Communities of enterprise: developing regional SMEs in the knowledge economy

Purpose – This paper proposes the concepts of communities of enterprise (CoEs) and virtual communities of enterprise (VCoEs) to describe business networking patterns in regional areas where there is no central organisational or industry focus and small and medium enterprises dominate the economy. Design/methodology/approach – Based on analysis of the literature this paper builds on theoretical understandings of knowledge management, clustering and regional development. Findings – The concept of CoEs is most appropriate for regional areas characterised by many small enterprises in diverse industries. CoEs enhance development of regional clusters by contributing to their intellectual capital, innovation culture, value networks and social capital. The incorporation of information and communication technologies (ICT) creates VCoEs which provide added potential by enabling regions to expand their learning potential through innovation. Research limitations/implications – This paper provides a conceptual foundation for empirical research into regional network or cluster development using ICT. Practical implications – VCoEs value creation potential is substantial but only when the socioeconomic elements of regional clusters are understood. The VCoE approach addresses the fact that without an industry focus it can be difficult to engage and link small and medium enterprises (SMEs) from different industries, although this is where the greatest potential for value creation in regional clusters is to be found. Originality/value – The VCoEs concept specifically addresses the unique requirements of SMEs in regions. It has the potential to provide value for regions in a way few ICT based regional development initiatives have been able to achieve.