Social capital and export ready clusters

Phillip Waite

doi:10.25907/00334

Exporting plays an important role in Australia's economic well being. There are many international business opportunities available to Australian firms yet small to medium sized enterprises (SMEs) seem unable to fully capitalise on them. The underlying reason for this dilemma it seems, is a lack of financial, production and personnel resources in SMEs to fully take advantage of international opportunities. The first research issue of the thesis investigates whether social capital may aid small firms overcome these lack of resources. In recent years industry cluster development initiatives have been widely promoted as the cure-all for resource poor SMEs. However, whilst most firms may be happy to form long and lasting relationships with suppliers, the concept of working and sharing information with competitors is yet another story. However to gain economies of scale, and to compete globally, firms may have little choice but to do so. The issue therefore, is how firms can overcome inherent cultural traits of individualism and non- cooperation among competitors to achieve these objectives. In recent years the concept of social capital has been put forth as a possible remedy to overcome distrust and aid cooperation in attaining shared goals for mutual outcomes in groups. The overall goal of this research therefore, is to provide an understanding of how social capital may benefit SMEs in the internationalisation process and to examine if social capital can be externalised by SMEs when forming exporting clusters. This leads to the research problem for the research: How does a firm's social capital contribute to export ready clusters situated in SE Queensland? A review of the relevant literature provides a foundation and focus for the research and the basis for the methodological approach, which could enrich the insights into the phenomenon under study. A theory building methodology was used and data collected through semi structured interviews with industry group and government participants. Four preliminary interviews with government and export industry experts confirmed and reinforced the research issues identified in the literature review. Nine firms across three clusters were examined in the main study. The main findings of the research indicate that SMEs may export without the existence of social capital in their firms however, social capital may aid a firm's state of export readiness by overcoming some of the resources often lacking in SMEs. It would seem however, that social capital is an important ingredient for potential export cluster members if cluster success and sustainability was to be attained. The thesis concludes with the contributions of the research including the development of an export readiness framework for SMEs and a model of social capital and export cluster formation.

Social capital and export ready clusters

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