Preface
This book is a collection of seven chapters representing the development of
thinking of the author on regional development agencies in entrepreneurial
and rural development. A preface will perhaps be useful in order to indicate
what are the thematic structure and main ideas, and to discuss how they are
connected. Therefore, the preface provides an integrated overview of the most
significant content of this book in a very compressed form.
THE CHALLENGE
This scientific monograph is envisaged as a follow-up research of regional
development agencies by author providing detailed analysis of their specific
role in entrepreneurial and rural development, with guidance on how the
overall economic and sustainable economic development can benefit from
the proposed concepts and practices of these important institutions.
The book is envisaged as a follow-up insight into regional development
agencies by the author, providing detailed elaboration of local economic
development, entrepreneurship and rural development arising out of their
connections. The book will provide guidance on how to establish regional
agencies, implement their sustainable development and potentially transform
them into rural development agencies. Academically scholars will benefit
from the deepened and further developed concepts elaborated by the author
in earlier IGI publications. It is expected that the conceived concepts, earlier
tested, will assist in proving that regional agencies are a distinct group of
institutions indispensable in entrepreneurial, loical and rural development
signficiantly contributing to the overall concept of sustainability.
It is hoped that academically scholars will deepen and further develop the
proposed regional agency development theory elaborated in this and earlier
IGI publications. It is expected that the conceived hypotheses, some of which
were earlier tested by the author, will assist in proving the usefulness of
regional development agency theory, distinct and yet a part of both rurality
and sustainability. It is a unique group of concepts deserving own field of
research which is separate in itself in a well functioning entrepreneurial and
rural development.
Besides other relevant institutions, regional development agencies are also
essentially about contributing to entrepreneurial and rural development. They
perform this role through a set of optimal institutional and developmental
structures. It becomes quite clear here that optimal solutions for regional
and sustainable development may be quite different from solutions for pure
entrepreneurship or pure rurality for that matter. Rural development agencies
are indeed complementary to this approach of the author and we shall discuss
them extensively in several chapters of the book. Having said that, the author
provides the following definition of regional agencies stemming from the
entrepreneurial and rural orientation of the book title and his contributions
in all chapters:
The regional development agency (RDA) is an institutionally and
organizationally structured linking pin through which regional actors pursue
economic, entrepreneurial and rural development objectives in their own
territory implementing a specific legal, non-profit, regional and public-private
cooperative and transformative framework for the benefit of sustainable
social-economic development.
A relevant, feasible selection of entrepreneurial and rural solutions requires
awareness of its many and diversified stakeholders and own strengths and
opportunities. In such an approach their penetrable contact points become
such that known and unknown states of environment are understood and
alternative modes of action appreciated. Role of Regional Development
Agencies in Entrepreneurial and Rural Development: Emerging Research
and Opportunities presents a diversity of theoretical and practical ideas
that should allow these unique regional entities of the proposed structure to
recognize and to make best use of entrepreneurial and rural reality and the
various alternative modes of development.
THE EXPERTISE DRAWN UPON IN THIS BOOK
The book draws on knowledge and expertise of a broad spectrum of
bibliographic resources which represent a rich mosaic of scientific fields,
technical expertise, institutions, and cultural contexts. Hopefully, the diversity
and broadness will stimulate interest and provide a an institutional and
developmental framework through which to realize the overall usefulness
and practicality of regional development agencies.
The book shares a system of methods used in particular areas of
sustainable social-economic development. Such solutions for any economy
lie in a systemic approach to management of entrepreneurship and rurality
in contrast to mere sets of techniques, technologies, or procedures. That is
why the proposals, solutions and expertise drawn upon in Role of Regional
Development Agencies in Entrepreneurial and Rural Development: Emerging
Research and Opportunities will hopefully be useful to readers.
BENEFITS TO BE GAINED FROM THIS BOOK
This book is particularly unique in several distinct ways. The target audience
of this book includes rural and entrepreneurship developers, professionals and
researchers working in the field of SME development in several disciplines,
e.g. sustainable rural economics, management, education, training, agriculture
and tourism, information and communication sciences, administrative
sciences and sociology, computer science, and information technology. In
addition, the book provides insights and supports executives concerned with
the management of entrepreneurial and rural development in different types
of work communities and environments directly and indirectly related with
sustainability and SMEs.
I hope that the modest successes I enjoyed by working with institutions
discussed in this book will be greatly enhanced now that the Role of Regional
Development Agencies in Entrepreneurial and Rural Development is available
as an ontological-philosophical and practical treatise on the practice of
sustainability as well as a practical guide for decision making. So, it is with
a bit of envy but even greater joy that I am able to share this book which will
serve as food for thought in the rural manager’s toolkit, for entrepreneurs
and academicians.
The book is organized into seven chapters based on three interconnected
sections of relevance to regional development agencies in entrepreneurial and
rural development. All chapters relate to theoretical and practical aspects of
the role of these institutions.
Integrally the book offers an exciting discussion at how developers,
managers, professionals and researchers may use different tools and strategies
to realize their mission, vision and strategy in rural and entrepreneurial
communities. Obviously, like with any evolving field of science, there will
be controversies; however, intelligent developers, leaders and managers will
make use of these dilemmas to increase economic value added in regional
development agencies. Ultimately, the author hopes that the general approach
to scientific research of these development institutions will be somewhat
clarified for future lines of enquiry.
SECTION 1: ENTREPRENEURSHIP AS AN
INDICATION OF NEW POTENTIAL IN BOTH
ECONOMIC AND RURAL DEVELOPMENT
Chapter 1: Critical Importance of Entrepreneurship
in Local Economic Development – The
Evolving Developmental Ontology
In Chapter 1, the author considers the overall evolving ontological significance
of entrepreneurship as a mindset in both local and rural economic development.
Here it is illustrated that entrepreneurship itself is demanding a new, nondivisive,
non-mechanical developmental approach to both social-economic
and local development, in the sense that the current concepts which recognize
this approach need to be fostered holistically in order to work well in modern
economics. It is further conceived that both in local economic development
and entrepreneurship, proposals based on indivisible developmental wholeness
offer a much more effective way of approaching the general social-economic
and rural reality. In subsequent chapters it will be shown that rural regions
can in fact greatly benefit from these notions. The author indicates that some
regions are not able to attract investment and ensure sustainable development
while regional and rural development agencies and entrepreneurial thinking
offer many available strategic options.
Chapter 2: Regional SME and Development
Agencies – Factors of Entrepreneurial Support,
Development, and Competitiveness
In Chapter 2 we go into the role of regional SME and Development Agencies
which are treated as factors of SME Support, regional development and
improvement of competitiveness in the global economy. We then inquire
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whether it is possible to experiment with new institutional concepts in which
the basic role will be given to these agencies as facilitators of social-economic
development at the local level reaching out not only regionally and globally
but in particular rurally. Such institutions will have as their substance a series
of development interventions that flow and merge into each other, without
sharp divisions which might inhibit entrepreneurship and, as it will be seen
later, rural development. What is proposed here is not a new institution as such
but, rather, a new fashion of using the existing development infrastructure. We
develop such a fashion as a form of experimentation with institutions, which
is meant predominantly to provide an insight into the fragmentary function
of the common social-economic development rather than to propose a totally
new method of developing an economy at the local and rural level. In the light
of the growing significance of entrepreneurship for business performance, the
several presented experiences of regional SME and development agencies in
some of the countries that have them, represent an undoubted potential for
their ongoing regionalization and further inclusion into the global economy.
Chapter 3: Structured Procedures of Establishing
Regional SME Agencies – Suggested Concepts
Potentially Benefiting Rural Development
Chapter 3 points out that in modern business conditions there is a large number
of limiting factors for the development of small and medium-sized enterprises.
These factors can be both internal and external which can be treated both
as opportunities and threats. Given the need to overcome many barriers in
the development of entrepreneurship, in order to stimulate the improvement
of business performance of existing SMEs, one of the forms of extending
business support is the so-called entrepreneurial infrastructure within which
the key institutions are also the regional enterprise and development agencies.
In chapter 3 business development issues are approached within structured
procedures of establishing, financing and sustainably developing regional
SME agencies as precursors of regional development and rural agencies.
We propose in essence a set of forms in an underlying universal process of
strategic planning for these institutions having rural development in hindsight.
Proposed key procedures for the establishment of regional SME agencies
from this chapter can essentially be replicated on other business support and
developmental infrastructure of this kind including the rural development
agencies. This chapter completes the first section of the book.
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SECTION 2: STEPS TOWARD A MORE DETAILED
RURAL DEVELOPMENT THEORY
The second section is really very critical because by introducing the main
rural concepts and institutions it leans very much on the first section. As
such, it must obviously be given serious contemplation in any approach to
develop an overall rural concept.
Chapter 4: Proposed Explanations of Theoretical
Concepts of Local Rural Development – Overcoming
an Alienated and Peripheral Economy
In Chapter 4, the author shared research evidence from rural regions as a
potential peripheral economy. The specific context is looking at the use of this
theory in a complex way by upgrading these regions in order to significantly
contribute to economic development through dynamic developmental
operations and strategic orientation of their businesses. Analyzed and
compared are concepts and regions in terms of mutual cooperation, growth
and leadership role of founders.
Chapter 4 is therefore concerned with making the first steps in the process
of developing consistent concepts of local rural development for overcoming
some of the identified root causes of rural-urban dichotomy. This might be
the basis of the correct entrepreneurial solutions discussed hereinafter. The
real and severe problems that confront many contemporary rural regions are
presented, a certain preliminary notion to a solution of these problems is
then revealed in terms of entrepreneurship and rural development agencies.
My developmental approach has, from the beginning, been that our concepts
concerning rural development and the great potential of entrepreneurship are
in a continuous process of advancement, and that one may have to start with
ideas that are merely some sort of improvement over what has thus far been
available, and to go on from there to ideas that are more profound.
Financing the growth of SMEs in rural areas potentially represents a
useful framework and development capacity for solving many socioeconomic
problems, particularly in emerging economies. In some countries high
percentages of the total population of live in rural areas, covering vast quarters
of the territory. These areas have often been under conditions of economic
and cultural stagnation for decades, which in some countries drastically
increases poverty. In less developed countries employment opportunities
in extra-farm activities are limited, inter alia, due to the slow establishment
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and financing of SMEs in these areas. As a result of the scarce possibilities
and process of urbanization that is underway, migratory movements are on
the rise, while the most capable and vital parts of the population lead the
trends. As a consequence, the poverty line is often deepened in rural areas.
The development and implementation of an integrated rural development
strategy with the provision of favorable conditions for financing SMEs,
suggests the chapter, represents a chance for overcoming rural poverty and
faster economic development throughout.
Chapter 5: A Proposed Quantification of Performance
of Rural Development Agencies – Fostering
Development, Growth, and Dissemination Innovation
Scientific research on financing SME growth in rural regions represents, at
least in the author’s opinion, a key area of interest for financial management as
an applied discipline of management. Together with other relevant disciplines
management should concentrate on those variables which can potentially
describe in more detail the diffusion, adoption and especially measurement
of financial innovation which would increase the capacities of funds in our
rural regions.
Therefore, in Chapter 5 the concept of financial innovation is introduced
in a general and quantifiable way but also with specific examples discussed
mathematically and qualitatively. In the chapter we go further to propose
a more concrete development of some new notions that may be suitable to
contemporary economic developments acknowledging the significance of
dissemination and quantification of financial innovation in fostering rural
growth and development. If a reader realizes that it doesn’t all boil down to
finance then an entirely different sort of basic connection of management
elements is possible, from which our ordinary concepts of social-economic
development are approached in a much deeper system.
In addition to the measurement of growth of rural population and
entrepreneurship the chapter has also presented author’s developed indexes for
quantification of rural agency performance coupled with financial innovation
which is based on criteria such as factoring, leasing and financing through
credit in these regions. In a similar way it is definitely possible to use other
criteria as well.
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Chapter 6: Development of an Institutional Model
of Organizational Structure of Rural Development
Agencies – Using Modeling as a Method of Inquiry
In Chapter 6, the author advocates and develops a new institutional model of
organizational structure of rural development agencies which should maintain
close collaborative links with both SME and local-regional development
agencies. The concrete context of the chapter addresses different scenarios
and models for innovatively conceived rural and entrepreneurial development.
The author structures the organizational units of potential rural development
agencies in improving their sophisticated organizational culture and strategy
and places significance on agency management performance.
Establishment of rural development agencies represents only a starting
point for further development of these regions and their SMEs. Such a
model of institutional and material support to the development of rural
entrepreneurship, of course, requires a proactive approach of rural leaders
and managers in further learning and successful mastering of the basics of
rural development and management. The results of earlier research conducted
by the author showed that, due to the absence of rural agencies and the
weak capacity of local secretariats for economic development the municipal
institutional environment for rural development is inappropriate for SME
needs. Obviously much better results could be achieved in business creation
and development of rural financial and development infrastructure. Presented
therefore is one model of regional rural development agencies, which seems
most suitable but of course not the only one for modern rural management
and contemporary development.
One thus observes that a new kind of organizational structure is required
which abandons some of the old concepts and modernizes these institutions
to a degree that allows better reflection of a deeper indivisible rural reality.
This chapter completes the second section of the book.
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SECTION 3: INDIVISIBLE WHOLENESS – THE
RURAL AND THE ENTREPRENEURIAL
Chapter 7: The Development of a New Relationship
Between the Rural and the Entrepreneurial
The seventh and last chapter, however, is a more substantial and summarized
presentation of the new proposed relationship between the rural and the
entrepreneurial. This leads to an indication of potential lines along which
it may be feasible to fulfill the compelling challenge to develop new sets
of specific developmental notions for future rural development. The most
important finding of this chapter belongs to the illustrated electromagnetic role
of development agencies which are the linking pin of the rural-entrepreneurial
relationship.
Radical changes in economic development have always involved the
perception of new orders and attention to the development of new rural ways
of using entrepreneurship that are appropriate to the development of such
order. We shall dedicate this chapter to a discussion of certain features of
both rural and entrepreneurial aspects of economic development that can help
provide some insight into what is meant by perception and communication
of a new sustainable rural order. It is clear from the preceding introduction
that in finding a new sustainable structure of development, it is crucial first to
discern relevant similarities and differences of these two development concepts.
The chapter tries to find a rational connection between the two with a major
role envisaged for the development agencies. A general feature of economic
development has often been a tendency to regard certain basic notions of
the rural and the entrepreneurial as relatively fixed and unchangeable. The
task of economics was then taken to be to accommodate new observations
by means of adaptations within these basic notions of economic order, so as
to fit the new developmental facts. The question then naturally arises: “What
is the proper role of integration of facts within known theoretical economic
orders, measures and structures?” Here, it is important to note that rural and
entrepreneurial facts are not to be considered as if they were independently
existent objects that we might find or pick up in textbooks. We are therefore
ready when necessary to consider changes in what is meant by rural and
entrepreneurial facts, which may be required, for their integration of such facts
into new theoretical notions of economic order whereby the two key concepts
complement and support each other through the development agencies.
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Obviously, the author, from several different aspects and angles, has carried
the theory and practice far enough to show how we can explain the essential
features of the role of regional development agencies in entrepreneurial and
rural development.
Clearly, such a theory has been developing for a long time and is now
provided with new empirical content, especially in relation to the main
topics in this book. Moreover, we have seen that regional development
agency theory reveals new challenges and opportunities for further progress
of these developmental entities in rural and entrepreneurial development. It
goes without saying that this developing theory as presented and discussed
here is far from finite. Additional discoveries will be published later and
elsewhere by the author. This uncovers an indicative supposition of some
lines of future scientific research along which it may be feasible to meet the
developing challenge to structure a more integral and systemic theory on the
role and contribution of regional development agencies and their strategy.
In these pages the reader will find many of those frequently asked
questions in rural and entrepreneurial development: “How to identify valid
rural entrepreneurial activities?” “How to set up and support small rural
businesses with lots of ideas but scarce resources?” “How to make bank
loans accessible to rural people without collateral?” “How to produce and
market the products of small rural firms successfully and what regional or
rural development agencies can do to assist?” “How to benefit from feasible
rural concepts of advanced nations in those which are less developed?” And,
above all, how to make rural and entrepreneurial processes both a means of
producing wealth and a way of fostering a sustainable development.
Nevertheless, even in its current incomplete structure, the evolving theory
of regional development agencies and rural development agencies does
answer some main questions of those advocates of sustainable development
who believe that such a theory is not feasible, or who thought that it could
never concern itself with any real empirical problems in real economic,
entrepreneurial, rural and business life of these entities. Regional development
agency questions, challenges and opportunities in the sustainable development
arena are, of course, deep and could certainly not be solved immediately and
completely systemically. At the very least, the book attempts to shed some
light on some of the key such explored rural issues.
Although the lists of boxes, tables, formulae, figures and abbreviations
are an appendix to the book, they should be helpful in calling the reader’s
attention to certain logical aspects of how the book is structured, in which
they can appreciate intuitively relationships that are in some ways similar
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to those proposed by other scientists. In addition, it may be hoped that in
this way the prevailing approach to economic science will be clarified, if
one regards it both as a logical and intuitive enterprise, rather than as an
aggregation of knowledge.
To conclude, it is hoped that the development and illustration of theories,
empirical results and concepts in these chapters may help to share with the
reader how the subject itself has really evolved, so that the form of the book
is, as it were, an illustration of what may be meant by the content.
Milan B. Vemić
Union – Nikola Tesla University, Serbia