Networks, weak signals and technological innovations among SMEs in the land-based transportation equipment sector

Abstract

On apprend plus par la conversation des Doctes,

que par la lecture de leurs livres

Les épistres de Seneque

Translation by François de Malherbe,

Paris, Anthoine de Sommaville, 1639, p. 21

Small and medium-sized enterprises, because of their limited resources, use a variety of sources and are linked to different networks to obtain the information they need to develop their strategy and then to gradually organize their environment. Among other things, networks keep them up-to-date with changes in the economy and allow them to take advantage of opportunities to innovate, thus remaining ahead of their competitors. The networks – personal or business – with which these firms interact the most are usually geographically or sociologically close by, embedded in the environment, and are known as strong tie networks. They generally supply signals in a familiar language, based on habit as well a good reciprocal knowledge, which are easy to understand. In addition to this, however, the most dynamic firms also have contacts with weak tie networks, which are further removed from the usual behaviours of entrepreneurs and provide weak signals that, while difficult to grasp and decode, nevertheless offer new, pre-competitive information that can support major innovations. Very little empirical research has been done so far to test the probability of this theory. This paper reports on the results of a survey involving 147 SMEs, all in the land-based transportation equipment sector. It confirms the importance of weak tie networks as opposed to other types of networks, recognizing their complementary contribution to technological innovation. The organization's absorptive capacity is also found to be a significant intermediary factor in taking advantage of weak tie networks.

Keywords:

• SMEs
• technological innovation
• strong tie networks
• weak tie networks
• strong and weak signals
• absorptive capacity

Acknowledgments

Notes

1. In French language, we use the term conforter (from latin, con: with; fortis: robust, strong; strengthen with others) which it is more specific for this idea of network.

2. We do not discuss here how these networks run by exchanged reciprocally or unilateral sources of information. Strong tie networks are reciprocal compared with weak tie networks. Most information to be transformed into knowledge is communicated and then measured normally by trust and some recommended other sources, so that we can suppose that it contains some reciprocal relations. Communication is necessarily a reciprocal process even if it is not symmetrical.

3. Johannisson (2000) adds social networks that we assimilate here as information networks.

4. Hence the importance of accumulating the complex information discussed earlier. It is often the most recently acquired information that gives meaning to earlier information and that allows the holder to make a qualitative leap towards innovation, in the form of something completely new or a new combination of existing elements.

5. These gatekeepers and boundary spanners are, however, difficult to detect in firms without an in-depth case study. This type of case study will not be carried out in this research, as we will see later.

6. In Québec, the CEGEPs or colleges of higher education dispense the initial years of university studies or the preparatory years required in other countries. They train specialist technicians, among other things for the production sector.

7. The factor analysis shows these ones outside of the two other groups. On the other hand, the literature shows that the frequency of some ones differs from the type of business organization, as industry fair for example, even if normally they are less used (Johnson and Kuehn 1987). Note that this information sources group has the greater Cronbach α.

8. The Cronbach α is a measure of coherence showing if each result is relatively similar to others.

9. Don't forget that these firms are often subcontractors of large firms in transportation products, which demand regularly new technologies use.