A Matter of Trust: Networks and Entrepreneurs

This paper discusses elements of inter-entrepreneurial trust in regional networks and clusters in terms of influencing business processes and economic viability in today’s economy. The message that can be extracted from the literature is that competitive advantage strongly depends on interfirm collaboration and that networks with a high degree of trust lead to entrepreneurship and innovation. The paper highlights two local Victorian network studies, one in the grains industry and one in the tourism industry, and explores trust based relations in these regional networks. Contrasting sectoral results indicate that social network cohesion and trust were found to be present in the grains community but were absent in the tourism community. Borrowing from the economics and leadership literature, it is proposed that trust fosters certain types of inter-entrepreneurial networks. A description of these networks and related policy implications conclude the paper.