Innovation search of new ventures in a technology cluster: the role of ties with service intermediaries

TLDR

Service intermediaries sit at the intersection of many firms and industries, maintaining extensive networks within technology clusters. The study investigates how new ventures’ ties with service intermediaries influence their product innovation in a technology cluster. By enabling ventures to plug into these networks, the ties broaden external innovation search, reduce search costs, and strengthen the relationship when network search is more critical to product innovation. Empirical analysis of Chinese technology‑cluster ventures confirms that stronger ties with service intermediaries are associated with greater product innovation. © 2009 John Wiley & Sons, Ltd.

Abstract

Abstract In this study, we examine the relationships between new ventures' ties with service intermediaries (i.e., technology service firms, accounting and financial service firms, law firms, and talent search firms) and their product innovation in the context of a technology cluster. Because service intermediaries sit at the intersection of many firms, organizations and industries, they maintain extensive networks in a cluster. We propose that new ventures' ties with service intermediaries enable the ventures to plug into these networks and contribute to the ventures' product innovation by broadening the scope of their external innovation search and reducing their search cost. Moreover, we argue that the positive relationships between new ventures' ties with service intermediaries and their product innovation will become stronger when search in the networks in the cluster is more important to the ventures' product innovation. Based upon a sample of new ventures in a technology cluster in China, our results support these arguments. Copyright © 2009 John Wiley & Sons, Ltd.