The effectiveness of knowledge networks: An investigation of manufacturing SMEs

Purpose: Although considerable attention in the extant literature has been devoted to knowledge acquisition and transfer within firms, there is a dearth of research on the effectiveness of outside sources of knowledge for technology-based small to medium-sized enterprises (SMEs). Furthermore, the majority of empirical studies in this area focus on large firms while research on smaller firms is underdeveloped. The aim of this paper is to investigate the impact of the sources of knowledge on the performance of technology manufacturing firms and the implications for higher education institutions (HEIs) providing advice to this sector. Design/methodology/approach: Following interviews with managing directors of manufacturing firms, a number of sources of technical advice were identified. A survey of small and medium-sized UK electronic and engineering firms was then carried out to investigate the relationship between sources of knowledge and performance and also to establish whether there is a relationship between performance and the extent of the advice network. Findings: Significant correlations were found between company age, knowledge source remoteness and company performance. The more remote the source the less effective it is. The stronger the firm's network the more profitable it is likely to be. Practical implications: This has particular implications for universities involved in knowledge transfer, as these institutions are often relatively remote compared with other sources of advice within SME networks. Originality/value: The research adds to our understanding of the role of HEIs and other members of knowledge networks in relation to the achievement of competitive advantage by SMEs.