Government as Network Catalyst: Accelerating Self-Organization in a Strategic Industry

TL;DR

This paper investigates how government programs can act as catalysts to accelerate private sector cooperation and innovation in strategic industries by influencing social network dynamics.

Contribution

It introduces a theoretical model suggesting government programs accelerate social network growth through preferential attachment, supported by longitudinal analysis of a high-tech industry network.

Findings

Government programs increase alliance formation among organizations.

Accelerated network growth enhances industry innovation.

Long-term network effects support strategic industry development.

Abstract

Governments have long standing interests in preventing market failures and enhancing innovation in strategic industries. Public policy regarding domestic technology is critical to both national security and economic prosperity. Governments often seek to enhance their global competitiveness by promoting private sector cooperative activity at the inter-organizational level. Research on network governance has illuminated the structure of boundary-spanning collaboration mainly for programs with immediate public or non-profit objectives. Far less research has examined how governments might accelerate private sector cooperation to prevent market failures or to enhance innovation. The theoretical contribution of this research is to suggest that government programs might catalyze cooperative activity by accelerating the preferential attachment mechanism inherent in social networks. We analyze the long-term effects of a government program on the strategic alliance network of 451 organizations in the high-tech semiconductor industry between 1987 and 1999, using stochastic network analysis methods for longitudinal social networks.