This paper investigates how small and midsize enterprises (SMEs) utilize networks to commercialize emerging technologies. We build on literature on SMEs and innovation, networks, and how innovation occurs within collaborative arrangements. Contrasting network types and their influences on commercialization outcomes are probed in the context of SME value chain positions. An exploratory study is undertaken to offer a framework and findings that provide context and insight. We consider roles of SME agency and strategy to put forward a framework of network types. Using a multiple case approach of a sample of UK nanotechnology SMEs, value-chain positions and networks for commercialization are examined. Data are collected through semi-structured primary interviews with managers and informants and from secondary business databases and other sources.
Commercialization outcomes are found to vary by SME network type and value chain positioning. SMEs can proactively create SME-led, peer-SME or broker-led networks that aid commercialization. SME-led networks enable successful commercialization of upstream and midstream products. Peer- SME networks are used for downstream commercialization. Broker-led networks facilitate commercialization in the upstream part of the value chain. Hybrid networks are used where SMEs pursue multiple commercialization strategies. Reactive approaches to networking and interrupted networks, regardless of value chain position, are unfavourable for commercialization. The study’s conceptual and managerial implications are discussed.
Technology commercialization is a process that translates promising discoveries and inventions into streams of economic returns and can involve strategic and tactical planning processes, product conceptualization, development, production, launch activities, and interactions with potential buyers and other relevant network actors (Gans and Stern, 2003; Mattila et al., 2019). Commercialization is especially challenging for emerging technologies, with the inherent uncertainty and ambiguity that accompanies radical novelty and anticipations of rapid growth and impact (Rotolo et al., 2015). These challenges include choosing a feasible strategy, understanding potential customers, creating credibility, acquiring support from the surrounding network and ecosystem, overcoming adoption barriers, and generating sales (Aarikka-Stenroos and Lehtimäki, 2014). Small and midsize enterprises (SMEsFootnote 1) can find that overcoming such obstacles is particularly difficult as their commercialization capabilities are often constrained by limitations of finance and internal skills and their inherent lack of market power (Shapira, 2010; Fortwengel and Sydow, 2020).
It has been suggested that SMEs’ capacity for commercialization can be increased by finding the right partners to engage with, utilizing existing business relationships and ‘building positions in networks’ (Aaboen et al., 2013; Lin et al., 2015). Yet, despite awareness that successful technology commercialization often requires network engagement, less is known about the types of networks that SMEs can use and what aspects of networks are conducive to successful commercialization (Agostini and Nosella, 2019). Much of the previous research tends to highlight only one specific dimension of the issue, with greater focus on the networking behaviour of firms in the close to inception research and development (R&D) phase of the innovation process and less attention given to the commercialization (close to market) stage. Although there is now an improved grasp of the practices of open and collaborative strategies for large firms (e.g., Billington and Davidson, 2013), our understanding is lower about how SMEs use networks for commercialization (Hossain and Kauranen, 2016; Randhawa et al., 2016). Furthermore, the different ways that such networks can be formed, which can lead to different network types, and the impacts of each network type on commercialization, are not well comprehended (Fernández-Olmos and Ramírez-Alesón, 2017).
Our research objective is to advance a more contextualized appreciation of how SMEs might use networks to commercialize emerging technologies. We consider two research questions. First, what types of networks are used by SMEs for commercializing emerging technologies? Second, how does the use of different types of networks influence the commercialization of emerging technologies? The research is positioned as an exploratory theory-development study, combining literature with empirical observations to add fresh perspectives to the existing research on the topic (Eisenhardt, 1989; Yin, 2014). We investigate various network configurations used for commercialization, develop a typology of networks based on a combination of network structure and roles of diverse actors, and probe how different network types facilitate or impede commercialization. To enable in-depth investigation of commercialization of an emerging technology, a multiple case study of SMEs in the UK nanotechnology field is undertaken. While we do not claim that our findings apply everywhere to all technologies, we do suggest that the combination of promise and complexity and the mix of research organizations, SMEs, larger firms, and intermediaries in the nanotechnology domain present an appropriate and suitable research context for an exploratory study of commercialization of an emerging technology in a network setting.
In the paper, we distinguish several types of commercialization networks and investigate how participation in these networks leads to different commercialization outcomes for SMEs. We argue that the influence of network type on commercialization outcome is a function of SMEs’ capabilities and agency, and their value chain position. We frame this contention within a nuanced understanding of the roles, interactions and contributions of various network actors (e.g., incumbent firms, broker organizations, universities and research centres, and government agencies) to commercialization within a network setting.
2 Theoretical background
The theoretical background of this study draws on studies of open innovation (OI) in SMEs (e.g., Lee et al., 2010; Verbano et al., 2015) as well as broader debates on SMEs and innovation (e.g., Shapira, 2010; Hemert et al., 2013). The OI literature suggests that organizations need to open up their innovation processes, searching outside their boundaries and managing a rich set of network connections and relationships (Chesbrough, 2006; 2017). While early studies of OI looked mostly at large multinational firms (Huston and Sakkab, 2006; Gassmann et al., 2010; Mortara and Minshall, 2011), it is now evident that opening up innovation can also benefit SMEs (Pervan et al., 2015; Verbano et al., 2015; Brunswicker and Vanhaverbeke, 2015; Freel and Robson, 2017; Brink, 2018). Yet, less formalized R&D procedures, limited resources, and different network characteristics affect the benefits that SMEs derive from OI (Purchase et al., 2014; Bigliardi and Galati, 2016). Although SMEs face greater risks associated with OI (e.g., becoming overly dependent on outside parties) than large firms, SMEs can experience substantial positive effects through OI-related sales of new products and services (Spithoven et al., 2013).
While SME benefits from OI have been highlighted (Hossain and Kauranen, 2016), especially in technology-intensive industries (Verbano et al., 2015), there is less agreement on the extent to which inbound, outbound or coupled processes of OI are prevailing practices among SMEs (Gassmann et al., 2010; Cassiman and Valentini, 2016). Inbound OI involves the acquisition of available external knowledge in the firm’s innovation processes and R&D; outbound OI includes the sharing, transfer, selling, or licensing of internally developed knowledge and technology with external partners; while coupled OI encompasses combinations of outside-in acquisition and inside-out transfer in cooperative relationships by a firm with its partners (Chesbrough, 2006). According to Theyel (2013), the implementation of OI by SMEs can be extended to the firm’s value chain (including both inbound and outbound processes). Van de Vrande et al. (2009) suggests that SMEs are more likely to be involved in inbound rather than outbound OI practices. However, Hossain and Kauranen (2016), and Randhawa et al. (2016) found that the most prevalent OI practice among SMEs is in the commercialization phase. Lee et al. (2010), Spithoven et al. (2013), and van Hemert et al. (2013) identify the importance of outbound OI for SMEs particularly in finding external paths to commercialization.
2.1 Commercialization networks and actors’ roles
Although the importance of networks is highlighted in the existing literature on OI and SMEs (Agostini and Nosella, 2019), there remains considerable scope to further examine how SMEs can make use of, and manage within, different kinds of networks, especially when pursuing technological commercialization. From an SME’s perspective, various network actors can intentionally or unintentionally and directly or indirectly support commercialization (Aarikka-Stenroos et al., 2014). Customers and users as well as lead partners can contribute to commercialization by creating markets, performing commercialization tasks, and facilitating innovation adoption and diffusion (Aarikka-Stenroos et al., 2017).
In developing a framework for this study, we focus specifically on the commercialization network surrounding an SME, that is, the set of actors with whom the SME collaborates and the set of linkages between actors. Collaborating actors can include other small or large firms as well as organizations such as universities, technology centres, or government agencies. Linkages can embrace diverse collaborative forms including strategic partnerships, joint development or production, and marketing alliances. Our research focuses particularly on the immediate network that an SME intentionally forms or joins with the aim of commercialization. We define the success of a commercialization network from a focal SME’s perspective as encompassing two elements: (1) effectively mobilizing other actors and forming and managing network relationships; and (2) achieving the desired commercialization outcome (e.g., offering new products, processes, or business concepts to the market) through support of partners in the network.
The varied stakeholders relevant in the construction of commercialization networks raise the issue of agency—a factor often taken for granted in the extant network literature (Möller and Halinen, 2017). To comprehend agency in network management requires focus on the prime mover role in SMEs’ networks for commercialization. Prime movers can be defined as the key actors in the creation of the network who are technically, financially, or politically positioned to initiate and strongly contribute to the development and commercialization of an emerging technology (Jacobsson and Johnson, 2000). The existence and legitimacy of a prime mover is critical for the formation of the network (Doz et al., 2000). By actively recruiting members to join in the network, they cause formation of various network types which can in turn influence commercialization outcomes.
A series of views have been advanced on the roles that SMEs can and do play in commercialization networks. For example, it has been suggested that technology-oriented SMEs might influence how innovation is managed in the network from visioning to commercialization (Aarikka-Stenroos et al., 2017). As prime movers in networks, SMEs can drive technological change and play a central role in commercialization by mediating the process of knowledge transfer from academic science and engineering to industrial application (Genet et al., 2012). Shapira et al. (2011, 2016) and Andersen (2011) support the view that SMEs can play a significant role in commercialization by establishing partnerships with large incumbent firms. In the case of nanotechnology, Avenel et al., (2007) argue that SMEs are in an advantageous position to use the opportunities created by the convergence of disciplines in this emerging technology. Hence, SMEs can proactively form commercialization networks and attract various types of partners. Radical qualities and novelty may be highly valued by their customers and these benefits may outweigh increased uncertainty in the minds of potential network partners (Maine et al., 2013).
A contrasting perspective emphasizes the importance of incumbents as prime movers in networks (which may also involve SMEs). For instance, Pandza and Holt (2007) highlight the influential role of large incumbent firms with endogenous knowledge about emerging technologies and high absorptive capacity (Cohen and Levinthal, 1990) in building ties with SMEs and initiating commercialization networks. In the nanotechnology domain, Larédo et al. (2009) and Rothaermel and Thursby (2007) stress the power of early-entry incumbent firms in commercialization, while OECD (2010) observes that large incumbent firms are well placed because of their established technological knowledge base and their ability to acquire and run expensive instrumentation and production activities. Comparing the emergence of nanotechnology with biotechnology and information and communications technology, Niosi and Reid (2007) and Mowery (2011) stress the role of large established producers in pharmaceuticals, medical equipment or materials as actors possessing commercialization capabilities which ally with smaller firms as sources of productivity in their research and innovation.
Hence, incumbent firms that have the competence, resources, and influence to push the development and commercialization of emerging technologies are likely to be prime movers in creating networks. These actors have high absorptive capacity and their interest in emerging technology is because its enabling character can sustain and extend their technology development trajectories. In this case, the emerging technology promises to be competency-enhancing and is limited in its discontinuous potential (Pandza and Holt, 2007). In these networks, the resources and activities of the SME and the incumbent firm are complementary. The incumbent firm has downstream assets for manufacturing, sales, and marketing of the product (Hill and Rothaermel, 2003). Meanwhile, the SME can offer intermediate products that match the incumbent’s existing technology trajectories and help the incumbent to sustain and enhance the performance of their existing products and knowledge base (Salehi et al., 2018).
A further dimension to understanding the dynamics of commercialization networks is offered by considering the role of brokers—intermediary organizations (including technology centres) who influence the formation of relationships between firms and the commercialization process (Lauritzen, 2017). Brokers can play significant roles in facilitating collaborative innovation (Winch and Courtney, 2007; Lee et al., 2010) by demand articulation, protecting intellectual property, network composition, and innovation process management (Howells, 2006; Batterink et al., 2010). SMEs in emerging technologies can experience high uncertainty due to the generic nature of their technology, potential applications in multiple markets and the need for customers to undertake further process innovations (Maine et al., 2013). Brokers can help SMEs to explore different application areas, find suitable industrial partners and facilitate translations. Brokers in such networks need to have a good knowledge of industrial needs and potential applications, available technologies and products of SMEs, and the expertise and capabilities to facilitate linkages. They can also help in linking to financial and other commercialization resources and engaging with regulatory bodies.
2.2 Types of commercialization networks
As the above discussion illustrates, diverse actors such as incumbent firms and brokers can collaborate with SMEs in commercializing emerging technologies. In turn, there may be varied ways that SMEs can collaborate in commercialization with these actors. However, there have been few attempts to formally categorize and investigate the varied types of networks involving SMEs formed for the purposes of commercialization, to probe the mechanics of relationships among the actors within these networks, to examine actors’ roles and agency in creating networks, or to consider the influence of different network choices on the success or failure of SME commercialization. We propose—as a starting framework—the possibility of four types of SME networks for commercialization in emerging technologies, differentiated by the prime mover and major commercialization pathways.
The first possibility is an incumbent-led network, where an active incumbent initiates a relationship with an SME. The second possibility is an SME-led network where the SME has a distinctive technology, is the prime mover, and proactively attracts large incumbents to develop relationships with the SME. The thirds possibility is a peer-SME network where the focal SME partners with other SMEs to facilitate access to complementary resources and capabilities for commercialization. The fourth possibility is a broker-led network where the prime mover is an intermediary (such as an institution or organization for technology transfer) that matches an SME’s technology with incumbent demands.
We suggest that categorizing different types of networks based on the prime mover (as discussed in further detail below) facilitates the exploration of network dynamics and outcomes including how networks start, operate, and create value. While commercialization is never guaranteed (bearing in mind the risks and uncertainties associated with emerging technologies), we anticipate that these varied network types have a differential influence on outcomes. We also recognize that an additional aspect to be considered in this framework is the SME’s value chain position.
From an industry-level perspective, an SME’s value chain position is based on the roles it performs—and the value it adds—in the series of inter-firm processes and activities through which raw materials are transformed into marketable products of value to users and consumers (Zamora, 2016). To make this tangible, we consider nanotechnology as an exemplar emerging technology domain, where new SMEs have emerged (Rafols et al., 2011, Pandza et al., 2011, Islam and Ozcan, 2017). Nanotechnology can be viewed as a value chain ranging from nanomaterials to nano-intermediates to nano-enabled products, and all supported by nano-tools (Lux Research, 2014). Nanomaterials are nanoscale structures in unprocessed form, e.g., graphene, which constitute the upstream part of the value chain. Nano-intermediates include intermediate products with nanoscale features such as nano-composites and coatings. The downstream includes nano-enabled products, i.e., finished goods incorporating nanotechnology such as pharmaceuticals, vehicle tires, or specialized clothing. Nano-tools are equipment used to visualize, manipulate, and model matter at the nanoscale, e.g., scanning tunnelling microscopes, that are needed at all stages of the value chain.
It should be noted that our proposed network typology elucidates idealized network types and, based on the literature, we tried to articulate boundary rules for each network type. However, in practice boundaries may overlap, so network types are not necessarily mutually exclusive. SMEs might be involved in more than one network type simultaneously or might be changing networks over time. As we focus on networks formed for the purpose of commercialization, a change in the network is possible once commercialization happens. Therefore, overlaps in network boundaries might occur in practice. Nonetheless, we focus on these four architypes as our initial proposed network typology in this study. Also, in theory, it might be possible for SMEs to commercialize without a network, but, in practice, successful technology commercialization often requires network engagement and it would be very challenging for SMEs to succeed without a network.
In the following sections, the four potential types of SME networks for commercialization are further elaborated. We propose that by overlaying these potential types of commercialization networks onto an SME’s value chain position, additional insights regarding which networks are more conducive to commercialization can be gleaned.
2.2.1 Incumbent-led networks
In incumbent-led networks, the incumbent firm initiates the relationship with a clear demand and the SME tries to fulfil the demand by developing the required technology. Such incumbents have high absorptive capacity and endogenous knowledge about the emerging technology. The major commercialization pathways in this type of networks are direct with strong activity links and resource ties between incumbents and SME; additionally, the resources and activities of the SME and the incumbent firms are complementary. The incumbent firm has downstream assets for manufacturing, sales, and marketing of the product. Aligned with these resources, the SME can offer nano-intermediate products that match the incumbent’s existing technology trajectories well and can help the incumbent enhance the performance of their existing products. The relationships between incumbents and SME in this network type are similar to the traditional original equipment manufacturing (OEM) subcontracting relationships in which a complete and finished product is produced in accordance with the specifications of the buyer (Lin, 2004; Lee et al., 2015). According to Youtie et al. (2010), large companies have the highest impact on commercialization of nano-intermediate products compared to nanotechnology applications in other parts of the value chain. Hence, we propose that incumbent-led networks are more conducive to commercialization of nano-intermediate products, i.e., for SMEs positioned in the midstream part of the value chain.
2.2.2 SME-led networks
Unlike the incumbent-led network that is triggered by the demand side, the SME-led network can be initiated and formed by the supply side offering a unique technology that creates market pull. SME-led networks are characterized by a proactive SME with a distinctive technology and high transformative capacity, that uses direct and strong activity links and resource ties with large incumbent firms as the main route for commercialization. We propose that SME-led networks are likely to be the riskiest type, but if successfully formed could be used for commercialization at all stages of the nanotechnology value chain.
2.2.3 Peer-SME networks
Proactive SMEs with a distinctive technology may choose to partner with other SMEs with complementary capabilities to form commercialization networks in which no large incumbents are involved. Peer SMEs can play different roles within the network, e.g., supplier of materials or components in the upstream, developer of complementary technologies in the midstream, or provider of required resources and capabilities for product launch, marketing, sales, and distribution in downstream. Hence, Peer-SME networks have the potential to facilitate commercialization for the focal SME by providing complementary capabilities in various parts of the value chain.
There are several reasons why SMEs choose to collaborate with other SMEs instead of large incumbents. Peer SMEs could be easier to approach and engage with and are usually known to be more agile and flexible. Therefore, they could be quicker in the decision-making and development processes. Moreover, considering the power dynamics in partnerships with larger firms, peer SMEs usually are not able to exert excessive pressures on their partners, while the power balance with SME partners is more equal.
2.2.4 Broker-led networks
A broker-led network includes knowledge brokers (intermediaries) as key actors that greatly influence the formation of relationships between firms and the commercialization process in the network. In this type of network, the intermediary tries to match an SME’s technology with incumbent demands. Incumbents and SMEs in this setting have low absorptive and transformative capacities respectively, however actors are supported by a third party (broker). Indirect and weak activity links and resource ties between incumbents and SME become the main commercialization route. It can be argued that broker-led networks are crucial for SMEs that are positioned upstream. In addressing uncertainty, the need for complementary innovations and the trialability of their innovation, Maine et al. (2013) found that the upstream nanomaterials ventures with the highest value creation were those targeting distinct markets, each requiring customization. Broker-led networks can play a significant role in commercialization of nanomaterials by reducing these uncertainties for upstream SMEs and support them in enhancing their transformative capacities.
This discussion highlights the importance not only of open and collaborative arrangements for SMEs in emerging technology domains but also of strategic positioning within networks for commercialization. It should be noted that SMEs might select a single network type for commercialization or choose to be part of different networks simultaneously. Furthermore, SMEs’ networks may change over time, e.g., one type of network might lead to creation of new network types or networks may collapse. We anticipate that SME choices about which different types of networks to participate in or form, according to their capabilities, agency, and position in the value chain, will have a bearing on commercialization outcomes (See Table 1).
The research methodology, research design, empirical case focus, data sources, and findings are considered in the following sections.
3.1 Research context
For an emerging technology research context, we focus on nanotechnology—a cross-cutting domain that involves the design and engineering of materials and devices at the nanoscale (1–100 nanometres), enabling new processes and products with novel functionalities (Ramsden, 2018). With pervasive applications in consumer products, defence, electronics, energy, medicine, and many other sectors (Pandza et al., 2011), nanotechnology is an emerging general-purpose technology with the potential to trigger a range of technical improvements and innovation complementarities (Youtie et al., 2008; Coccia et al., 2012; Schrempf and Ahrweiler, 2014). Nanotechnology has seen fast growth globally in public and private investment since the 2000s (Lux Research, 2014; Suominen et al., 2016).
Nanotechnology development involves a strong research base requiring highly developed skills, knowledge, and infrastructure, as with other ‘deep technologies’, such as synthetic biology, bio manufacturing, advanced materials, and robotics. Usually, large investments are needed, and it can require considerable development time before being brought to market (Nanda, 2020). Offering ground-breaking products based on deep technologies necessitates working through challenges in procurement, manufacturing, and achieving scale (De La Tour, 2019). Moreover, focusing on nascent markets for novel products requires the ability to anticipate and understand customer needs that do not yet exist or are not clearly defined, and a detailed strategy that addresses the challenges of commercialization. These characteristics make deep technology or ‘tough technology’ ventures, including nanotechnology, an idiosyncratic case compared to the software and service sectors where much lower initial capital is needed for new ventures. The latter are typically based on proven technologies, often with short development times and are able to benefit from rapid market feedback (Lerner and Nanda, 2020).
Extant studies have highlighted the importance of collaborative efforts in nanotechnology development. Avenel et al. (2007) emphasize firms’ access to research clusters and production facilities as a key asset, while Robinson et al., (2007) and Gomez Uranga et al., (2011) highlight positioning in geographic clusters of diverse scientific and technological specialities. Exploring nanotechnology research projects and partner roles within collaborative projects, Pandza et al., (2011) observe large firms focusing strongly on application networks, but patterns for SME engagement in networks are less clear. We take up the opportunity to explore the burgeoning nanotechnology domain to further probe commercialization strategies for an emerging technology in a network setting, especially from the viewpoint of SMEs. Our study approach is detailed below.
3.2 Research design
An exploratory multiple case study approach (Yin, 2014) is adopted to enable in-depth examination of different types of networks of SMEs and to draw insights about varied commercialization strategies. The ‘case’ is conceptualized as the network(s) formed around a focal nanotechnology SME for the purpose of commercialization; i.e., the commercialization network is our unit of analysis. A multiple case approach offers a means for understanding the complexities underlying the choice of network type and facilitates comparisons of different network configurations to assess premises of prior literature (Stake, 1995; Bryman and Bell, 2015). Additionally, the use of multiple cases not only provides variation (Eisenhardt, 1989; 1991) to investigate the different network types in the study framework, but also allows the discovery of new forms of networks not posited by the initial framework. In theory-building cases, while one case is enough to illustrate the phenomenon at hand, using a replication logic bolsters the findings and the ability to develop theory (Eisenhardt and Graebner, 2007). Such a strategy involves finding additional cases that exhibit the same phenomena and strengthening the theory building potential of the research. This is not a quasi-experimental approach, rather one where we use a theoretical sampling logic to justify the cases included (Barratt et al., 2011).
To operationalize our approach, we compiled a list of nanotechnology firms from the UK Nanotechnology Directory (NanoKTN, 2014), industry reports, patent records and specialized websites (e.g., graphenetracker.com). Websites and profiles of these firms on the Fame (2014) database of UK companies were examined to select privately held companies with under 250 employees, resulting in a population of 139 UK nanotechnology SMEs. Contacts were made with firms to identify their interest in participating in the study. Interview requests were emailed to senior managers (mainly CEOs) of these nanotechnology SMEs. Follow-up phone calls encouraged interview participation and arranged appointments. Additional contacts were initiated at commercial events, exhibitions, and workshops where senior managers of nanotechnology SMEs were participating. This enhanced rapport with managers and access to other key informants in industry and policy. Overall, over 70 contacts were made with firms, resulting in 24 firms who agreed to participate in the research, with the rest saying no or providing no response.
In total, 40 interviews were conducted (between September 2013 and April 2014) as primary source of data for this study, including 26 interviews with senior managers at 23 of the UK nanotechnology SMEs who had agreed to participate (Appendix S1) and 14 interviews with key informants in the UK nanotechnology field (Appendix S2). Additionally, copious documentary evidence was compiled from company websites, reports, and archives, along with information from the Fame company database (see also next section). We recognized the potential endogeneity issues that might be associated with our qualitative multiple case approach and how they might be addressed (Bennett and Elman, 2006). To avoid, as far as is possible, issues related to unobserved factors and simultaneity, we carefully tracked the unfolding of events and the development of network relationships over time, probed causes and effects, and verified and triangulated the data drawing on the intensive interviews and the extensive evidence from secondary sources.
Although 23 SMEs participated in interviews, this paper focuses on 20 SMEs involved directly in nanotechnology materials and product development. The three SMEs not included were involved in consulting and service activities. The 20 SMEs taken forward comprised firms active in nanotechnology development and commercialization from all parts of the value chain (Lux Research, 2014; Fig. 1).
3.3 Data collection and analysis
Semi-structured interviews with SME managers were used to elucidate links with other actors established for commercialization purposes. As stated in the interview protocol (Appendix S3), we enquired about the network partners, their role, nature of relationships, and the value that the network brings for the focal SME. The semi-structured interviews provided openings for pursuing details and further inquiries based on respondents’ answers (Yin, 2014). We interviewed founders or senior managers in SMEs that were directly responsible for leading the company, devising commercialization and partnership strategies, and managing firm activities. At least one interview was conducted with each SME’s senior management (Appendix S1). Interviews were 1.5 to 2 hours long. Interviews were recorded and transcribed, with interviewees offered the opportunity to review transcripts. Only one of the interviewees took up the opportunity to review the transcript and made no changes. Interview data triangulated with secondary data enabled the building of a robust profile for each case.
Interviews with key UK nanotechnology informants generated insights about the broader context, firms’ networking behaviour and the role of diverse actors. Key informants included senior managers in large incumbent firms that collaborate with SMEs for the purpose of commercialization and development of nanotechnology. Interviews with these informants provided valuable insights from the incumbents’ perspective. Other key informants were from policymaking and funding organisations, e.g., representatives from venture capital firms, investors and public agencies responsible for supporting firms in commercialization (Appendix S2). These interviews were mostly conducted after the main data collection on nanotechnology SMEs and complemented insights gained from other evidence sources.
Data gathered from secondary sources included the firm’s history, areas of activity, technological capabilities, patents, products, number of employees, revenues or total assets, ownership structure, formal alliances, managerial team, investors, and news events. Secondary research was conducted prior to interviews and provided familiarity with the case, thus enabling preparation and the refinement of interview questions.
To identify the value chain position of SMEs, we examined company offerings and types of customers. The number of stages between the company and their final customers was considered. If there were two or more stages between the company and their final customers, the company was designated in an upstream position. If there was only one intermediary between the company and final customer, a midstream position was designated. If the company sold directly to end customers, the company was allocated to a downstream part of the value chain (Maine et al., 2012; Fig. 1). One company (CPH) encompassed two value chain positions. While value-chain positioning could be determined early in the empirical research phase, the assignment of network types for companies required further data gathering and subsequent analysis.
A two-stage approach was used to organize and analyze data. In the first stage, a detailed description of each case was developed. This included a history of each SME and an account of their surrounding network and its development. The second stage comprised an analytical investigation of the cases, deploying the conceptual framework. In this stage, thematic analysis was used for analysis of each individual case and cross-case investigation (Cassell and Symon, 2004). Thematic analysis is suitable for studies in which theoretically based group comparisons are conducted in relation to a specific issue (Flick, 2014). Our analysis involved categorizing cases in groups based on their network types specified in the conceptual framework (used as the initial template) and new types that emerged from empirical data. We also elaborated correspondences and differences between the groups. To systematize the data coding, NVivo 10 was used to code and cross-reference the codes that emerged from the data (Appendix S4). The matching process between empirical evidence and theoretical understandings enabled refinement and development of the study framework.
Our conceptual framework initially signalled four types of networks for commercialization. Following data analysis, in addition to the use of a single network form by an SME, we added two variations to the framework: a hybrid network form that encompasses those cases where SMEs changed or added to the types of networks used for commercialization; and an interrupted network form that includes cases where network relationships are initiated but become stalled or not sufficiently developed and there is no clear prime mover in further advancing commercialization linkages. Alongside their value-chain position, our mapping of the 20 SME cases incorporates the key network types (incumbent-led network; SME-led network; peer-SME network; and broker-led network) with the network forms (single, hybrid, and interrupted). (See Table 2.) We discuss our findings for each of these categories and trace implications for commercialization (see below). In this discussion (as in Fig. 1; Table 2), company names are anonymized using non-meaningful three-letter codes. The findings are also summarized in a cross-case analysis (Table 3). In addition, a sample of diagrams prepared of the network relationships for individual networks is demonstrated in the appendix (Appendix S6). To visualize the networks and linkages, a landscape overview of all the cases investigated in this study, including all actors and their relationships, was undertaken using social network analysis (Appendix S7).
4.1 Network types
4.1.1 SME-led networks
In SME-led networks, SMEs are prime movers in creating the network and linking directly with incumbent firms as the main route for commercialization. EDG is an exemplar case, proactively forming this type of network to commercialize their breast cancer diagnosis instrument and its tracing material. EDG developed a prototype in collaboration with UK and US universities. Then, EDG partnered with a large medical design and manufacturing firm, developing a commercial device, supported by public and private investors. The incumbent provided development and large-scale manufacturing capabilities, along with quality and regulatory accreditation. EDG later developed its tracing material through partnerships with two other large firms, one as an exclusive nanoparticle supplier and the other to formulate and package the material. EDG then partnered with the European arm of a multi-national diagnostics company for marketing and distribution. Here, a major aspect is product complementarity: EDG’s device can detect lymph nodes while their distribution partner commercializes a product for analysing lymph nodes.
We’ve had very quick growth because of this partnership. We’ve sold in over fourteen countries in the EU and more than seventy systems in the span of nine months. So it’s very, very rapid growth that we could have never done that on our own… What was interesting to us is that they were selling to the same customers that we would sell to, but also they had built their own sales channels all across Europe … rather than using a standard distributor that might have 200 products in their catalogue, this is a distributor that has only one other product and it’s complementary. (EDG CEO)
EDG further expanded their network by building partnerships with other large firms for marketing and distribution of their device in other parts of the world.
Six other SMEs followed similar patterns by forming SME-led networks, successfully commercializing upstream and midstream products. Examples include the commercialization of ‘cadmium-free quantum dots’ and ‘graphene nanoplatelets’ in upstream; and ‘perovskite solar cells printed directly onto glass’ and ‘graphene-based specialty intermediate chemical products’ in midstream. A common thread is that these SMEs offered a technology or product with distinctive merits that prevailed over partner and customer uncertainty concerns. Additionally, these SMEs strategically pursued proactive partnerships for commercialization with clear partner selection criteria, were demand-oriented in collaborations, demonstrated flexibility and agility, possessed strong internal teams with technological capabilities and business expertise, and were skilled in communicating, motivating, and engaging with other network actors.
In SME-led networks, an incumbent firm may supply materials and collaborate in manufacturing, marketing, and distribution. However, the most common incumbent role was as a development partner.
Our contribution was the development of the materials and the contribution from the partner was an understanding from them as to, the architecture of how the materials would be used in real products, and therefore what the technical specification requirements needed to be … and obviously feedback from them, testing our materials for us to understand better how they performed in an application environment as opposed to a test tube in the lab. (NNC COO)
SMEs drew on resources provided by incumbents that included finance, complementary technological expertise, test and verification capabilities, production facilities, qualification systems, credibility, and reputation, and established global distribution channels. SMEs in these networks benefited from collaborating with large incumbents and experienced relatively higher growth compared to SMEs in other categories.
4.1.2 Peer-SME networks
In peer-SME networks, SMEs pursue a proactive partnership approach as their commercialization strategy and have clear partner selection criteria, similar to SME-led networks. However, they partner with other SMEs rather than larger incumbents. Five case study SMEs were engaged in peer-SME networks. Peer SMEs were viewed as being easier to interact with and quicker in decision-making and development processes. Some SMEs formed peer-SME networks with the vision that this could lead to acquiring partner firms as a strategy for growth.
MLV was one of the study SMEs immersed in a peer-SME network, partnering with a management and marketing company, a joint university venture, and four other technology and testing companies, with various degrees of interlocking ownerships. The resources and capabilities provided by this network enabled MLV to commercialize its lab-on-a-chip technology and point-of-care diagnostic kits. (See Appendix S5.)
All peer-SME networks combined the complementary capabilities of specialized SMEs, enabling the network to deliver a final product in the downstream part of the value chain. While the focal SME in these networks coordinated activity links and resource ties, there were variations in partner role, ranging from strategic suppliers and development partners to manufacturing, marketing and distribution partners.
4.1.3 Broker-led networks
In broker-led networks, SMEs did not directly form partnerships with incumbents or other SMEs but sought linkages through a broker organization. Eight of the SMEs in our study engaged in broker-led networks, although five of these SMEs had at other points engaged in other types of networks. Broker-led networks were observed to facilitate commercialization of technologies or products developed in the upstream part of the value chain, with both SMEs and brokers serving as prime movers in creating these networks. While two SMEs used private-sector brokers, the majority collaborated with universities, engineering centres, funding agencies, and government initiatives that offered technological expertise and did not require direct payment for brokerage services.
Broker-led networks were seen to be particularly useful when an SME sought to enter a new market (including overseas), find national or international partners, or start a new field of activity. Research and engineering centres played important brokerage roles between SMEs and large incumbents by supporting them in testing, validation, and prototyping. Universities with a strong reputation in a specific technological field contributed to commercialization by brokering and endorsing relationships between SMEs and potential incumbent partners. For example, BST’s entry into the graphene market was facilitated through their collaboration with a national technological institute at a leading British university that linked them to large and midsize established firms. Another example was SNS’s entry into a new field. SNS had manufactured nanotechnology equipment; in a strategic change, they shifted to producing a specific nanomaterial. Potential customers of SNS’s new nanomaterial were large semiconductor firms that SNS found difficult to approach directly. For introductions to potential customers, SNS networked with research centres (including one outside the UK) known through previous sales of equipment sales. These research centres helped SNS in technology demonstration for large firms and provided technical support.
4.1.4 Incumbent-led networks
In incumbent-led networks, the prime mover was an incumbent firm with endogenous knowledge about the emerging technology and formative visions about applications. Five SMEs in our study engaged in incumbent-led networks, either as upstream or midstream suppliers in the value chain. However, such networks—with reactive SMEs—typically did not lead to strategic commercialization partnerships for the focal SMEs. Confirmation that a reactive approach towards networking was less conducive to commercialization raised the question of why some SMEs engaged in incumbent-led networks. Factors observed among these SMEs included absence of business development expertise, lack of transformative capacity, unclear marketing strategy, and operating several business lines with lower priority given to the emerging technology line.
There was one exception, however. A large pharmaceutical firm approached CPH, through their scientific publications, and initiated a partnership for using CPH’s drug delivery innovation:
What we bring is this novel delivery system… it’s a manufacturing method, a way of formulating that drug to create long-acting products or nasal products. We bring a lot of expertise about formulation. The key thing they [the incumbent firm] bring is the drug, the active ingredient of interest. They also have a lot of knowledge about that specific drug; how to analyse it, how it’s performed in various different studies, etc. Also marketing and distribution of the drug would be by the partner. (CPH CEO)
Even in this one case, CPH later changed its strategy into in-house development of a novel drug incorporating its drug delivery innovation, due to the high uncertainties involved in pursuing a reactive approach that was subordinate to the incumbent.
4.2 Network forms
4.2.1 Single networks
Most of the SMEs studied in this research pursue one selected commercialization strategy and solely focus on forming or participating in a single specific network type. For example, EDG, OPV, INS, AGM, and NNC have only focused on creating or participating in SME-led networks. We distinguish between single versus hybrid network forms to better clarify SME choices in forming or joining commercialization networks.
4.2.2 Hybrid networks
Some SMEs engage in a single type of network for commercialization, whereas other SMEs are involved in more than one network type. SMEs that use a combination of two or more of the network types explained above are described as having a hybrid network. As the concurrent existence of multiple networks implies, hybrid networks might have multiple influential actors as prime movers. Hybrid networks are usually used when SMEs pursue multiple strategies for commercialization and use different types of networks for different purposes, e.g., HDL used an SME-led network for joint product development and a broker-led network for international expansion. Another interesting observation is that SMEs with hybrid networks also all engage in broker-led networks; in some cases, the broker-led network has caused formation of other network types, e.g., SME-led or peer-SME networks. For example, ESC started its product development through a European Union (EU) project and formed broker-led networks. Through this network they established direct links with other SMEs in the UK and EU, which later became long-term strategic partnerships for joint development and manufacturing, and consequently formed the company’s peer-SME network. These findings suggest that brokers play a prominent role in stimulating hybrid networks. No specific pattern regarding the position of the SMEs in the value chain was found in hybrid networks. SMEs in all parts of the value chain used hybrid networks.
4.2.3 Interrupted networks
Interrupted networks comprise networks that started but which did not progress in advancing commercialization linkages. In interrupted networks, either no consistent prime mover appears, or the prime mover is not successful in managing the network. Hence, relationships in the network break or become bottlenecked. As might be expected, interrupted networks pose a challenge for commercialization, with divides between supply and demand. The three SMEs in interrupted networks were in the midstream part of the value chain, producing nano-intermediate products. Each had sought collaboration with incumbent firms as their commercialization route. IOT tried, but lacked major success, in working with large pharmaceutical firms to offer a novel formulation to enhance solubility of ingredients in incumbents’ products. PRT had a less proactive approach but was interested in collaboration with large firms; it was able to licence to two large firms and two midsize companies, albeit after about 16 years of effort. CML attempted to supply coatings to a large incumbent firm, after an EU project introduction; however, there were technical and price/performance issues, so CML halted commercial activities and consolidated back to research-oriented further technological development. Overall, our cases revealed that the reasons behind interruption in networks and failures in commercialization included: difficulties in scaling and marketing a process innovation, lack of incumbent firm engagement and supportive funding partners, insufficient SME technological capability, absence of clear partner selection criteria, and a passive partnership approach.
4.3 Within- and across-network type and form comparisons
In addition to the cross-case analysis within each category of network, we compared and contrasted cases between different types of networks. In this section, we elaborate common themes of SMEs’ commercialization strategies as well as success factors and unique features of each network type. A summary of the comparisons between all network types and forms is presented in Table 3.
The commercialization strategy of all five SMEs with SME-led networks was focused solely on the application areas that the SME could secure a large incumbent partner to work with, on the basis of a joint development agreement (JDA), driven by performance milestones. NNC worked with large Japanese electronics companies, OPV worked with multi-national glass manufacturers in Europe, INS worked with Philips, a European display manufacturer and a Taiwanese mobile manufacturer, AGM worked with Dyson, P&G and two European leaders in paints and coatings, and EDG with medical device manufacturers and distributers. Each firm with a SME-led network had close ties with at least three large incumbents in their commercialization network which provided application input, large scale production facilities, quality accreditation, established sales channels, credibility and reputation, plus the ability to influence standards. The main success factor for all SMEs with SME-led networks was the strong links that matched up- or mid-stream resources of SMEs with mid- or down-stream assets of incumbents. Working with incumbents was not without challenge for these SMEs. Excessive pressure on financial terms, intellectual property issues, slow decision-making processes in large firms, risks of dependence and losing control, and obstacles in information flow were common challenges that SMEs in this category successfully overcame.
Comparing the nanotechnology innovations of the studied firms, based on the level of differentiation of enabled product attributes and/or the decrease in manufacturing costs, showed that all firms with SME-led networks offer highly differentiated nanotechnology innovations, i.e., products/processes that drastically improve performance, production cost or both. SMEs with other network types mostly offer nanotechnology innovations with moderate or low levels of differentiation (i.e., products that enable significant improvement in known attributes or cost reduction).
SMEs with SME-led networks have experienced relatively higher growth compared to SMEs with other network types. Company growth in these firms is revealed in terms of increases in the number of employees, total assets and production capacity, faster sales growth, market expansion, product enhancements, expansion of application areas, access to finance (EDG and OPV raised other rounds of venture capital funds; AGM, NNC, and HDL floated on the AIM stock exchange), and gaining reputation. All firms in this category managed to increase their patent portfolio which shows they continued to innovate in their respective areas.
Besides the common advantages that SME-led networks brought for SMEs in this category, each firm had a unique outcome from the network. EDG’s network completely covered all the value chain activities from upstream to design and production, packaging and then marketing and distribution, and, consequently, caused faster growth. For OPV, the SME-led network enabled having impact on standard bodies, raised product awareness and technology familiarity for potential partners and customers even before full commercialization of the technology. In the case of INS, the network enabled transition of the company, from a small R&D service firm to a medium-size manufacturing unit supplying incumbents. For NNC, the network was the key success factor in becoming a unique born-global with a high growth rate.
The characteristics of firms with SME-led networks are very similar to the firms with peer-SME networks. SMEs in both categories have a proactive approach toward partnership, high transformative capacity and distinctive technological capabilities. SMEs in both categories have similarities and differences in partner selection criteria. Common partner selection criteria include having aligned goals and targets and complementary technological capabilities. However, SMEs with peer-SME networks consider local proximity of partner firms too, i.e., peer-SME networks have been largely UK based with a few European partners. Another difference observed between SME-led and peer-SME networks is the nature of activity links. In SME-led networks all activity links were formalized usually in the JDA format, whereas in peer-SME networks both formal and informal collaborations among SMEs were observed. The informal collaborations were based on an understanding of complementary technological capabilities of other SMEs, usually as suppliers of product components or process innovation in the midstream.
When finding partners on a global scale and across industries proves to be difficult for SMEs, assistance can be realized through the support services of broker organizations. Seven SMEs used broker-led networks to expand their activities internationally. We observed that access to new markets, faster market penetration, presence in targeted geographical regions, and forming new international partnerships were prominent outcomes of collaboration with brokers for these SMEs.
5 Discussion and conclusion
This study aims to contribute to a contextualized and nuanced understanding of the networking approaches that SMEs use to commercialize emerging technologies. We identified four types of networks that are used for commercialization and found that these network types might exist in three forms. We explored and uncovered how different types of networks influenced commercialization and identified why certain network types were chosen and with what outcomes. We found that commercialization outcomes vary by SME network type and value chain positioning. SME-led networks enabled the successful commercialization of upstream and midstream products. Peer-SME networks were used for downstream commercialization. All peer-SME networks were formed based on complementary capabilities of specialized SMEs so that the network can deliver a final product. Broker-led networks facilitated commercialization in the upstream part of the value chain and were particularly useful for internationalization, entering a new market or starting a new field of activity. Hybrid networks were used where SMEs pursue multiple commercialization strategies. Reactive approaches to networking and interrupted networks, regardless of value chain position, were (as might be expected) unfavourable for commercialization.
Actors with which an SME partners are largely determined by its existing resources and the capabilities required to develop and commercialize new products or services (Vanhaverbeke, 2017). Proactive SMEs that form SME-led networks, rely heavily on large incumbent partners with high absorptive capacity as development partners. Joint value creation in these networks occurs as a result of combining incumbents’ endogenous knowledge about the emerging technology and SME’s distinctive technological expertise and high transformative capacity. The benefits for an SME from SME-led networks are multiple. We identified support in application input, ability to test, access to quality management systems, established marketing and sales channels, association and branding recognition as the most important ones. Collaborations with SMEs are attractive for incumbents to remain competitive and guarantee their survival in the long term by capitalizing on innovation. In SME-led networks, the emerging technology is competency-enhancing for incumbents, i.e., SMEs offer highly differentiated new technologies/products either in upstream or midstream parts of the value chain that match incumbents’ existing technology trajectories.
For SMEs, taking a dynamic lead in applying technologies to a particular product market is a profitable strategy (Vanhaverbeke, 2017; Grama-Vigouroux, et al., 2020). Studying the value creation logic of peer-SME networks shows that this strategy is not necessarily pursued in collaboration with incumbents; it can also be realized in collaborating with other SMEs that have complementary technological capabilities. Offering differentiated products that combine the expertise of several partners in peer-SME networks was the main value driver in these networks. Most SMEs with peer-SME networks designed the network in a way that they cover all parts of the value chain from raw materials and components to the final product/service for the end-users.
In the absence of partners with high levels of absorptive and transformative capacities, working effectively with brokers facilitates network formation and commercialization. Although the literature on innovation brokers/intermediaries is substantial, there is very limited research about brokers whose clients are mainly SMEs (Iturrioz, et al., 2015; Fukugawa, 2018). Our study of broker-led networks revealed that some SMEs approach private innovation brokers to support expansion of their markets in new countries. However, most SMEs’ limitations in financial resources pushed for working with applied research and engineering centres that can support SMEs in further technology development and demonstration to potential partners and customers, with no or low charge. This strategy was attractive particularly for SMEs in the upstream part of the value chain that offered technologies/products with potential applications in multiple markets and there was a need for customers to undertake further process innovations. Applied research and engineering centres added value to the network by supporting customers (usually large incumbents) in developing the required process innovations. We also found that SMEs use participation in regional or national-funded projects (such as EU FP7) as an important platform for finding suitable commercialization partners.
Networks for commercialization are typically anticipated as long-term, but that does not mean they are unchanging or lasting forever. First, the network itself can be a major change driver for the organizations that are part of it (Vanhaverbeke, 2017). For example, in our study, an SME-led network enabled growth and transformation of the SME from a small knowledge-based firm to a medium-size manufacturing company. In some networks, relationships among organizations are complementary and will strengthen over time. In other networks, relationships can become competitive over time. The development of new capabilities and the resulting dynamics in the dependency between the partners can lead to changes in the network. Our research showed cases where the broker-led network caused formation of other network types, e.g., incumbent-led or peer-SME networks.
Finally, networks can collapse. The case study SMEs with interrupted networks were all situated in the midstream part of the value chain and struggled to stay embedded in partnerships with downstream incumbent firms or work efficiently with other SMEs and brokers. In most cases, drastic changes in the network partners (e.g., change in investment) and bottlenecked resource and activity links resulted in the network starting to crumble and the commercialization attempt failing.
Our findings highlight the importance of commercialization through networks for SMEs that pioneer deep emerging technologies such as nanotechnology. We observed that there were no SMEs without a network. This is mainly due to the characteristics of deep technologies, such as having substantial R&D and manufacturing value chains. Collaboration with other actors as sources of commercialization is vital for SMEs in this domain.
We now consider the theoretical and managerial implications of our findings and discuss limitations and future research directions.
5.1 Theoretical implications
Building on the role of diverse actors in networks for commercialization (Aarikka-Stenroos et al., 2014), the variety of network types and forms revealed in this study contributes to the literature on inter-organizational networks for commercialization. Distinguishing different categories of networks, based on a combination of network structure and actors’ agency, offers new opportunities to explore network formation, strategy, and value creation. As the literature suggests (e.g., Chiesa and Frattini, 2011; Aarikka-Stenroos et al., 2014), commercialization is considered as the least well managed phase of the entire innovation process and is particularly complex, highly risky, costly, and prone to failures in the context of emerging technologies. A contextualized and refined understanding of various types and forms of networks and their possible outcomes aids comprehension of how SMEs orchestrate their interactive activities with potential buyers and mobilize other relevant players to build the value of their new technology. Our findings emphasize the relevance of business and non-business actors for the construction of networks for commercialization. Additionally, the research augments our understanding of differential managerial approaches to SME networks.
This study expands on the findings of Xia and Roper (2016), Spithoven et al. (2013), and van Hemert et al. (2013) who highlighted the importance of outbound OI for SMEs and the necessity of collaboration for finding external paths to commercialization. Our study elucidates the various pathways through which open and collaborative strategies can be initiated, how implementation of these strategies can lead to the formation of different network types and how different network types impact commercialization processes. The research also provides a complementary view to the existing literature on inbound OI practices of SMEs (Gama et al., 2019), showing how SMEs make use of different kinds of networks when engaging in OI for commercializing emerging technologies.
While other extant literature highlights large incumbents (Pandza and Holt, 2007) or intermediaries (Lee et al., 2010, Mele and Russo-Spena, 2015) as drivers of outbound OI and commercialization, and we do find cases of SMEs that are reactive to large incumbents, we also find that SMEs can be effective prime movers. We demonstrate the various roles that SMEs can play in networks, from being prime movers in creating the network and proactively selecting other partners for collaboration, to more reactive or passive approaches. SMEs can proactively create SME-led, peer-SME or broker-led networks to facilitate commercialization.
The dominant role of large incumbent firms in commercialization networks has been a debate in the emergence of other technologies e.g., early stages of biotechnology. For example, Chiesa and Toletti (2004) propose a typology of networks in the biotechnology industry in which large multinational pharmaceutical and agri-food corporations are dominant. In their typology, there is no network in which a large incumbent firm is absent or which only comprises SMEs. However, we show that peer-SME networks, without large incumbent firms, are formed and do facilitate nanotechnology commercialization. Moreover, our typology offers a broader view, also including broker-led networks.
The study also contributes by exploring the influence of network types and value-chain position on commercialization outcomes. We find (not unsurprisingly) that a reactive approach towards networking is less conducive to commercialization. However, other cases show that SME-led networks are conducive to commercialization of both nanomaterials and nano-intermediate products (up and midstream). Peer-SME networks are conducive to commercialization of nano-enabled products (downstream). Broker-led networks can facilitate commercialization of technologies or products developed in the upstream part of the value chain and are more influential when SMEs decide to enter a new country, a new market or start a new field of activity.
We also found various network forms. Some SMEs are simultaneously involved in more than one network type, i.e., have hybrid networks, pursuing multiple strategies for commercialization. All SMEs with hybrid networks have broker-led networks in common and in some cases the broker-led network has caused formation of other network types. This research shows that although networking is a pre-condition for commercialization success, it does not guarantee success. The findings demonstrate how interrupted networks pose the biggest challenge for commercialization.
The study offers insights for research in the domain of nanotechnology as an emerging technology with an enabling, general purpose, science-based and interdisciplinary nature. While much other research focus on the input side of nanotechnology (knowledge and technology generation by studying publications and patents), this study provides insights on the output side, i.e., corporate activities, commercialization strategies, accomplishments, and trajectories, where less investigation has previously been done (Andersen, 2011; Huang et al., 2011; Li et al., 2015). Furthermore, it provides insights about the role of large and small firms in the nanotechnology area and highlights various challenges and uncertainties SMEs face in this domain. The study shows that successful commercialization of nanotechnology necessitates collaborative efforts of diverse players within a network setting so that different complementary capabilities can be combined to realize commercial output.
5.2 Managerial implications
Findings from this research can inform SME managers’ strategies and choices related to participation in networks for commercialization. Awareness of various networking experiences of SMEs and different consequences of their networking behaviours can provide practical lessons for both SMEs and their partners. A first implication is that proactive engagement in network formation and management is not only possible for SMEs but also essential for successful commercialization. Furthermore, to mobilize and engage other organizations in commercialization efforts, SMEs need to develop managerial capabilities (beyond their distinctive technological capabilities). These capabilities include having clear partner selection criteria, the ability to adjust their offering with customers’ demand, having strong business development teams, showing flexibility to the market conditions, agility in responding to changes and the ability to pivot objectives.
Second, when SMEs have difficulties in directly engaging with potential customers or partners, organizations with technological expertise that offer brokerage services can be significant in facilitating network formation. Such organizations should not necessarily be private companies (which might not be affordable for SMEs). Broker organizations can include universities, research centres, funding agencies, or government initiatives.
As a third implication, the research enumerates some reasons behind interruption in networks. One specific suggestion for management from our study of interrupted networks is that the commercialization of a process innovation, where its function or platform is dependent on the product of another company, can be challenging, especially if the partner’s product is also a novel application which is not yet commercialized. An SME in this study overcame this challenge by pivoting from externally marketing a process innovation to developing own products based on that process innovation, although it is acknowledged that this shift introduces new challenges (and may require new strategies).
The fourth implication for managers is based on findings from hybrid networks. SMEs with a clear single network type seem to be more successful in commercialization and have higher growth rates than SMEs with hybrid networks that have tried various forms of partnerships as a result of lack of strategic networking focus or unclear partner selection criteria. SME managers should make strategic decisions about the types of networks they would like to form or join according to their commercialization purposes and be cautious about the number of network types and associated number of ties they can manage at one time.
The research also provides insights for policy makers regarding the networking behaviour of SMEs and contributions of various actors in the network to commercialization. In our UK study, we find that Innovate UK and its Knowledge Transfer Networks play prominent roles in supporting the commercialization activities of nanotechnology SMEs, through financial support for collaboration and brokerage services. Yet, we did not find evidence of significant roles from local government agencies, notwithstanding the prominence often attributed to proximity in business network formation. This suggests an opportunity for further consideration of the potential (and weaknesses) of localized initiatives such as the UK’s Local Enterprise Partnerships in collaborations for the commercialization of emerging technologies. Additionally, from a national policy perspective, the relatively limited presence of large incumbent firms in UK networks for commercialization in nanotechnology raises issues about incentives and policies for such firms to collaborate with nanotechnology (and other emerging technology) SMEs.
5.3 Limitations and future research directions
The empirical investigation in this research is limited to a multiple case set of UK-based nanotechnology SMEs and is not intended to statistically represent the whole population of nanotechnology SMEs in the UK or elsewhere. We do not address nanotechnology SMEs who chose not to network (although we did not find such firms in our UK empirical investigation).
Our exploratory study seeks to contribute to theory-development by offering a framework and findings that provide context and which offer suggestions for further studies including of other emerging technologies. We highlight the significance of investigating differential types and forms of networks for commercialization within specific technological domains, the role and agency of diverse actors in commercialization, and the characteristics and networking behaviour of successful and failed SMEs.
The focus of this research was predominantly on product-based technological innovations in the nanotechnology domain. The network typology could be tested in the context of other emerging technologies which are process-based or service innovations to see if new network types or forms emerge. Additional studies in such domains can build upon, test, and potentially further refine our framework of SME network types for commercialization.
Availability of data and material
The data that support the findings of this study are available from the corresponding author upon request.
NVivo data coding hierarchy is available in the appendix.
In Europe (including the UK), SMEs are broadly defined as enterprises employing fewer than 250 persons, with additional criteria related to annual turnover and/or balance sheet assets (see, for example, European Commission, 2015).
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Salehi, F., Shapira, P. & Zolkiewski, J. Commercialization networks in emerging technologies: the case of UK nanotechnology small and midsize enterprises. J Technol Transf (2022). https://doi.org/10.1007/s10961-022-09923-3
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