Abstract
This paper has its background in a research project that studied 12 cases of local development and co‐operation in the Swedish wood‐manufacturing sector during 1997‐2000 and 20 similar projects in other parts of Sweden in 1998. One reflection from this project was that the small firm managers, as well as the supporting bodies, lacked understanding of the process of the creation and support for survival of the networks. This article presents some hypotheses of the important factors in the creation process of strategic small to medium‐sized enterprise (SME) networks. This is done through an in‐depth analysis over the whole life cycle (eight years) for one of the networks studied in the project. The article gives small business owners some ideas of what they should consider before they start or join an attempt to create a strategic SME business network, indicates some of the pitfalls and contributes to policymakers’ understanding of what kind of support is needed.