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Harnessing Externalities to Enhance Competitiveness in an Industrial Cluster: Experiences in a South African Cluster

Harnessing Externalities to Enhance Competitiveness in an Industrial Cluster: Experiences in a South African Cluster
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Author(s): Mary Jesselyn (University of Southern Queensland, Australia) and Bruce Mitchell (Oxford Brookes University, UK)
Copyright: 2015
Pages: 18
Source title: Handbook of Research on Global Competitive Advantage through Innovation and Entrepreneurship
Source Author(s)/Editor(s): Luís M. Carmo Farinha (Polytechnic Institute of Castelo Branco & NECE – Research Unit, Portugal), João J. M. Ferreira (University of Beira Interior & NECE – Research Unit, Portugal), Helen Lawton Smith (Birkbeck, University of London & Oxfordshire Economic Observatory, Oxford University, UK) and Sharmistha Bagchi-Sen (State University of New York – Buffalo, Buffalo, NY, USA)
DOI: 10.4018/978-1-4666-8348-8.ch013



This chapter investigates the effects networks have on the acquisition of external economies. The objectives of this chapter include determining if businesses located in clusters are benefitting from external economies and identifying the extent to which these firms are using their networks in accessing these external economies. Six SME business owners were interviewed. They form part of an automotive manufacturing network based in Port Elizabeth in South Africa. The researchers used content analysis and pattern matching to analyse the data. The findings indicate that the entrepreneurs interviewed were all using their networks to gain external economies. They used networks to gain technology spillovers in the form of information on new trends and processes in the industry and highlighted the fact that the network contacts provided opportunistic information. The study also found that some of the entrepreneurs used their network to source skilled employees from the pooled labour market and obtain specialized services and input.

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