Density and strength of ties in innovation networks: an analysis of multimedia and biotechnology

Abstract

This paper proposes modifications and extensions to the thesis of the ‘strength of weak ties’ in interfirm networks. It proceeds on the following assumptions. First, network effects depend on the industry and on whether the focus of a network is on exploration or on exploitation. Second, next to density and strength of ties one should also look at their content, for example in terms of types of knowledge and technology. Third, the analysis should take into account matters of both competence for innovation and governance of relational risk. The paper develops theoretical propositions that argue in favour of ties in exploration that are dense and strong in three out of five dimensions. Predictions are confronted with case histories of innovation in Dutch multimedia and biotechnology industries. While this does not yield a rigorous quantitative test, and results cannot be generalized, it does yield interesting refutations that yield new insights.