Network Building

Successful innovation depends increasingly on the ability of companies to access external knowledge and other resources to complement areas where they are lacking (Rothwell, 1994). To be able to access these resources, researchers agree that efficient networks need to be in place (Prahalad & Hamel, 1990; Teece & Pisano, 1994, Aken & Weggeman, 2000).

An innovative network is composed of customers, suppliers, and other firms that help companies overcome complexities with regards to their goods or services (Rothwell, 1994).

However, Beaudry and Breschi (2003) point out that a network by itself is not enough;

actors within the network also need to be related to one another. By being located in the Aarhus Business Region, the park sits close to important players in the Danish food industry such as suppliers, experts, specialized workforce and customers. The proximity to these players makes it easier and faster for tenants to access this network outside of the park.

Furthermore, Agro Food Park hosts only companies that work in the food industry to create an innovative environment also inside the park. In addition, we find that tenants get greater benefits from being clustered within a related field if network building is facilitated.

5.2.1.1. Facilitation of Network Building

The likelihood that firms exchange knowledge and work together increases when a commonly known third party is involved (Ring & Van de Ven, 1994). Agro Food Park has different facilitators or third parties that connect the tenants. One facilitator is the park management. By offering various social and business events, lunch meetings, and other networking events, they help companies build new relationships and expand their network.

Furthermore, the management actively connects tenants when they believe that there is

potential for valuable exchange as well as helps connecting them to partners and other actors

outside the park. Phan et al. (2005) and Tsai et al. (2009) stress the importance of a park’s

management to help build networks. However, our findings indicate that the impact of the

park’s management on the network building is more important for SMEs and larger

companies while it is less impactful for the startups. Instead, the startups’ network building

emanates almost exclusively from the incubator in the park. The incubator plays another facilitating role in the park, however, solely for the startups. It takes on a similar role as the park’s management in actively connecting startups with relevant partners inside and outside the park as well as offering events specifically geared towards startups. The startups report that the events organized by the incubator are more relevant than the activities offered by the park’s management. This is consistent with Lecluyse et al. 's (2019) findings that the relevance of the services is important and that this is likely to differ depending on firm size.

It is not possible to conclude whether the network building for the startups is solely impacted by the incubator and that there is no influence from the park. Our findings do not allow us to argue that without the incubator, the startups would potentially use the park’s offering more or find them beneficial. Still, based on the literature, we can argue that the current management team of the park is not large enough to efficiently facilitate network building amongst all the tenants. Albahari et al. (2018) assert that the larger the management team, the better the facilitation amongst tenants. The current management size of four people, with Søren Madsen and Anne-Marie Hansen being the only ones involved in facilitating the network, seems to be too small. Furthermore, understanding the needs of the different tenants is necessary in order to create valuable connections (Löfsten & Lindelöf, 2003).

From our data, we find that the incubator does a better job than the park management in fulfilling that role for the startups. Even though Søren Madsen has extensive knowledge of the food industry, acquired through experience, the incubator offers extended facilitation, being not only specialized in the food industry per se but also in the development of startups.

Further facilitating institutions such as the Danish Food Cluster or Future Food Innovation are also relevant when it comes to network building. These institutions have well-established connections within the food industry. They therefore complement the park management’s efforts by creating synergies and offering access to valuable networks.

Amongst the tenants, these institutions were seen as a valuable complement to the

management when it came to building networks. Hence, it is not necessarily solely the

management that impacts the facilitation of networks. Rather, the management can be

complemented by institutions focusing on a specific firm type (such as the incubator) and area of work (network institutions in the food industry) that help create relevant networks.

Hence, we can say that while facilitation plays an important role in network building, this task does not rely exclusively on the park management but can be complemented by other institutions. Typically, the other institutions become relevant when the management team of the park is too small and therefore lacks resources, especially time. Furthermore, they can substitute for missing expertise of the management with regards to industry knowledge or firm size. However, having different network facilitators poses a threat of creating separate ecosystems that do not interact. This is arguably the case for the startups, managed by the incubator since they all asserted that while they knew the other startups in the incubator, they did not interact or know the other tenants in the park more than superficially.

5.2.1.2. The Role of Trust

A further point worth noting when it comes to network building is the role of trust. Trust, which is an essential mechanism for knowledge exchange, is strengthened through repeated interactions between entities (Ring & Van de Ven, 1994). It builds the basis of durable relationships which Capitanio et al. (2010) argue to be a driver for a competitive product innovation process. Hence, while facilitators help build a network, the previous relationships that tenants in the park have with other firms, as well as the frequency of interactions, need to be considered. Since the representatives from Arla, Foodjob Nordic and the park management knew each other from past employment at Arla, they had an already established relationship when joining the park which arguably impacted their network building.

Concerning the frequency of interactions, the physical layout of the park has to be

mentioned as well. Since there is only one canteen in Agro Food Park, it creates a space

where it is easy to approach other tenants and have a chat. Furthermore, tenants sitting in a

shared office building reported more interactions with other companies than the ones

occupying a whole complex. Hence, part of the network building effects can be traced to

the physical design of the park. Furthermore, since larger companies and SMEs both have

could be stronger just based on the fact that they have had more past interactions with each other (Ring & Van de Ven, 1994). This is also supported by our findings that the SMEs and larger companies in our sample have more formal collaborations with tenants in the park than the startups. For formal collaborations to establish, trust again plays a crucial role since such collaborations require stronger commitments and contributions from each party. As mentioned before, trust generates an improved knowledge exchange and access to information which positively connects to innovation (Jones et al., 1997).

In conclusion, all the aforementioned factors help tenants to expand their network and establish new relationships, be it through the location itself, facilitation, past relationships or interactions with other tenants. Therefore, the park influences network building, which Omta and Fortuin, (2013) also found to be most valuable for food companies studied in the Dutch Food Valley. The network becomes especially relevant in the development phase of a good or service when companies need to access external resources to complement their internal capabilities (Mowery, 1989). The resources accessed through the network will be discussed further in the next subsection.