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Unravelling the nexus between entrepreneurship, neighbourhoods and communities – Introduction

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Despite the growing evidence on the importance of the neighbourhood, entrepreneurship studies have largely neglected the role of neighbourhoods. This book addresses the nexus between entrepreneurship, neighbourhoods and communities, confirming not only the importance of ‘the local’ in entrepreneurship, but also filling huge gaps in the knowledge base regarding this tripartite relationship. This open access introduction outlines a general conceptual framework of entrepreneurship, neighbourhoods and communities that lies at the basis of the in-depth analyses in the consecutive chapters. It subsequently summarizes all chapters and concludes with the identification of several directions for future research on the nexus between entrepreneurship, neighbourhoods and communities.
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1. Unravelling the nexus between
entrepreneurship, neighbourhoods
and communities – introduction
Reinout Kleinhans, Darja Reuschke, Maarten
van Ham, Colin Mason and Stephen Syrett
1.1 ENTREPRENEURSHIP, NEIGHBOURHOODS
AND COMMUNITIES
Until recently, entrepreneurship and neighbourhood studies were separate
academic disciplines which rarely interacted with each other. However,
recent macroeconomic and societal trends have pointed the spotlight on
the nexus between entrepreneurship, neighbourhoods and communities,
highlighting not only the importance of ‘the local’ in entrepreneurship,
but also the huge gaps in our knowledge base regarding this tripartite
relationship. To date, most research on entrepreneurship, firm forma-
tion and innovation, compares entrepreneurial activities, ambitions and
policies between countries, or investigates entrepreneurship in a regional
context (see e.g. Buckingham et al., 2012; Fritsch and Storey, 2014), largely
ignoring the ‘local’.
Despite the growing evidence on the importance of the neighbourhood,
entrepreneurship studies have rarely ‘scaled down’ to cities and neighbour-
hoods including the residential context of where entrepreneurs live. This
missing local and social perspective which brings in the social context of
entrepreneurs is even more surprising in light of the increasing interest in
the role of social networks for entrepreneurship (Somerville and McElwee,
2011; Bailey, 2015) and economic activity more generally. Crucially, most
research on the role of networks for firms and start-ups has focused on the
location of the firm. It is known, for example, that contacts with (former)
colleagues are relevant for starting up a business and those contacts are
retained over a distance. However, research on entrepreneurship from a
gender perspective suggests that for understanding social networks of
entrepreneurs and firm owners, the concept of community is important
(Hanson, 2009). ‘Community’ refers to the valuable connections between
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2 Entrepreneurial neighbourhoods
people including family, friends, and co-members of voluntary associ-
ations, which are maintained through social networks (Delanty, 2003). It is
common knowledge that communities and neighbourhoods can be inter-
related but do not often overlap (Wellman and Leighton, 1979; Chaskin,
1997). Neighbourhoods comprise localised spaces of social interaction
often delineated by administrative boundaries, while communities are
formed by connections between people with similar interests or social
backgrounds and attitudes, which may, or may not, have a clear spatial
base. While entrepreneurs may foster local social and economic networks
with business partners and others, they may also create communities of
practice that extend beyond ‘the local’ but are not recognised by studies
with a regional perspective.
This book investigates the neglected role of community, neighbourhoods
and local social networks for entrepreneurship. Many European countries
have witnessed decades of urban regeneration policies, which have often
been unsuccessful in both economic and social terms, often breaking up
and dispersing tightly knit neighbourhoods, and failing to strengthen
local opportunities for employment or decrease levels of social isolation.
Policymakers across Europe have turned to fostering entrepreneurship in
deprived neighbourhoods and communities, for example as a means to
bring young people out of unemployment back into work (OECD, 2003;
Welter et al., 2008), especially since the great economic crisis of 2007/2008
(Fairlie, 2013). Entrepreneurship is considered a key element in enhancing
local economic development through job creation and increased product-
ivity, as well as ensuring greater social inclusion (Williams and Huggins,
2013, 166; see also Blackburn and Ram, 2006; Syrett and North, 2008).
Policymakers and researchers have not only been interested in individuals
in deprived areas but also in how forms of community-based entrepreneur-
ship may benefit people, places, and more generally, the ‘common’ good
locally (Peredo and Chrisman, 2006; Somerville and McElwee, 2011).
Community-based social enterprises may take over the management of
formerly state-provided services or facilities (Bailey, 2012), combat poverty
(Teasdale, 2010) and sponsor bottom-up regeneration of deprived neigh-
bourhoods either working alongside, in opposition to, or in the absence of
state-led regeneration programmes.
Over time, academic disciplines that study entrepreneurship and firm
formation have widened to include a variety of social and economic
science disciplines. In much of the existing literature, a distinction is drawn
between entrepreneurship taking place in neighbourhoods or communities,
and entrepreneurship taking place for neighbourhoods and communities.
This emphasises the importance of scale (see also Steyaert and Katz, 2004).
Many chapters in this volume apply a geographic lens to the links between
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Entrepreneurship, neighbourhoods and communities – introduction 3
neighbourhood and entrepreneurship, and treat ‘community’ as a local,
spatially embedded concept. Ronald Coase, winner of the 1991 Nobel
Prize for economy, has claimed that the relation between entrepreneur-
ship and community is the next true frontier for entrepreneurship research
(Coase and Wang, 2011).
Hence, this volume is a response to the international call for interdiscip-
linary approaches to entrepreneurship and firm formation to overcome
entrepreneurship research and neighbourhood and community studies’
mutual neglect for one another’s fields of research (e.g. Peredo and
Chrisman, 2006; Lyons et al., 2012; Daskalaki et al., 2015; Fortunato and
Alter, 2015; Reuschke and Houston, 2016). This book aims to shed light on
the multiple relationships between entrepreneurship, neighbourhoods and
communities across several countries. Chapters explore the importance of
the neighbourhood and local social networks for individual entrepreneurs.
The concept of community will be explored here through a particular
focus upon community-based social enterprises and their relationship with
wider economic and political trends.
1.2 HOW NEIGHBOURHOODS AND COMMUNITIES
SHAPE ENTREPRENEURSHIP
The need to devote more attention to the relationship with neighbourhoods
and communities for understanding entrepreneurship lies, paradoxically, in
the radical changes of (inter)national and regional labour markets. Labour
markets are changing dramatically in advanced economies in response to
fundamental and structural economic and technological changes, result-
ing in the decline of permanent employment and in the growth of free-
lance and self-employed workers. This change in employment relations is
also labelled the ‘gig economy’; an economy with a strong prevalence of
short-term contracts between independent contractors and organisations
(Donovan et al., 2016). The relationship between labour market analysis
and entrepreneurship becomes increasingly blurred through the rise in
self-employment. While there is considerable debate over what constitutes
an entrepreneur, it is evident that entrepreneurs and the self-employed
are not synonymous although there is clear overlap between the two and
the majority of business owners are self-employed. Self-employment is
a heterogeneous category that includes a range of activities from highly
professionalised freelancers to disguised employees. The broad set of
self-employed workers display varying levels of control and independence
within the economic system, which often require different skills, capaci-
ties and personality traits to those associated with the entrepreneur. Part
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4 Entrepreneurial neighbourhoods
of the difficulty in academic analysis is because of the greater availability
of data on self-employment in comparison to the limited data on entre-
preneurs; previous research has often conflated entrepreneurship and
self-employment as a matter of convenience rather than in the pursuit of
academic rigour.
International statistics highlight the importance of the self-employed
workforce. In the United States, there were roughly 17 million independ-
ent, self-employed workers; a number which is likely to almost double in
the next decade (Tovey, 2013). Across the Atlantic, the United Kingdom
had 4.6 million self-employed workers in 2015 (ONS, 2016), which roughly
equals an increase of 17 per cent between 2008 and 2014 (D’Arcy and
Gardiner, 2014). In both the UK and the Netherlands the recovery after
the economic crisis has been largely driven by self-employed workers
(Hatfield, 2015). In the Netherlands, this category has almost doubled in
size from about 700,000 in the late 1980s to 1.3 million in 2014 (Stam and
van de Vrande, this volume). This is partly hidden unemployment; many of
these self-employed make very little money.
There is growing evidence that neighbourhood contexts impact on entre-
preneurship and self-employment in various ways. Many self-employed
workers use their home as workplace – a phenomenon that has started to
attract attention from policy and business groups (Mason and Reuschke,
2015; Mason et al., 2011, 2015). This calls into question the resources and
conditions that neighbourhoods can provide for (would-be) entrepreneurs,
self-employed workers and different types of firms. Bailey (2015, 21) has
suggested that
We can think of the entrepreneur’s neighbourhood both in terms of ‘space’
(alocational resource) and in terms of ‘place’ (a social or relational resource).
As a locational resource, the neighbourhood can provide land or premises as
well as access: to markets or demand; to market knowledge or research; to busi-
ness services or infrastructure such as broadband; or to image or reputation. As
a social or relational resource, the neighbourhood context might be an import-
ant influence on attitudes to entrepreneurship as well as shaping the chances
of business success. Local networks or social capital can provide resources and
support, knowledge and innovation, or opportunities for collaboration.
Studies have shown that the neighbourhood context may influence firm
locational choices (Sleutjes and Völker, 2012) and that local networks in
neighbourhoods where (would-be) entrepreneurs live are crucial for gener-
ating and realising business ideas. Other research has measured the proxim-
ity of nascent business to established entrepreneurs’ residences (Andersson
and Larsson, 2016) and the social capital of business owners (Schutjens
and Völker, 2010). Employment studies have found that neighbourhoods
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Entrepreneurship, neighbourhoods and communities – introduction 5
are crucial for job searches by young people from disadvantaged back-
grounds (Tunstall et al., 2012). Although these studies indicate the poten-
tial importance of the neighbourhood context (including social capital),
in fact, very little is known on whether entrepreneurs actually interact in
neighbourhoods and the extent to which they use social resources in the
neighbourhood. Earlier studies have also hinted at the importance of role
models by showing that ‘entrepreneurship is self-reinforcing in nature and
concentrates geographically because of the social environment as individ-
uals follow societal clues and are influenced by what others have chosen to
do’ (Williams and Williams, 2012, 676, citing Feldman, 2001 and Minniti,
2005).
However, the relationship between social networks and entrepreneurship
is by no means only supportive. Social networks, particularly in dense-knit
communities, can prevent efforts to climb up the social ladder. In such
cases, downward-levelling social norms are used contra-productively
(Portes, 1998) towards entrepreneurship. Deprived neighbourhoods are
usually assumed to have high levels of bonding social capital but much less
bridging capital (Forrest and Kearns, 2001; Bailey, 2015). The latter form
of social capital is highly dependent on social networks that transcend
neighbourhoods and connect through (less intimate) social ties to people
that can provide access to resources that are helpful for entrepreneurship.
In contrast, many entrepreneurs in deprived neighbourhoods who build
upon their strong social bonds with other people on low income, are often
locked into markets that offer limited opportunities for business develop-
ment (Blackburn and Ram, 2006; Syrett and North, 2008).
From a neighbourhood perspective, the role of gender is intriguing but
has also rendered ambivalent research outcomes. Women appear to have a
stronger reliance on local networks to set up a business than men (Hanson,
2009; Hanson and Blake, 2009; Ekinsmyth, 2011). However, other studies
comparing women and men could not find gender differences in the use of
neighbourhood resources for business purposes (Reuschke and Houston,
2016). Thus, the role of gender is still largely unknown.
In sum, because the relationship between entrepreneurs and their
communities is a neglected topic in the entrepreneurship literature (Ratten
et al., 2012; Lyons et al., 2012), we know very little about the ways in which
neighbourhoods and communities help to create, sustain but also hinder or
even destroy entrepreneurship:
Entrepreneurship does not take place in a vacuum, nor is it restricted to rela-
tionships between entrepreneurs and their customers, suppliers, investors, part-
ners, and competitors. The actions of entrepreneurs can have both productive
(job and wealth creation) and unproductive (e.g. unhealthy competition and
environmental degradation) impacts on communities. Similarly, the policies
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6 Entrepreneurial neighbourhoods
and initiatives adopted by communities can be both helpful (e.g. infrastructure
provision and maintenance, financial and non-financial programs to assist
entrepreneurs) and detrimental (e.g. ill-conceived regulations and well-meaning
but poorly designed market interventions) to entrepreneurship. (Lyons et al.,
2012, 1)
The neglect of community influences on entrepreneurship and enterprise
is partly due to the focus in entrepreneurship and business studies on what
makes individual firms successful, rather than what makes communities
successful (Lyons et al., 2012; Fortunato and Alter, 2015), and the neglect
of firm owners and entrepreneurs in community and neighbourhood
studies. According to Fortunato and Alter (2015, 450),
the field of entrepreneurship continues to witness a deep transition from
thinking about entrepreneurship as an individualistic effort, supported by
community actors – toward one that sees entrepreneurship as a socially
embedded, community-wide effort where many actors can contribute.
Viewing entrepreneurship as a community-based (instead of individual)
effort shifts the focus to how entrepreneurship can influence neighbour-
hoods and communities, in particular through entrepreneurial actions of
residents joining forces.
1.3 HOW ENTREPRENEURSHIP INFLUENCES
NEIGHBOURHOODS AND COMMUNITIES
Fairly recently entrepreneurship has been connected to the debate on the
implications of welfare state regimes, labour market change, and social
inclusion. Neoliberalism and welfare state retrenchment have shifted the
economies of advanced Western states and are now reshaping the ways
in which citizens and the public, private and third sectors interact with
each other. In the aftermath of the global economic crisis of 2007/2008,
many Western countries have enacted austerity measures and public
policy reforms, and simultaneously encouraged what policymakers refer
to as ‘active citizenship’. In reality this means that citizens are required to
take responsibility and actively self-organise to address gaps arising from
spending cuts in health care, education, employment and neighbourhood
policies (Newman and Tonkens, 2011; Wells, 2011; Bailey and Pill, 2015).
Whether this devolution of responsibility will truly enhance people’s
agency is questionable and needs critical assessment. The general assump-
tion is that active citizenship is most effective when rooted in collective
and entrepreneurial actions of groups of residents, because ‘voluntary,
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Entrepreneurship, neighbourhoods and communities – introduction 7
community-based agencies are believed to be better able to meet the needs
of their consumers because they reside closer to the people being served
and are less bureaucratic than public institutions’ (Gilbert, 2004, 114).
A particular form of active citizenship is community-based enterprise,
which can take various positions vis-à-vis the market, state and other
institutions. First, citizens can take over the management of services or
facilities that were previously funded by public authorities, for example
libraries, community centres and local swimming pools. This manifest-
ation of active citizenship is perceived as a viable alternative to state-based
welfare provision (Mori, 2014).
Second, neighbourhood residents or community members may observe
serious deficiencies in a particular area which need to be addressed, but to
which other agencies are unlikely to respond. Such deficiencies may range
from deprivation, poor health, inadequate housing or a lack of commu-
nity facilities, inter alia. The fact that neither state nor market institutions
properly address these deficiencies can motivate individual residents and
groups to join forces and to set up an organisation with the aim to provide
community-based solutions (Bailey, 2012, 26–27).
Third, community members may act together based on a shared belief
that they can deliver specific goods at lower costs, higher quality and in
more environmentally friendly ways than regular state or market providers.
Examples are cooperatives developing co-housing, sustainable energy
(solar panels, wind turbines), farming, craft produce and elderly care
(Mori, 2014; Wagenaar and Van der Heijden, 2015; Bauwens, 2016). In
sum, bottom-up, community-based entrepreneurial activities are increas-
ingly seen as solutions for deficiencies in public services and as contempor-
ary bottom-up neighbourhood regeneration efforts.
Entrepreneurship is commonly believed to increase not only the eco-
nomic strength and innovation of countries, regions and cities, but also
of neighbourhoods and communities (OECD, 2003; Baumol et al., 2007).
This volume will focus particularly on community enterprises; organisa-
tions which are set up and operated by local residents, aiming to invest in
their neighbourhood and create benefits through entrepreneurial activities.
Community enterprises are often supported by local governments and
other institutions, partly because they seek to be inclusive and work for
the common good (Peredo and Chrisman, 2006; Somerville and McElwee,
2011; Bailey, 2012). However, there is little empirical and policy-related
understanding of community enterprises (Teasdale, 2010; Pierre et al.,
2014). Hence, the ways in which entrepreneurship can benefit, shape and
transform neighbourhoods, particularly those areas affected by social
deprivation and poverty, is an open and timely research question that will
be addressed in this book.
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8 Entrepreneurial neighbourhoods
1.4 CONTENT OF THIS VOLUME
This book is a collection of chapters discussing interdisciplinary theoret-
ical and empirical insights into the importance of the neighbourhood and
localised spaces, the rise and meaning of community-based enterprise, and
the role of changing social and business networks and social capital of
entrepreneurs in residential neighbourhoods.
The volume is divided into three parts. Part I addresses neighbour-
hoods as economic places and enterprise cultures, and focuses on how
neighbourhoods, localised spaces and localised social networks provide
conditions for entrepreneurship and business, based on case studies in
the United Kingdom, the United States, France and the Netherlands.
Special attention is devoted to how networks of entrepreneurship are
embedded in wider societal relations such as gender relations, and how (in
particular female) entrepreneurs draw on these networks (social capital)
in their entrepreneurial endeavours. This part of the book also analyses
innovations regarding contemporary working spaces, especially those of
self-employed workers (‘solopreneurs’).
Part II focuses on the concept of ‘community’. The entrepreneurship-
community interrelationship will be explored in this part of the book
through the concepts of community entrepreneurship, economic democ-
racy and co-production between entrepreneurial citizens and professionals.
Community-based (social) enterprise and its potential for contemporary
bottom-up neighbourhood regeneration will be investigated in particu-
lar in the United Kingdom, the United States, and the Netherlands. The
origins of the concept of community-based enterprise and its development
are analysed. Part III outlines the conclusions based on all chapters.
In Chapter 2, Nick Williams and Colin Williams provide a conceptual
basis for analysing neighbourhoods as economic places and enterprise
cultures. They evaluate how exploitation of entrepreneurial opportun-
ities is contingent on barriers, motivations, and human and social capital
endowments of individuals within a locality. The authors argue that entre-
preneurs in deprived areas face a range of barriers, including low skills,
limited financial capacity and bridging social capital, which are usually
more acute in deprived areas than in affluent areas. Entrepreneurial activ-
ity in deprived urban areas is often small in scale, with individuals entering
trades with low entry barriers, finite and highly localised demand. The
authors argue against the often used simple opportunity- necessity dichot-
omy for understanding entrepreneurial motivations. A more nuanced
understanding of motivations is required, with entrepreneurs often start-
ing as necessity-based but becoming opportunity-based as the business
expands. The authors conclude that deprived areas do not lack entre-
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Entrepreneurship, neighbourhoods and communities – introduction 9
preneurial activity per se, despite numerous barriers to entrepreneurship.
Instead, a ‘hidden enterprise culture’ makes entrepreneurs in deprived
areas more likely to engage in the informal economy.
In Chapter 3, Marianne de Beer and Veronique Schutjens focus on inter-
firm networks of entrepreneurs in Dutch residential neighbourhoods and,
in particular, on the importance of temporal changes in local inter-firm
cooperation contacts. The authors have used panel data from two waves
of the Dutch Survey of the Social Networks of Entrepreneurs. Contrary
to the stance in the literature that inter-firm cooperation is important for
small-sized firms, the authors find that local cooperation with other firms
is not a common strategy for entrepreneurs in residential neighbourhoods.
They found that networks are highly dynamic, loose and temporal in
nature. Only a small portion of all cooperation contacts is located in the
neighbourhood or municipality in which the entrepreneurs live. De Beer
and Schutjens conclude that, if local embedding of entrepreneurs exists,
this will occur through private social networks that are not exploited for
business purposes.
Chapters 4 and 5 particularly look at how co-working spaces affect the
social networks of self-employed workers and the importance of neighbour-
hood as a working environment. Against the background of an increasing
number of ‘solopreneurs’ (self-employed people without employees), Erik
Stam and Vareska van de Vrande explore flexible co-working spaces in
the Netherlands (Chapter 4). They analyse the motives and benefits of
solopreneurs for using co-working space provided by Seats2Meet. This
co-working space offers solopreneurs and other types of workers the
opportunity to interact with others, to expand customer networks, to
improve current products and services and to improve business skills.
Earlier research has pointed out that many self-employed workers are
predominantly home-based. However, solopreneurs, especially the higher
educated, are more likely to work in a co-working space (temporarily),
maybe not in the neighbourhood where they live, but in the same city. Stam
and van de Vrande interpret this trend as the rise of the multifunctional
city with distinct places to live and work, and not as an increasing import-
ance of residential neighbourhoods for (self-)employment.
Chapter 5 also analyses collaborative spaces of work but here with
the objective to explore their potential for innovation. Ignasi Capdevila
derives a classification of collaborative spaces based on their openness,
collaboration, knowledge sharing and entrepreneurial approach. Fab labs,
hackerspaces, makerspaces, co-working spaces and living labs are further
explored using empirical material from different countries. Capdevila
concludes that the creation of new collaborative spaces facilitates the
emergence of new communities and reinforces existing networks. At the
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10 Entrepreneurial neighbourhoods
local level, collaborative spaces of work and innovation can attract distrib-
uted talent. Depending on the management of these spaces, they have the
potential to foster the engagement of citizens and provide local platforms
for social and economic development.
Chapters 6 and 7 contribute to a stronger conceptualisation of gender
in the relations between entrepreneurship, neighbourhood and social net-
works. In Chapter 6, Beate Volker focuses on social networks by revealing
gender differences in the creation of forms of social capital (individual-
versus neighbourhood-level social capital). She also analyses to what
extent the networks of male and female entrepreneurs are local and benefit
from community-level social capital (such as having a successful busi-
ness). Volker uses data from the Dutch Survey of the Social Networks of
Entrepreneurs, defining ‘neighbourhood entrepreneurs’ as those people
who have their business either in their own home or close to their home.
Unlike De Beer and Schutjens (Chapter 3), Volker finds that self-employed
workers’ neighbourhood contacts are a large and vital part of their
network. Women appear to benefit more than men from weak ties (i.e. ties
to acquaintances) although they have fewer of these ties than men, who do
not need or use these ties for the performance of their businesses.
In Chapter 7 Jenny Lendrum and Sarah Swider explore informal entre-
preneurial practices and how these are gendered. They investigate these in
a neighbourhood in Detroit, using ethnographic methods. One important
finding is that the spaces women occupy and the activities they participate
in make them visible as mothers and wives, but not as economic actors.
While many private businesses owned by men make their economic
activities highly visible in this neighbourhood, women generally work in
businesses operating behind closed, locked doors and limited hours of
operation, regulating or removing the development of relationships and
thus social capital. Another significant implication is that the home, typic-
ally considered as private closed space, is often used as a social open space
where women not only do unpaid community work but also operate as
entrepreneurs and partake in informal paid work.
Part II shifts focus from individual entrepreneurs, self-employed workers
and their social or business networks to the level of ‘community’. In
Chapter 8 Ana María Peredo and James Chrisman provide a conceptual
foundation for understanding ‘community-based enterprise’ (CBE) that
addresses social, economic or environmental goals. They define ‘CBE’
as a community acting corporately as both entrepreneur and enterprise
in the pursuit of the common good. CBE is an unconventional form of
entrepreneurship in which collective and individual interests are regarded
as complementary and which incorporates communal values and the
notion of the common good as essential elements of venture creation. The
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Entrepreneurship, neighbourhoods and communities – introduction 11
chapter draws on rich empirical material which the authors have collated
in various studies in the global south, examines the role that collective
action, forms of social capital and size play in the creation of CBE, as well
as characteristics such as rootedness in available community skills, and
multiplicity of goals. Challenges regarding the balancing of individual and
collective outcomes, of reconciling social, economic and environmental
goals and withstanding the pressures of globalisation are discussed. Peredo
and Chrisman conclude that the concept of CBE represents an alternative
and promising model for community development, particularly but not
exclusively in impoverished communities.
In Chapter 9, Evan Casper-Futterman and James DeFilippis investigate
community-based enterprise through the lens of Community Development
Corporations (CDCs), which are the most common organisational form of
neighbourhood-based enterprises in the United States. CDCs are not-
for-profit corporations that build affordable housing, provide social ser-
vices, conduct job training development, create community facilities and
gardens, provide legal services, some community building organising, and
many other programmes and activities. In the literature, this type of com-
munity development is being scrutinised because of an increasing preva-
lence of capitalist market-based logics in ‘excluded’ urban neighbourhoods
where CDCs operate. Casper-Futterman and DeFilippis argue that this
binary thinking of pro-market versus anti-market logics is insufficiently
nuanced. The authors use the case of the Bronx Cooperative Development
Initiative (BCDI) to argue that the use of market logics in community
development is more complex than the usual neoliberal critique. BCDI is
a multi-stakeholder community development initiative that seeks to build
community wealth among low- and middle-income residents of the Bronx
by enlarging the scope of local economic actors and policy. BCDI’s vision
is for entrepreneurialism in which the local businesses are embedded in
networks that support community organisation. The case study of BCDI
shows that it may indeed be possible to construct local political-economic
institutions that make use of markets that are accountable to, and operate
in the service of, more just cities.
In Chapter 10, David Varady, Reinout Kleinhans and Maarten van Ham
compare American Community Development Corporations (CDCs) with
Community Enterprises (CEs), their British counterpart. In the context
of slow post-crisis economic recovery and austerity policies, this chapter
assesses the potential of community entrepreneurship for neighbour-
hood revitalisation. The authors found that, while CDCs have a relatively
successful record in affordable housing production in distressed areas,
CDCs are fundamentally limited in terms of reversing processes of com-
munity decline. CEs have focused on local non-housing issues and have
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12 Entrepreneurial neighbourhoods
generally not played a central role in neighbourhood revitalisation. Varady,
Kleinhans and van Ham conclude that, first, CEs and CDCs are assumed
to take on more social responsibility, but their success depends on the
ability to secure external funding. Second, CDCs and CEs face trade-offs
in the multiple requirements of maintaining financially stable operations,
offering needed social services, promoting community economic develop-
ment and maintaining high environmental standards. Finally, although
both CEs and CDCs aim to strengthen community participation, the
desired levels of participation and the presumed benefits usually have not
been achieved or are of a long-term nature difficult to grasp by research.
In Chapter 11, Nick Bailey focuses on a specific type of Community
Enterprises (CEs) – asset-based community development trusts (CDTs)–
and their contribution to contemporary British urban regeneration. CDTs
have evolved since the 1970s, responding to government policies that
encouraged the transfer of assets and service delivery from the public
sector to third sector bodies. Bailey presents three models in order to
outline the key dimensions of CDTs, using a number of examples. The
findings show that CDTs are often fully committed to seeking sustainabil-
ity while operating on the margins of profitability. Only the larger CDTs
can make a significant contribution to wider regeneration strategies in
urban communities. The author concludes that greater flexibility is needed
in transferring assets and integrating CEs in broader regeneration strat-
egies, while acknowledging that CDTs cannot keep up with rapid changes
in policies because they are predominantly concerned with achieving their
own viability. Hence, ‘entrepreneurial’ in the context of CDTs means being
able to respond quickly to new opportunities arising in relation to funding
sources or assets to be acquired.
In Chapter 12, Reinout Kleinhans discusses the emergence of CEs in the
Netherlands. The basic concept has been strongly inspired by the British
experiences discussed in Chapters 10 and 11. In the context of the Dutch
‘Participation Society’, citizens are given the responsibility to self-organise
and to fill gaps in service provision as a consequence of budget cuts and
policy reforms. Especially in deprived neighbourhoods, CEs face huge chal-
lenges in the transition from ‘subsidy-dependent’ reactive resident asso-
ciations to entrepreneurial CEs with a market-oriented business model.
Kleinhans maintains that CEs need to cooperate with various stakeholders
who bring in various resources to achieve better outcomes. This form of
co-production is investigated using data from repeat interviews with civil
servants and housing association staff members. Professionals struggle
with the societal reality in which CEs operate, but support the discourse of
self-organisation and in particular the importance of cooperation between
residents and local governments. This cooperation is fundamental to the
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Entrepreneurship, neighbourhoods and communities – introduction 13
notion of co-production. However, the ambivalent and contradictory
responses of local governments are rather forms of ‘counter-production’
that keep CEs uncertain over the possibilities to acquire assets, and lacking
in crucial information or consent for the development of various activities.
This sometimes smothers the motivation of CE initiators and other vol-
unteers, and maintains CEs’ full dependence on formal local institutions.
Emiel Rijshouwer and Justus Uitermark provide more insights into
Community Enterprises in the Netherlands through a study of former
Amsterdam community centres and their transformation into CEs in
Chapter 13. Informed by austerity politics and the disillusionment with
welfare policies, governments are increasingly looking at civil society
as providers of community services. In order to qualify for government
funding, community centres are obliged to propagate entrepreneurship
and acquire external financial resources to continue their activities. The
authors investigate how this ideal concept works out in practice. Drawing
upon interviews with representatives of community centres, Rijshouwer
and Uitermark find that only one of the studied centres conforms to
this ideal. All other centres are durably dependent on formal institutions,
not only in financial terms, but also in terms of indispensable profes-
sional support for volunteers, a point that is also made by Kleinhans
(Chapter12). The authors conclude that despite the restrictions austerity
policies pose to the autonomy of citizens, the enactment of independency
and entrepreneurialism is widespread among stakeholders in this field.
Finally, Chapter 14, written by the editors, synthesises findings and
arguments across the books and formulates a basis for future research.
In summary, the chapters offer a range of interdisciplinary perspectives
which investigate the multiple relationships between entrepreneurship,
neighbourhoods and communities. Collectively, they contribute to
an increase in our knowledge of the nexus between entrepreneurship,
neighbourhoods and communities, and in particular the importance of
‘the local’ for the interrelationships between these entities.
Together, the contributions to this volume attempt to answer several
questions. How do neighbourhoods (in particular socio-economically
deprived areas) and local social networks provide conditions for entre-
preneurship, business and innovation? Specifically, how are networks of
entrepreneurship embedded in wider societal relations such as gender
relations, and how do (in particular female) entrepreneurs draw on these
networks in their entrepreneurial endeavours? What are the implications of
new localised co-working spaces for innovation and business development
in neighbourhoods? To what extent can community-based enterprises
provide services, wealth and benefits for members of these communities?
How do policymakers react to these new bottom-up forms of active
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14 Entrepreneurial neighbourhoods
citizenship, in the context of austerity regimes and urban policy reforms?
Which opportunities and barriers do community enterprises face in their
evolution from small start-ups, towards established social businesses that
make a sustainable impact on economic development, community partici-
pation and local welfare provision?
Finally, we have identified several directions for future research on
the nexus between entrepreneurship, neighbourhoods and communities.
First of all, social capital appears to be highly relevant for (individual)
entrepreneurship and community enterprises (alongside other forms of
capital). Several contributions to this volume endorse the viewpoint that
both the ‘consumption’ and ‘production’ of social capital are still not well
understood. A relevant investigation would be the nature of and balance
among different forms of social capital as those are related to region,
size and specific character of the community and social networks, and to
effectiveness and sustainability. Secondly, current research on community-
based forms of entrepreneurship is of a cross-sectional design and thus not
able to identify changes over time. More longitudinal research is needed to
understand the relative performance of such collective forms of entrepre-
neurship and their social, economic and environmental impacts.
ACKNOWLEDGEMENTS
The work published in this edited volume partly draws on a grant
of the UK Economic and Social Research Council (ESRC) to Darja
Reuschke, Colin Mason, Stephen Syrett, Maarten van Ham and Duncan
Maclennan (Grant No. ES/L001489/1). See also http://www.st-andrews.
ac.uk/homebusiness.
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An emerging area of scholarship can be found at the nexus between entrepreneurship and community development. Beyond a mere focus on firms and their contributions, this growing nexus in the literature seeks to understand the complex ways that entrepreneurs benefit their communities, and that communities enhance or inhibit entrepreneurship. This exploration is fundamentally economic, sociological, psychological, strategic, behavioral, and cultural; it should incorporate many contributions of scholars across a wide range of disciplines. This introductory article examines the current state of research at the nexus of community and entrepreneurship, and conceptually positions entrepreneurship as deeply embedded in – and inseparable from – community, social, and economic structures. The article presents community entrepreneurship development as a multidimensional and challenging strategy economically speaking, but one that produces many benefits beyond economic growth. The article discusses both the challenges and benefits of promoting entrepreneurship in the community, presents the articles comprising the special issue, and ends with a call to action and scholarship in this exciting conceptual space.