Assessing the Importance of Local Supporting Organizations in the Automotive Industry: A Hybrid Dynamic Framework of Innovation Networks

Abstract

The advancement of knowledge on networks entails acknowledging the heterogeneity of their participants, more precisely, the organizations that lie beyond the scope of the activities of firms. Adopting a dynamic perspective of networks, and considering different types of innovation exchanges, we propose a hybrid and wider notion of industry which implies taking account of a set of local supporting organizations (LSOs) in domains such as research and technology, production factors, consultancy and training, and public support. Based on a rich data set built from face-to-face interviews with Portuguese automotive organizations, which resulted in a network comprising 867 organizations, we apply social network analysis techniques to analyse the structure, content and dynamics of the networks. The evidence gathered unveiled huge industry turbulence and significant changes in the boundaries of the Portuguese automotive networks over a 20-year period, with the emergence (and decline) of different prominent organizations. Specifically, following AutoEuropa major foreign direct investment (in 1995), the analyses reflect a clear increase in connectivity within the industry (from 524, before 1995, up to 2327 connections after 1995), with greater involvement among suppliers and between suppliers and LSOs, with the latter achieving top positions in the ranking of innovation networks.

Acknowledgements

We acknowledge the valuable collaboration of all the respondents that participated in the study. We are also sincerely indebted to two referees for helpful insights and comments.

Notes

1. In 2001, it accounted for 2.5% of the national GDP, 11% of total exports and generated nearly 3600 direct jobs (NORTINOV, 2004). AutoEuropa, now (2012) fully owned by Volkswagen, has consistently been among Portugal's top three exporters (Simões & Cartaxo, 2011).

2. The face-to-face interviews were carried out in 2007. The interviews were recorded and lasted, on average, 1 hour and 15 minutes. The interviewees were top managers/directors that were in the organizations before and after 1995 (when AutoEuropa started operating). The respondents were asked in 2007 about their pre- and post-1995 perceptions about networking. Although the data reflect subjective perceptions, the interviewees' responses were, in general, complemented with documentation which confirmed the referred linkages among organizations.

3. Couro Azul stands as a specific example of a supplier that accesses technological resources outside its boundaries, by networking with supporting organizations. Pedro Carvalho, director of Couro Azul, explained how the in-house technological efforts were complemented with collaborations with universities, technological centres and interfaces.