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Horizontal and Vertical Networks for Innovation in the Traditional Food Sector

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  • Gellynck, Xavier
  • Kuhne, Bianka

Abstract

The locus of innovation is not the individual firm anymore but increasingly the network in which the firm is embedded. Hence, in this paper innovation is investigated in the broader context of networks and applied to the traditional food sector. Networking refers to a process of identifying and acting on complementary interests with or without formal means of cooperation and plays an important role for the diffusion and adoption of innovations, because they increase the flow of information. Two main types of networks exist. Vertical networks relate to cooperation of partners belonging to the same chain. Meanwhile, horizontal networks refer to cooperation among firms which are primarily competitors. Data were collected during focus groups and in‐depth interviews in three European countries: Belgium, Hungary, and Italy. In each country, data are collected from retailers/wholesalers, food manufacturers and suppliers in the beer, hard and half hard cheese, ham, sausage, or white paprika chain. In the investigated countries both vertical and horizontal networks exist. However, the intensity of using the network differs. On the one hand vertical networks are well developed based on quality assurance schemes and traceability, though these networks often face difficulties due to high lack of trust. On the other hand, horizontal networks are well developed when a producer consortium is involved. However, these networks can be inhibited through strong competition. The partners in traditional food networks focus mainly on innovation related to product characteristics such as new size, form and packaging without changing the traditional character of the product. The main barriers for innovation in the traditional food networks are the lack of understanding the benefits of networking activities for innovation, the lack of trust, the lack of knowledge of appropriate methods and skills, and the lack of financial and physical resources. Our study points out that successful SMEs use their networks to overcome lacks of knowledge and information and to create possibilities of joint use of resources.

Suggested Citation

  • Gellynck, Xavier & Kuhne, Bianka, 2010. "Horizontal and Vertical Networks for Innovation in the Traditional Food Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 1(2), pages 1-10.
  • Handle: RePEc:ags:ijofsd:97229
    DOI: 10.22004/ag.econ.97229
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    References listed on IDEAS

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    Cited by:

    1. Janarthanan Balakrishnan & Pantea Foroudi, 2020. "Does Corporate Reputation Matter? Role of Social Media in Consumer Intention to Purchase Innovative Food Product," Corporate Reputation Review, Palgrave Macmillan, vol. 23(3), pages 181-200, August.
    2. Ciliberti, Stefano & Bröring, Stefanie & Martino, Gaetano, 2015. "Drivers, effects and peculiarities of innovation activities in the food industry: a comparison across EU Member States using CIS data," 2015 International European Forum (144th EAAE Seminar), February 9-13, 2015, Innsbruck-Igls, Austria 206249, International European Forum on System Dynamics and Innovation in Food Networks.
    3. Kuhne, Bianka & Gellynck, Xavier & Weaver, Robert D., 2010. "Network connections and innovation capacity in traditional agrifood chains," 116th Seminar, October 27-30, 2010, Parma, Italy 95050, European Association of Agricultural Economists.
    4. Aron TOROK & Jozsef TOTH & Jeremias Mate BALOGH, 2018. "Networking theory of innovation in practice - The Hungarian case," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(12), pages 536-545.
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    6. Lamprinakis, Lampros, 2012. "Organizational Innovation and Institutional Change: The Case of Valio in Finland," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 3(2), pages 1-11, December.
    7. DeMaria, Federica & Zezza, Annalisa, 2020. "Drivers and barriers of process innovation in the EU manufacturing food processing industry: exploring the role of energy policies," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 9(1), April.
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    9. Henchion, Maeve M. & Sorenson, Douglas, 2012. "Formal Food-related Networks in Ireland: A Case Study Analysis," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(4), pages 1-16, March.
    10. Calderón García, Haydee & Kolbe, Diana, 2017. "Capacidades dinámicas en el proceso de internacionalización de las empresas de distribución de productos agroalimentarios," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 16(02), January.
    11. Dismas Said Shija & Okeyo A. Mwai & Julie M. K. Ojango & Daniel M. Komwihangilo & Bockline Omedo Bebe, 2022. "Assessing Lactation Curve Characteristics of Dairy Cows Managed under Contrasting Husbandry Practices and Stressful Environments in Tanzania," World, MDPI, vol. 3(4), pages 1-21, December.
    12. Cadilhon, Jean-Joseph & Pham, Ngoc Diep & Maass, Brigitte, 2016. "The Tanga Dairy Platform: Fostering Innovations for more Efficient Dairy Chain Coordination in Tanzania," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 7(2), pages 1-11, March.
    13. Minarelli, Francesca & Raggi, Meri & Viaggi, Davide, 2015. "Innovation in European food SMEs: determinants and links between types," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(1), pages 1-21, April.
    14. Ciliberti, Stefano & Bröring, Stefanie & Martino, Gaetano, 2015. "Drivers of innovation in the European Food Industry: Evidences from the Community Innovation Survey," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 6(3), pages 1-16, July.
    15. Kuhne, Bianka & Lefebvre, Virginie M. & Gellynck, Xavier, 2013. "Knowledge Exchange in Innovation Networks: How Networks Support open Innovation in Food SMEs," 2013 International European Forum, February 18-22, 2013, Innsbruck-Igls, Austria 164742, International European Forum on System Dynamics and Innovation in Food Networks.
    16. Bianka Kühne & Xavier Gellynck & R.D. Weaver, 2015. "Enhancing Innovation Capacity Through Vertical, Horizontal, and Third‐Party Networks for Traditional Foods," Agribusiness, John Wiley & Sons, Ltd., vol. 31(3), pages 294-313, June.
    17. Kuhne, Bianka & Lambrecht, Evelien & Vanhonacker, Filiep & Pieniak, Zuzanna & Gellynck, Xavier, 2014. "Factors Underlying Farmers’ Decisions to Participate in Networks," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 4(3), pages 1-16, February.
    18. Grashuis, Jasper & Dary, Stanley Kojo, 2017. "An empirical investigation of patent and trademark ownership propensity and intensity in the U.S. food and drink industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(5).
    19. Dismas Said Shija & Okeyo A. Mwai & Perminus K. Migwi & Raphael Mrode & Bockline Omedo Bebe, 2022. "Characterizing Management Practices in High- and Average-Performing Smallholder Dairy Farms under Contrasting Environmental Stresses in Tanzania," World, MDPI, vol. 3(4), pages 1-19, October.

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