give in an alliance. This creates uncertainty, a fear of opportunism and reduces the flow of knowledge and organizational learning (Soekijad & Andriessen, 2003; Cegarra-Navarro, 2005). Brokers attempt to reduce this uncertainty, to bring potential partners together and to raise awareness about the potential benefits of an alliance (Visser & Atzema, 2008; Kirkels & Duysters, 2010). Next to that, having an independent third party involved can increase the credibility of both partners and the willingness to trust the other partner (Visser & Atzema, 2008).
2.3.1. Tasks, Roles & Requirements
In guiding and helping other organizations, there are various tasks and roles a broker can take. Many external agencies provide firms with financial advice. This is however not the primary concern of SMEs (Kirkels & Duysters, 2010). Small firms are mainly interested in discussing innovation-related information with intermediaries and getting access to valuable contacts (Kirkels & Duysters, 2010).
2.3.1.1. Tasks
| 19 place to connect, translate and facilitate flows of knowledge. Major & Cordey-Hayes (1999) discussed the knowledge translation gap. This gap refers to the differences in tacit and explicit knowledge and the way these differences are seen by the respective companies. The authors hence argue that there is a need for an intermediary organization to translate this information in both ways. This role is somewhat similar to the view of Ziam, Landy & Amara (2009). According to these authors, brokers can also take a more pro-active role. In their view, brokers actively absorb knowledge from other companies which they consequently apply to serve their clients or users (Ziam et al, 2009). Cohen & Levinthal (1990), argue that when the level of expertise and knowledge from employees differs significantly from external sources, the use of gatekeepers could be helpful. These gatekeepers monitor and absorb external knowledge and then update the organization’s knowledge base, or in this case reinforce the knowledge base of brokers (Cohen & Levinthal, 1990). Brokers are able to perform such tasks by combining their expertise and applying the knowledge they have gained over the past years to their current customers (Soekijad & Andriessen, 2003; Ziam et al, 2009)
2.3.1.2. Roles
Besides these descriptive characteristics, several authors have created a list with various types of brokers. Kirkels & Duysters (2010) described five different types of brokers:
1. Coordinator - Enhancing interaction between the members of the group he belongs to.
2. Gatekeeper - Absorbing knowledge from a group and passing it on to another group he belongs to.
3. Representative - Diffusing knowledge of the own group to another group. 4. Cosmopolitan - Mediating as an outsider between members of the same group. 5. Liaison - Enhancing the interaction as an outsider between different groups.
| 20 broker between different groups/actors, this cautious approach diminishes, enhancing the credibility of the relationship (Visser & Atzema, 2008; Kirkels & Duysters, 2010). With regard to the Liaison role, research indicated that the overall collaboration between all groups (both organizations and the broker) was very close and the capacities to function as a broker were stimulated to all involved individuals (Kirkels & Duysters, 2010).
Next to the five roles described by Kirkels & Duysters (2010), Major & Cordey-Hayes (1999) have distinguished three possible roles: Signposters, Facilitators and Contractors. In figure 2 it becomes clear to which goals the different broker roles are committed. Signposters are primarily used by SMEs that use a reactive strategy. Links with other organizations in the market fall into this category. Facilitators are used by SMEs that take a responsive strategic approach. Organizations like the Chamber of Commerce and branch organizations make up this category. Finally, the contractors are external intermediaries that are used by SMEs that use a strategic and active approach. Consultants and professional institutes are specialist firms that assist these firms (Major & Cordey-Hayes, 1999).
. Figure 2 Broker Roles, (Major & Cordey-Hayes, 1999)
2.3.1.2. Requirements
| 21 capacities of a broker (Kirkels & Duysters, 2010). According to these authors, the type of information that is valued most by brokers is unclear.
Visser & Atzema (2008) argue that brokers should be private or semi-public institutions because public actors (such as the government) cannot risk failure and exposure to the involvement of being a broker in private organizations. However, public institutions can play a vital role in the development, training and funding of brokers (Visser & Atzema, 2008). Brokers should have a lot of experience and a well-developed social network to perform their tasks efficiently and effectively. Because such networks and experience only emerges ‘on the job’, governmental funding and assistance in the recruitment and training of brokers is important (Nooteboom, 1999).
Apart from the governmental role and the influencing factors on broker capacities, there are a number of personal characteristics that influence the functioning of a broker. First, brokers need a solid social network, since they are very dependent on the links with other people/organizations that enable them to do their jobs in the first place (Kirkels & Duysters, 2010; Visser & Atzema, 2008). Second, brokers need to have a high level of personal integrity and trustworthiness because they deal with very sensitive information that could disrupt a company’s competitive landscape. Third, it is important to continuously develop personal qualities and work methods. By doing so, the level of expertise and effectiveness is increased. Finally, brokers need to develop a thorough understanding of region-specific issues, such as culture, successes and failures, bottlenecks and growth perspectives. This understanding helps them in ensuring that the changes they make are effective (Visser & Atzema, 2008).
2.4. Governmental Policy
In order to draw conclusions about current policy and generate future advice, it is necessary to review historical initiatives and see how current initiatives came to life.
| 22 SMEs (Nooteboom, Coehoorn & Van der Zwaan, 1992). These centers should function as brokers between companies and sources of novel technologies. For their research on the effectiveness of these innovation centers, Nooteboom et al (1992) divided SMEs in technology-driven, technology-following and non-technological firms. Their line of reasoning for this division was that technology-driven firms are often well aware of innovation and technological opportunities. Moreover, non-technological firms are considered not worthy of the attention, given their disinterest to pursue technological objectives. The main tasks of the innovation centers thus pertained to the technology following firms and increasing their awareness and receptiveness to suppliers and specialists on novel technologies. Eighteen innovation centers were established and in 1997 the innovation centers merged with the Instituut Midden- & Kleinbedrijf. The merged organizations were renamed to Syntens (Van der Wal & Van Es, 2010). Syntens is an organization which performs similar tasks as the Innovation Centers to the Dutch SMEs. Syntens allows SMEs to obtain a total of 16 hours of free consultation by professionals with experience in the field (www.syntens.nl). The consultants from Syntens assist in innovation issues and other strategic plans SMEs have. When the 16 hours are not sufficient to establish a solid plan of action, the entrepreneur is usually referred to a commercial consultant.
2.4.1. OECD
| 23 Figure 3 SME R&D Contribution, (OECD, 2004).
The OECD concluded that the overall level of knowledge in the Netherlands was high. However, this knowledge was available at the universities that lacked the ability to effectively disseminate it to companies. Next to that, the companies were poor at absorbing the knowledge which did flow from the university (OECD, 2004). Based upon this finding, the Dutch government decided to initiate programs that promoted the transfer of knowledge between companies and from knowledge institutions to companies. Because of the superior quality of university research, the funding for Public-Private Partnerships (PPPs) was increased from €220 million in 2003 to €800 million for the period 2003-2010 (OECD, 2004). This money was primarily meant for universities to conduct research in cooperation with private sector companies.
| 24 2.4.2. Innovation Vouchers
In 2004, the government introduced the concept of innovation-vouchers. These vouchers could be used by SMEs to acquire external knowledge from universities, research facilities or other knowledge institutions. Through the vouchers, companies can apply for market research, innovation strategy, process, organizational analysis etc.1. The vouchers were designed to allow and promote the transfer of scientific knowledge for commercial and non-commercial use. Organizations could apply for a voucher at SenterNovem (which now is embodied within AgentschapNL)2. May 2009, a distinction was made between public and private vouchers. In the beginning, vouchers were only open for advice from public organizations such as universities. However, the demand grew for professional advice from consultants with experience in the field. There is a private voucher with a value of €7500,-, that requires 25% additional own funding in order to apply, and a voucher of €2500,-. In contrast to the public vouchers, prior to the use of private vouchers consultation with Syntens is required. In a report on the progress and effectiveness of these vouchers, it is stated that the voucher is useful and accessible to many SMEs (Bongers, Den Hertog, Kaashoek, Bekkers & Brennenraedt, 2008). However, because the application is very simple and does not contain many preconditions, the percentage of organizations actually using the vouchers is very low at around 60% (Bongers et al, 2008). Hence, 40% of the vouchers available were issued to organizations that did not use the voucher. At the end of the project, over 30.000 vouchers have been issued (Annual Report Innovatieplatform, 2010).
2.4.3. Innovation Performance Contracts
For 2011, the government decided to relocate the budget for innovation-vouchers to the Innovation Performance Contracts (IPCs) (Ministry of EL&I, 2010). These contracts are more in line with the stimulation of the government to arrange more PPPs and regional innovation initiatives. Next to that, it is considered more efficient to stimulate the sharing of knowledge already available than to subsidize innovation efforts and let multiple actors reinvent the wheel. IPCs are subsidized cooperative agreements for a period of 3 years. These projects are meant for groups of businesses working together on a
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3. RESEARCH METHODOLOGY
In this section, the research methodology will be explained and developed. It will start with explaining the chosen research design. Next, the two distinct parts of the study will be discussed in more detail. After that, the data collection methods and interview structures are described and elaborated upon. This section will conclude with the approach to validity issues.
3.1. Research Design
Before getting started with the empirical research, conducting a comprehensive literature study and coming up with a solid theoretical framework are essential. Further on in the process it will become a point of reference for generalizing findings across the cases (Yin, 2009). The empirical part of this report will be divided in two sections. The first part will consist of conducting interviews with five intermediary organizations to provide context for the main part of this study. In the second stage, a multiple-case study among four SMEs in the yachting industry is. According to Yin (2009), when conducting multiple-case studies the literature review is particularly important. Conditions under which a phenomenon occurs need to be clear. However, it is equally important to describe when the studied phenomenon is unlikely to happen. This helps in generalizing the data acquired across the cases studied (Yin, 2009). From the literature it came forward that collaborative interactions between competing SMEs are rare and unlikely to occur due to the risk of losing one’s competitive positioning and the risk of opportunistic behavior. One of the benefits of a multiple case study design for this research is that it can help to uncover why these interactions are rare. By targeting multiple SMEs for this study, conclusions can be drawn with respect to the motivation to enter or not enter a collaborative interaction with a competitor.
| 27 common. In this part, SMEs will be interviewed about their experiences in collaborative innovation. Next to that, the contribution of intermediaries and recommendations by SMEs with regard to intermediary and governmental influence will be discussed.
By choosing this two-stage approach, the quality of the interviews in the second stage is raised. The concepts are clearer and potential bottle necks can be determined and discussed in the second stage (Cooper & Schindler, 2006). Next to that, choosing a multiple-case study offers a couple of important advantages over single case studies: the design is considered more robust, because the evidence from multiple cases is often more convincing (Herriot & Firestone, cited in Yin, 2009). Furthermore, when using more cases to analyze there is less chance of studying an unusual case in the research, which influences the external validity (Yin, 2009).
3.1.1. Preliminary Descriptive Study
Through interviewing the five intermediary parties, it is intended to determine what role they have in a collaborative innovation project. Next to that, these interviews are used to determine the opportunities SMEs have with regard to intermediary involvement and government subsidies. This approach fits the goal of the research as a whole, which is to determine to what extent direct SME competitors are considering to collaborate and how intermediaries can assist them.
For this study, five intermediary organizations were interviewed: MKB Noord, NL Innovatie, SNN, Syntens and TCNN. MKB Noord is an organization which supports SME’s on various issues ranging from day-to-day business as well as more specific challenges an organization faces.3 NL Innovatie is a department of the Ministry of Economic Affairs, Agriculture and Innovation. Formerly separated and knows as SenterNovem, this institute is responsible for the issuing of innovation subsidies and offering knowledge and contacts to organizations.4 Syntens is a governmental organization which helps SMEs in the process of innovation and exploring new business opportunities. SMEs can apply for specialized advice and preliminary guidance free of charge, bounded to a couple of hours per year.5 SSN is a regional bound collaboration institute to support collaborative initiatives in the northern three provinces of the Netherlands: Friesland, Groningen and Drenthe. This organization is not in business
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| 28 solely for SMEs, but supports governmental, as well as commercial business projects in the region and aims to strengthen the economy of these provinces as a whole.6 Finally, TCNN performs a somewhat similar role as Syntens. An important difference is that the services TCNN offer is not restricted to a specific number of hours per year.7
3.1.2 Primary Case Study
After having conducted the interviews in the descriptive study, with the help of these five intermediary parties a list of organizations to include in the case study was made. From the interview with TCNN, their role as a secretary in an IPC project in the yachting industry became clear. In this project, SMEs that are all active in the yachting industry are working together to develop a new technology. The interactions among the SMEs in this project seemed to be very similar to the interactions that could help answering the main research question of this study. First of all, the IPC project is a government subsidized initiative, which helps explain the governmental influence on SME collaboration. Next to that, the SMEs in the project could be considered competitors, providing insights into the aspects of collaboration among competing SMEs. Therefore, four of the SMEs in this project were chosen to interview for their experiences and motivations to enter the IPC project. Adel Polyester, Hoora, Interboat and Jetten Yachting were selected. Hoora’s main focus is building Polyvalk’s. These are small sailing boats.8 Open boats and cruisers are the main production focus of Interboat.9 Jetten Yachting is primarily building yachts.10 Finally, Adel Polyester is functioning as a subcontractor and creates hulls for other firms that finish boats.11 Results from these interviews will be compared with the literature review and the results from the interviews with the intermediary parties.
An important issue to consider when conducting a multiple-case study is the replication logic (Yin, 2009). The selection of which cases to involve in the study can be based on the anticipation to find similar outcomes (literal replication), or to find opposing results (theoretical replication) (Yin, 2009). For this study, SMEs were chosen in the anticipation to find similar results.
| 29 3.2 Data Collection Methods
Data collection can be either qualitative or quantitative (Cooper & Schindler, 2006). In a quantitative approach the research is based upon factual numbers and statistics, whereas in a qualitative approach the interpretation and understanding of a topic is the key issue (Cooper & Schindler, 2006). The small exploratory study, as well as the larger multiple-case study, will follow a qualitative research methodology. Interviews are chosen as the primary data collection method. After all interviews are completed, the concepts discussed will be linked with each other throughout the study. This means that findings from the literature review, interviews with intermediary organizations and the SMEs involved in alliances will be compared in order to draw conclusions
3.2.1 Exploratory Phase
Interviews can be arranged either fully structured, with a pre-set list of questions, or unstructured, where the interviewer determines during the interview which subjects require more elaborate discussion (Sekaran & Bougie, 2009). In conducting the interviews with the intermediary organizations, a more structured approach will be chosen, since it is relevant and necessary to get answers to all relevant questions and make sure these issues are all discussed. Reason for this is that the findings are later in the process used to compare and reflect on the findings from the interviews with the companies involved in alliances. For each interview a separate list of questions is set up. When conducting the interviews with the intermediaries, the focus of the interviews will differ across the interviewees because of the differences in the roles they have in relation to the SMEs. The questions to NL Innovatie and SNN will focus more on the governmental aspects and subsidies, whereas the interviews with MKB-Noord, Syntens, & TCNN will deal with current issues and practical methods in guiding organizations.
3.2.2 Multiple-case Study
| 30 number of issues need to be clarified. Overall, because of the contingencies in the environment, a fully structured approach is considered less viable as this leaves little place for generalizing the evidence found. Next to that, the validity of fully structured interviews is questioned, as this leaves little space to express ones ‘real’ opinion about specified issues (Sapsford & Jupp, 1996). The main advantage of taking a looser approach is that the relevant and interesting parts of information are discussed in more detail and with more interaction from both sides. This makes the flow of the interview more informal and leaves more room for discussing other issues which might not have been though about before (Cooper & Schindler, 2006).
3.3.1. Validity
3.3.1 Construct Validity
Construct validity relates to the degree in which a research instrument (in this case a Case study) is able to provide evidence based on theory (Cooper & Schindler, 2006). In other words, does the empirical measure used describe the theoretical construct defined? Yin (2009) provides three tactics to increase construct validity: using multiple sources of evidence, establishing a chain of evidence and reviewing the draft report by key informants. For this study, both in the exploratory section and in the descriptive section multiple actors will be interviewed and through the interaction with practitioners as well as SMEs the study will develop thorough construct validity. Interviews are the primary data collection methods, by separately interviewing all parties (intermediaries and SMEs involved in an alliance) and making use of historical data from previous policy the construct validity is further enhanced.
3.3.2 External Validity
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4. RESULTS
The empirical part of this research is divided in two parts: interviews with intermediary organizations and interviews with SMEs involved in collaborative innovation. The first section will deal with results from the interviews with the intermediary organizations: NL Innovatie, SNN, MKB Noord, Syntens and TCNN. The primary business of NL Innovatie and SNN is advising about subsidies and the issuing of subsidies. MKB Noord is a lobbying organization to represent and serve the interests of SMEs. Finally, TCNN and Syntens are organizations consulting SMEs with regard to the innovation process.
The second section will elaborate on the results from the interviews with the managers of Hoora, Interboat, Jetten Yachting and Adel Polyester. Hoora’s main focus is building Polyvalk’s. These are small sailing boats.12 Open boats and cruisers are the main production focus of Interboat.13 Jetten Yachting is primarily building yachts.14 Finally, Adel Polyester is functioning as a subcontractor and creates hulls for other organizations that finish boats.15
Table 1: List of interviewees 12 www.hoora.nl 13 www.interboat.com 14 www.jettenyachting.nl 15 www.adelpolyester.nl
Interviewee Company Position
Henk Emmens SNN Director of Subsidies & Arrangements Ron van Gent MKB Noord Managing Director
Arno Gielen TCNN Managing Director
Marja Peperkamp NL Innovatie IPC Project Advisor Geert-jan Walda Syntens Innovation Consultant
Marcel Jetten Jetten Yachting BV Managing Director Wim Kooman Interboat BV Production Manager Arvid de Lange Arvid de Lange BV Managing Director Jos Wijnands Hoora BV Managing Director
| 32 4.1. Intermediaries
In this section, the role and influence of the intermediaries stated above will be discussed. First, governmental regulations and influence will be described. Second, the view of the intermediaries on collaborative innovation among competitors is discussed. The third paragraph will deal with the role the interviewed intermediaries fulfill within the innovation and collaboration process. Finally, during the interviews, the interaction between various intermediary organizations proved to be a possible important influence on the overall effectiveness of intermediary involvement. Therefore, a separate paragraph is dedicated to this topic.
4.1.1. Governmental Involvement
In this section, the governmental influence will be discussed from a national perspective and from a regional point of view. Governmental regulations and influences are an important aspect of the innovation support system in the Netherlands. The SMEs involved in this study are collaborating in a project that makes use of a governmental innovation program. Next to that, the government stimulation programs available to SMEs influences the innovation decisions SMEs take. Therefore, there is a need to clarify the process and development of the government innovation stimulation program. Next to that, the section contributes to drawing conclusions about the extent to which government policy is conforming to SME needs. The first subparagraph will focus on the national initiatives, whereas in a second subparagraph regional initiatives from SNN will be discussed.
4.1.1.1. National Government Innovation Policy
The Ministry of Economic Affairs, Agriculture and Innovation has introduced a wide variety of subsidies to stimulate innovation. Some initiatives were more successful than others. However, the current offer of governmental stimulation programs is becoming scattered and confusing. At this point in time, the website of NL Innovatie (a governmental agency affiliated to the Ministry) is offering 222 different arrangements and subsidies to stimulate innovation.16
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| 33 Ron van Gent, managing director at MKB Noord argues that this high number of available subsidies is confusing and unnecessary. The Dutch government is already undertaking efforts to limit the number of innovation stimulation programs. These programs are monitored by an external agency (Dialogic). According to Marja Peperkamp, IPC project advisor at NL Innovatie, on their recommendations the Innovation Voucher program was ended.
‘The innovation voucher program has led to little innovative outcome, what was considered the goals of the program. The vouchers did not fulfill their reason of existence, even though they probably did help organizations with solving specific problems. Next to that, the voluntary aspect of the vouchers has led to the fact that 40% of the vouchers were left unutilized.’
Overall, this statement is shared by the involved intermediaries. However, MKB Noord was pleased with the innovation vouchers, arguing that they were effective in helping organizations with specific problems and stimulating interactions with knowledge institutions. TCNN has issued a similar concept before. According to Arno Gielen, managing director at TCNN, their knowledge vouchers needed to be spent within three months after they were issues. Furthermore, the vouchers were not free of charge, as SMEs needed to pay €300,- to obtain them.
Current innovation policy is focusing on stimulating nine specific top branches. These branches are chosen based upon the fact that Dutch businesses that operate in these branches are currently amongst the top performers in the global environment. Ron van Gent, managing director at MKB Noord, argues that this policy is flawed:
| 34 The Innovation Performance Contract (IPC) program is the main government innovation stimulation program. Overall, all intermediary organizations are enthusiastic about this program. However, there are some concerns with regard to the application procedure and the practical execution of the project. As of 2011, the application changed and new applications are assessed based upon the contents of the project, instead of on the order of submission. Both Syntens and TCNN encourage this step. However, they see important constraints with regard to the assessment of the projects. According to Geert-jan Walda, innovation consultant at Syntens, AgentschapNL lacks the ability and knowledge about innovation routines to assess projects based upon their content. This problem is to be overcome by involving Syntens in the application process to help secretaries and SMEs with setting up a proper investment plan. Arno Gielen questions this approach. His organization TCNN is currently secretary of an IPC project. According to Gielen, the involvement of Syntens in an IPC project is not always necessary and when this would become mandatory he foresees problems with regard to the integrity of the IPC program as a whole.
All intermediaries, except for NL Innovatie, argue that current policy is created from a top-down perspective. Ideas initiated by the government are well thought of at the office, but prove to be ineffective in practice. Geert-jan Walda argues that the current approach is not stimulating organizations sufficiently:
‘You cannot force organizations to adopt a certain innovation strategy. Instead, I offer an innovation management process and guidance throughout the first steps in that process. Organizations should take the lead and governmental programs should encourage and support organizations to take initiatives on their own.’
| 35 ‘Why are AgentschapNL and Syntens performing similar tasks and both funded by the Government? In hard economic times when SMEs need to turn every dime, it is irresponsible that the government is not doing the same thing.’
Both Syntens and TCNN agree that several governmental agencies could be merged to improve efficiency and increase the clarity for the entrepreneurs. Governmental agencies should focus on their core capabilities and should acknowledge and exploit their different capabilities.
4.1.1.2. Regional Government Innovation Policy
Next to the national innovation policy, SNN, a partnership of the Northern three provinces (Groningen, Friesland and Drenthe) runs an additional innovation stimulation program. The most successful subsidy is the NIOF (Northern Innovation Support Facility). MKB Noord and TCNN are frequently advising their members and clients to make use of this subsidy. Projects which are subsidized by the NIOF can be either individual or with a group of organizations. Given the fact that the future use of this subsidy will focus on collaborative innovation project, this is an interesting source for SMEs that are willing to invest in innovation.
4.1.2. Collaborative Innovation & Competition
The design of current innovation programs is increasingly focusing on collaborative projects. One of the requirements of the IPC program is that SMEs need to invest 20% of their time and money in interactions with other companies. Demand for collaborative projects is increasing according to the intermediaries. Due to financial constraints, SMEs are forced to seriously consider collaborating with other SMEs. At TCNN, the consulting process starts with collaboration:
| 36 At MKB Noord, several initiatives have been launched recently to adapt to this development. www.slimmerwerken8.nl and the Young Business Network are bringing organizations together to share ideas and undertake collaborative projects.
Marja Peperkamp, IPC project advisor at NL Innovatie, confirms that it is possible that competitors are involved in the same IPC project, but the chance is real that they are not undertaking any collaborative initiatives. Within an IPC project, it is not documented who collaborates with whom. At SNN, there are no known instances within the NIOF program of direct competitors being involved in the same project. Ron van Gent argues that collaboration between competitors is definitely happening:
‘Collaboration between competitors is happing at a far larger scale than most would believe. However, collaborating with a competitor is often a sensitive topic. Most companies are unwilling to disclose any information about these initiatives, let alone formalizing the relationship under a subsidized program.’
This statement could explain the fact that SNN and NL Innovatie have no records of any competitors that are collaborating within subsidies or other innovation stimulation programs. Emmens, Van Gent and Walda contend that keeping these interactions informal is increasing the chance of successful collaboration between competitors. Nonetheless, Walda argues that in his role as innovation consultant at Syntens, he would not recommend competitors to become involved the same project. Competitive reasons, as well as the overall outcomes of the project (compared to the possible outcomes should they both undertake the same project separately) are probably the reason why collaborative innovation between competitors would not work.
Arno Gielen, managing director at TCNN, also mentioned that competitors often collaborate with each other. However, these collaborative initiatives often relate to research and development. When this combined research is complete, each company integrates the newly developed knowledge or technology within their existing business processes. The openness of the companies within these projects differs based upon the role an involved individual has within the company:
| 37 considered themselves competitors. In meetings where the marketing staff of different companies was involved, the level of disclosure was very limited. In other meeting with technical IT-operators, there was a lot more openness and willingness to help each other out with problems they encountered.’
4.1.3. Role of the Intermediary Organization
The intermediaries in this study can be roughly divided into business consultants and in intermediaries that aim to create an optimal business environment. Syntens & TCNN are consultants that actively assist firms in their innovation efforts. SNN & NL Innovatie are issuing subsidies and other projects. MKB Noord is lobbying for SMEs to make sure these subsidies and projects are conforming to SMEs needs. These different roles lead to different forms in which the intermediaries interact with SMEs. Even though the specific roles of the intermediaries are very diverse, all of them agree that the needs of SMEs should be the focal point. Henk Emmens explains how SNN attempts to incorporate this in their business:
‘The offer of subsidies should be based on the demand of the firms that wish to make use of it. When we get signals that a subsidy is not functioning appropriately, I contact firms and other intermediaries to verify these signals. If the signals relate to issues we can resolve, we will do so and take them into consideration when developing new subsidies.’
NL Innovatie has a different role. Their role in the actual innovation process is strictly procedural: NL Innovatie is the organization where firms need to apply for subsidies from the national government. Specific design of programs is done at the Ministry of Economic Affairs, Agriculture and Innovation. MKB Noord is lobbying to improve the programs available to SMEs:
| 38 Next to making sure that the offered programs are conforming to SME needs, it is important that SMEs are aware of their options. The ideal way to promote a new subsidy or project is through word-of-mouth. Next to that, SNN is undertaking efforts to promote their programs through a special website at which organizations can check which subsidies are available to them.17 Furthermore, SNN organizes a networking dinner three or four times a year, in which entrepreneurs and university researchers exchange contacts and give presentations.
Syntens & TCNN have a similar role, yet there are a couple of important differences and similarities. To start with the similarities, both intermediaries argue that the initiative to innovate should come from the SMEs themselves. Next to that, the role in the actual process is mainly to facilitate interactions with external agencies or with partners when the firms are involved in collaborative innovation. This broker function is one of the most important aspects of their job, as their network allows them to connect firms that can complement each other.
At Syntens, Geert-jan Walda is working with a cluster approach:
‘Our cluster approach consists of four stages:
1. To Know: in this stage, SMEs are looking towards a common goal.
2. To Want: in this stage, the process comes down to the intrinsic motivation of SMEs to collaborate. This step is ending with a declaration of intent and a plan on how to make money. Other SMEs are unable to become part of the project at the end of this stage.
3. To Can: the main goal of this stage is setting up a concrete business plan and involving external agencies like higher education institutions or research agencies.
4. To Do: finally the project is all about making money.
During the process, the role I adopt varies across the different stages. In the first two stages, my role is like a school teacher: I’m guiding the SMEs through the process. In the third stage, my role is primary to apply group dynamics: it is important to get
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| 39 everybody focused and working towards a common goal. Next to that, it is my job to contact possible interesting external firms that can contribute to the project. In the last stage, it is up to the companies to execute the business plan and my role has ended.’
Arno Gielen argues that this role is exactly what distinguishes TCNN from Syntens. Because Syntens is a publicly funded organization, there are some limitations to their services. Due to the restricted number of 16 hours a Syntens consultant is allowed to spend on a single company, Syntens is, in contrast to TCNN, not able to offer long term guidance to a project.
4.1.4. Intermediary Collaboration
During interviews with various intermediaries, the interactions they had with other intermediaries came up for discussion. Interactions between these intermediaries can contribute to the development of a suitable innovation stimulation program for SMEs. For instance, MKB Noord might get signals from their members that the NIOF program is not functioning as they would want it to function. Interactions between MKB Noord and SNN could then lead to better design of the subsidy. Furthermore, SMEs are often targeted by various intermediaries independent of each other. For instance, events organized by MKB Noord and a symposium organized by TCNN. When these intermediaries would combine their efforts, the overall supply of innovation related advice and stimulation could be organized more effectively. Moreover, since the innovation stimulation program is focusing on collaboration, Ron van Gent stated that:
‘For us as an intermediary, it is rather unconvincing to promote collaboration without undergoing collaborative interactions with our own partners.’
