A SHIFT IN THE POWER DYNAMICS
The new collectives such as C4DI that it is being operated in the area for less than two years play an integral role in the management of self-organizing processes, with implications for collective entrepreneurship in new industry formation, as suggested by Comunian (2010). The data reported here appear to support the assumption that a minor representation of companies affiliated to the C4DI has expressed their will to collaborate with other companies to start some form of collective entrepreneurship seeking for new revenue models with the help of the community; however, with a small sample size, caution must be applied. Fuller and Lewis (2003) already stated (in Fuller and Warren, 2006:965) that the firm’s strategy and relationships are bounded and interaction with others moderate innovative entrepreneurial practices, which may lead to emergent features arising from the interactions within the ecosystem. Fuller and Warren hold the view that, in the specific context of the startup ecosystem, “it is essential to bear in mind that startups are dynamic organizations, not static entities, and that each task evolves in response to business challenges and opportunities that may come up due to interactions within the ecosystem” (2006:965).
It is being suggested that networks in social systems may be nested, for example, organization networks within industry networks. (Kadushi, 2012:162) In that sense, the FEO initiative is also a facilitator of connectivity and growth for entrepreneurs participating in different industries, the Digital Economy among them.
The collective organization, such as the Hull Digital Economy Cluster, are often better positioned than individuals to influence the feedback that “brings about the emergence of new organizational collectives”, such as the entrepreneurship networks within the Hull Digital Economy ecosystem. According to Chilles and Meyer (2001 and 2004) this new organizational collectives “play an integral role in the management of self-organizing processes, with implications for collective entrepreneurship in new industry formation” (Chiles et al., 2004:515). Erkko Autio et al.(2014), also observed how as a result of associating entrepreneurial activities and innovation many nations, states, and universities are engaging with policies designed to stimulate innovation in entrepreneurial firms, “in the hope of facilitating economic growth” (Grimaldi et al., 2011 in Autio et al., 2014:1097). As pointed out by the author's examples of such policies include local, regional, and national initiatives to promote university-based startups and technology-based economic development initiatives such as incubators and accelerators. The Hull Digital Cluster show evidence of engagement in that direction and the hubs monitored by the present research are the precise product of this type of policy stimulation that is being reproduced all across the region named “The Northern Powerhouse”. As pointed out by Putnam (2008) it is safe to assume that social capital implies that “social network has value” (Putnam, 2008 in Kadushin, 2012:162), especially in the context of the Digital Economy. Value structure serves as “the facilitator between the nature of the underlying opportunity and the enactment of that opportunity via resource and transactive elements” (Georges and Bock (2011:90). Many scholars also believe that there is also a shift in the power relation within the organizations and within the ecosystem (Chiles et al., 2010:11) and that there is a correlation between the characterization of business models and biological ecosystems. In their paper, “Strategy as ecology”, published in the Harvard Business Review, Iansiti and Levien defined the term “ecosystem” as something closer to the biological term “community” (2004:5).
There is also a few literature interrogating issues surrounding the business model concept in a networked world or linking business models to complexity management in strategy research. Zott and Amit (in Kleindorfer et al., 2009), in their paper ‘The role of business models as the engine of a network-based strategies’ describe the role of business models in creating value through the network, paying special attention to the central design task of entrepreneurs and managers. In their study, they conclude that entrepreneurs often “try to find fundamentally new ways of doing business that will disrupt an industry’s existing competitive rules, leading to the development of new business models” (Kleindorfer et al., 2009:262). The present research has interrogated how business models can be adapted for a better business performance and results by means of improving and creating symbiotic relations within the network where the startup operate. Evidence show that a large number of startups has a yearly budget dedicated to network activities, but, at the same time, many companies had also stated their need for assessment in terms of accessibility to clients and resources outside Hull area, and none of them take a relevant role as part of an international network. In that sense, it is solid to suggest that if the C4DI learns how to be a facilitator for startups to access national and international networks it may increase the network value of the overall Hull Digital cluster.
Competitivity is not just among companies anymore (if it ever was just among companies) but also among networks. According to Tech North Report the “Northern Powerhouse” was one a key driver of the industrial revolution in the UK and today is really well positioned as a leader in digital innovation. It is home to seven different leading clusters with a diverse range sector expertise: “Northern cities are making particular headway in several subsectors of the digital economy. Manchester has a world-class digital advertising cluster, Hull is building up its expertise in e-commerce, and Liverpool is foremost among UK cities for connected devices and the Internet of Things. HealthTech has become a strong suit for Leeds, software is a specialty for Sunderland, and there is a notable grouping of social network businesses taking root in Newcastle. Such is the degree of specialization that several cities have taken on distinctive monikers, including Liverpool (‘sensor city’), Sheffield (‘maker city’) and Leeds (‘data city’)” (Tech North, 2016:7). In their 2004 paper, Iansiti and Levien predicted that “rather than involving individual companies that are engaged in technology races, battles in the future will be waged between ecosystems or between ecosystem domains” (Iansiti and Levien, 2004:10). It is possible that we are observing a shift in the dimensions of networked competitivity, in which case, under the premise network equals connectivity which equals value, it would be interesting to continue the present research undertaking a multilevel approach to the dimensions of networked competitive as a way to measure connections between value dynamics and business networks in the North Powerhouse Network. Especially considering that Hull has just secured £32 million for the UK City of Culture celebrations in 2017, which can fuel the network activities of the city and boost Hull Cluster into the greatest position within the North Powerhouse network (Young, 2016).