Contribution of Social Capital to Innovation: The Mediating Role of Knowledge Embedded in Social Networks

Contribution of Social Capital to Innovation: The Mediating Role of Knowledge Embedded in Social Networks

Mustapha Bengrich (University of Ibn Zohr, Agadir, Morocco), Adil Azzahidi (University of Ibn Zohr, Agadir, Morocco) and Amina Omrane (FSEG, Sfax, Tunisia & ECTSRA, IHEC, Carthage, Tunisia)
DOI: 10.4018/978-1-7998-3142-6.ch009


In today's uncertain environment, companies should develop solutions to meet the global competition trends and the rapidly changing customer demands. In fact, to gain a competitive advantage, organizations should be equipped with knowledge, which is considered as an essential resource, rather than with traditional resources, such as durable assets or material/technical resources. In other words, investing in intangible assets that are difficult to imitate, such as social capital, promotes dissemination and exchange of accessible knowledge used by organizations. Such knowledge management processes enable firms to enhance their capacity of innovation as well as their creativity skills. The objective is therefore to develop a literature review that helps enrich and in-depth understanding the dynamics of social capital within an industrial cluster (i.e., a common geographical area).
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A particular attention has been paid to the better understanding of mechanisms implemented in order to improve the survival and development of SMEs’ networks, like technopoles, clusters, service-based spaces, innovative areas, industrial districts, and learning regions (Carluer, 2006). More specifically, many researches are currently focused on industrial clusters and their respective role in the local development of countries (Karlsson et al, 2005). A cluster, recognized as a group of interconnected actors/organizations within a particular domain, enables companies to gain competitive advantages. It allows them to be more innovative and creative than any other enterprises established elsewhere (Baptista & Swann, 1998; Molina-Morales & Martinez-Fernandez, 2010). Moreover, the cluster is designed to be a place that enhances innovation among the stakeholders of a company, while taking advantage of the existing proximity between them (Boschma, 2005). However, it seems that such a proximity is not enough to explain their competitive advantage (Mitchell, Burgess & Waterhouse, 2010). It appears that social connectivity and interaction between actors are the most appropriate triggering factors of their innovation capacity (Doloreux & Parto, 2005). On the other hand, social networks within a cluster promote cooperation, as well as exchange of resources and knowledge; and more precisely transfer of tacit knowledge, which better contributes to innovation. Consequently, a group of skilled entrepreneurs enhances a collective capacity of innovation, greater than the sum of the individual capacities developed by each entrepreneur working lonely within the group.

In this perspective, a strong stream of studies emerged to develop a knowledge-based cluster theory (Maskell and Malmberg, 2007). In such researches, scholars have mainly focused on the functioning of social networks within clusters and their evolution in order to understand and explain how knowledge is created and organized. These social networks have been associated with knowledge transfer and dissemination structures within clusters (Boschma, 2005).

Such research annotation turned to networking and knowledge development in clusters is relatively recent, but increasingly inspirational. Indeed, new concerns consider a cluster as a dynamic system (Cooke, Uranga, and Etxebarria, 1997), which can be explained by two factors. First of all, the rise and convergence between theories is based on knowledge, acquisition, creation and dissemination of knowledge (Maskell et Malmberg, 2007). Then, the theory of social networks focuses mainly on the interactions between different actors of a cluster (Eklinder-Frick, Eriksson and Hallen, 2012). Moreover, these two theoretical fields merged and combined have the effect of associating the capacity for innovation within clusters with the social networks that compose these areas and the social capital disseminated by actors evolving there (Suire and Vicente, 2014).

Nevertheless, it is worth mentioning that researches on the dynamics of social networks and knowledge within clusters are still scarce and could be better developed.

Our objective is therefore to understand how social capital affects positively the companies’ innovative capacity within a cluster, by fostering the exchange of knowledge embedded in networks. Such innovation capacity-based on knowledge transfer, is pursued as a source of success and sustainability. In this perspective, we will try to answer the following central question: “To what extent does social capital enhance enterprises’ innovative capability within a cluster?”

Key Terms in this Chapter

Collaborative Innovation: The innovation process involving several human individuals as creators. The collaboration is either intra- or inter-organizational (open), depending on whether the individuals belong respectively to the same organization, or to different organization(s).

Knowledge Management: The process of critically acquiring, disseminating, conbining, selecting, exploiting, and sharing a great amount of information and existing knowledge in order to meet current needs and develop new opportunities.

Social Capital: The sum of the actual and/or potential, virtual resources (including emotional and affective support), which are linked to the possession of a durable network of institutionalized or informal relationships of mutual acquaintance or recognition.

Absorption Capacity (CA): The organisation’s ability to identify, assimilate, transform, and use external information, scientific and technological knowledge, as well as other practices and kinds of knowledge existing outside of the organization and enabling it to learn.

Knowledge Café: A common physical place where individuals/organizations come and meet in order to gather innovative ideas, to exchange and discuss on their different problems, searching for further interesting possibilities and solutions.

Industrial District: A common geographical space or area where workers, small companies, and firms, specialised in a main industry and auxiliary industries, live, work together, and can benefit from their proximity to collaborate and elaborate common ideas and outputs.

Firm Capacity for Innovation (or Innovative Capacity): The organization’s capacity and abilities to move beyond current ways of doing things by introducing novelty in existing/new products/services, strategies, technologies, methods, and operational systems with revolutionary, major, or minor modifications and transformations.

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