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Network Centrality and Open Innovation: A Social Network Analysis of an SME Manufacturing Cluster

Research on open innovation has, in the main, focused on large, high-technology firms and tended to adopt an organization-centric approach in examining external links. In contrast, this article uses social network analysis and network centrality to explore open innovation among a cluster of 33 low-technology small and medium-sized enterprise (SME) manufacturers in Ireland. Adopting a mixed-methods approach this article looks beyond the immediate external links that SMEs form with external organizations and explores the wider network in which such firms are located, their position in these networks and the impact of such positioning on open innovation. This article reports a generally positive relationship between networking activity and innovation performance. Within the context of the low-technology cluster it is apparent that the positioning of a firm within the network may serve to enhance or impede its innovation activity in product development. Despite factors such as fears of appropriation limiting the degree of knowledge and resource exchange within the network, this evidence suggests that those firms occupying central network positions and thus connected to a greater number of other members of the cluster, typically demonstrate greater degrees of innovation activity. Finally, as a means of elucidating the factors that may influence a firm's position the article illustrates that firm size, absorptive capacity, and managerial orientation serve as antecedents of network position.