In emerging industries, networks of public and private organizations can be incredibly powerful. In this study, the authors demonstrate this effect in the growth of the wine industry in two regions of Argentina — Mendoza and San Juan. In Mendoza, nascent winegrowers had access to firms, schools, associations, and other government-supported groups that helped the vintners evolve from producers of low-quality wine into industry leaders. In San Juan, winegrowers did not enjoy the same support from private, public, or government organizations, and the quality and quantity of its wine production did not achieve the same success as that of neighboring Mendoza. Based on this research, the authors conclude that Mendoza’s ongoing success is linked to its association with institutions that helped the vintners in the region gain access to knowledge, resources, and contacts outside their immediate vicinity.
Building relationships with public and private institutions can help emerging businesses upgrade their operations and gain access to knowledge, technology, and contacts — all of which can lead to substantial improvements in quality.