Organization in SME networks
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Sustainable economic development is based on a foundation of innovative activity (development of new products and processes), entrepreneurship (converting innovation into economic activity), and industry clusters (networks of supporting markets, services, and skilled labor). The purpose of this chapter is to demonstrate how network organizations of small and medium sized enterprises (SME) can contribute to economic growth. It is concluded that network organizations are a very suitable form to sustain continuous business growth without losing the advantages of the high adaptability of a typical SME. A special focus will be given to a new concept, which proposes sustainable business growth in networks based on so called ‘core competence cells’. It allows an organization to flexibly adapt to changing environmental conditions, and thus promote sustainable business growth within an organizational network.