SMALL WORLD CHARACTERISTICS OF INNOVATIVE SMART CARD NETWORKS

Abstract

The paper examines the evolving innovative network structure in the smart card industry between 1992 and 2006. The aim is to search for sub-groups within the main network which allowed better understanding of the global innovative network structure and the speed of the smart card innovation system. Based on a proprietary database covering inter-firm agreements in the smart card industry, our empirical results reveal the existence of small-world structures, widely thought to enhance creativity and knowledge diffusion, and the emergence of giant components of innovative networks. Three notable features of this small world structure were the presence of broker incumbents, the decrease of average degree, and the increase of average distance of the networks.Small world networks, smart card industry, innovation system, networks of innovation, knowledge creation