Studies on Firms, Markets and Networks
Chapter 7: Regional Business Networks
7.1 INTRODUCTION Regional business networks (RBNs) have attracted a great deal of attention over the last twenty-ﬁve years, although their importance was recognized by economic historians long before that (see for example Wadsworth and Mann, 1931; Court, 1938; Prest, 1960; Allen, 1966; Church, 1966). Recent academic literature on RBNs draws upon a number of disciplines, including politics, economics, sociology and geography (see for example Dalzell, 1987; Hudson, 1989). This literature places considerable emphasis on informal social interactions within the regional economy. This emphasis on ‘networking’ is a useful antidote to the rather narrow view of regional economic development taken in many purely economic texts. Much of the literature on RBNs is, however, ﬂawed by an unwarranted neglect of the entrepreneur. The importance of the entrepreneur was highlighted in Chapter 3. It was pointed out in Chapter 4 that networking enhances the contribution of entrepreneurship to economic development. However, both entrepreneurship and networking are crucial to the development process described in Chapter 4. Just as entrepreneurship without networking may prove ineffectual, so networking without entrepreneurship may also prove ineffectual. Networking without entrepreneurship may actually retard regional economic development. This is a special case of a more general proposition: namely, that the type of networking that occurs is more important than whether or not networking of any sort occurs. There is ‘good’ networking and ‘bad’ networking as far as regional economic development is concerned. Good networking is typically open, transparent and entrepreneurial, and involves the provision of ‘public goods’ to industry....
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