The impact of business networking on the transfer of knowledge: implications for the diffusion of innovations

This paper examines the impact of networking on learning via the transfer of tacit knowledge and in turn, innovation diffusion for Australian regional SMEs. The findings suggest that Australian regional industry cluster/networks play an important role in facilitating “learning” via the transfer of tacit knowledge for SMEs. In turn, a small number of firms benefit from the diffusion of innovation. In contrast to past studies, this study identified minimal evidence of SMEs collaborating on joint supply-side or marketing opportunities. The findings suggest that while SMEs do participate in Australian regional cluster/networks and knowledge is transferred amongst some members - innovation diffusion and transfer on the desired scale does not result. A number of reasons may be the cause for this; Australians may be less trusting in their approach to business, hence developing a culture that includes collaborative activities may require time. In addition, government policies based predominantly on traditional rational economic models may not be appropriate for growing SMEs. More research is required to understand their goals and the factors affecting their decision-making before developing policies aimed at assisting them