Organizing NPD networks for high innovation performance: the case of Dutch medical devices SMEs

This research examines which combination of network characteristics (the network configuration) leads to high innovation performance for small and medium sized companies (SMEs). Even though research has paid significant attention to the relation between the external network and the innovation performance of SMEs, research has not yet clearly demonstrated which configurations most affect innovation in particular contexts. The context of the research is the Dutch medical devices sector. This sector is selected because collaboration with external partners for new product development means becomes increasingly important due to the complexity of the products and the fragmentation of the market. In addition the sector is characterized by very strict regulations. These regulations are the cause of the time and cost consuming product development process. In triangulation with quantitative survey data (N=60), qualitative data was gathered through semi-structured interviews in these same companies (N=50), which resulted in a response rate of 61,9%. The systems approach was used to construct the successful network configuration that is related to high innovation performance. By using this approach we are able to simultaneously address multiple network characteristics. Correlation statistics between the Innovation Performance and the Euclidean Distance showed that the more a companies’ network configuration differed from the successful network configuration, the lower the Innovation Performance of that company. Contrary to what we hypothesized from literature, the results of the social systems approach indicate that the network configuration that is related to high innovation performance includes high levels of resource complementarity and goal alignment, and low levels of trust and network position strength. Instead of the social way of networking, both our quantitative and qualitative findings show that a “businesslike” approach which is focused and consistent is related to high innovation performance.