Inter-firm network policies and firm performance: evaluating the impact of initiatives in the United Kingdom

This paper explores the strengths and weaknesses of inter-firm networks as a public policy resource, that has necessarily required experimentation and adaptation. The focus of the paper is an evaluation of public policy network initiatives in the United Kingdom from the point of view of the companies participating in these initiatives. The study finds that inter-firm network initiatives have faced a number of problems, resulting in the level of inter-firm interaction being generally fairly low and unintensive. This has severely limited the number of firms that have benefited from participation, as well as the overall impact on firm performance and growth. More positively, it is shown that the initiatives have resulted in substantial gains for albeit a small number of participating companies. The small number of companies achieving substantial benefits were most often those involved in initiatives that were able to formalise sustainable networks. The key policy problem is that this situation has occurred in only a very restricted number of circumstances, with formal network initiatives being subject to extremely high 'drop-out' rates. It is suggested that policies aimed at formal network initiatives should be abandoned as a mechanism for creating a critical mass of sustainable networks. Instead, the progression of policy models based on informal initiatives appears to offer the most plausible means of catalysing inter-company contact. (C) 2001 Elsevier Science B.V. All rights reserved.