The Weak Failure Process of Engineered Innovation Networks in the Initiation Phase: The Case Study of Gas Industry in Iran

Network failure is one of the factors explaining the failure of innovation systems, which in comparison with other factors, has been less studied. In general, networks may fail in two ways: a) weak failure which means that they fail in the initiation phase, b) strong failure which means that they fail in keeping the network stable. System failure is one of the most important rationales for government intervention. However, it is not clear that how government can intervene, due to the lack of deep understanding of the phenomenon. In this article, the process of weak failure of engineered innovation networks has been analysed in detail by using process and exploratory-descriptive approach. The validity and applicability of the conceptual model, which is generated is tested in a single in-depth case study. The results are showing that networks become unstable because of two reasons: disappearance of trust among the members of the network, which leads to the members losing  their incentives to be involved in the networks. These two factors, might be the results of main activities of network creation, which are member selection, structure design, formalization of relationships and network governance. The conceptual framework, which is developed in this article shows how these four main blocks  could cause the network failure through hurting the trust and damaging the incentives of network members. In the last half of the paper, the failure mechanisms of innovation networks in the gas industry in Iran are explained through the application of proposed conceptual framework.