Strong ties, Substantive Embeddedness and Innovation: Exploring Differences in the Innovative Performance of Small and Medium-sized Firms in UK Manufacturing

Abstract

Recent work on small and medium enterprises (SMEs) and networks has emphasised the importance of external ties in enhancing firms' innovative performance. Drawing upon survey data from 360 SMEs, this paper explores differences in the strength of UK SMEs' collaborative ties—in a range of activities—with partner firms and industry institutions across five industrial sectors. In doing so, it asks whether differences in the degree of substantive embeddedness are related to innovative performance. The paper finds evidence that substantive embedded ties along the value chain appears to matter for SME innovators, while links with institutions are only significant in industry specific contexts. Copyright © 2011 John Wiley & Sons, Ltd.

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