Profitnet (Profit through Networks)

An innovative approach to networking, knowledge sharing, and exploring solutions among Sussex businesses.

Profitnet is a free 'Learning Networks' programme with nearly five hundred member businesses across East and West Sussex.

Aims

The project aims to investigate the dynamics and the effects of ‘constructed’ learning networks of small and medium firms.

The research examines four areas:

‘Constructed’ networks, their overall performance and the barriers and the enablers for creating and operating them
‘Facilitated’ inter-firm groups, their dynamics, and the competencies required for the effective management of these dynamics
The impact of ‘constructed’ networks and ‘facilitated’ groups on firms, namely the management of innovation, their skills and their organisational capabilities
Knowledge transfer issues with a special focus on the transfer between small firms and higher education Institutes

Background

There are numerous studies about networks of small and medium sized enterprises such as the studies on clusters or the studies on the social networks of entrepreneurs. However most of these studies are on emergent or ‘natural’ networks focusing on the assessment of their contribution to (regional or business) development or on defining them and mapping them. The area of ‘constructed’ networks of small and medium sized firms is rather neglected - ‘constructed’ mean networks formally designed and established for a purpose rather than emergent. The focus of this project is on networking – i.e. less about defining a unit than about how to create and operate ‘constructed’ networks of small and medium firms the implications of such design understanding for policy agents at different levels.

Another main stream of research has looked at the knowledge sharing and development among communities of practitioners –for instance the literature on communities of practice. Here again the main focus of these studies is the emergent communities rather than the communities as designed and created entities. This project concentrates on facilitated communities of small business entrepreneurs addressing issues like the required facilitation skills and competencies as well as the actual facilitation practices and how those affect the learning of the involved practitioners.

The open innovation paradigm has found its way into the academic discussion as an increasing number of firms look for ideas outside their organisation. So far, this discussion has focused primarily on the ‘lucrative’ part of the economy such as the software industry and the strategies of large corporations to access the potential of smaller firms. The Profitnet project looks at open innovation practices in the context of small firms in a variety of sectors including sectors beyond the usual focus of research (e.g. high-tech sectors).

Finally there are significant challenges in developing university-industry linkages beyond the simplistic notions of high tech spin-offs or the sharing of patents with large corporations. Here the focus is on exploring new ways of bridging to local communities, developing what Alan Hughes from Cambridge calls the ‘public space’ of the university within which new and regular interactions can be created. This project adopts an activity-based view where the links between the university and the small firms are examined in practice.

Outputs

Our study has the benefit of being informed by the large regional network in the Sussex area, Profitnet, set up by the University of Brighton — under the guidance of CENTRIM.

Profitnet is composed of a set of 33 groups with about 450 executives from small- and medium-sized enterprises. The research takes place by a combination of quantitative and qualitative methods namely surveys, interactive workshops, direct observation of network sessions and interview-based cases.

This research expects to contribute to the academic agenda in several areas.

Networking

The project has the chance to capture and codify experience across the five Profitnet networks (West Sussex, Gatwick area, Brighton and Hove, East Sussex and Hastings) distil ‘best practice’ from comparing different networks and identify the management challenges of such ‘constructed’ networks.

Facilitated groups’ dynamics

Where the academic team leverages the ‘live laboratory’ of this programme. Attendance and members satisfaction are being captured for all groups while a number of direct observations are being conducted among high-, mediocre- and low performing groups.

Innovation policy and how to bridge the gap to smaller firms

The absorptive capacity of a significant number of small enterprises is measured through a specially developed instrument. Moreover case studies of a selected number of participating firms is carried out to identify the knowledge transfer and flows in the context of open innovation among SMEs.

Higher education

From the standpoint of HE institutions, and other ‘supply side’ players in the knowledge innovation system, the enablers and the inhibitors of building extensive interactions with the industry and more particularly a significant number of small and medium sized enterprises in its region

The research will also lead to practical deliverables for policy agents, Universities and managers group facilitators alike seeking to add networking to their repertoire and needing some guidelines about how to do this effectively and how to scale up pilot activities.