Proceedings of the 8th International Conference on Intellectual ...

Rita Babiliūtė and Kęstutis Kriščiūnas
and, <strong>the</strong>refore, to an intensification/reinforcement <strong>of</strong> competition which, in turn, postulates
innovativeness.
On <strong>the</strong> o<strong>the</strong>r hand, <strong>the</strong> German cluster <strong>of</strong> automotive component manufacturing is characterised by a
high degree <strong>of</strong> institutionalization and thus, institutional trust. In this cluster <strong>the</strong> agents are related and
prefer to regulate <strong>the</strong>ir relations with <strong>the</strong> help <strong>of</strong> formal (e.g. standardisation institutions and <strong>the</strong>
regulatory authorities) mechanisms. As this cluster is continuously searching how to improve <strong>the</strong>
products, many participants from various economic groups (e.g. research institutions,
service/application providers, mobile operators, resellers, end users etc.) are taking place within
(Preissl and Solimene, 2003). As a result, it all requires a strong institutional basis in order to ensure
all <strong>the</strong> shareholders’ compliance with „<strong>the</strong> rules <strong>of</strong> <strong>the</strong> game“, <strong>the</strong> leakage <strong>of</strong> information etc. and in
turn to maintain high trust relationships.
One can expect that all <strong>of</strong> <strong>the</strong> above-mentioned different regional and industrial contexts may lead to
different strategies as far as <strong>the</strong> management <strong>of</strong> trust is concerned.
4. Management <strong>of</strong> trust in knowledge-based industrial clusters
The literature is dominated by two different perspectives towards inter-organizational trust building.
One approach suggests that trust inside clusters should better be built via repeated inter-personal
interactions, possibly with <strong>the</strong> leader at <strong>the</strong> forefront, maybe under some guidance by <strong>the</strong> neutral third
party.
Ano<strong>the</strong>r approach suggests that inter-actor trust should first <strong>of</strong> all be created with <strong>the</strong> help <strong>of</strong>
institutions as <strong>the</strong> core <strong>of</strong> trust in <strong>the</strong> system (e.g. Bachmann and Inkpen, 2011). The proponents <strong>of</strong>
<strong>the</strong> later approach claim that modern economies are too sophisticated in order to rely in building <strong>the</strong>
systemic trust only on inter-personal interactions.
Beugelsdijk and Hospers (2005) draw attention to <strong>the</strong> fact that not all firms in all countries are equally
good at cooperating and that, partly based on cultural and institutional features, in some countries
entrepreneurship and innovativeness are more prevalent than in o<strong>the</strong>rs. Indeed, <strong>the</strong> type and intensity
<strong>of</strong> cooperation, as well as <strong>the</strong> ways in which cooperation and innovation are successfully achieved,
differ between countries. In Germany, for example entrepreneurship and innovation in biotechnology
sector only developed after significant government involvement and adaptation <strong>of</strong> institutions at <strong>the</strong>
sector level. The Japanese keiretsu, on <strong>the</strong> o<strong>the</strong>r hand, are a different type <strong>of</strong> inter-organizational
cooperation and that developed in response to <strong>the</strong> lack <strong>of</strong> efficiently functioning institutions after <strong>the</strong>
Second World War, combined with market-distorting government policies. Thus, in <strong>the</strong> German and
Japanese contexts <strong>the</strong> inter-actor trust was to a significant extent institutionally induced.
However, it may also be partly due to <strong>the</strong> “special situation”, such as crisis, as mentioned by
Bachmann and Inkpen (2011), that <strong>the</strong> institutions are given <strong>the</strong> social legitimacy for intervention in
(re-)constructing trust. Under stable circumstances <strong>the</strong>re may be no social consensus justifying <strong>the</strong>
institutional intervention.
As we look at numerous “entrepreneurial” clusters (e.g. Third Italy or Silicon Valley) we can see that
trust is institutionalised via successful repeated inter-personal relations (in a relatively stable cultural
and institutional environment). Thus, over multiple iterations, a productive equilibrium is achieved
when actors are capable <strong>of</strong> predicting each o<strong>the</strong>r’s behaviour. The problem with many developing
countries, including <strong>the</strong> former transition economies, is that under uncertain or, even worse, corrupt
institutional environment <strong>the</strong> opportunist behaviour is too <strong>of</strong>ten rewarded; <strong>the</strong>re are many “one-<strong>of</strong>f”
transactions without “shadow <strong>of</strong> <strong>the</strong> future”, while <strong>the</strong> broken old networks do not provide enough
reputational monitoring (Humphrey and Schmitz, 1998). However, after <strong>the</strong> EU accession, <strong>the</strong>
situation in new member states is becoming more stable; less so in o<strong>the</strong>r Eastern parts <strong>of</strong> post-Soviet
Europe.
Therefore, trust building in a not-yet-mature institutional environment has to rely on any level <strong>of</strong>
initiative (i.e. macro/institutional, micro/personal or meso/industrial), depending on where <strong>the</strong> sufficient
“capital <strong>of</strong> trust” has been accumulated.
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