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For Italian companies, networking proves to be a possible response to the challenges posed by international competition, and indeed, the instrument of networks is experiencing an interesting development. According to the report published in December 2019 by the National Observatory on Business Networks, promoted by InfoCamere, RetImpresa, and the Department of Management of Ca’Foscari University of Venice, network contracts are experiencing a period of considerable success because, with these tools, associates aim to improve competitiveness and increase innovative capacity without giving up managerial and strategic autonomy.

According to the data, in 2019, 5,863 network contracts were reached involving a total of 34,766 companies across the entire national territory. The reasons behind aggregations are primarily represented by innovation (16%), but also by the desire to activate common marketing strategies (10%), share purchases, supplies, and technologies (9%), and enhance the network brand (7%).

Companies adhering to a Network Contract (NC) can access a series of national and regional incentives and facilitations, such as innovation agreements, development contracts, investment programs, a 50% tax credit for incremental Research and Development expenses, research contracts with universities, research institutions, other companies, startups, and innovative SMEs, 4.0 technology depreciation quotas, industrial and laboratory tools, and equipment. To begin with, it’s a good incentive.

Taking into consideration the main factors, the current situation is as follows:

  • Size: we see a growth of micro-networks (48% of the total) and an increase in large networks (15%), while medium-sized networks are declining (37%).
  • Geography: about 50% of networks involve companies from the same province, 30% from two provinces, and the remaining 20% aggregate companies from at least 3 provinces.
  • Industries: high inter-sector heterogeneity (73.6% involve companies operating in different industries, almost 25% involve companies from at least four different sectors of activity), confirming the instrument’s ability to create supply chain connections and connections between complementary or interdependent supply chains to achieve common industrial policy objectives.

The data collected so far by the network performance observatory demonstrates that the network’s ability to achieve its objectives (Effectiveness), the competitive and organizational strength of the network (Cohesion), and the economic results of the network (Market Performance) are achieved in aggregations where the exchange of knowledge and skills is stimulated. The exchange of information and the monitoring of results are also beneficial for innovation, as the presence of joint organizational structures, informal, flexible relationships, common organizational structures, and more constant social relationships are proving suitable for supporting innovation projects.

Another common objective pursued by the majority of networks (about 75%) places marketing at the center, aiming to give external visibility to the network by giving significant weight to digital communication means, but on this point, a low frequency of use is noted, suggesting a clear lack of strategic vision and inadequate use of these tools, stemming from a delay in understanding that characterizes, as we have seen previously, Italian SMEs.

Company aggregations can make individual entities grow and make them weigh more. To keep up with the times and to resist, a company needs investments, and the risk of not making it is high, especially in this phase of rapid transformation where multichannelism linked to digital technological innovation plays a significant role but is costly to implement.

Networks are the result of the trend towards open innovation, which is now more evident than ever, after overcoming parochial resistance, a deeply rooted culture of suspicion, and strong entrepreneurial individualism. It’s a type of inclusive, plural, open innovation where teamwork wins, a profitable alliance between communities, suppliers, and even competitors.

This revolution is accelerated by both the long crisis of markets that has forced a review of now ineffective paradigms, and digital technologies that also contaminate the physical component of doing business. However, alongside business networks, there must be a network of skills, where training entities, public and private, play an important guiding role as they must have a clear view of the transformation’s progress and offer training plans suitable to address it, taking into account the strong heterogeneity of potential users, managers, and employees, more or less digitally advanced.

Although there is still much work to be done, especially in bridging skill gaps, business networks have the positive aspect of being an enzyme for the spread of shared reflection on the usefulness of joining together to increase their performance, optimize the effectiveness of investments, and face change without being overwhelmed.

The competition arena is now global. Companies must confront gigantic realities that impose their presence everywhere geographically, with deep penetration and a propagation speed that is difficult to contain.

A defensive strategy can do little in the face of such power. In the David vs. Goliath struggle, intelligence, acumen, and a long-term vision plan are needed to strengthen and become increasingly capable of resisting and reacting to attacks.

We believe that these elements represent very interesting opportunities for an offer bridging strategic marketing and digital communication aimed at filling part of the aforementioned gaps and improving the competitive capabilities of our clients’ companies and organizations.