Literature recognizes that networks and networking are vital for firm performance and enterprises of all sizes are joining international networks (Lechner & Dowling, 2003; Bernhard & Karlsson, 2014; Cesário & Noronha Vaz, 2014;). Further research claims that networking is an important business activity for entrepreneurs, especially important for small businesses during start-up, which can then contribute to the growth of the business and superior performance. The emerging information society challenges relations not only between public agencies such as municipalities and citizens but also small enterprises in many ways. Earlier research also claims that entrepreneurship is a key issue in destination development.

This study aims to describe and analyze the value creation of networks for small enterprises and destination development. The enterprises are located in two municipalities in a region undergoing structural change, due to the closure of a big car plant. We will focus on the value creation of different forms of networks and networking such as face-to-face and digital-based networks. Further we focus on value creation related to different actors within the networks, such as the role of entrepreneurs, municipalities, customers and sub-contractors. Theories on entrepreneurship, e-government, social media and network are important for our study.

The research method is based on case study methodology with use of qualitative in-depth interviews, observations and document studies. Twelve interviews were conducted with managers from ten small enterprises (defined as microenterprises according to European Commission (Ekonomifakta, 2014). We contacted the public managers at the business offices in each municipality and they selected a list of companies involved in destination development within their municipality. Two of the ten enterprises were chosen from the list made by the managers. The remaining eight were selected from the list of members of the tourism company’s website. The tourism company is partly owned by the two municipalities and managed by a non-profit association for tourism development. Each interview took about an hour and was recorded before transcribing. All interviews were conducted in autumn 2013 and were made together by the authors. The analysis was made by qualitative content analysis and done in two steps; first separately by each author, after which the analysis was discussed together. This was done in order to increase the validity of the analysis. Regarding some issues respondents have received follow-up questions in order to get further understanding.

The main findings indicated that networks and municipal support were important for the small enterprises. The municipalities could for example support network building for destination development. The use of local e-government was hitherto limited to e-services for public procurement. The respondents did not ask for more municipal e-services, but that could be a consequence of their limited experience of the potential of local e-government.

The respondents stressed the importance of face-to-face contacts for establishing and maintaining their networks. The use of social media among the enterprises was limited due to lack of time, competence and motivation for most of the enterprises, although the potential of social media for marketing was seen as extensive. A few of the respondents on the other hand were very skilled in their use of social media, as a consequence of their professional knowledge and business orientation. Strategic choices of networks and relevant competence to handle social contacts (both face-to-face and digitally) contributed to the value creation.

This research provides insight into and deeper understanding of some important aspects that contribute to value creation for small enterprises and destination development.