Evaluation of network approaches to business training and development

Networking, or inter-firm collaboration is not a new phenomena. Internationally, it has been supported and encouraged by government and has gained international prominence as an economic development strategy (Bosworth and Rosenfeld 1993). Up to now, the majority of state and local governments have been focussed almost exclusively on firm specific strategies, either to recruit out-of-region firms to relocate and/or to build the capacity of the region's companies and entrepreneurs. Networking as an economic development strategy has been demonstrated in the Italian region of Emilia-Romagna, Denmark, Germany and Japan. However, an understanding how networks operate and how best to facilitate the expansion of the beneficial aspects of networks to assist small business has received limited review. An understanding of networks and their development is important given the fact that small businesses comprise over 95% of all Australian businesses and some 35% of the nation's earnings (QSBC 1992). Many Australian firms find they are unable to compete in international markets because individually they lack the resources and skills needed to succeed in those markets. In addition, small firms are generally viewed as lacking appropriate management skills and offering limited formal training opportunities to employees due to the difficulty in convincing small firms of the benefits of training (Williams 1984; Meredith 1984; Gibb 1987). Networking is perceived as one process of assisting companies overcome these difficulties. It allows companies to develop capabilities in association with other enterprises, and collectively make them more efficient and competitive. Bosworth and Rosenfeld (1993) argue that networks have the potential to change the way small firms operate, organise work and increase entrepreneurial activity. Private and public sector agencies should therefore be encouraged to demonstrate the success of networking among small firms. Public policy is needed to promote and enhance networking as a private sector phenomenon.