Internationalization of Networks Barriers and Enablers

Internationalization of NetworksBarriers and Enablers

Study: Empirical analysis of selected European networks

www.bmwi.de

Innovation policy, Information Society, Telecommunications

The Authors

Dr. Gerd Meier zu Köcker

Claudia Martina Buhl

VDI/VDE Innovation + Technik GmbH (VDI/VDE-IT)

www.vdivde-it.de

This study is part of a series of publications

issued by the office of the Initiative

Kompetenznetze Deutschland

c/o VDI/VDE Innovation + Technik GmbH

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Germany

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Layout

André E. Zeich, VDI/VDE-IT

Translation

Karsten Balgar, VDI/VDE-IT

Print

Druckerei Feller, Teltow

Publisher

Federal Ministry of Economics and Technology

Department Public Relations

Scharnhorststr. 34-37

D-10115 Berlin

Germany

www.bmwi.de

State

September 2007

Internationalization of NetworksBarriers and Enablers

Study: Empirical analysis of selected European networks

www.bmwi.de

Innovation policy, Information Society, Telecommunications

3

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Networks as Instruments of Internationalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Internationalization Aspects from the Point of View of Innovation and Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Aim and Method of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Current State and Perspective of the Interviewed Networks’ Internationalization Activities . . . . . . . . . . . . . . . . . . . . . .11

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Appendix I: Information on the Interviewed Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Categories of Networks’ Internationalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

The Initiative Competence Networks Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Recommended Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Content

4 Internationalization of Net works | Short Study

Summary

In the current state of ever-changing political, eco-nomic, technological and social conditions, compa-nies are more and more confronted with the impera-tive of adjusting their own business strategies to thealtered circumstances. The knowledge a companyneeds, the technologies it utilizes and consequentlyits manufactured products and services tend to spe-cialize increasingly. As a result, the joining of forcesof complementary companies and institutions (likeinstitutions of research or education with serviceproviders) is of growing importance. The co-opera-tion of companies acting collectively in networksrepresents an answer to the actual challenges ofglobal competition. The collective and goal-orientedco-operation of different actors of the value-addedchain allows for innovations with great value-cre-ation potential to be generated faster and more effi-ciently, therefore bringing regional advantages tobear.

Nevertheless, solely concentrating upon anational market in economic, technological orresearch matters is simply not enough anymore –both for companies and for networks. Networks haveto co-operate ignoring regional and national bound-aries, develop their own strategies for international-ization, and pursue these strategies persistently tokeep and expand their share on the market as global-ization progresses.

Since internationalization of networks and co-operation is regarded an important subject on theagenda of innovation policy, currently a lot of meas-ures for the support of networks are being discussedand implemented in this context. Still, the position ofnetworks themselves concerning this topic has notbeen examined sufficiently. Only if the current situa-tion and specific needs and goals of this target groupare well understood, appropriate political measurescan be designed and realized effectively. For thisempirical study altogether 91 networks from 10 Euro-pean countries have been interviewed, for the mostpart represented by their network managers, toimprove the understanding of needs, strategies,enablers and barriers of networks concerning theiractual or intended paths towards globalization.

For a lot of networks their reasons for going inter-national can primarily be attributed to its expectedcontribution to keep the lead in technological devel-opment and to strengthen the own position on mar-kets worldwide. Furthermore the expectation toimprove the access to identified target markets tomore easily and efficiently take advantage of the co-operation is a common motive. In case a networklacks some important competences internally, theprimary objective of taking part in international co-operation is to obtain the missing know-how onusability or technology. This becomes especiallyimportant if networks are active in areas with broadtechnological character.

Although all interviewed networks express themotivation to adjust to an international orientationand engage in transnational co-operations in thefuture time, just 10% of them could specify concretestrategies and plans on how to realize their interna-tionalization efforts in practice. The majority of thenetworks interviewed had – if at all - vague ideas bywhich means the network and its members couldadjust to a more international focus (altogethernearly 75% of the questioned networks).

One of the greatest barriers for international co-operations is the prevalent lack of mutual trustbetween business partners. In addition, quite oftenrivalling companies are part of the networks willingto engage, making co-operations harder or possiblyleading to conflicting interests – at least in the begin-ning.

The lack of time and resources or financialaspects were other reasons often mentioned as pos-ing further barriers. Hence, it is to be concluded thate.g. by external funding alone just a small contribu-tion can be made by externals to abolish barriers ofthis type. Other obstructions identified like a lack inspecification of co-operation projects, spatial dis-tance and language barriers are just minor factorswith each being named in less than 10% of the cases.

Results of the survey show the persistent greatdemand to adjust to an international orientation.But it will also become clear that conventional sup-porting instruments of grant policy cannot meet the

5

real needs of networks because the specific problems,requirements and measures applied are not takeninto account. Customized supporting measures andtools have to be realized to provide support bothmore effective and more efficient for networks andtheir members on their paths towards international-ization.


Introduction

From the 1980s onward companies worldwide sawthemselves confronted with the necessity of adaptingboth their business strategies and their value-creationto the changed conditions of a shifting political, eco-nomic, technological and social framework, so theycould keep and improve their competitiveness in orderto ensure their turnover and profit. One promisingmethod to realize this goal is a more international orientation 1 of economic subjects.

Yet the old – and very successful – strategy ofexport, which was nearly solely concentrated upon bya major part of companies acting on the internationaleconomic stage, will not be enough to keep up with,and react appropriately to the altered terms anymore.Rather internationalization respectively international-ization efforts have to be regarded a dynamic processwhich is being affected by a large number of measuresfrom the sector of economic policy. The scope of activi-ties can imply, amongst others, depending on the aim[sales market, expense, profit, research or resourcedominating]:

3 Expansion of the company's export businessrepresenting the easiest and quickest possibilityof entry onto the international market

3 Reduction of vertical range of manufacturing andincreased import of (primary) products, compo-nents and services in the context of a globally ori-ented supply-management 2

3 Increase the outsourcing of elements of the value-creation process to company-owned respectivelyco-operating foreign companies

3 Grant licences to foreign companies: Not to putown products, technologies, patents respectivelytrademarks on the international market themsel-ves, but transfer them to partners for royalties.

3 Participate in foreign companies by forming jointventures

3 Take over or establish production facilities inforeign countries to ensure advantage of the eco-nomical potential of the companies’ know-how istaken of exhaustively and on the other hand toachieve an ideal adjustment of own production tothe local markets by faster product adaptation,quicker reaction to changes in demands, et cetera.

3 Collective transnational R&D-activities and –co-operations

In the course of globalization and the consequentialovercoming of national boundaries, furthermore asan effect of the eventual stagnation of domestic mar-kets, the previous internationalization of businesspartners and clients and the entry of foreign compa-nies and corporations onto the domestic market,companies of all sizes are forced to compete on aninternational level in order to stay competitive and fitfor the future on converging markets.

Still there are great differences in the stages ofdevelopment in the context of internationalizationdepending upon the size of the companies: largeenterprises have advanced much more in this sectorcompared to medium-sized businesses. While onlyapproximately 35% of European small enterprises areinternationalized, approximately 60% 3 of medium-sized enterprises are (at 30% the most common form iscontact to foreign suppliers, the second being exportat 18%, while just 3% of European SME have foreignsubsidiaries).

Reasons for small and medium-sized enterprises’(SME) internationalization deficits compared to largeenterprises are to be found in the following shortagescharacteristic for SME:

1 Remark: Further information on forced internationalization of SME:1. European Commission/European Network for SME Research ENSR: Internationalisierung von KMU, Beobachtungsnetz der europäischen KMU,

2003, Nr.32. European Commission/European Network for SME Research ENSR: KMU und Kooperation, Beobachtungsnetz der europäischen KMU, 2003, Nr.53. Dieter Ahlert, Josef Hesse, Phillip Kruse (Publishers): Internationale Markenführung in Dienstleistungsnetzwerken – Internationalisierung

von KMU: Bericht zum ersten Projektabschnitt des Teilprojektes „Schäper“2 See Kühlmann, Torsten (Research association Transnationale Netzwerke) 3 Source: ENSR Enterprise Survey 2003

7

3 Lack of equity capital

3 Problems raising credits for international activities

3 Absence of employees with international experience

3 Deficit of information on foreign markets

3 Poorly developed corporate planning

3 Willingness to keep corporate independency 4

These restrictions make it hard for a lot of SME toincrease their involvement in internationalizationand to adapt forms of internationalization other thanthe expansion of their corporate export strategy.

One possible conclusion would be for differenteconomic subjects to collectively act as part of inter-corporate networks and to consequently push for-ward collective internationalization ambitions.Therefore it is to be analysed how European networkssupport their member enterprises’ internationaliza-tion, which strategies are chosen, in which way net-work managers influence Internationalizationefforts, and finally it is to be analysed which barriersexist for the internationalization of companies.

Networks as Instruments of Internationalization

Experience has taught that international co-opera-tions between companies can be encouraged if theinvolved companies are part of a network and thenetworks’ managers take active steps to support theirmembers in the context of a more internationally ori-entated perspective. Most of all this concerns regionalnetworks which utilize local advantages the sur-rounding metropolitan areas provide them to a vary-ing extent. These advantages agglomerations holdcan be either sectoral effects in the wake of horizontalor vertical cross linking of companies or simply theinfrastructure a region provides 5 .

There are numerous examples which show that theconsequent orientation of regional networks (e.g.Minalogic, BioValley or Medicon Valley) towards aninternational perspective in combination with a net-work management specialized in this field of expert-ise lead to easier and more successful access onto for-eign markets than it would have been possible with-out network support. This is no surprise since net-work managements usually have more resources attheir disposal and are more experienced in interna-tionalization matters.

Networks can be of great use to many companiesconcerning their internationalization ambitions. Onereason for that lies in the reduction of international-izations costs for the analysis of the intended futurearea of application, furthermore, the collective use ofresources like distribution channels, suppliers andcapacity of transportation becomes possible. Anotherimportant aspect is the momentum of dividingresponsibilities and work within networks and thesubsequent company’s concentration onto corporatecore products respectively services. Even more, as aresult of co-operation a networks’ allied companiescan not only offer advanced or innovative products orservices, but can provide full-scale system solutions ifthe network as a whole is involved into the interna-tionalization process.

Taking a closer look at services networks offertheir members, support of internationalizationappears on top of the agenda. Hence, it becomes evi-dent that this competence is an important criterionfor networks from a member company’s point ofview. Many interviews with companies and networkmanagers showed the growing demands companiespose to the management of their network to get con-crete support benefits for their internationalizationefforts.

Members expect the networks’ managers to real-ize goal-oriented and efficient measures fulfillingtheir client’s specific needs. Established conventionalmethods alone, like business trips to foreign coun-tries, matching by business development agencies orChambers of Commerce or similar activities seem to

4 Source: ENSR Enterprise Survey 2003Kühlmann, Torsten: Selbstorganisation im Dschungel der Weltmärkte: Der Mittelstand spinnt Unternehmensnetzwerke, 2006

5 Makinsky, A.H., 1999


be increasingly insufficient nowadays. Membersthemselves often lack a distinctly defined strategicapproach on how to capture the target markets. Net-work managers are called for to design appropriateinternationalization strategies and prepare to backthem up with concrete measures on short-term. Ifnetwork managements are able to meet such expec-tations and realize them successfully there is a clearlycommunicable benefit for members, often strength-ening the affected member’s long-term motivationand participation within the network.

The transnational collaboration of entire net-works with other networks represents a form of net-work-specific internationalization, in particular lead-ing to the development of competitive, dynamiceconomy-, research- and technology-based agglom-eration areas. Networks and even more the involvedcompanies benefit from the rapid transnationaltransfer of both information and knowledge andfrom mutual technological improvement. Theybecome able to formulate standards for innovationswithin development co-operations respectively pro-mote the cross-national harmonization of standards.These standards can serve as amplifiers for furtherinnovations, since open standards are becominglocalized, finally leading to new products and serv-ices. Yet the necessity of a more international adjust-ment in order to keep up with global competitionlong-term is unquestioned, it still remains difficult toidentify critical factors for a successful international-ization of networks. This territory remains largelyunexplored, especially in the European context.

Internationalization Aspects from the Point of View of Innovation andFunding Policy

Companies, regions, and entire economic systems asa result of the liberalized world economy opening upnational markets are facing an increasingly fierce sit-uation of international competition. In particularSME, at 90% the by far largest group of economicalsubjects (e.g. FRG: 3.3 million SME, Czech: 1 millionSME), are forced to make great efforts to adjust to thechanging environment to stay in business in times ofongoing globalization, even more taking intoaccount the formerly explained factors like lack ofequity capital, deficit of information on internationaleconomic regulations and the lack of competentemployees.

Different subjects of the value-creation chain act-ing collectively in a network lowers the individualmember’s economic risk and allows for the raise ofknow-how potential, cost reduction, and most of allfor the subsumption of the innovation level.

Based on the impact singular companies and net-works have on the sustainability of national businesslocations, policy-makers have realized that both net-works and the internationalization of companies aretwo of most important aspects of national and inter-national marketing of innovative regions. On the onehand this paves the way for relevant actors from othercountries to become familiar with national economi-cal environments and provides investment incen-tives, on the other it enables domestic subjects to begranted supportive measures with their internation-alization activities. Yet they are country-specific thesemeasures to assist internationalization efforts exist innearly all European states. Amongst other they reachfrom the provision of basic information, general pro-motion of exports (standardized provision of informa-tion) to company-specific measures like financial sup-port (export credit/export guarantee), qualityimprovement programmes and the identification ofbusiness partners.

In addition to the various national support meas-ures on a European level, initiated by the EuropeanCommission, different programmes and fundinginstruments exist to intensify internationalization

9

efforts of companies and networks and networks’direct cross-linking, the most important programmesbeing ERA-NET (Support of transnational R&D-co-operation), PRO-INNO-EUROPE/Europe INNOVA(Development of cross-border initiatives to link net-works and harmonize national network policies),INNET (support of transnational R&D-co-operationsbetween selected networks and clusters) and theInnovation Relay Centres (EU-link office for researchand technology).

Nevertheless, it is not enough to simply approveto all kinds of internationalization efforts companiesand networks make. Moreover supporting measureshave to be formulated and addressed more specific bymeans of prior identification and classification ofexisting primary structures, the applied sector, ambi-tions, sphere of action, aim and individual needs ofnetworks and their members. Accordingly the neces-sity for the following categorical distinction of theinternationalization process becomes evident:

3 Networks already internationalized

3 Networks with good internationalization potential

3 Networks with little potential for internationa-lization

As explained before there is a multitude of goodexamples for networks acting very successful on theinternational stage requiring no need for any furtherexternal help concerning their internationalizationstrategies (see chapter: Networks as Instruments ofInternationalization). There are also lots of networksthat in consequence of network age (e.g. embryonicnetworks), members (young companies with insuffi-cient capital) or the area of application they are activein show little interest in or do not have sufficientpotential for an international orientation at a particu-lar moment. A premature shift of focus towards for-eign markets or other forms of internationalizationcould lead to overstraining of the concerned networkpartners and possibly affect the future developmentof the network.

Figure 1: Importance of networks depending on their phase of development (simplified, schematic illustration without regard toother important determining factors)

A stronger support seems to be especially important forthose networks and member companies with signifi-cant potential for internationalization already havingdeveloped an own strategy for internationalization,which yet rely on appropriate supporting measures forthe implementation. Concerning the establishment ofsuch adequate objectives there is still need for furtheraction in the sector of innovation and grant policy.

Objectives and Methodology

This study aims at creating a better understanding forthe needs, existing strategies, barriers and enablersreferring to internationalization of networks andtheir members. Only a better understanding of thosematters will allow to develop and implement moretailor-made supporting measures than before. Thisstudy shall make a contribution to that issue.

Due to the fact that internationalization of net-works is regarded a very important and actual innova-tion-policy topic and a lot of supporting measures arebeing discussed respectively implemented at themoment, the question arises what opinion networksthemselves hold on the topic. Appropriate public fundedaccompanying measures can be designed and realizedeffectively only if the initial position, needs and aims ofthe target group are sufficiently known and understood.

Altogether 91 network managers from ten Euro-pean countries participated (see figure 2) in this sur-vey and were available for further discussion. Mostnetworks are based in France, Germany and Spain.

Need for Internationalization

Cluster Quality

EmbryonicEstablished

Mature

- New technological paradigma- Policy measures

Time


Figure 2: Origin of the participating networks

Primarily networks were chosen that had alreadystated a serious interest in possible transnational co-operation with other networks. These networks aremostly regional networks incorporating developingand producing companies of every size, researchinstitutions (including universities), institutions fortraining and education and other service providers(e.g. Chamber of Commerce, banks etc.) while at thesame time retaining regional concentration. Thisapproach assured a well balanced ratio of SME andmajor companies represented in this study.

i

Figure 3: Typical structure of networks that participated in the survey

Networks solely concerned with research or educa-tion were not regarded in the study since only net-works with a certain number of industrial enterpriseswere eligible to participate. Accordingly networksout of very different areas of technology and applica-tion took part (mainly life sciences, new materials,micro- and nanotechnology, information and com-munication technique, production and automationtechnique as well as environmental technique).

Important criteria besides a basic interest intransnational co-operation with other companieswere

3 existing internal structures characteristic for so-called regionally acting networks and

3 the networks had to be active in innovative, newareas of technology and application

Networks’ characteristics ranged from such the areaof aerospace technology exhibits primarily domi-nated by major companies, to those of networks fromthe textile sector characterized by a large number ofsmall and medium sized companies.

The interviewed networks were chosen withoutcountry-, size-, or technology-specific preference byproject initiators and innovation agencies of cooper-ating countries from Europe. These agencies oftencoordinate regional- and national-specific pro-grammes on behalf of the accountable ministries,and consequently maintain a good overview over theactivities of the chosen candidates. Partially alsoregional ministries provided active help.

In addition to the internationalization strategiesthemselves it was of fundamental interest to gain abetter understanding for the internal of processes(like decision making, etc.) within those networks.Furthermore networks were asked why international-isation is deemed vital from their perspective andwhich aspects they focus upon. Concerning those net-works that had previously utilized measures to realizetheir internationalization ambitions, it certainly wasof interest to learn about the progress and resultsmade as well as about the barriers encountered thatcould be identified as important for international co-operation. The interviews were conducted by provid-

Research institutions

Developing and producing companies

Training and education institutions

Accompanying service providers

Network coordinator

Germany 15

Italy 8

France 22

Sweden 7

UK 5

Poland 8Belgium 5

Greece 2

Netherlands 4

Spain 15

1 1

ing an online questionnaire that would be answeredby the network manager. A first contact was estab-lished preliminary to the survey usually in form of apersonal telephone call, in order to receive appropri-ate background information avoid possible misun-derstandings. The addressed network managersproved to have a very different amount of informa-tion available on the member companies of their ownnetworks. The spectrum reached from very detailedknowledge on member companies (number of com-panies, employees, turnover etc.) to very little infor-mation (no numbers available or just a very roughoversight on member companies). In the following,only results respectively classification numbers willbe accounted relying on an adequate number ofanswers.

Further information concerning the participat-ing networks like e.g. turnover and number ofemployees as well as age and stadium of develop-ment of networks are summarized in appendix I.

Current State and Perspective of the Interviewed Networks’ Internationalization Activities

In the following, mainly those questions and answerswill be discussed dealing with the ambitions, reasons,existing strategies, barriers and enablers and theresults accomplished so far in internationalizing theinterviewed networks. For all partaking networks amore international orientation is an important topic,no matter if initial successes are achieved already orthe first steps are yet to be made.

Ambitions of the interviewed networksAmongst many other factors motivation and intensityof internationalization most importantly dependupon the own motives of the networks respectivelytheir members. If the ambitions to act on an interna-tional stage are comparatively weak, intensity ofactivities in this field tend to be less than average. Ifon the other hand a network has clear perspectives toact Europe-wide or even worldwide, active pursuitand according activities should be the logical conse-quence. For the overall understanding it was impor-tant to find out if the interviewed networks are focus-

ing activities primarily onto a European level or ifthey orient worldwide. Figure 4 shows that mostinterviewed networks have worldwide ambitions(53%) or at least want to act Europe-wide (39%). As aconsequence of the selection criteria only a small partof the participating networks were merely nationallyorientated.

Figure 4: Ambitions of the interviewed networks (based on 88 net-works’ answers, no multiple answers allowed)

Reasons for an international orientationNetworks do not just adapt to an international orient-ation per se increasingly, they often react to trendsand changes imposed upon them externally. Sinceinternational activities and co-operations are moreexpensive and time-consuming than those strictlylimited to national level, clear benefits have to arisefrom such action or have to be expectable at least.Like explained previously a wide range of reasons fora more international orientation of networks andtheir subjects exist. It is to be taken into account thatthese reasons are very different and may be affectedby many factors. For these reasons, it was especiallyinteresting to find out the interviewed networks’ primary reasons to adjust to an international orient-ation increasingly. Because these reasons were to beexpected to be very complex no default answers weregiven, to allow room for the respondents to formulatetheir reasons. The answers then were evaluated andmapped according to their contents.

The answers of the interviewed networks aresummarized here, giving rise to seven main thematicemphases (figure 5).

Europe-wide

National

Worldwide


Taking a closer look at the answers given, four reasonswere mentioned quite often. Most networks regard thecontribution internationalization promises to assurethe lead in technology internationally and tostrengthen the market position worldwide as primaryreasons for the necessity to internationalize their focusincreasingly. Furthermore expectations predominatethat this type of co-operations will make access to eligi-ble target markets easier and more efficient. Given thecase networks lack some important competences inter-nally, international co-operations shall primarily allowfor the missing know-how on usability or technologyto be acquired. This is even more important if networksfocus their activity upon areas with high generic char-acter, in which an increasing convergence of technolo-gies originating from different fields is to be observed.

As anticipated mutual exchange of experiencesand information does also play a major role, thoughnot one as important as one might have expected. Thisfact is even more surprising given that no obligationsfollow the type of co-operation exchange of experienceand information represents; accordingly this type ofactivity should be easier to realize than the other threeprimary motives. This is the reason why it was to beexpected that this answer would be the predominantmotivation, it does not require much effort to realizeand from a rational standpoint it represents the bestanswer to the primary barriers for a transnational co-operation (see figure 9).

The wish for collective peer assessments as a possi-bility to intentionally match up, thus making a mutualcomparison of competence in technology and know-how possible, is another important argument even if itis not one of the top four. This kind of peer reviews is agood instrument to identify the participants’ indivi-dual strengths and weaknesses and to find areas to beimproved. Unfortunately these peer assessments areusually both time-consuming and require a lot ofmutual trust, the last mentioned often being the pri-mary barrier for a transnational co-operation (see fig-ure 9). Because actual literature rarely presents indica-tors or instruments to assess peer reviews between net-works there is a definite need to provide appropriateinstruments to interested networks in the future time.The authors will pay attention to this issue in the nearfuture by developing an appropriate approach formutual benchmarking and peer reviews.

Figure 5: Reasons for the internationalization of networks (89 networks answered, max. two answers per network possible,figures in %)

Responsibility for the internationalization strate-gies of networksGiven the ideal case, the first step towards an aspiredinternationalization of networks and their membersis the formulation of a collective strategy or approachby the involved parties, to define and to later on mon-itor primary goals, methodical approach, liabilities,milestones, indicators etc. But who is responsible fordesigning the strategy respectively their realizationinto a concrete course of action within the network?Again there were no default answers to this question,so the answers would not be limited unnecessarily.Evaluation revealed that answers are limited to fivedifferent categories of subjects (see figure 6). In mostcases the strategy is determined by the existing man-agement board or a similar steering committee (44%)The rarest named solution is the existence of a spe-cialized internal workgroup for the topic internation-alization (5%). At first glance it seems surprising thatonly in 25% of cases members respectively the compa-nies themselves are in charge of issues dealing withinternationalization. This again reinforces the thesisthat membership in networks appears interesting

0 5 10 15 20

Contribution to assure worldwide leading position / Strengthening ofworldwide market position

Easier access to targeted markets

Access to know-how or technologies not available within the own network

Exchange of information and experience at an international level

Comparing with the best in technology and know-how (peer reviews)

Establish new networks in special technology or application fields

Stronger competition enforcesinternationalization

Improved international visibility

Improvement of competitiveness

Motivation of external partners to settle/produce within the ownnetwork

13

and vital for companies amongst other because theyexpect active support from the network’s manage-ment on their path towards internationalization. Inabout 16% of cases the network’s manager or the net-work itself takes the lead, in 10% of cases an externalperson or institution bears responsibility for conceptand realization of internationalization activities.

Figure 6: Responsibilities regarding strategies for internationaliza-tion of networks (based on 89 networks’ answer, only one answer pernetwork)

Internationalization strategies of the interviewednetworksOne of the central concerns of the study at hand wasto find an answer to the question for potentially exist-ing internationalization strategies and - if applicable– possible options for action. Out of this motivationnetworks were asked about their internationalizationstrategies, so it would be possible to gain insight intothe strategies for internationalization which arebeing applied and – if – on how explicit they are for-mulated. No pre-set answers were formulated to giveenough room for the questioned networks todescribe their utilized strategies in detail. As far asanswers were ambiguous or couldn’t be articulated indetail for confidentiality reasons, the networks man-agers were contacted separately afterwards by phoneto get further information.

The results are shown comprehensively in figure7, analogical answers were clustered according totopic. As the figure illustrates concrete plans for inter-nationalization do exist for only about 10% of therespondents. Concrete plans mostly contain somesort of written fixation of the prioritized target mar-kets (e.g. in form of a business plan), partners (in the

targeted networks respectively regions), acceptablebranches of application, concrete measures to realizethese aims and options for action, a time- and budget-plan or milestones. These plans are evaluated andadjusted periodically by those in charge according tothe progress made.

One might be surprised only every tenth networkutilizes those explicit strategies. On the other handthis fact just reinforces the assumption that an effi-cient, goal-oriented internationalization of networksremains to be deemed exceedingly complex and onlyin rare cases the subjects in charge are able toadvance the project on their own.

Figure 7: Internationalization strategies of interviewed networks(based on 85 networks’ answers, max. two answers allowed, all figures in %)

The majority of the interviewed networks had nostrategy at all or only vague ideas on how the net-work and its members could realize a more interna-tional focus of activities than they have previously(altogether about 70%). Most answers belonging tothis category stated the establishing of contact withother networks to be their main concern, not givingdetails on method and intensity of the efforts (31% ofcases). 26% of the networks interviewed regard theinitiation of collective R&D-projects as their primarystrategy to establish contact to target networksrespectively their member companies (though no

Managementboard

Internal workgroup

Externals

Network-/ Clustermanager

Companies themselves 0 5 10 15 20 25 30 35

Establish contact to othernetworks and clusters, no furtherspecification

Embedding into co-operation projectswith members of other networks andclusters, no further specification

No strategy or concept available

Concrete plans to enter eligibletarget markets and partners areavailable

Participation in business trips

Establish contact to other networks and clusters by joining(technology) platforms

Establish contact to business development agencies

Other


further information were given on prioritized areasof R&D or prioritized target markets/networks). Fewrespondents assigned collective business trips or theembedding of regional business development agen-cies to be appropriate strategies for internationaliza-tion. But these answers also lack further specification.

Co-operations between networks already achievedIndicators to evaluate internationalization activitiesare complex and quite controversial. They dependvery much on the initial aim the internationalizationof the networks had appointed. Because these aimsproved to be very heterogeneous, within the studythe comparatively simple indicator “co-operationrealized up to now” was chosen to evaluate success ofefforts undertaken yet. Certainly there is a lot of roomfor interpretation of the term “co-operation” and theresulting imprecision has to be taken into account.Figure eight shows the co-operations with other com-panies or institutions achieved in the last three yearsfrom the point of view of the participating networks.A differentiation was made dividing both theregional (national, Europe-wide and worldwide) fac-tor and equal respectively new areas of technologyand application.

Figure 8: Co-operations achieved within the last three years accor-ding to regions and application areas (based on 86 networks’ ans-wers, multiple answers allowed, figures in %)

Like expected, nearly all networks interviewed reportsuccessful new co-operations on a national level;notably a lot of co-operations were realized withinthe frame of equal technological and applicational

areas (about 75%). Only half of the respondentsanswered to have accomplished new co-operationsinto new technological areas on a national level, afact that is certainly surprising at first glance. Oneexplanation is the quite large number of very youngnetworks among the respondents (approx. 25% of net-works interviewed asses themselves to be embryonicnetworks). Those young networks usually don’t focusupon new co-operations in new areas of technologyand application but set other priorities lying withinthe areas they focus upon. Besides, networks con-firmed the continuing difficulty to co-operate withother networks acting in different areas of applica-tion or technology, even on a national level. Oftenthere are problems finding the connecting momentsthat would indicate where co-operations are possibleand how far those could reach.

Half of the networks interviewed report success-ful co-operations in equal areas of technology andapplication on a European level. This definitely is apleasant amount. Partnerships on a European levelwith partners coming from other areas of technologyor application in contrast seem to be much harder toestablish (less than 20% of the respondents have suc-ceeded here). Only one quarter of the networks inter-viewed report success in establishing new co-opera-tions within their area of technology or application.Only 10% of networks interviewed report this kind ofachievements beyond their applicational or techno-logical sector, although it has to be kept in mind onlylittle more than 50% of the interviewed networks hadworldwide ambitions.

Barriers for a co-operation between networksIn spite of numerous examples for successful co-oper-ations between networks respectively their membersa number of barriers for partnerships with other net-works still remain, as one might have expected partic-ularly to international ones. Intended strengtheningof international focus of networks on the part of net-works’ managers or on behalf of motivational supportby third parties calls for the awareness of characteris-tic causes for these barriers in order to reduce orremove them in advance, if possible.

Figure 9 differentiates the most common barriersfor an international co-operation of networks fromthe interviewed networks’ point of view.

0 10 20 30 40 50 60 70 80 90 100

National, in equal areas of technology or application

National, in new areas of technology or application

On a European level, in equalareas of technology or application

On a European level, in newareas of technology or application

Beyond Europe, in equal areas of technology or application

Beyond Europe, in new areas of technology or application

Lack of trust between partners is the most dominantsingle reason posing a barrier, usually because net-works are not sufficiently familiar with each other(approx. 23% of cases). Also the fact that often com-petitors are present in networks willing to co-operate(approx. 22% of cases) impedes co-operations (at leastin the beginning) or possibly leads to conflictinginterests, as one might have expected. Lack of timeand resources as well as financial reasons were statedat 15% each, illustrating the fact third parties can onlyprovide little help to reduce barriers e.g. with exter-nal support only. An insufficient level of concretion ofpotential co-operation projects, spatial distance orlanguage barriers are minor factors each only beingmentioned by less than 10% of the respondents.

Figure 9: Main barriers, hindering a possible co-operation betweennetworks from their managers’ point of view (based on 84 networks’answers, multiple answers allowed, figures in %)

All in all the main barriers for international co-opera-tions between networks appear similar to those prob-lems arising on a national level, often predominant inthe beginning of the lifecycle of respectively youngnetworks (lack of mutual trust and fear of co-opera-tion with competitors).

Possible financing sources for a collective trans-national co-operationIn the beginning usually expenses for co-operationsof every kind outweigh additional turnover andprofit, this is even more true for international co-operations. Since there were a lot of successful co-operations on a European level and worldwide werereported (see figure 8), it was of special interest tofind out about their present and future financing. Figure 10 gives a good impression of the prevailingexperiences and expectations in terms of financialsupport for international co-operations from the networks’ point of view.

Figure 10: Financing sources for international co-operations from thenetworks’ point of view (based on 83 networks’ answers, multipleanswers allowed)

The interviewed networks primarily mentioned the6th/7th Framework Programme of the European Com-mission (approx. 30%) and national funding (approx.26%) as most suitable financing instruments for inter-national R&D co-operations. The first one named hasbeen an established instrument for years now, even ifit is not regarded unproblematic amongst SME due tothe large effort connected to applying and theimmense bureaucratic obstacles arising in the processof realizing projects. On the other hand it turned outthat collaborative research, done by international con-sortia of this kind are very well suited to establishlong-term collaboration on an international scale inaddition to their actual R&D activity.

Own empirical investigations amongst GermanSME revealed that nearly 40% of the companies inter-viewed regard the chance to collaborate with part-

15

0 5 10 15 20 25

Lack of mutual trust between partners

Partners are competitors, conflicting interests

Lack of financing or other financial reasons

Lack of time or capacity

No shared points of contact / project ideas

Geographic distance

Language barriers

Lack of a common technological basis

Other

6th/7th Frame-work Programmeof the EuropeanCommission

National funding

Other

INTERREG and other European structural funds

ERA-NET-model

Concrete own financing concept,

without publicfunding


ners at target markets individually aimed at in orderto gain easier and faster access to these markets to betheir primary reason for participating in projects ofthe 6th Framework Programme (see figure 11). Thisimpression was backed up and verified by own evalu-ations recently performed or currently ongoing. Inthose analysis many European companies inter-viewed report having gained easier access to the tar-geted markets by participating in this kind of collec-tive R&D projects. Partially the value of the improvedaccess towards foreign markets was assessed evenhigher than the technology- or product-specificdevelopment that - originally - was the direct aim ofthe research project.

Figure 11: Reasons for participating in international R&D projectsin context of the 6th Framework Programme of the European

Commission (40 German companies funded by the 6th FrameworkProgramme were interviewed, own enquiries, figures in %)

In matters of eligible funding sources nearly 15% ofthe networks interviewed report to have their ownfinancing concepts for long-term co-operation withforeign partners (Figure 10). European structuralfunds like INTERREG and others only play a minorrole and were mentioned primarily by Polish and Ital-ian networks. It is particularly noticeable that aboutevery tenth network reports to make use of the com-paratively new so called ERA-NET funding scheme.This scheme stands for a new approach of transna-tional research funding within Europe supported bythe European Commission. Partners of the project areindividually funded according to their national fund-ing scheme, but the consortium as a whole actstransnationally. Partaking national funding authori-ties define contents and goals of the joint calls whichwere prior jointly agreed upon. The European Com-

mission takes care of the additional amount ofadministrative work resulting from the realization ofthis kind of programmes with help of national projectexecuting organizations or innovation agencies. Con-sequently, R&D consortia acting transnationally canbe established a lot easier since they do not have todeal with the bureaucratic work usually connected toapplications for the European Framework Programme.Furthermore national funding programmes’ work-flows and procedures don’t need to be alteredbecause only the domestic associate partner isfunded. The ERA-NET approach in contrast to theEUREKA approach also features the advantage oflargely harmonized application and testing proce-dures. Prior experiences with especially successfulERA-NET projects (e.g. ERASME – www.erasme.org orMNT ERA-NET – www.mntera.net) indicate both awide acceptance for this approach on the part ofapplicants and a smooth application process.

0 10 20 30 40 50

Easier access to new markets

Reduction of expenses for R&D by public funding

Access to foreign know-how or technologies

Lack of domestic partner(s)

Other

17

Conclusion

On the following pages the most important results ofthe empiric analysis shall be summarized and dis-cussed in the form of hypotheses and subsequentlyevaluated. The main issues areas existing for theinternationalization of networks will be summed upand innovation policy’s fields of activity to be priori-tized will be pointed out. The 91 networks inter-viewed stand for approximately 32.000 member com-panies and institutions with two million employeesand a 2006 turnover of approximately 500 to 600 bil-lion Euros (details see appendix I). Certainly furtheranalysis will be necessary to verify the results of thisstudy on a wider basis. Still the number of 91 networksinterviewed provides a good base of significance inthe case given.

The subject “internationalization” is very complexand will have to be treated and discussed more dif-ferentiated in the near futureThe term “internationalization” is a very heteroge-neous one, implying many facets and being subject todifferent meanings respectively interpretations.Although internationalization in general certainly isimportant and should be appreciated, this doesn’tmean internationalization per se has an economicvalue. The reasons that accompany networks andtheir members on their paths towards international-ization are widely different. This fact must be takeninto account in the future discussions on the topic, asopposed to the currently common practice within thediscourse that claims to argue on a so-called “meta-level”. If networks want to develop an internationalorientation, during the first time there is great needto analyse (amongst other things) both which (Euro-pean) networks could be adequate and productive co-operation partners as well as the networks primaryreasons for taking this step (search for know-how,access to new markets etc., see also figure 5). This alsodetermines the options of choice for actions to betaken. Such analysis should be made a prerequisitebefore further public funding is granted; at least net-works must be encouraged and supported to performthis kind of analysis. From such analysis clearly com-prehensible action plans result individually tailoredto the particular starting points and needs of net-works.

European networks are usually relatively young,but have cross-border ambitions from the verybeginningAll in all the comparatively young age of the inter-viewed networks comes as a surprise (see figure 12,appendix I). Despite the fact primarily innovative andhigh-performing networks (interested in transna-tional funding) were chosen to participate in the sur-vey, more than half of the networks interviewed areless than five years old, one quarter of the networkseven assess themselves to be embryonic networks.

This exemplifies the continuing dynamic in theprocess of networks establishment. Still more than90% of the interviewed networks have Europe-wide orworldwide ambitions, independent of age, phase orthe branch of application the networks are active in.

Network managers are often not directly responsi-ble for the internationalization of their networksNetwork managers typically take care of a variety ofduties and activities concerning their networks. Forthe most part they are either directly member of thenetwork or they are elected by the networks’ members(in more than 80% of cases). Surprisingly they are onlyseldom (in less than 20% of cases) regarded account-able for the internationalization strategy of networks(see figure 6), if at all only at a later stage for concreteoperative measures for implementation. Usually themanagement board or similar boards of the networks(nearly 50% of cases) or the companies themselves(about 25% of cases) define the respective internation-alization strategies and consequent options for action.

The four dominating reasons for the internatio-nalization of networksEach network has its own individual reasons to inter-nationalize short- or medium-term; a fact not too sur-prising since the topic is a quite complex one. Yet fourdifferent motives stand out, being mentioned by twothirds of the networks interviewed. All motives werementioned equally often (in between 14 and 18% ofcases, also see figure 5):

3 Contribution to realize technological leadershipand to strengthen the own position on marketsworldwide

3 Improved access to identified target markets


3 Access to know-how/technologies not available in the own network

3 Improved exchange of experience and informa-tion on an international level

It is important to keep these reasons (which are par-tially very divergent) in mind when strategies forfunding of internationalization efforts of networkswill be designed in the future, since they lead to dif-ferent strategies and actions to be preferred.

Internationalization yes – but how to do it?The imperative internationalization poses for net-works on the one hand and the strategies and stepsnecessary for its realization on the other are wayapart. Only each tenth network interviewed was ableto present reliable strategies or appropriateapproaches for action concerning the international-ization of their network and the participating mem-ber companies. Most networks confirmed not havingany strategy at all (almost 20%) or just have vagueideas on what could be done concerning the desiredinternationalization (altogether nearly 70%, see figure7). These figures reinforce the thesis already existingwhich criticizes the lack of long-term and strategicthinking within networks on the topic “international-ization”. Usually there is no appropriately reliableplanning on and concretization of the options foraction necessary. So far, in the recent past the mostpublic funded supporting measures which aimed tomatch certain networks with other or support net-works on their way for internationalization, did notreally take these findings into account. As a logicalconsequence the sustainability of such supportingactions was quite insufficient. Mostly standardisedsupporting and matching activities were performed,but no really demand-oriented or tailor-made solu-tions have been implemented (not taking the individ-ual needs off the relevant network partners intoaccount). As a logical consequence, the InitiativeCompetence Networks Germany, which is the authorof this study, just designed appropriate tools andapproaches to offer interested networks or cluster tai-lor-made support on their way for internationaliza-tion.

The four main barriers for a transnational co-operation of networksEven if a transnational co-operation is deemed desir-able there are often reservations and (mental) barri-ers remaining. Two factors prevail: the lack of trustbetween partners and the fact that there are compet-ing companies among the networks willing to co-operate. At least in the first stages those two factorscomplicate actual co-operation. Even though a lack oftime / resources and funding sources are also factorsof concern, they are not as significant as the barriersmentioned earlier (see figure 9). To take the respec-tive main barriers into account and provide adequatesolutions early enough can make a huge contributionto reduce and eliminate many partners’ reservationsin the early contacting phase. This is where the net-works’ managers are called for utilizing the rightinstruments. Any supporting actions from a neutralthird party could also facilitate to right matching ofinterested networks.

Accomplished co-operations tend to focus on theEuropean area and on similar fields of applicationor technologyThe majority of networks interviewed report to havealready accomplished successful co-operations withother networks. This is especially true on a Europeanlevel and in similar fields of application or technologyapplying to more than 50% of cases (see figure 8). Co-operations of this type, still on a European level yetinto other/new fields of technology or application,seem to be much more demanding, with only lessthan 20% of cases reporting successes. Nothing to beastonished about since co-operations between net-works originating from other fields of application ortechnology have proven themselves complicated andare per se more difficult to establish, even more so forcross-border co-operations. Compared to the largeamount of successes reported for European co-opera-tions within similar fields of application or technol-ogy the number of worldwide co-operations is ratherlow, too (approx. 25% of cases).

19

EU-Framework Programmes and national fundingprogrammes are regarded as primary fundingsources for international co-operationsFunding sources like the Framework Programme ofthe European Commission or national programmesare considered to be the primary instruments when itcomes to financing international co-operations(applies to 65% of cases, see figure 10). These fundingsources often have objectives (usually funding pro-gramme oriented to R&D or innovation) differentthan the respective internationalization strategiesapplied by the networks interviewed (only in about25% of cases R&D co-operations also represents theprioritized internationalization strategy, see figure 7).Due to the absence of appropriate tools or publiclyfunded support programmes, networks and theirmembers seldom have any other option than to usesuch support programmes when in need for financialsupport on their way to operate more internationally.Further discussion with some of the network man-agers revealed that using R&D or innovation support-ing projects, financed on national or European level,for internationalization purposes are considered tobe an emergency solution. Typically business supportactivities, like networking visits or organising of fairsetc. are also considered accompanying measures, butthey can not be the main tools to support interestedparties to operate more internationally. A real task toidentify and implement appropriate public supportmeasures remains, both on a national and on aninternational level, to provide the networks and theirmembers tailor-made support.

There is a wide gap between objectives of policy mak-ers respectively funding instruments on the onehand, and prioritized internationalization strategiesrespectively reasons for an internationalization onthe other hand. To actively involve networks’ mem-bers into the Research Framework Programme of theEuropean Commission is certainly of use here,although it is usually the toughest and most complexalternative of external funding available. This field isclearly in need for (national) grant policy actions.

Which criteria classify a network as being internationally orientated?The degree of internationalization a network hasreached cannot be assessed on behalf of a list of activ-ities only. Network managers like to depict theirinternational orientation with participating in inter-national meetings or happenings. But this cannotstand a closer look. The role of the network keepsundisclosed, did it just participate passively or was itactively involved? Furthermore an assessment has totake into account if there are mechanisms within thenetwork ensuring the whole network benefits fromthe knowledge gained from participating. This is theonly way to assess if a network as whole has adjustedto an international perspective or if particular activi-ties of individual network partners dominate. Cer-tainly other indicators like concrete successes,improved innovation capability and economic figures have to be taken into consideration, too.

Otherwise membership of only one internationallyactive R&D institute or company leads to a networkbeing able to claim participation in internationalexchange and thereby claim to be internationally ori-entated. This kind of classification wouldn’t makesense in terms of critical reflection and evaluation.

A more precise classification is needed here to dealwith the topic profounder than it has been dealt withso far. In appendix II an approach towards this classi-fication issue is outlined to give a first impression,though it is not very extensive yet.


The economic importance of theinterviewed networks

From the very beginning the authors knew only asmall part of the vast area of European networkscould be covered with the limited number of net-works comprised, since the 91 networks interviewedoriginate from ten European countries only. Irrespec-tive thereof it was of interest to assess the economicmeaning of the networks involved in the survey. Stan-dard figures like the

3 number of companies and institutions represented

3 annual turnover of the networks’ members

3 number of employees of the companies and insti-tutions

help to get an impression on the economic meaningof the participating networks. The figures displayedin the following demonstrate impressively that thenetworks chosen represent companies and membersholding significant economic power.

Number of companies and institutions active inthe networksOf 91 network managers interviewed 86 gave thenumber of their member companies and institutions(universities, research institutes, funding agencies,banks etc.). According to their answers there areabout 31.500 companies and institutions representedaltogether. The figures varied from 25 to 8000 mem-bers per network. The five networks that did not replydo not represent a large number of members (accord-ing to own estimations between 400 and 500 compa-nies), leading to an effective number of about 32.000member companies and institutions represented inthe 91 networks.

A finer distinction (e.g. differentiating SME andmajor companies, determining the ratio of compa-nies and other institutions) was abstained frombecause the quality of data didn’t suffice. Since nopurely research- or education-oriented networkswere included, companies preponderate within thenetworks chosen.

Turnover of the companies acting in the networksinterviewedFigures on the overall turnover of the partners activein the respective networks definitely were the hardestfigures to get. In this context it is to be appreciated 44of the network managers interviewed were able togive reliable figures after all, about half of the net-works interviewed. These managers were informedvery well on the turnovers and other figures relatedto their networks and had excellent information ontheir networks’ data available.

All in all the members of these 44 networksachieved a total turnover of about 285 billion Euros in2006. Definitely an impressive figure, even more tak-ing into account half of the networks didn’t providedata; so the actual total turnover is probably muchhigher.

Number of employees working for the networks61 network managers of the 91 network managersinterviewed provided data on the number of employ-ees working for the member companies and institu-tions. The number totals about 1.8 million employees.A remarkable number, even more considering 30 net-works did not answer and consequently are not pres-ent in the total number.

Character of the interviewed networks

To assess the results later on it is important to knowthe basic structures of the networks that took part inthe study, so possible contexts can be discovered eas-ier. First thing of interest was the age of the networks.Experience has taught that in general older and con-sequently established networks have advanced morein terms of internationalization and gathered moreexperiences in this field than their young pendants.86 of the 91 network managers answered the ques-tion for the age of their network. The legal form of thenetworks did not matter, but it needed to be docu-mented by a formal act, e.g. by a co-operation agree-ment etc. Figure 12 shows the networks dividedaccording to their age.

Appendix IInformation on the Networks Interviewed

21

Figure 12: Age structure of the interviewed networks (based on 86networks’ answers)

It is striking at first glance that a tight majority of net-works (52%) are younger than five years. Still the num-ber of young networks in proportion to old ones sur-prises. All in all only 16% of networks were at age tenor older. These networks originate primarily fromSpain, Italy and Germany. Nevertheless, in some casesnetworks are older but have agreed in a formal con-tract or co-operation agreement just recently.

Beside the age the phase of development of theindividual networks is of interest. Generally older,established networks have gained experiences in thecontext of internationalization respectively are awareof the necessity to internationalize (figure 13). Therespondents were offered four categories to assessthemselves:

3 Embryonic network (newly found network; communication, exchange of information andservices offered by the network have just begunrecently)

3 Established network (network is established andhas clear perspectives to grow)

3 Fully developed network (well established net-work which has reached its peak performance,further growth is only to be expected to a minordegree)

3 Declining network (network is past its prime, willloose members and importance perspectively)

Figure 13: Phase of development of the interviewed networks (based on 86 networks’ answers, self-assessment)

As expected most networks assess themselves estab-lished or fully developed networks (more than 75% ofcases). Taking into account half of the interviewed net-works are younger than five years (figure 12) the figuresare a little surprising. All in all the self-assessment of thenetworks’ development phase means more than theage, also considering the reasons mentioned above.

The number of companies and institutions repre-sented in the participating networks is interesting,too. The networks were offered four categories at thispoint (see figure 14). Most networks represent morethan 100 members (45%), second comes the categorybetween 50 and 100 members (30%). Considering anumber of young networks (see figure 12) were partof the survey it doesn’t come as a total surprise 25% ofthe networks have less than 50 members.

The network bringing together the most members(more than 7000) is a network from Italy; some small net-works in Germany and Poland are those representing thefewest members with less than 20 members each.

Figure 14: Number of companies and institutes represented by thenetworks (based on 88 networks’ answers)

Befor 1994 1994-1996 1997-1998 2000-2002 2003-2005 2006-2007

40

35

30

25

20

15

10

5

0

1013

44

36

19

Declining network

Embryonic network

Fully developednetwork

Established network

51-100 members

More than100 members

Less than 25members

26-50 members


The performance of networks very much dependsupon network managers respectively network coor-dinators and the way they are linked to their net-works. There are several entirely different approachesto that being practiced in a similar fashion through-out Europe. One approach consists of the co-ordina-tor or the office themselves being members of thenetwork. In another approach the co-ordinator or theoffice are no direct members of the network, but areentrusted with this responsibility by the network. In athird variant an external service-provider takes thelead being appointed by third parties. This variant isespecially common if the network management isfinanced by thirds and the financer wants to exercisean amount of direct influence.

In the survey a narrow majority of the inter-viewed networks were managed by a co-ordinatorfrom their own ranks (51%). In about one third of casesthe co-ordinator did not originate from the networksdirectly, but was assigned by the majority of members(see figure 15).

Figure 15: Relation between network managers and networks (basedon 89 networks’ answers)

Member of theNetwork

No direct member,but assigned by thenetwork.

External Service-Provider

In this appendix an approach is presented for possiblecategories describing a network’s internationalisa-tion. These categories are meant as basic distinctionrevealing the differences concerning the level ofinternationalization networks have achieved. There isno direct link between the categories and the net-works interviewed in the study.

7 Obviously internationally acting network: boththe network itself as well as its members demon-strably act successful on an international level. The network is recognized as such acting primarilyinternational. Also foreign partners are membersof the network. A large number of examples forsuccessful international co-operations existsresulting in improved innovative dynamic, astrengthened market position and improvedfinancial figures of the network and its members.

6 Intense cross linking / partnership with one ormore foreign networks. A lot of measures andactivities both on behalf of the management and ofmost of the network’s members point out the inter-national orientation of the network. A large num-ber of examples for successful international co-operations exist resulting in improved innovativedynamic, a strengthened market position and thefinancial figures of the network and its members.

5 Active, regular and intense participation of thenetwork and its members in European projectsand other events, partially also initiated by thenetwork itself. The network is internationally pres-ent and accepted by likewise foreign partners.There is a basic strategy / implementation plan.Members and management can report on first suc-cesses in international co-operations. Still, there ispotential to adjust to a more international orienta-tion.

4 Punctual co-operations with international partners exist (network manager, institution orcompany), but are unspecific and rather sporadic.Single members are already internationally activeand linked, but the network itself is not recognizedas acting internationally. In spite of first successesthere is still a high potential for further interna-tionalization that is yet to be implemented in spe-cific strategic measures.

3 First participation in and / or organization ofinternational events by the network’s manage-ment are visible. The management and most com-panies have the intention to internationalize, butthere are no strategies or concrete options foraction. The topic internationalization does play aminor role to date, even if singular companieshave advanced more in internationalizing theirfocus.

2 No international activities by the network’s man-agement are visible, but are basically intended.Concrete measures or plans do not exist, becauseother priorities prevail. Independent thereof, net-work’s members might have eventual interna-tional contacts.

1 No international activities by the network’s man-agement are visible or intended. There are noideas, no concrete measures or other plans. Inde-pendent thereof, network’s members might haveeventual international contacts.

23

Appendix IICategories of Networks’ Internationalization


The Initiative Competence Networks Germany (Initia-tive Kompetenznetze Deutschland) of the FederalMinistry of Economics and Technology (BMWi) bringstogether the 120 most innovative German compe-tence networks which focus on technology. TheInitiative offers to the highest-performing networksin technology a common platform and providesvarious benefits to its members. Members of theInitiative stand out due to innovative partners, inten-sive co-operations and the goals they share. Outstan-ding proximity to markets and industry, regionalintegration, dynamics in their development and flexi-bility are qualities characteristic for them. These qua-lities sum up to the competence networks allied inthe initiative being a crucial element of technologicalperformance, economic growth and competitiveness.

With the Initiative Competence Networks Germany(named “kompetenznetze.de” until November 2006)the BMWi allows for the Initiative’s members to pre-sent their range of services and products to a broadaudience, national and international, to demonstratethe attractiveness of Germany as a region for innova-tion. The concept of Kompetenznetze Deutschland isto be the “league of the best innovative networks” inGermany; membership to the initiative is a qualitylabel for German networks.

The Initiative3 supports the development of Competence Net-

works in different fields of innovation, 3 helps Competence Networks to develop a visible

profile, 3 promotes Germany on the international market,3 gives access to a multitude of information and

communication channels,3 enables presentation to relevant target groups via

platforms like fairs, events and publications,3 provides ongoing support to the Networks in their

further development and in current activitiessuch as press and public relations work,

3 supports its members to operate more on an inter-national level.

What are Competence Networks?The following attributes are characteristic for the networks active in the initiative:3 Competence networks3 are innovation clusters with a regional focus but

acting on an international scale, 3 concentrate on a specific thematic area, 3 are capable of generating innovations with a

particularly high value-added potential, 3 cover many links in the value chain and incorpo-

rate multiple sectors of industry and scientific disciplines,

3 stand out by virtue of the close interaction andcommunication among their members,

3 works within the context of an infrastructure thatfavors innovation and

3 help to give regions a distinct profile and anadvantageous position with respect to their inter-national competitors.

Criteria for Membership At the moment the initiative represents 120 compe-tence networks from nine areas of innovation andmore than 30 regions, and thus demonstrates thestrength of the innovative region Germany. Morethan 6,000 companies and 1,600 research institutionsare active in the member networks of the initiative.

The main criteria for networks becoming a memberin the initiative are1. Technical focus2. Regional concentration and integration3. Organisation and identity of the network4. Actors from different stages of the chain of added

value5. Collaborative development of technologies6. Sustainability of the network7. Innovative performance and potential for added

value

For further information, please contactAgency Competence Networks Germanyc/o VDI/VDE Innovation + Technik GmbHSteinplatz 1, D-10623 BerlinGermanyPhone: +49 30 31 00 78 219Fax: + 49 30 31 00 78 222Mail to: [email protected]

The Initiative Competence Networks Germany

25

Recommended Literature (some not available in English)

Andersson, Thomas; Schwaag Serger, Sylvia; Sörvik,Jens; Wise Hansson, Emily (Pubishers): The Cluster Policies Whitebook. Malmö (Holmbergs), 2004

Brussig, Martin; Böhm-Ott, Stefan et al.: Regionale Netzwerke erfolgreich gestalten undbetreiben. Frankfurt (VDMA-Verlag), 2001

Interreg III C Project – Clusters Linked Over Europe(CLOE): Cluster Management Guide – Guidelines for theDevelopment and Management of Cluster Initiatives.Vienna, 2006

Department for Trade and Industry (dti, since restruc-turing: Department for Business, Enterprise and RegulatoryReform): A Practical Guide to Cluster Development.London, 2001

Flocken, Peter et al.: Erfolgreich im Verbund. Die Praxis des Netzwerk-management. Eschborn (RKW-Verlag), 2001

Müller, Bernhard et al (Publishers): Kommunikation in regionalen Innovationsnetz-werken. Munich and Mering (R. Hampp Verlag), 2002

Porter, Michael E.: Competitive Advantage of Nations. Palgrave Macmillian, 1998

United Nations Industrial Development Organization:Development of Clusters and Networks of SMEs. The UNIDO Programme. Vienna, 2001

Ritter, Thomas: Innovationserfolg durch Netzwerk-Kompetenz: Effektives Management von Unternehmensnetz-werken. Wiesbaden (Gabler), 1998

Sölvell, Örjan; Lindqvist, Göran; Ketels, Christian: The Cluster Initiative Greenbook. Stockholm (Bromma tryck AB), 2003

Sydow, Jörg; Manning, Stephan (Publishers):Management von Netzwerkorganisationen. Wiesbaden (Gabler). Fourth edition, 2006

Sydow, Jörg; Duschek, Stephan et al.: Kompetenzentwicklung in Netzwerken. Wiesbaden (Westdeutscher Verlag), 2003

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Documents

Internationalization of Networks Barriers and Enablers