Building potential networks between SME

ALDERETE MARÍA VERÓNICA

Singapur. Singapore Management University, Singapore

Conferencia; The Fourth SMU EDGE Conference. BRIDGING THE GAP: ENTREPRENEURSHIP IN THEORY AND PRACTICE; 2009

Lee Kong Chian School of Business, SMU

Building potential networks between SME Abstract Introduction During the last years, the setting faced by small and medium sized enterprises has changed. This caused the restructuring, both internal and external, of firm coordination and organization modality. The positive network externalities importance in contemporary industry comes from the concept of “network” that differs from the old industrial paradigm concept of scale economy. Nowadays competition occurs between networks of firms or value chains, not among isolated firms. New information and communication technologies characterize the current market, generating new information management forms and new communication modes intra e inter-firm. This paper inquires about SME network as the new industrial organization modality. Methodology and Data The particular purpose is analyzing potential networks in Food and Beverage industry between SME using a Categorical Principal Components Analysis. The data consists of a SME sample that comes from a Structural Survey of Fundación Observatorio PyME during the period 2001-2002. This sample was obtained as an award from this foundation in 2005 for a research project in Industrial Economy. The INDEC (Argentinean National Institute of Statistics and Census) made the sample design of the Structural Survey. This survey collects data from 617 firms of different industrial activities and location. The objective of this study is analyzing 106 firms from the Food and Beverage industry and its possible international insertion with a categorical principal components analysis. Conclusions Associative entrepreneurships are collective actions that allow SME reaching different levels of technology and improving their bargaining power in markets. Through the CATPCA we concentrate on 31 firms to build potential networks, that is, nearly 30% of the set of Food and Beverage firms. Most of them are situated in two main regions from Argentina: Cuyo and Gran Buenos Aires. The networks built are not solely for export activity, the scope of the international market depends on the characteristics of the product considered. In some products, the proposed links between firms are in areas that could affect the probability of future exports, as training in external commerce and participation in fairies. In other cases, the possibility of alliances for outsourcing appears as a production strategy. Keywords: Networks, Categorical Principal Components Analysis, Small and Medium Sized Enterprises.