To meet or to connect? Face-to-face contacts vs ICT in cluster organisations

Cluster organisations, also referred to as bottom-up clusters or cluster initiatives (Sölvell et al., 2003, p. 9; Lindqvist et al., 2013, p. 1), are in the focus of attention in the following publication. They are formally established organisations which function at a higher level of aggregation, composed of institutional members that have joined them purposefully and act actively in order to achieve some collective objectives (related to the development of a specific cluster) or individual objectives (aimed at developing their mother organisations) (Lis, 2018, p. 86; Cheba, 2015; Haviernikova et al., 2016; Štverková and Mynarzová, 2017). Clusters are examples of industrial organisations with strong social ties, involving also networks of local enterprises and local institutions (Elexa et al., 2019). Most publications in scientific literature refer to clusters viewed in geographical or economic categories, yet only a few of them address clusters as organisations.

Meanwhile, the treatment of COs as organisations which function at a higher level of aggregation is extremely valuable when viewed from the perspective of the management sciences, because it forces collective entities to assume an intentional and engaged approach towards the functioning in the structure of a higher rank. At the same time, it also imposes the necessity to provide management to such a complex organisation. The coordination of a CO refers to actions undertaken by both individuals (people who are employed in organisations which are the members of a CO and who are engaged in the activities undertaken by such an organisation) and collective entities (institutional members). Therefore, the level of advancement of a cluster cooperation is, on the one hand, largely determined by the level of development of the relationships of cluster partners (unit level); on the other hand, based on the use of Information and Communication Technologies (in short: ICT), which facilitates contacts not only at the individual but also at the institutional level. ICT refers to technologies that provide access to information through telecommunications (with particular emphasis on communication technologies, such as the Internet, cell phones, and other communication mediums).

Taking the above into account, the purpose of this paper is to explore how cluster organisations (COs) take advantage of direct (F2F) and indirect (ICT) contacts in fulfilling their main roles. The research goes beyond the state-of-the-art knowledge in the clustering literature by exposing a wider view of cluster cooperation, particularly in connection with the role of ICT in the development of cooperation networks based on geographical proximity.

The discourse is organised in the following manner. First, it contains a literature review on the cluster concept and the role of direct (F2F) and indirect (ICT) contacts in the development of cluster cooperation. Second, the paper includes details with regard to the methodology. Third, it reports the empirical results. Finally, discussion and conclusion are provided.

The concept of a cluster (Porter, 1998, 2000) derives from Porter’s earlier publications on international competitiveness, in which he repeatedly emphasises the importance of geographical proximity to achieve competitive advantage (Porter, 1985, 1990). The definition of a cluster by Porter includes its most important attributes, namely geographical concentration, sectoral concentration and interactions among enterprises, being a derivative of the two previously mentioned attributes. A small distance favours the establishment and development of contacts, whereas sectoral concentration enables to create various systems of connections based on the similarity or diversity of enterprises operating in a cluster. The heterogeneity of cluster partners is advantageous for the development of vertical links along the value chain, while their homogeneity is the basis for the development of horizontal connections based on coopetition. Numerous and repetitive interactions among enterprises can turn into long-lasting and trust-based relationships. A cluster is also specific owing to its strong specialisation, division of work and key competencies as well as an exchange of complementary resources (Lis and Lis, 2014).

The relations between the location and the competitive advantage were studied by the representatives of classical economics (Smith, 1954) and neoclassical economics (Marshall, 1890). The discussion on industrial clusters is also continued within other theories, including the agglomeration theory (Scitovsky, 1954; Perroux, 1950; Krugman, 1991), which explains the reasons for the formation of industrial clusters, the theory of transaction costs (Williamson, 1985) (which emphasises the possibility of reducing transaction costs due to the cooperation of cluster partners), the theory of flexible specialisation (Piore and Sabel, 1984; Sabel, 1989), and the network approach, which exposes the relationships among companies remaining in different dependencies (Cooke and Morgan, 1993; Johanson and Mattson, 1993). All these theories address the significance of trust as an important determinant of cooperation, bringing benefits to all the cooperating entities, as well as geographical proximity, facilitating the development of relationships.

The assumptions of cluster cooperation are also consistent with the resource approach. Companies operating in clusters and cooperating with one another to exchange resources reflect the Resource-Based View (Wernerfelt, 1984; Mahoney and Pandian, 1992; Barney, 1991), which grows out of the company growth theory (Penrose, 1959) and the resource dependency theory (Pfeffer and Salancik, 1978). According to the resource approach, a company is perceived as a bundle of specific resources, abilities and competences that distinguish them from the competitors. The resource approach also emphasises the resource imperfection of a company that is unable to create or acquire all the necessary resources. Dependence on resources is a factor that drives entities to enter into more or less stable exchange relations with other organisations (Pfeffer and Salancik, 1978). As best shown by the concept of clusters (in the form of cluster organisations), obtaining wider access to missing resources encourages companies to create alliances in a form of inter-organisational ties with a non-hierarchical and non-market character (Czakon, 2011). Enterprises in clusters have access to various types of resources, including, first of all, information and knowledge, circulating “in closure” (Coleman, 1988). In clusters, the observed effect of tacit knowledge spillover (Audretsch and Feldman, 1996; Feldman, 1994; Beaudry, 2001; Beaudry et al., 2000; Lawson and Lorenz, 1999) is based on personal, face-to-face interactions, which are facilitated by geographical proximity.

Cooperation in clusters also illustrates the concept of the value chain developed and popularised by Porter (Porter, 1985). According to this concept, a company is a set of activities carried out to design, produce and market a final product, enabling to create value for customers. Actions that prevent a company from gaining a competitive advantage should be scrutinised in terms of their outsourcing to other market players that are able to provide the desired advantage. The effect of this approach is to extend the value chain beyond the boundaries of an individual enterprise. As a result, the value chain becomes a supply chain (Handfield and Nichols, 2002) and even — in a broader sense — a supply network (Christopher, 2005). Cluster cooperation creates opportunities for integration of activities into one common value chain, where competitive advantage is achieved collectively by all the interconnected entities. Due to the special type of cluster relationships (based on coopetition), the value chain in clusters can be extended to a value network, including — apart from suppliers and recipients — competitors and entities providing complementary goods (Nalebuff and Brandenburger, 1996).

The popularity of cluster concept and the widespread use of information and communication technologies in the economy would indicate that approaches combining these both phenomena should appear in the literature quite often. Surprisingly, it is the exact opposite. Searching for scientific publications that include both terms “industrial cluster” and “ICT” resulted in 47 records in the Scopus database and five records in the Web of Science database. What is more, considering the pace of the development of the ICT sector and the dynamics of the modern economy, it must be stated that the vast majority of publications indexed in the previously mentioned databases are outdated (the works published earlier than 2010 dominate). The fact that this is not a new situation is evidenced by the observations contained in the 2008 publication, whose authors expressed astonishment at the small number of scientific papers on the role of information and communication technologies in achieving success by clusters, particularly in the period when a lot of research was conducted on the concept of the cluster (Steinfield and Scupola, 2008). Both of these observations — the very small number of publications related to the use of ICT in cluster enterprises and the low relevance of literature in this regard — lead to the conclusion that there is a large theoretical gap in the problem area undertaken in this paper.

The information and communication technologies present in enterprises have a strong impact not only on the functioning of the company (e.g. improving communication within the value chain) but also, which is perhaps even more important, on creating and applying completely new economic opportunities (Carbonara, 2005), e.g. expansion into new markets. Such possibilities increase owing to the Internet communication characteristics like the speed of transmission, relative easiness of creating and receiving messages by electronic devices, the potential behind processing and analysis of large data sets, etc. The specific nature of ICT also affects cluster companies and clusters as a whole, providing the potential for transforming into one or more effects:

Information and Communication Technologies is, however, a very broad category containing many different products and services. Therefore, the literature highlights the need to make an internal ICT division (Ciarli and Rabellotti, 2007) — at least a division into IT (mainly affecting activities in the sphere of production, administration and logistics) and CT (setting standards for communication within the enterprise and communication with its environment). Each of the division tips indicated above has its specific features and has a different impact on the operation of enterprises.

The needs and adaptability of IT and CT are also to some extent related to the sector, in which the analysed enterprises operate. In sectors offering standard goods, the possibility of using CT is greater because it supports the rapid exchange of codified knowledge and reduces the transaction costs of internal and external communication (Ciarli and Rabellotti, 2007).

In sectors that require better knowledge of a given product/service (Leamer and Storper, 2001), tailoring it to individual customer expectations or the universality of tacit knowledge in the process of producing the offered product/service, face-to-face relationships play a more important role (Leamer and Storper, 2014). Such a situation took place, e.g. in the Italian region of Biella, known for the production of woollen yarns and fabrics, in which local enterprises were more willing to adapt information technologies than communication due to the importance of transferring tacit knowledge in relations between the suppliers and buyers (this region operated with regard to the principle of an industrial district) (Ciarli and Rabellotti, 2007). A similar situation occurred in the case of biotechnology enterprises located in the Medicon Valley — due to the fact that biotechnology products are far from what is commonly understood as standardised products, no information and communication technology here could replace the personal contacts and careful (personal) product selection (Steinfield et al., 2010).

It is worth mentioning that the scientific literature lacks empirical evidence that the hypothesis concerning the substitution of personal contacts for information and communication technologies can be justified. At the current stage of science development, the contemporary level of ICT and the specific nature of interpersonal contacts, we can only talk about the complementarity of these two worlds — human and digital — and their positive impact on the success of cluster enterprises, especially in knowledge-based sectors (Steinfield et al., 2010). ICT cannot entirely replace personal contacts even in the case of a cluster located in rural areas and cluster enterprises scattered over a fairly extensive area. In this case, information and communication technologies compensate for the lack of permanent geographical proximity, but they do not have the potential to make geographical proximity superfluous. Knowledge transfer or a shared pool of workforce qualified to perform activities specific for a cluster located in rural areas are only some of the factors determining the need to conduct business in geographical proximity (Steinfield et al., 2012).

Personal contacts remain irreplaceable in terms of initiating and creating task groups within the cluster. They also constitute a tool to monitor the quality of activities in these groups and to strengthen the motivation of their members. Face-to-face relations facilitate the coordination of activities in groups and are a panacea for uncertainty resulting from constantly changing business conditions. However, to take full advantage of the benefits of cooperation based on personal contacts, permanent cooperation of motivated individuals (not just their occasional contact) with high intellectual capital is necessary. Although ICT allows to decrease the difficulties resulting from the dispersion of production within the value chain (especially in relation to distributed configuration), it is necessary to cooperate in a common location (Storper and Venables, 2004) to deal with uncertainty that may evoke while performing activities in different places, or processes of creating and implementing new solutions. Therefore, with regard to the arguments presented above, it is essential to recognise the specific nature of cooperation among cluster enterprises and the role of information and communication technologies in this area.

The paper reports the results of an explorative, qualitative study aimed at analysing the role of Information and Communication Technologies in the development of cluster organisations. This is a part of a larger study aimed at identifying the levels of advancement of the cooperation among enterprises in selected COs in Poland (Lis, 2018). The question stated in the current research is as follows: “How important are Information and Communication Technologies at each level of advancement of cluster cooperation?”

The research was carried out in the first half of 2016 in the selected cluster organisations in Poland. In the selection of Cos, the extreme cases logic was used to ensure the maximum variability and diversity within the research field. Taking the economic sector as the main differentiating criterion, four cluster organisations were selected for the study – two COs from the metal industry and two COs representing the ICT industry (Tab. 1). From the point of view of the main aim of the paper, such a research sample provides additional benefits because it serves to compare ICT cluster organisations, in which Information and Communication Technologies are very popular, with COs from the metal industry, in which these technologies are not so commonly used.

The research sample comprised 30 cluster entities (from each of the four selected cluster organisations), including cluster coordinators, enterprises, R&D institutions, educational institutions and support institutions. The way of selecting respondents was based on the snowball sampling procedure (Goodman, 1961). The interviews were the basic technique of data collection. The cluster entities were represented in the study by one person and several cases by two people — in total 35 individual in-depth interviews were conducted. In addition, one group interview was conducted (in Metal Working Eastern Cluster) to verify the obtained results. The group of interviewees was composed of the company owners or top managers as well as individuals chosen to represent the organisation in the cluster organisation involved in cluster activities.

The interview questions were divided into the following sections: forms of cooperation in COs, the involvement of the coordinator and members in COs, creating opportunities and achieving benefits in COs, and flows of knowledge and information in CO. The selection of the above thematic blocks resulted from the objectives set out within a larger study. Nevertheless, each of these blocks may form the basis for more detailed analysis in the areas related to the main research problem of a larger study. As a part of the current research, the following topics were discussed (Tab. 2).

The data analysis and interpretation were based on content analysis and coding. The study ensures methodological and data triangulations since in addition to the interviews, the author provides an analysis of the current data, including the COs’ documents, as well as any means of using Information and Communication Technologies by the COs, such as websites, social network accounts, knowledge repositories, Internet forums, etc.

The authors applied the qualitative content analysis (Hsieh and Shannon, 2005; Glaser and Strauss, 1999) as the main procedure to analyse the interviews. The analysis included open, axial and selective coding. At the open coding stage, some common themes emerging from the interviews in each cluster organisation were identified (for instance, these were ‘integration’, ‘broker’, ‘information system’, ‘mentor’). In the axial coding, the identified themes were classified with respect to the six distinguished categories and their peculiarities (Tab. 3). In the selective coding, the categories and their peculiarities were horizontally grouped to feature the general and specific roles, systems, F2F contacts and Information and Communication Technologies in each level of cooperation. The results of selective coding are presented in Tables 5–7 and discussed in the next section.

Based on the research conducted in selected cluster organisations, it has been established that cooperation in COs can take different forms, which separated into sets, can form a hierarchical system consisting of four levels of cooperation: level I “Integration at the unit level”, level II “Allocation and integration at the process level”, level III “Impact on the environment” and level IV “Creation and integration at the organisational level” (Lis, 2018, 2019). As the research survey indicates, despite the differences among the four stages of development of cooperative relationships, cluster organisations may assume three fundamental roles at each stage: of a direct resource supplier, a broker and an integrator.

Cluster organisations play analogical roles at the subsequent levels of cooperation, but each of such roles is affected by the specific nature of a particular level. The specification mentioned above allowed the author to distinguish 12 specific roles — three roles at each of the four cooperation levels (Tab. 4).

The research shows that each of the 12 identified roles of cluster organisations was supported by specific ICT tools, although personal contacts always played a significant role in each of them. Tables 5–7, apart from describing each of the roles of a CO, indicate a particular system necessary to fulfil a given role as well as present the observed forms of face-to-face contacts and the applied Information and Communication Technologies.

The results of the research show that cluster organisations, fulfilling the roles assigned to them, slightly differ in the combination of factors related to the development of personal relationships of cluster entities and the use of Information and Communication Technologies.

A cluster organisation appearing in its first form — the Direct resource supplier — puts a great emphasis on the sphere of personal contacts: both within the cluster and with external entities. Nevertheless, the applied ICT tools are an important complement to the effects of face-to-face meetings — at least with regard to the roles concerning the distribution of information (Informer, Donor, Information tube). In the role in which one-way transmission of knowledge occurs (Mentor), ICT tools prove to be of little use, because, despite their technological advancement, they are not effective enough at generating an atmosphere and conditions conducive to the diffusion of tacit knowledge.

According to the obtained research results, a CO that takes the role of a Broker focuses its objectives on creating conditions for the functioning of its component entities in which it will be possible to provide bidirectional flow of information (allowing a CO, for example, to establish a relation of exchange). What appears essential to ensure this bidirectionality in the case of the first three described roles (Information exchange platform, Resource exchange platforms and the Link with the environment) is appropriately selected ICT tools. At the highest level of cooperation (a CO in the role of the Common resource creation platform), ICT solutions play a less important role (although they facilitate cooperation). To use these tools effectively, it is vital to initiate the process with establishing a group of CO members joined by both strong relationships and a common goal (the joint creation of new resources).

Due to its specific nature, a cluster organisation in the form of a Direct resource supplier and a Broker correlates with the resource theory – the two mentioned forms of a CO are focused either on ensuring access to a certain pool of new resources (primarily information) or on creating a platform of information exchange co-managed by constituent entities of the cluster organisation. Communication proximity created and maintained with ICT tools in these two forms has a complementary role in relation to the personal contacts established and developed by virtue of geographical proximity.

A cluster organisation acting as an Integrator uses ICT tools for communication purposes primarily among socially integrated member entities, thus with regard to the role of a Social integrator (integration inside the CO) or a Lobbyist-visionary (integration of the cluster members with the closer and further environment). Many more ICT solutions appear in connection with the roles of a Process integrator and an Organisation integrator, which indicates the presence of dedicated software for basically every aspect of the organisation's operation and cooperation. Their application, however, is directly dependent on the prior establishment of face-to-face contacts and the development of stronger relationships characterised by a relatively high level of mutual trust. In the case of the Process integrator and the Organisation integrator roles, ICT solutions implemented by a CO are not likely to be helpful in the development of such relationships — they are only convenient tools for implementing decisions made via direct relations among people representing the cluster constituent entities.

A cluster organisation in the form of an Integrator comprises the concept of a value chain (and in some cases the value network concept) – this particularly applies to the roles of a Process integrator and an Organisation Integrator. As far as the Process integrator is concerned, ICT tools play a predominant role (when compared to their use by the CO in other distinguished roles) – in principle, they can replace the F2F contacts established within geographical proximity. However, in the case of the Organisation integrator, ICT solutions play an important, yet only a complementary role, facilitating the implementation of institutional integration in a specific form. For the Social integrator, ICT tools are expected to be relatively insignificant since the face-to-face contacts facilitated by the geographical proximity of the cluster partners remain irreplaceable. The same issue concerns the role of a Lobbyist-visionary — although ICT solutions can be beneficial to fulfil this role, meetings and personal contacts of the cluster members definitely prevail.

The study findings have indicated a variety of roles fulfilled by cluster organisations via face-to-face contacts and the use of Information and Communication Technologies. The results contribute to the state-of-the-art knowledge in the clustering literature since they have exposed a wider view on cluster cooperation by using the identified cluster roles at every stage of its development. They have also implemented the Resource-Based View, a value-chain concept and emphasised the significance of F2F contacts (established and developed within geographical proximity) as well as ICT in the processes of resource exchange and integration in different dimensions among cluster partners. Additionally, the research augments prior research as it solely addressed cluster organisations, which — contrary to the concept of a cluster — has been scarcely explored so far.

The conclusions from the conducted research indicate the invariably crucial importance of geographical proximity as a factor strongly affecting the functioning of cluster organisations and their members. As the research shows, almost for every role distinguished in the paper, geographical proximity and direct contacts are a prerequisite for the constitution and development of cluster cooperation at a given level. Therefore, even though indirect contacts established and developed based on Information and Communication Technologies play a significant role in the functioning of cluster organisations, they cannot replace face-to-face contacts. This particularly applies to the first level of development of cluster cooperation, when the network of relationships among cluster members is being built (CO as the Social integrator). As the study results show, only in two identified roles (the Process integrator and — to a lesser extent — the Organisation integrator) the importance of ICT tools was at least as huge as F2F contacts. In the case of the other roles (Direct resource supplier and Broker), ICT were an important complement to the face-to-face contacts at every level of the CO development.

The empirical findings can also suggest some practical implications for cluster coordinators and members – they can be treated as a practical tip in the process of development of COs. Cooperation in cluster organisations should always start with building personal contacts among members and only when relationships based on mutual trust are sufficiently developed, it is worth introducing Information and Communication Technologies as a factor facilitating the achievement of the set goals (individual or common).

Due to the research limitations resulting from the specific nature of qualitative research (a relatively small research sample and the subjectivity of qualitative research, which does not allow the author to generalise the conclusions), future research should also include quantitative research to confirm the observed dependencies. It is also advisable that the future research sample should include cluster organisations representing various industries as it will provide a wider universality of the discovered phenomena.