Innovation in small business: comparing face‐to‐face with virtual networking

Purpose – The paper aims to better understand the process of networking by small business with their customers to achieve innovations. In particular the relative roles of face‐to‐face and virtual interaction are to be investigated. Design/methodology/approach – Initially a week of participant observation was undertaken then 17 in‐depth interviews were conducted and analyzed. The biotechnology sector was used for the sample. Findings – Networking interaction could be categorized into stages. A deepening of the relationship developed on two fronts: increasing exchanges of technical information but necessarily supplemented by increased sharing of social information to facilitate tacit knowledge exchanges. As the relationship continued to develop, virtual modes could be used in an increasing capacity. The paper developed a stage model and identified the role of face‐to‐face and virtual exchanges at each stage. Research limitations/implications – Generalizability is unproven. However the issues appeared typical of any technology or science‐based sector and suggest broader applicability. Practical implications – Business people cannot assume that all steps in the process of generating an innovation with a customer can be achieved virtually. The stage model provides guidance to practitioners on the appropriate interaction modes to avoid wasteful face‐to‐face meetings and ineffective virtual exchanges. Originality/value – While the usefulness of networking by small business is well recognized, little is known about the process of networking and in particular the potential role of virtual communication and what can and cannot be achieved. The paper sheds light on these issues and develops an explanatory framework.