The Theory and Practice of Entrepreneurship
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The Theory and Practice of Entrepreneurship

Frontiers in European Entrepreneurship Research

Edited by David Smallbone, João Leitão, Mário Raposo and Friederike Welter

This timely book provides a fresh perspective on contemporary research in the field of entrepreneurship and small business, considering both theory and application.
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Chapter 9: The Virtualization Potential of SME Networks: An Exploratory Investigation

Emilio Esposito, Pietro Evangelista, Vincenzo Lauro and Mario Raffa


Emilio Esposito, Pietro Evangelista, Vincenzo Lauro and Mario Raffa INTRODUCTION1 In Italy during the 1970s and 1980s, networks of small and medium-sized enterprises (SMEs), such as enterprise clusters and industrial districts, offered an important alternative to the advantages achieved through a larger production scale in many countries and industries. However, in more recent decades uniform growth in SME networks has come to an end. In order to respond to competitive challenges, local SME networks have experimented with new development paths, and the range of options has significantly expanded. Traditional unidirectional development paths have no longer proved valid, and various avenues have been pursued to face up to market globalization. Accordingly, on discussing the future of industrial districts, Becattini et al. (2003) recognized that this organizational form of SMEs has often proved to be rather a ‘stage’ in one of the possible different paths of industrialization. The radical changes that have occurred in the competitive scenario in recent years have driven small firms to seek new development paths in order to cope with the growing complexity of the business environment and to ensure access to new sources of competitive advantage (Davenport and Short 1990; Manuelli 2002). In this new scenario, many studies have stressed firms’ opportunities to redesign processes and business organizations through electronic networks on a worldwide scale (Jin and Robey 2008; Scott Morton 1991; Tapscott 1996). By focusing on the gains in efficiency stemming from the electronic management of business processes, physical proximity and localization have become less important....

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