Int. J. Strategic Business Alliances, Vol. 2, Nos. 1/2, 2011 113 Copyright © 2011 Inderscience Enterprises Ltd. Small and medium sized enterprises and knowledge networks: an initial analysis of the roles of external supporting organisations Nick Clifton* Creative Leadership & Enterprise Centre, Cardiff School of Management, University of Wales Institute – Cardiff (UWIC), CSM Building, Western Avenue, Llandaff, Cardiff, CF5 2YB, UK E-mail: nclifton@uwic.ac.uk *Corresponding author David Pickernell Welsh Enterprise Institute, University of Glamorgan Business School, Treforest, Pontypridd, Wales, CF37 1DL, UK E-mail: dgpicker@glam.ac.uk Martyn Senior School of City and Regional Planning, Cardiff University, Glamorgan Building, King Edward VII Avenue, Cardiff, Wales, CF10 3WA, UK E-mail: SeniorML@Cardiff.ac.uk Abstract: This paper presents research examining the effects of network interaction and small medium sized enterprise (SME) performance, with particular regard to the accessing of knowledge for innovation. Economic development policy is increasingly focused on SMEs, creating a clear research issue in terms of the roles and interactions of support bodies and the creation and dissemination of innovation. This paper thus analyses the contribution of a range of external supporting institutions in an innovation creation and dissemination framework – exploring the contribution of networks, and identifying the mechanisms required therein. Bivariate and multivariate (regression) analyses are employed to investigate outcomes in relation to these structures; data is derived from survey responses of over 450 UK SMEs. Results on the conscious use of relational embeddedness show this to be an important indicator of SME performance, but not universally so. In general, we find less support for the factors predicting SME growth outcomes than is the case for innovation. Finally, we outline an agenda for further research in the area.