Does cooperation enhance competitiveness? Assessing the impacts of inter-firm collaboration

Collaboration among small- and medium-sized enterprises (SMEs) is an emerging approach to industrial competitiveness. Since first noted in western Europe, governments agencies and private foundations have experimented with policies to stimulate and accelerate forms of inter-firm collaboration - commonly called manufacturing networks. The assumption behind such policies is that cooperative behavior will help SMEs firms compete, and therefore the goal is to alter the behavior of enterprises and to facilitate co-operation. These strategies are part of an emerging national effort to stimulate industrial modernization through a variety of interventions. State legislatures and government agencies being asked to invest in network initiatives want to know whether they are meeting their goals and what impacts they are having on their state, regional, and national economies. While investments small in scale, expectations are high. This article draws on two evaluations of network initiatives, one sponsored by a state and one by a private foundation, to discuss issues, methodologies, evidence of impacts, and challenges. The first evaluation requested by for the Oregon Economic Development Department, occurred at an early stage in the process and therefore was limited to the process and early industry responses. The second, requested by the Northwest Area Foundation, was over the 3-year grant period, and also included some measures of change among participating SMEs. Both, however, illustrate the difficulties in trying to attribute 'bottom line' changes in a business and economic changes in an economy to relatively small and indirect interventions, and the need for additional research on measures and methodologies.