Entrepreneurship and Regional Development

The object of this paper is to clarify the Marshallian ideas of agents, markets and evolution that make up his concept of the industrial district. The industrial district is interpreted as an organizational and institutional answer to uncertainty. Its longevity depends on the strategies of the local economic actors, the fruition of external economies and its adaptation to a particular trade and technological environment. These propositions are illustrated with regard to contemporary industrial history.

Insight into the investment behaviour of firms is central in understanding economic dynamics. A critical question, however, is whether firms provide sufficiently reliable data to enable them to make plausible forecasts at the meso (regional or sectoral) level. This paper analyses Dutch investment forecasts at different levels of aggregation. The central research question is whether entrepreneurs, individually or as a group, make systematic errors in their investment forecasts. A statistical test reveals that investment forecasts are not biased at the aggregated (regional and sectoral) level. At the micro level, however, there is a significant bias. Hence, using aggregated (regional and sectoral) data to test the lack of bias (unbiasedness) of forecasts may lead to the wrong conclusions. Moreover, aggregated investment forecasts may then be an inappropriate source for policy recommendations, despite their seemingly high reliability. This finding may in principle be valid for many European countries, since data collection on investment is organized in similar ways throughout Europe.

While innovative technology supply has been the focus of much neo Schumpeterian modeling, few have addressed the critical and more resource demanding commercializing of the same technologies. The result may have been a growth policy focused on the wrong problem. Using competence bloc theory and a firm based macro to macro approach we abandon the assumed linear relation between technology change and economic growth of such models, and demonstrate that lack of local commercialization competences is likely to block growth even though innovative technology supplies are abundant. The break up, reorganization and part withdrawal of Pharmacia from the local Uppsala (in Sweden) economy after a series of international mergers illustrate. Pharmacia has “released” a wealth of technologies in local markets. Local commercialization competence, notably industrially competent financing has, however, not been sufficient to fill in through indigenous entrepreneurship the vacuum left by Pharmacia. Only thanks to foreign investors, attracted by Pharmacia technologies, that have opted to stay for the long term the local Uppsala economy seems to be heading for a successful future. The Pharmacia case also demonstrates the role of advanced firms as “technical universities” and the nature of an experimentally organized economy (EOE) in which business mistakes are a natural learning cost for economic development.

This paper aims to examine the performance conditions of ethnic (migrant) entrepreneurs in a modern economy. After a broad overview of key issues, an analytical tool from marketing theory is proposed, based on 5 P's (product, price, place, personnel and promotion). Next, an empirical application is presented, in which results from an in-depth interview study on Moroccan entrepreneurs in Amsterdam are discussed. Given the linguistic and qualitative information in our data base, two recently developed pattern recognition methods for categorised information, viz. apriori and rough set methods, are deployed in order to derive meaningful association and classification rules which are helpful to identify conditional success or performance rules.

Using information provided by over 450 small firms throughout Ireland this paper examines the links between firms' strategic initiatives and their growth, profitability and asset utilization. Strategy choice is found to have an important and significant link to business growth and profitability but no significant link to asset utilization. Growth and profitability linkages, however, often operated in opposite directions. For example, strategies designed to centralize the ownership or control of sample businesses were positively associated with business growth but had negative profitability links. Similar results were evident for a number of market and systems strategies. The implication is that the appropriate strategy choices for a firm depend strongly on the firm's business priorities. The strongest growth associations were with the introduction of management accounting systems, the introduction of new or improved products and moves to centralize ownership. For businesses with broader development objectives, new product development, export market development and moves towards more consensual managerial approaches had positive profitability, growth and asset utilization links.

This paper explores the possibilities of combining the recently developed ` value constellation’ concept and the literature about industrial districts. The advantages related to the geographical concentration of economic activities are insuÝ cient in the competition with companies that are linked to each other within a value constellation ± a customer-oriented inter-organizational strategy. This new type of competition forces traditionally operating SMEs in industrial districts to team up with each other in a customer-oriented network. However, these networking strategies are unlikely to emerge because SMEs are locked into their traditional competencies and they lack the ® nancial and strategic resources to develop interactive strategies covering the entire value system. Business associations and local institutions may play a crucial role in changing and shaping the emerging network among the SMEs. However, local institutions are equally susceptible to being locked into traditional patterns of interaction. Their willingness to break away from the past is crucial for the learning capabilities of local SMEs. The diÝ culties in setting up a customer-oriented network are illustrated by the ` construction and home furnishings’ business cluster in South West Flanders (Belgium).

The paper aims at investigating how far transaction costs economics (TCE) concurs in the explanation of outsourcing decisions in firms characterized by “thick’ industrial relations, that is where unions and employees are involved in, and are sometimes able to affect, the relative managerial decisions through participatory formal and informal mechanisms. What is more, the paper aims at investigating whether the concurrence of TCE and industrial relationships has different outsourcing implications for firms which are also involved in delocalization strategies. An empirical model, translating a set of theoretical correlations between an original outsourcing extent variable, on the one hand, and a number of proxies related to TCE, industrial relations and delocalization, on the other hand, is applied to a representative sample of manufacturing firms for the local production system of Reggio Emilia (RE) (in Northern Italy). Overall, the empirical application shows that the role of TCE in accounting for outsourcing in the LPS of RE is quite blurred, if not even contradicted, while the role of industrial relations emerges instead quite straightforwardly. Finally, RE firms generally use outsourcing and international delocalization in a complementary way, but the correlation between outsourcing and delocalization turns out to be dependent on the kind of activity and of the nature of the delocalization channel.

The modern growth literature pays much attention to innovation and knowledge as drivers of new developments in a competitive open economic system. This paper reviews concisely the literature in this field and addresses in particular micro- and macro-economic interactions at local or regional levels, based on clustering and networking principles, in which also sustainability conditions play a core role. The paper then develops a so-called knowledge circuit model comprising all relevant stakeholders, which aims to offer a novel framework for applied policy research at the meso-economic level.

The aim of this paper is to contribute to the debate about how, in advanced countries, industrial districts specialised in traditional manufacturing industries evolve as a consequence of new challenges linked to the globalisation process. Using a multiple case study design, the study examines the evolution of two fashion-led Italian districts: the Montebelluna sportswear system and the Vibrata-Tordino-Vomano clothing district. Our findings reveal that cluster firms’ ability to shift from manufacturing to other activities providing higher returns along the global value chain is key to understanding the effect of globalisation and relocation processes on the cluster’s long-term competitiveness. As illustrated in this study, weak learning districts are the most threatened while innovative districts are able to enact a selective process of relocation, substituting outplaced activities with more valuable ones and attracting inward investments.

The present paper aims to investigate and compare various modalities of migrant entrepreneurship in European countries in order to design a systematic classification of migrant entrepreneurship and to highlight key factors of migrant entrepreneurship in Europe. The paper is based on a comparative assessment of available quantitative data and qualitative information derived from a broad review of findings from previous studies in the literature. Our quantitative evaluation includes the European OECD countries, while our qualitative investigation addresses migrant entrepreneurship experiences in eight European countries: Denmark, Germany, Greece, Italy, the Netherlands, Portugal, Sweden and the UK. The results of our comparative analysis show that the general picture of European migrant entrepreneurship is determined by some distinct push factors such as high unemployment rates and low participation rates or low status in the labour market as well as by an accompanying factor, viz. mixed embeddedness. The results of our comparative evaluation are summarized in a systematic typological table. These show that, while an informal and labour-intensive sector, an underground economy, and small companies and traditional households prompt migrant entrepreneurship in Southern European countries, an overrepresentation of non-Western immigrants among the self-employed, as well as relatively lower income levels of self-employed immigrants compared to both self-employed natives and employed immigrants are decisive for migrant entrepreneurship in Northern European countries.

This study analyses the impact of foreign direct investment on small business employment along the border in Mexico between 1987 and 1996. During this period, unprecedented levels of foreign direct investment flowed to Mexico, most notably to the northern border region. At the same time, it appears that internal migration of workers from the interior to the border occurred in response to employment generated by this investment. Utilizing 1987 and 1996 data from the Encuesta Nacional de Empleo Urbano, bivariate probit models of employment and small/ large firm employment for the border and interior regions are estimated. The results suggest that the increased employment share captured by large firms in the border may have hindered growth in the small business sector. A better understanding of the impact of FDI flows on small businesses may help policymakers in developing countries as they strive to create broad-based economic growth.

This paper examines the US portion of the global communications network known as the Internet. The stages in the Internet's evolution, telecommunications deregulation, and a rush by new competitors to new market opportunities associated with the Internet combined to prompt a flurry of investment in new fibre-optic networks. Frameworks to explain new networks built upon, and added to, existing telecommunications networks include network economies and the opportunity-rich paths located between the large markets on the east and west coasts of the country and a capital-driven set of new and old network suppliers. The paper then reviews the small but growing body of research on the geographic structure of the Internet. The empirical section of the paper focuses on analyses of the variation among urban areas both in bandwidth on interurban Internet backbone networks and in the number of web design firms in the USA. Bandwidth investment was attracted not only to cities with larger populations but also to cities with 'knowledge economies', indicated by doctoral degree-granting institutions and economic dynamism. The paper concludes with remarks about future research priorities.

Insight into the investment behaviour of firms is central in understanding economic dynamics. A critical question, however, is whether firms provide sufficiently reliable data to enable them to make plausible forecasts at the meso (regional or sectoral) level. This paper analyses Dutch investment forecasts at different levels of aggregation. The central research question is whether entrepreneurs, individually or as a group, make systematic errors in their investment forecasts. A statistical test reveals that investment forecasts are not biased at the aggregated (regional and sectoral) level. At the micro level, however, there is a significant bias. Hence, using aggregated (regional and sectoral) data to test the lack of bias (unbiasedness) of forecasts may lead to the wrong conclusions. Moreover, aggregated investment forecasts may then be an inappropriate source for policy recommendations, despite their seemingly high reliability. This finding may in principle be valid for many European countries, since data collection on investment is organized in similar ways throughout Europe.

Labour market policy in Germany strongly supports initiatives to found new businesses. In addition to credit programmes with low interest rates open to everyone, the state also supports the foundation of businesses by the unemployed. Business founders who are entitled to receive unemployment compensation get temporary financial assistance to start up a business on their own. In this paper, the authors evaluate how this policy instrument works. The analysis is based on data taken from a mail survey with business founders who started their businesses in 1995 in the metropolitan area of Munich. The results show that it is hard to define whether the programme supports additional business foundations. However, the authors have some empirical evidence that this might be the case. In addition, the analysis did not reveal a deficit in human capital among the unemployed founders. However, a deficit in financial resources was detected. Unemployed founders have to negotiate higher hurdles if they want to raise outside capital. The businesses founded by the unemployed founders are on average as competitive as those founded by employed founders; however, they show a slower pace of employment growth. Furthermore, the authors demonstrate that the unemployed founders are a highly selective sample of all the unemployed, especially if one focuses on human capital resources. As a consequence, the effects of the programme should be interpreted conservatively.

Business networks (co-operative arrangements between independent business organizations) may be the signature organizational form of the contemporary global economy. Many policy-makers and local leaders advocate business network membership as an alternative development strategy for regional economic vitality. The extant literature on business networks has focused on their association with business success. However, little is known about their impact on other aspects of community life. The purpose of this paper is to elaborate the role of network membership on one non-economic dimension of the business community interface. We examined the relationship between business network membership and business social responsibility to communities, defined as the provision of leadership and support for community betterment projects. Data were gathered from telephone interviews with a random sample of 460 non-metro small business operators in the USA. Independent t -tests and ordinary least squares regression analyses controlling for theoretically important variables were conducted. Findings show that networked businesses provide more leadership and support for their communities than non-networked businesses. However, networked businesses were no more likely than non-networked businesses to use local suppliers of goods and services.

The expansion of globalization has led to the relocation of many industrial activities. In particular, this process has affected industrial districts in the traditional industries. However, different districts vary in their capacity to retain activities. The robustness of industrial districts and, in consequence, their capacity to retain core activities at home and thus avoid painful relocations can be analysed by means of the relational capital developed at the district level. The relational structure within the district affects and determines the capacity of innovation of the district firms. This paper analyses the extent to which innovation depends on the amount of relational capital developed at the district level. We have addressed this proposition using internal human mobility, shared vision and trusting co-operation as indicators of the amount and quality of relational capital. In order to support theoretical propositions we have conducted empirical research comparing different industrial districts in the Valencian region of Spain. Research findings suggest a significant association between social capital variables and innovation outcomes. In consequence, these factors can facilitate retaining activities in districts.

Despite its theoretical and practical importance, the evolution and development of entrepreneurs' networks has attracted a little attention of researchers. The emerging research literature on this topic found that the dynamics of entrepreneurial networks were contingent upon venture lifecycle, industry and region, and resource needs of the firm. In addition and contrast to the previous research, this article examines the effects of the initial network structure, and firm performance of previous years on the changes in entrepreneurs' network structure, relations, and resources over 4 years. The empirical data is composed of the face-to-face interviews with 75 Russian entrepreneurs in 1995, and the follow-up interviews with 56 original respondents in 1999. I found that the greater the initial network size, the less the increase in network size, strong and weak ties, and resources over time. Further, the findings indicate that revenue growth of previous years predicts the changes in networks in the reverse manner. Thus, I found that the greater the average revenue growth, the less the increase in network size, weak ties, and resources over time.

This paper considers the interaction of stocks of talent, entrepreneurship, processes of institutionalization and networking in local development. The main theme is that although innovation necessarily involves social networks and collective action, it should not be overlooked that the quality of those networks is dependent on the quality or talent of individuals who have initiated particular developments. The paper argues that the literature on local and regional development tends to overlook the agency of individuals and that to do so ignores processes that lead to the distinctive characteristics of localities. Using Oxfordshire as a case study, it demonstrates how the expertise of talented individuals has been translated in the fastest growing high-tech economy in the UK. This has brought visibility to the county's techno-economic and institutional achievements feeding into high-level professional and political policy agendas.

In recent years new firm formation has become a major area of both research and policy. Yet, while regional differences in business start-up intensity, and their causes, have been the subject of various studies, few attempts have been made to investigate spatial variation in the structural features of start-ups. Theoretical considerations and the existing literature both suggest that agglomeration advantages and sectoral structure of regions figure prominently among the factors important in influencing start-up activity and characteristics. In the empirical analysis of start-ups in Austria we accordingly apply a regional typology based on these two factors. The data analysed were drawn from two similarly designed surveys relating to the years 1990 and 1997. It is shown that Austria displays marked regional differences in start-up activity, in terms of both intensity and characteristics. In line with the urban incubator hypothesis, tertiary centres - above all the Vienna region - displayed significantly above-average start-up rates, as well as more favourable structural characteristics of the new firms. Start-up activity in old industrial and in rural areas was substantially lower than average, structural features also being less positive there. Furthermore, the 1990 cohort displayed regional differences in business start-ups' survival period, although the Cox model indicated no significant direct influence of area type in this respect. In economic policy terms it can be concluded that, as well as a general improvement in the environment for start-ups, greater regional differentiation of financial, informational and consultancy support is desirable, since not only the conditions for new firm formation but also the intensity and characteristics of start-ups themselves vary considerably between regions.

Continued political enthusiasm for encouraging entrepreneurship in the UK is beginning to influence business support policy towards black and minority ethnic businesses (BMEBs). The Small Business Service (SBS; the government agency charged with providing business support to small firms in England) has an explicit remit to cater for entrepreneurs from all sections of society. This is an important development given the widely noted reluctance of BMEBs to avail themselves of the services of mainstream business support agencies. This paper aims to assess the extent to which policy aspirations in relation to BMEBs have been realized. A survey of Business Links (the agencies contracted to deliver SBS services in England) and interviews with key informants are drawn upon to address three questions: To what extent do Business Links have a policy to support BMEBs? What form are initiatives to support BMEBs taking? How can these experiences inform a policy agenda towards BMEBs? The findings suggest that uneven and under-developed approaches to the support of BMEBS are commonplace. However, some encouraging examples of potentially fruitful initiatives are in evidence, which may reflect a growing awareness of the particular needs of BMEBs. A number of guidelines for future policy are presented, including the importance of diversity within mainstream provision; the need for an engagement strategy; improved access to finance; the promotion of sectoral diversity; and better evaluation.

The present study aims at explaining female and male entrepreneurship from a country perspective. Explanatory variables are derived from three streams of literature, including the literature on the determinants of entrepreneurship in general, on female labor force participation, and on female entrepreneurship. To test hypotheses we make use of Global Entrepreneurship Monitor data, including total entrepreneurial activity rates for both women and men for 2002, as well as a range of possible determinants from standardized national statistics. We find that female and male entrepreneurship are largely influenced by the same factors in the same direction. A remarkable exception is life satisfaction for which we find a positive impact on female entrepreneurship and no impact on male entrepreneurship. The paper pays explicit attention to several methodological aspects of investigating determinants of female and male entrepreneurship.

Over the last decade or so, networking has become a ‘vogue concept’ in small business research, connecting with wider debates on learning and regional development. Participation in inter-firm networks is seen to provide small firms with access to a broader pool of resources and knowledge, helping them to overcome size-related disadvantages. In particular, the role of such networks as channels for innovation and learning within regions and localities has been emphasized in the context of an apparent shift towards a knowledge-driven economy. In this paper, we provide an empirically-grounded analysis of networking, trust and embeddedness amongst small and medium-sized enterprises (SMEs) in the Aberdeen oil complex. Drawing upon survey and interview data, it is argued that connections to extra-local networks play a crucial role in providing access to wider sources of information and knowledge. At the same time, an Aberdeen location still matters to oil-related firms because of the access it offers to crucial forms of industry-specific information and expertise. In concurring with recent calls for more empirically-grounded research which seeks to ‘test’ theoretical propositions against relevant data, we suggest in conclusion that a combination of firm surveys and face-to-face interviews provides an appropriate way forward.

Encouraging enterprise in deprived places is an important objective of the UK government policy. Evidence on the perceptions of entrepreneurs suggests that access to finance may be harder for firms in deprived areas, who may have fewer contacts, less collateral or worse access to mainstream banks. Yet there is little empirical evidence on whether this is actually the case. This paper investigates whether firms in deprived areas are more likely to find it hard to access finance than other firms, using a sample of around 3500 UK small and medium sized enterprises (SMEs). We find that firms in deprived areas are more likely to perceive access to finance is a problem. However, controlling for SME characteristics, firm growth, credit scores and selection effects, we find no evidence that they actually do find it harder to obtain. The results suggest that geographical disparities in access to finance are unimportant for the average firm.

This paper longitudinally examines the relationship between the career reasons of nascent entrepreneurs, their growth preferences and subsequent growth achieved. The longitudinal design allows for examination and control of both survivorship and recall bias upon career reason and growth linkages. Substantial recall bias was observed in the career reasons of entrepreneurs, with the reported importance of self-realization and financial success, as explanations for entering venturing activity, being significantly lower when responses were obtained once the venture was operational. Consistent with economic motives, the importance that the entrepreneur places on financial success was a key determinant to explain cross sectional differences in growth preferences of the entrepreneur, the intended size of the venture, and achieved growth. Further, the importance of financial success was robust to the use of both prospective and retrospective career reasons. While independence was the most important factor to explain the career choices of nascent entrepreneurs, independence was also found to be negatively associated with intended and achieved employment growth. Overall, the findings demonstrate that nascent entrepreneur career reasons for self-employment are not homogeneous, vary by growth intentions and preferences, and are associated with subsequent venture growth achieved.

The cluster literature assumes that technology gatekeepers (TGs) shape a district's learning process and its evolution. However, analysis of the resilience of TGs, and their role across different stages of the cluster life cycle (CLC), is absent. Instead, most of the evidence that has been produced is set at a particular stage of the CLC. This article seeks to use a qualitative case study to understand the dynamics of TGs, and their knowledge creation and diffusion capabilities in the CLC renewal period. This is a stage less studied in the literature. Further, the article explores TG resilience across different stages of the CLC. Our results show that not all TGs are resilient and necessary for cluster renewal. In addition, they are not sufficient for fostering disruptions: their manifest reluctance to destroy the status quo and their network centrality makes necessary the entrance of new firms with new knowledge. TGs are necessary because they facilitate a cluster's transition across stages thanks to their powerful control of the most vital aspect of clusters: networks.

This paper reports new survey results on the extent, sourcing and impact of external business advice to SMEs in Britain. The survey, covering 2547 respondents, is the largest and most definitive assessment to date. Its results demonstrate the very wide extent of external advice: used by 95% of respondent SMEs, an increase from 85.8% in a similar survey in 1991. The analysis of the survey assesses sources of advice in terms of the level of trust that exists between the supplier and the SME client. The market appears to be strongly segmented and dominated by high trust specialist sources (accountants, lawyers), customers, suppliers and business friends. Business associations and government-backed sources play an important but lesser role. The recent government initiative of Business Link has, however, established an important market, used by 27% of respondents. Impact assessments confirm the significance of high trust private sector suppliers for the most crucial supplies of advice. Variations in use occur by SME type chiefly by size but also by sector and growth record. Generally levels of use vary by SME type to a greater extent than levels of impact.

This research investigates how a strong personal relationship (strong tie) between a small business owner-manager and his professional or informal advisor affects the relationship between the advisor's recent performance and the owner-manager's perceptions of the advisor's trustworthiness in terms of ability, benevolence and integrity. A negative moderating effect could point to a 'tie that blinds': the owner-manager may be less critical in evaluating the advisor's perceived trustworthiness in light of their recent performance, because of the existing personal relationship. A conceptual model is constructed and examined with survey data comprising 153 young Finnish businesses. The results show that strong ties increase the owner-manager's perception of the advisor's integrity, disregarding their recent performance. For professional advisors, strong ties reduce the impact of recent performance in the owner-manager's evaluation of their ability. For informal advisors, a strong tie makes it more likely that their benevolence will be evaluated highly in light of their recent performance. While the results show that 'ties can blind' under certain circumstances, the limitations of the study raise the need for further research to specify these contextual factors and examine the causal link between the choice of advisor and business performance.

We respond to repeated calls over the years to further develop cluster theory specifically in an African context. Our contribution is to construct a framework which integrates theories focusing on path dependency, transaction cost economics (efficiency and systemic interdependency models) and regional development (lock in models). Our focus is on the innovativeness of African clusters and constraints on such innovation. Thus, drawing on cluster literature on constraints to innovation coupled with insights from current empirical work within African automotive clusters, we examine the challenges of counteracting the multilevel constraints which hinder innovation in African clusters. We develop a model for counteracting cluster constraints focusing on the impact of variations in innovative frequency, diffusion of innovations, innovative speed and protection of innovation. The model emphasizes the opportunities that arise when new entrant and incumbent firms interact to neutralize constraints at transactional, social, ecological and knowledge levels.

Numerous studies examining the linkage between corporate entrepreneurship and performance resort to the entrepreneurial orientation construct to assess a firm's degree of entrepreneurship. Little conceptual and empirical research has been devoted to understanding the factors and conditions that produce Entrepreneurial Orientation. Generic explanatory variables such as environment, organization, strategy and culture have been mentioned in past research, but though a number of hypotheses have been proposed, few have been thoroughly developed and tested. In this article, we focus on one explanatory variable – culture – that we develop along multiple axes. We propose a conceptual framework that aims to provide a better understanding of how three interdependent levels of culture – national, industry and corporate – influence Entrepreneurial Orientation.

This paper investigates how resources available in urban agglomerations influence the organizational form, innovation activity and collaborative linkages of knowledge-intensive business services (KIBS) firms. Compared with their counterparts elsewhere, KIBS located in Norwegian large city labour market regions are more likely to be independent of multi-establishment business organizations and thus reliant on resources available externally, in their locations. This is most pronounced in the central and Western business districts of the capital, wherein independent KIBS exhibit high turnover of professionals and are less inclined to engage actively in innovation. Yet, those that do engage use the capital region economy as a platform for engaging with both domestic and international collaboration partners. Only by consecutively analysing these aspects and accounting for the selection processes involved is the empirical analysis able to uncover contrasting firm-level responses to the same urban economy resource base.

This explorative study of network orchestration processes conducted by innovation brokers addresses new issues in bridging small and medium-sized enterprises (SMEs) and research institutes in innovation networks. The study includes four in-depth case studies in the agri-food sector from different countries: the Netherlands, Germany and France. A guiding research question is how innovation brokers successfully orchestrate innovation networks of SMEs. Based on literature research and cases, we conclude that the innovation broker may have great added value for innovation networks with divergent organizations, especially when the innovation broker takes the lead in three network orchestration functions: innovation initiation, network composition and innovation process management. In addition, the case findings offer best practices of innovation brokers for these orchestration processes

Studies contextual networks to explain the network as an intermediary between a firm and its global environment. In contrast to the "habitat" or "milieu," the context model focuses specifically on entrepreneurship -- offering both stability and change, suggesting guidelines but allowing for entrepreneurial independence. Networks are defined as personalized socioeconomic exchange, encompassing both influence and information diffusion. The industrial district, the science park, and the innovative corporation are identified as three fundamental contexts, each consisting of node, local, and global level networks. The industrial district is characterized by competition and cooperation, the science park by separation and integration, and the corporation by coexisting chaos and order. To study these contexts, a 1990 postal survey is conducted in southern Sweden, focusing on Anderstorp industrial district, Ideon science park at Lund University, and Telub Service Corporation. Through graph analysis of the data, Anderstorp is found to be a highly integrated, self-organizing arena for entrepreneurship. Ideon consists of elaborate networks, but members are too loosely bundled, so that they are not typically interconnected. Telub Service has even more elaborate networks, but these are not able to mobilize social relationships. Conclusions show that different context logics reflect how the network is structured. Further comparative studies are needed, including the impact of technology on contexts. Finally, a support strategy is suggested based on socio-economic policy and the results of the study, which would foster entrepreneurial activity by creating arenas for building social and business networks. (CJC)

The business angel market is usually identified as a local market, and the proximity of an investment has been shown to be key in the angel's investment preferences and an important filter at the screening stage of the investment decision. This is generally explained by the personal and localized networks used to identify potential investments, the hands-on involvement of the investor and the desire to minimize risk. However, a significant minority of investments are long distance. This paper is based on data from 373 investments made by 109 UK business angels. We classify the location of investments into three groups: local investments (those made within the same county or in adjacent counties); intermediate investments (those made in counties adjacent to the 'local' counties); and long-distance investments (those made beyond this range). Using ordered logit analysis the paper develops and tests a number of hypotheses that relate long-distance investment to investment characteristics and investor characteristics. The paper concludes by drawing out the implications for entrepreneurs seeking business angel finance in investment-deficient regions, business angel networks seeking to match investors to entrepre- neurs and firms (which are normally their primary clients), and for policy- makers responsible for local and regional economic development.

Kosetsushi centres (Japanese technology centers)are analyzed.These centers, which provide services to Japanese small andmedium-sized enterprises (SMEs)at subsidized costs, are considered to beone of the most extensive national technology transfer systems.AlthoughSMEs have tended to shy away from using external sources of knowledge expertiseas a result of trouble communicating their needs and issues and adequatelyevaluating the service providers, SMEs in Japan do not as a result of thekosetsushi centres. The kosetsushi centres examined in this article serve the electrical,electronic, and precision engineering industries in the Nagano Prefecture andthe textile industry in the Kyoto Prefecture.Both questionnaires andinterviews were used to collect the data.The questionnaires covered 167firms in Nagano and 97 firms in Kyoto, while 53 individuals from 5 kosetsushicentres, local government and economic development organization in Nagano, andtrade associations in Kyoto were interviewed. The results show that despite the lack of prompt service which results fromtheir research functions, the kosetsushi centers rate higher in terms ofreliability and empathy than doprivate sector consultancies.Theyare also viewed as more competent than universities.Finally, thelong-term commitment of the public sector is viewed as necessary to ensure thecontinued success of these centers. (SRD)

Why do some entrepreneurial high-technology industrial clusters grow and prosper, while others stagnate? Even after several decades of research, we have yet to find a definitive answer. One of the main debates in the literature revolves around the importance of societal variables, such as the growth of a cohesive community, versus the importance of factor availability, such as the supply of highly educated labour. Employing a critical case study design to analyse the technology industry in metropolitan Atlanta, this article shows that although the availability of certain factors might be necessary, it is not sufficient without the crystallization of a cohesive social structure. More specifically, we argue that unless a local high-technology industry develops rich multiple, locally centred social networks, which embed companies in the region, cluster development will stagnate. This is true even if the region is extremely rich in all the factors identified as growth-inducing in the literature.

Examining an increasingly prevalent but under-researched phenomenon, cross-border venture capital investments, it is observed that local venture capitalists typically invest first, followed by foreign venture capitalists in later rounds. A model is developed that explains the role of a domestic venture capital investor in attracting foreign investors and which also accounts for the impact of various circumstances on the importance of this role. In our model based on analysis of nine cross-border venture capital-backed companies, local venture capitalists have several important roles in increasing the venture's cross-border investment readiness including advice to operational management and contributing contacts and local market knowledge. The importance of these roles is mitigated if the entrepreneurial team is highly experienced or if the home market is not important for the venture. The prominence of the local investor has signalling value. Finally, the local investor's international social capital facilitates the formation of cross-border syndicates. Overall, the model developed in the paper contributes to a better understanding of cross-border venture capital and in particular to the division of labour between domestic and foreign venture capitalists in international venture capital syndicates. The paper also contributes to the emerging literature on international social capital.

Publicly-financed support measures for private external consultancies to SMEs in the Walloon Region of Belgium are evaluated based on supply and demand, efficiency, and policy effectiveness. The study was commissioned by the Minister of Economics of the Walloon region. Analyses were conducted on the content of various support measures, databanks of the administrations offering the support services, the dynamics of the consulting sector in the Walloon Region, and two samples of local SME managers surveyed via telephone. The first sample was of 200 SMEs that utilize the support offered to hire private external consultants, and the second sample was of 100 non-user SMEs. Results indicate that the use of external consultants is influenced by sector and education level, where higher-educated entrepreneurs in the primary sector and industry are more apt to hire external consultants. Several shortcomings, such as a confusing profusion of support services, a lack of conceptual integration between services, and the exclusion of certain categories of SMEs, were identified with regard to supply. A neo-Austrian approach to delivering services, in which the client is the subject of external consultancy rather than the object, is recommended to avoid adverse selection and enhance efficiency and effectiveness. (LKB)

In-migrants make disproportionately positivecontributions to the creation of new ventures in rural England. This studyexplores three questions: (1) Are in-migrant entrepreneurs different from theirlocally-born counterparts? (2) To what extent does the origin of the in-migrantentrepreneur affect the degree of localization of the emerging venture? and (3)What are the implications of the degree of embeddedness (present or absent) ofin-migrant entrepreneurs on the social and economic business community? A population survey in the Cumbria region of northwest England, usingstructured questionnaires obtained from 500 people,explored the degree towhichrural entrepreneurship was present in 2001.Interviews with 100innovative entrepreneurs were then conducted. It was found that in-migrantsdiffer from local entrepreneurs--i.e., the formerhave higher educationalattainment, mainly managerial and professional backgrounds, and greatermanagerial expertise. In-migrants were also found to rely less upon the local setting as a sourceof materials and market for their products or services, and more upon nationaland international sources of information and advice than their locally-borncounterparts. In additon, in-mirants have close relationships withsources of information and advice, even though these are frequently locatedoutside the region. Overall, the positive contribution of in-migrants takes place at the expenseof the demise of the local area as an integrated community. There is modest useof information coming from the community, and knowledge diffusion is outside,rather than inside, the community. (TNM)

The economic activities of entrepreneurs are not confined to the ownership of a single firm, but encompass income generation from a variety of sources including wage labour, non-earned income and profit from secondary business ventures. This paper investigates the multiple income sources of a sample of 18 561 business owners in the UK. A latent class analysis revealed seven different groups of entrepreneurs differentiated by their degree of engagement in enterprise ownership and income generation. The results demonstrate the importance of multiple income sources in smaller firms and challenge previous assumptions that portfolio activities are expedited solely as a profit maximization strategy by growth-seeking entrepreneurs. While some use portfolio activities for the purpose of wealth accumulation, others use them as a survival mechanism. The results also highlight time variations in the use of portfolio activities. For some business owners, they are a long-term and relatively stable strategy contributing towards either the economic survival of marginal ventures or the development of high growth enterprises. For others, they are a time-limited strategy facilitating business entry or exit.

While bootstrap finance is widely used in entrepreneurial ventures, both scholars and practitioners have presented conflicting views on the relation between financial bootstrapping and venture growth. This paper empirically investigates the association between bootstrap strategies used at startup and subsequent venture growth. For this purpose, we use a longitudinal database comprising data from both questionnaires and financial accounts of 214 new ventures. Findings demonstrate that the association between financial bootstrapping and venture growth is either non-existent or positive. More specifically, new ventures that use more owner funds, employ more interim personnel, encourage customers to pay more quickly and apply for more subsidy programs exhibit higher growth over time. We discuss the managerial and policy implications of these results and suggest avenues for future research.

This paper revisits the two-equation model of Carree, van Stel, Thurik and Wennekers (2002) where deviations from the 'equilibrium' rate of business ownership play a central role in determining both the growth of business ownership and that of economic development. Two extensions of the original set-up are addressed: using longer time series of averaged data of 23 OECD countries (up to 2004) we can discriminate between different functional forms of the 'equilibrium' rate and we allow for different penalties for being above or under the 'equilibrium' rate. The additional data do not provide evidence of a superior statistical fit of a U-shaped 'equilibrium' relationship when compared to an L-shaped one. There appears to be a growth penalty for having too few business owners but not for having too many.

This paper addresses the use of the Internet to provide business development services such as training, consulting, counselling and networking. Using a Delphi study of experts from around the world, the possible uses of the Internet as well as criteria for successful implementation are presented. Three critical success factors for providing online services are identified. First, an effective use of online resources requires that the inherent strengths of the Internet be exploited. Using online tools when they are perceived to be a 'second-best' mode of communication is inefficient and can be counterproductive. Second, personal contact is still very important and can complement online services. Third, Successful online services require an effective Internet site and program management. The study also shows that the specific nature of entrepreneurship and entrepreneurs must be carefully considered when developing online services. The entrepreneur is more concerned about his/her problems and is less concerned with the problems of others. However, he or she is willing to participate in a small learning network if the benefits ac, beyond that of just learning together. Similarly, online training for entrepreneurs should be complemented by a face-to-face component. An efficient/effective pure online training program for entrepreneurs would be very difficult if not impossible to develop and implement.

The definition of minority businesses in the U.S. has been changed by the National Minority Supplier Development Council (NMSDC), and the experiences of the first four years of the new policy are discussed. Furthermore, policy-oriented implications of these features regarding the growing number of European ethnic minority enterprise are analyzed.The need for a definition of a "minority business" is fundamental since these businesses contribute greatly to the U.S. economy. Although several minority organizations opposed the change in requirement from 51 percent of a company being minority-owned to as little as 30 percent, this new policy was implemented in February 2000. Due to a weak U.S. economy during the first four years of implementation, the NMSDC's vision for this policy was not achieved as expected. For example, due to a surge in mergers and acquisitions activity, many strong minority-owned businesses lost their independence and status. Implications facing U.S. minority-owned businesses include maintaining their minority status, utilizing alternative methods of financing growth, and U.S. research in the minority-business field. Implications facing minority-owned businesses in Europe illuminate social policy concerns. Research regarding minority-owned businesses in the U.S. as well as in Europe has begun to move in a policy-oriented direction. (NEE)

We explore how socially embedded life courses of individuals within Britain affect the resources they have available and their capacity to apply those resources to start-up. We propose that there will be common pathways to entrepreneurship from privileged resource ownership and test our propositions by modelling a specific life course framework, based on class and gender. We operationalize our model employing 18 waves of the British Household Panel Survey and event history random effect logistic regression modelling. Our hypotheses receive broad support. Business start-up in Britain is primarily made from privileged class backgrounds that enable resource acquisition and are a means of reproducing or defending prosperity. The poor avoid entrepreneurship except when low household income threatens further downward mobility and entrepreneurship is a more attractive option. We find that gendered childcare responsibilities disrupt class-based pathways to entrepreneurship. We interpret the implications of this study for understanding entrepreneurship and society and suggest research directions.

This paper analyses the determinants of business income for rural households in Nicaragua. A sample of 1030 households was studied in order to assess the importance of material and behavioural factors that influence income from business activity. The households are involved in manufacturing, trade, services or have a mixture of businesses. They generally have a low income and asset value. Households supplement their income from wages and agricultural activities. To estimate non-farm business income per employed person we analyse the impact of resources, location, entrepreneurial experience and trust. Our results show that household resources and entrepreneurial experience are significant determinants for business income in all sectors. Trust is also important, particularly generalized trust. The contribution of other forms of trust, such as institutional trust, depends on the sector in which households participate.

The multi-levelled processes taking place in Crowdfunding (CF), when tapping a large heterogeneous crowd for resources, and the often fundamentally different intentions of individual crowd members in the case of highly desirable social ventures with little prospect for economic gains, may lead to a different logic and approach to how entrepreneurship develops. Using this under-institutionalized sphere as both, context and subject, the author seeks evidence and a new understanding of entrepreneurial routes by using the sociological perspectives of Bourdieus' four forms of capital as a lens on 36 cases of social ventures. In the cases, opportunity recognition, formation and exploitation could not be distinguished as separate processes. CF and sourcing help form the actual opportunity and disperse information at the same time. In addition, the ‘nexus’ of opportunity and entrepreneur is breached in CF of social causes through the constant exchange of ideas with the crowd, leading to norm-value pairs between the funders and the entrepreneurs. Issues of identification and control are thus not based upon any formal relationship but based on perceived legitimization and offered democratic participation leading to the transformation of social capital (SC) into economic capital (EC). Success is based upon the SC of the entrepreneurial teams, yet the actual resource exchange and transformation into EC is highly moderated by cultural and symbolic capital that is being built up through the process.

Social capital, which offers the broader theoretical construct to which networks and networking relate, is now recognized as an important influence in entrepreneurship. Broadly understood as resources embedded in networks and accessed through social connections, research has mainly focused on measuring structural, relational and cognitive dimensions of the concept. While useful, these measurements tell us little about how social capital, as a relational artefact and connecting mechanism, actually works in practice. As a social phenomenon which exists between individuals and contextualized through social networks and groups, we draw upon established social theory to offer an enhanced practical understanding of social capital – what it does and how it operates. Drawing on the work of Pierre Bourdieu and Robert Putnam, we contribute to understanding entrepreneurship as a socially situated and influenced practice. From this perspective, our unit of analysis is the context within which entrepreneurs are embedded. We explored the situated narratives and practices of a group of 15 entrepreneurs from ‘Inisgrianan’, a small town in the northwest of Ireland. We adopted a qualitative approach, utilizing an interpretive naturalistic philosophy. Findings show how social capital can enable, and how the mutuality of shared interests allows, encourages and engages entrepreneurs in sharing entrepreneurial expertise.

Descriptive and univariate methods are used to examine the diffusion of information communication technology (ICT) into firms located in Scotland and northern England between 1998 and 2001. Data consisted of a sample of 1,347 firms collected from a larger survey entitled "Survey of Enterprise in Scotland and Northern England." Results indicated that the adoption of ICT (e.g., microcomputers, email, the Internet, in-house website, and the automation of business functions) into firms increased from 1998 to 2001. Older firms demonstrated a greater diffusion of ICT compared to smaller, younger firms. Additionally, exporting firms showed a greater diffusion of such technologies and the automation of business functions when compared to non-exporting firms. Data suggested a greater diffusion within novel process and novel innovating firms than incremental innovating firms. Sequential adoption, from generic to specific, of automated business functions was also discovered. From these findings it is evident that the diffusion of ICT depends on several variables such as size and age of firm, firm growth, and export and innovation factors. Although the adoption of ICT has increased, many firms still employ traditional methods of marketing and sales. (NEE)

Specific factors that affect the marketing practices of small and medium-sized enterprises (SMEs) in China, Hong Kong, and Taiwan is studied. Data were collected utilizing a narrative method and content analysis approach on 391 published news stories about entrepreneurs in China, Hong Kong, and Taiwan. Results are as follows: (1) government intervention--Chinese SMEs indicate a strong governmental influence, Hong Kong business owners report government intervention as being minimal, and Taiwanese entrepreneurs identify no issues related to government intervention; (2) production systems--product planning and sales are the highest ranked activities in China, Hong Kong, and Taiwan; and (3) business approach--Chinese SMEs work in a relation-oriented business environment, Hong Kong SMEs function in a transaction-oriented business atmosphere, and Taiwanese SMEs are run in a relation-oriented business setting. Chinese and Hong Kong SMEs spend a limited amount of expenditure on marketing and with customers compared to Taiwanese SMEs. The marketing activities of Chinese and Hong Kong SMEs are at the early stages of the marketing development life cycle, whereas Taiwanese SMEs are at the entrepreneurial stage. All SMEs will soon operate under Own Brand Manufacturers (OBM) systems with low levels of government intervention. A tentative schema is proposed, characterizing the interplay and between aspects of business and government and its impact on marketing practices of Chinese SMEs. (NEE)

In 1992 in Rio de Janeiro, 179 countries agreed on three declarations including Agenda 21. The concept of Sustainable Development (SD) became a triumph in both speeches and potential concepts. The various meanings of 'sustainable development' led to a confusion of Babylonian proportions. The obvious overloading of the term to meet high expectations makes it much more difficult to set into practice. The clever construction of the Rio Declaration allows for opportunities that must not be squandered. The strength of SD as a concept lies in the complexity of the problem and its high degree of commitment among signing members. In this study, SD will be investigated for its applicability; the authors consider the quality of the concept of SD and the handling of the complexity of SD. A two-strategy approach is developed: the difference between the global project 'SD' and the short-run mastery of the SD problem. Such statements need to be investigated and measured against the global context of SD. SD can then be integrated into the concept of regional 'sustainable development'.