Exploring Rural Enterprise : New Perspectives on Research, Policy and Practice 9781784411091, 9781784411121

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EXPLORING RURAL ENTERPRISE: NEW PERSPECTIVES ON RESEARCH, POLICY & PRACTICE

CONTEMPORARY ISSUES IN ENTREPRENEURSHIP RESEARCH Series Editors: Colette Henry and Susan Marlow Recent Volumes: Volume 1:

Innovating Women: Contributions to Technological Advancement Edited by Pooran Wynarczyk and Susan Marlow

Volume 2:

Social and Sustainable Enterprise: Changing the Nature of Business Edited by Sarah Underwood, Richard Blundel, Fergus Lyon, and Anja Schaefer

Volume 3:

Enterprising Places: Leadership and Governance Networks Edited by Lee Pugalis and Joyce Liddle

CONTEMPORARY ISSUES IN ENTREPRENEURSHIP RESEARCH VOLUME 4

EXPLORING RURAL ENTERPRISE: NEW PERSPECTIVES ON RESEARCH, POLICY & PRACTICE EDITED BY

COLETTE HENRY School of Business and Humanities, Dundalk Institute of Technology, Dundalk, Ireland

GERARD McELWEE Sheffield Business School, Sheffield Hallam University, Sheffield, UK

United Kingdom North America India Malaysia China

Japan

Emerald Group Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2014 Copyright r 2014 Emerald Group Publishing Limited Reprints and permission service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-78441-112-1 ISSN: 2040-7246 (Series)

ISOQAR certified Management System, awarded to Emerald for adherence to Environmental standard ISO 14001:2004. Certificate Number 1985 ISO 14001

CONTENTS LIST OF CONTRIBUTORS

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SERIES EDITORS’ PREFACE

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DEFINING AND CONCEPTUALISING RURAL ENTERPRISE Colette Henry and Gerard McElwee

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INVESTIGATING THE RELATIONSHIP BETWEEN SCOTTISH RURAL SMALL FIRMS’ SOCIAL NETWORKS, EXTRA-LOCAL MARKET DIVERSIFICATION AND INTERNET USAGE John Sanders, Laura Galloway and Jo Bensemann

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EXPLORING RURAL ENTERPRISE: THE IMPACT OF REGIONAL STAKEHOLDER ENGAGEMENT ON COLLABORATIVE RURAL NETWORKS Felicity Kelliher, Elaine Aylward and Patrick Lynch

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CONTRASTING PERCEPTIONS OF THE CHALLENGES OF RURAL SMEs: RECONCILING ENTERPRISE AND AGENCY VIEWS David Moyes, Mike Danson and Geoff Whittam

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THE ROLE OF ‘LEADER’ IN DELIVERING RESILIENT COMMUNITIES Ivan Annibal and Liz Price

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ADDRESSING RURAL SOCIAL EXCLUSION IN THE DEVELOPING WORLD: EXPLORING THE ROLE OF AFRICAN SOCIAL PURPOSE VENTURES David Littlewood and Diane Holt v

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CONTENTS

CHALLENGES FACING RURAL FARM ANIMAL VETERINARY ENTERPRISES IN THE UK Katherine Adam, Colette Henry, Sarah Baillie and Jonathan Rushton

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ENTERPRISE AND ENTREPRENEURSHIP ON ISLANDS Mike Danson and Kathryn Burnett

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THE SPIRITUAL DIMENSION OF BIODYNAMICS: AN ALTERNATIVE SOURCE OF CAPITAL IN THE RURAL CONTEXT Kate Lewis and Sue Cassells

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POST-COMMUNIST RURAL ENTREPRENEURSHIP IN BULGARIA Diana Traikova, Judith Mo¨llers and Gertrud Buchenrieder

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SUPPORTING FEMALE RURAL ENTREPRENEURSHIP: A CASE STUDY OF WiRE (WOMEN IN RURAL ENTERPRISE) Izzy Warren-Smith

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‘SEEDS’ FOR GROWTH? POLICY AND SUPPORT FOR MICRO RURAL FOOD ENTERPRISES IN A PERIPHERAL REGION Barry Quinn, Adele Dunn, Rodney McAdam, Lynsey McKitterick and David Patterson ABOUT THE EDITORS AND CONTRIBUTORS

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LIST OF CONTRIBUTORS Katherine Adam

Royal Veterinary College, University of London, North Mymms, UK

Ivan Annibal

Rose Regeneration, Lincoln, UK

Elaine Aylward

RIKON Group, School of Business, Waterford Institute of Technology, Waterford, Ireland

Sarah Baillie

School of Veterinary Science, University of Bristol, Bristol, UK

Jo Bensemann

School of Management, Massey University, Palmerston North, New Zealand

Gertrud Buchenrieder

Institute of Agricultural and Food Economics, Martin-Luther-University Halle-Wittenberg, Halle (Saale), Germany

Kathryn Burnett

School of Creative and Cultural Industries, University of the West of Scotland, Ayr, UK

Sue Cassells

School of Economics and Finance, Massey University, Palmerston North, New Zealand

Mike Danson

School of Management and Languages, Heriot-Watt University, Edinburgh, Scotland

Adele Dunn

Ulster Business School, University of Ulster, Newtownabbey, UK

Laura Galloway

School of Management and Languages, Heriot-Watt University, Edinburgh, UK

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LIST OF CONTRIBUTORS

Colette Henry

School of Business and Humanities, Dundalk Institute of Technology, Dundalk, Ireland

Diane Holt

Essex Business School, University of Essex, Colchester, UK

Felicity Kelliher

RIKON Group, School of Business, Waterford Institute of Technology, Waterford, Ireland

Kate Lewis

School of Management, Massey University, Wellington, New Zealand

David Littlewood

Henley Business School, University of Reading, Henley-on-Thames, UK

Patrick Lynch

RIKON Group, School of Business, Waterford Institute of Technology, Waterford, Ireland

Rodney McAdam

Ulster Business School, University of Ulster, Newtownabbey, UK

Gerard McElwee

Sheffield Business School, Sheffield Hallam University, Sheffield, UK

Lynsey McKitterick

Ulster Business School, University of Ulster, Newtownabbey, UK

Judith Mo¨llers

Leibniz Institute of Agricultural Development in Central and Eastern Europe, Halle (Saale), Germany

David Moyes

University of the West of Scotland, Dumfries, UK

David Patterson

Cultural and Economic Development Department, Down District Council, Downpatrick, UK

Liz Price

Lincoln Business School, University of Lincoln, Lincoln, UK

Barry Quinn

Ulster Business School, University of Ulster, Newtownabbey, UK

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List of Contributors

Jonathan Rushton

Royal Veterinary College, University of London, North Mymms, UK

John Sanders

School of Management and Languages, Heriot-Watt University, Edinburgh, UK

Diana Traikova

Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO), Halle (Saale), Germany

Izzy Warren-Smith

Department of Land, Farm and Agribusiness Management, Harper Adams University, Edgmond, UK

Geoff Whittam

School for Business and Society, Glasgow Caledonian University, Glasgow, UK

SERIES EDITORS’ PREFACE The ISBE-Emerald Book Series aims to provide a platform for leading edge research that reflects themes of interest to contemporary entrepreneurship scholars. The volumes within the series are proposed and edited by established scholars within the international ISBE membership, and contributions are peer reviewed by experts in their respective fields. The fourth volume in the series, Exploring Rural Enterprise: New perspectives on research, policy & practice, edited by Colette Henry and Gerard McElwee, draws together contemporary research contributions that seek to critically explore a range of issues relating to rural enterprise. Accordingly, the chapters in this volume consider the various iterations of rural enterprise noting the underpinning synergy of the rural context but exploring the diversity of how this is articulated. Within this overarching theme, the volume contributors explore topics which range across issues relating to networks, social exclusion, communities and gender. Thus, the chapters in this volume use conceptual frameworks which underpin generic entrepreneurial theory and practice but recognise that their articulation within the rural environment acts as a particular lens to offer a novel perspective upon these issues. As the volume editors offer their insightful critique, they draw our attention to the critical nature of rurality and its impact on entrepreneurship, thus furthering understanding in this area. We are grateful to Colette Henry and Gerard McElwee and their author team for compiling this exciting fourth volume. We also appreciate the support provided by the teams at Emerald Publishing and ISBE’s London office in helping to promote this important series. In keeping with the objectives of series, this volume constitutes a body of peer reviewed contemporary research chapters that will engage our growing ISBE community globally. We look forward to presenting further texts within the series in the near future.

(Editors

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Colette Henry Susan Marlow ISBE-Emerald Book Series)

DEFINING AND CONCEPTUALISING RURAL ENTERPRISE Colette Henry and Gerard McElwee ABSTRACT Purpose The objective of this chapter is to lay the foundation for the edited collection of contemporary research contributions contained in this book. Specifically, the chapter is concerned with defining and conceptualising rural entrepreneurship. Methodology The chapter seeks to explore why and how a rural enterprise can be defined, and determines whether rural entrepreneurship is a distinctive category of entrepreneurship theory and practice. Building on descriptive rural enterprise taxonomies proposed in previous studies, the chapter considers the drivers and barriers impacting on firm start-up, growth and decline in rural environments. Findings The authors argue that there is little difference between a rural and non-rural enterprise in terms of structure, that is how the business is organised or managed, or how the characteristics of the individual entrepreneur are exhibited. Thus, it would appear that there is no specific

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 1 8 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004001

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category for, nor definition of a rural entrepreneur beyond that of ‘an individual who manages a venture in a rural setting’. Research limitations extant literatures.

The chapter is based mainly on a review of

Originality/value The chapter concludes that it is the exogenous factors that differentiate rural from non-rural ventures, and it is these factors that will have a significant impact on start-up, growth and failure rates. Keywords: Rural; enterprise; definitions; farmers; agriculture; rural economy

INTRODUCTION Despite significant changes to the agricultural sector and rural environment in recent years, the topic of rural enterprise has not been the subject of concerted academic attention. As a consequence, with the exception of a few texts, the area remains relatively under-researched; this is particularly the case at the international level. This text aims to bridge this gap in the literature by offering an edited collection of contemporary research contributions that explore the complex nature of rural enterprise across a range of settings and geographical contexts. This introductory chapter is concerned with defining and conceptualising rural entrepreneurship. As a sub-set of the entrepreneurship literature, rural entrepreneurship and, in particular, rural enterprise is an emerging area of study. This distinction between entrepreneurship and enterprise is important, as shown elsewhere (McElwee & Smith, 2012, 2014). Although regional and national economies consist of urban and rural components, much of the entrepreneurship literature tends to have an urban-centric focus. Thus, this book focuses on two important questions. Firstly, is there actually a categorisation ‘rural entrepreneurship’ or is it simply ‘entrepreneurial activity’ that occurs in rural environments? And secondly, is a ‘rural’ business any different to an ‘urban’ business in terms of how it ‘does business?’ By way of laying the foundation for the range of contributions presented in this text, this chapter seeks to explore why and how a rural enterprise can be defined, and determines whether rural entrepreneurship is a distinctive category of entrepreneurship theory and practice. Building on descriptive

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rural enterprise taxonomies proposed in previous studies (see, e.g. McElwee & Annibal, 2010; McElwee & Smith, 2012, 2014), we consider the drivers and barriers impacting on firm start-up, growth and decline in rural environments.

DEFINITIONS OF RURAL ENTERPRISE There is no clear definition of what constitutes a rural business. Her Majesty’s Stationery Office (HMSO) defines a rural business in England as a business registered at an address in an area defined as rural by Defra (2004).1 However, this says little about the enterprise itself. The notion of a rural enterprise is important because entrepreneurship, as measured by indicators such as new firm formation rates, has been correlated with economic prosperity and growth. Despite this there is little discussion of the notion of a rural enterprise as a distinct concept and phenomenon. Indeed, rural enterprise has tended to be equated with land based businesses such as farms and agricultural related services. Where enterprise and entrepreneurship is explored in a rural context, studies have tended to focus on the dynamics and behaviours of individuals, often focusing on farmers as entrepreneurs within a rural setting (see, e.g. Carter, 1996; Carter & Rosa, 1998; McElwee, 2006; McElwee, Pyysia¨inen, Anderson, & Vesala, 2006; McNally, 2001). A common theme in the literature suggests that methods used to analyse business entrepreneurs in other sectors can be applied to rural businesses such as farmers and village entrepreneurs. But is this really the case?

THE RURAL BUSINESS In real terms, the distinction between rural and urban enterprises is arbitrary. What is important, however, is the nature of the endogenous and exogenous factors that influence the potential strategic capability and activity of the enterprise. The internal factors are personal characteristics qualities and skills of the entrepreneur. External factors, many of which are outside the control of the individual entrepreneur, include the activities and processes undertaken by the entrepreneur the characteristics of the enterprise itself, policies, markets and environmental factors. Using this distinction would suggest that there is little difference between a rural and urban

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enterprise in terms of structure or the characteristics of the individual entrepreneur; rather, it is the exogenous factors that are different for rural ventures and impact on start-up, growth and failure rates. These aspects are discussed in more detail later.

THE RURAL Definitions have attempted to produce quantifiable measurements of rural and rurality, using measures such as regional productivity, population size and firm output, amongst others. The CRC’s State of the Countryside report (2005), for example, divided rural England into three categories using the metric of population sparsity to distinguish between different forms of rural area (‘sparsely populated’, ‘sparse’, ‘non-sparse’). Defra’s (2004) definition of rural produces a classification of six types of rural area: town (less sparse); town (sparse); village (less sparse); village (sparse); dispersed (less sparse); dispersed (sparse). According to the European Union (EU) standard definition, more than 91 per cent of the territory of the EU is ‘rural’, and this area is home to more than 56 per cent of the EU’s population (Rural Development Policy 2007 2013). Over 56 per cent of the population of the 27 Member States of the EU live in rural areas. Nevertheless, defining a rural enterprise in itself is problematic and, for the purpose of this chapter, we suggest that a rural enterprise is a venture with the following characteristics: • Its primary location is in a rural setting • It employs people within a specified travel to work area • It contributes to gross value-added (GVA). A working definition would suggest that a rural enterprise employs local people, uses and provides local services and generates income flow to the rural environment. This definition suggests that rural enterprises provide a ‘value adding’ function to both their local economies and, in the case of larger ventures to wider economies and markets. A village shop, therefore, would constitute a rural enterprise; a self-employed person who is, for example, a home worker and is domiciled in the rural and does not utilise services is not. Clearly, the latter may add value to other rural economies. Thus, it would appear that there are few ventures that cannot be undertaken in both rural and urban economies.

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DRIVERS OF RURAL ENTERPRISE A number of drivers of development in a rural regional and local economy have been identified and discussed in the literature (McElwee, 2006; McElwee & Smith, 2014), and include both tangible and intangible factors. The OECD (1996) suggests that less tangible factors are the reasons why rural areas with very similar characteristics can exhibit differences in economic performance. According to Defra (2005), rural areas can display significant strengths both socially and economically. From this perspective, they are likely to have attractive housing, good labour relations, lower wages, lower rental and premises costs, and greater space for business expansion. The quality of life associated with living and working in a rural environment can have a positive impact on competitiveness because these attributes attract entrepreneurial incomers who energise business, political and cultural life, leading to positive developmental changes (Annibal, Liddle, & McElwee, 2013). Therefore, rural development is influenced by multiple factors, and can be explained and analysed in different ways and from varying perspectives. Enterprise in the rural economy is clearly driven by rates of new venture formation. Furthermore, there is a clear and wellestablished link between business start-up dynamics and local economic development in urban environments.

CONCLUSION In this chapter we have suggested that there is little difference between a rural and non-rural enterprise in terms of structure, that is how the business is organised or managed, or how the characteristics of the individual entrepreneur are exhibited. Thus, it would appear that there is no specific category for, nor definition of, a rural entrepreneur beyond that of ‘an individual who manages a venture in a rural setting’. Rather, it is the exogenous factors that are different for rural ventures, and it is these factors that will have a significant impact on start-up, growth and failure rates. It is against this background that the chapters in this edited book critically explore the concept of rurality across a range of settings. The chapters represent contributions from authors who specialise in rural enterprise policy and entrepreneurship. Following our opening chapter, John Sanders, Laura Galloway and Jo Bensemann investigate Scottish rural small to medium sized enterprises (SMEs) social networks and their relationship

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with market diversification strategies and Internet usage. Their study based on interviews with Scottish small rural firm owners reveals that Internet usage facilitates both market reach and social networks. Sanders, Galloway and Bensemann contribute to extant rural entrepreneurship literatures by highlighting the critical role of the Internet in augmenting social networks in rural areas. Developing the networking theme, Felicity Kelliher, Elaine Aylward and Patrick Lynch consider the impact of regional stakeholder engagement on rural networks. Adopting a longitudinal research approach, the authors demonstrate that communication, resource sharing and prolonged social interaction are key elements in promoting stakeholder trust. They posit that stakeholder engagement cannot be assumed in a rural network environment; rather, a network paradigm needs to be implemented as part of national strategic plans for rural regional development. The chapter by David Moyes, Mike Danson and Geoff Whittam considers the differing and contrasting perceptions of the many challenges facing rural SMEs. The authors highlight mismatches between the concerns of rural business owners and the stakeholders who strive to understand them. In particular, they draw attention to the need for policy interventions to appreciate and align with the different aspirations and growth strategies of rural SMEs. Linking to the theme of policy and regional development, Ivan Annibal and Liz Price’s chapter focuses on the role of the LEADER programme in strengthening the resilience of communities in rural areas. Using specific project examples, the authors measure the wider impacts of the LEADER initiative, thus highlighting its value as a key component in rural economic development strategy. In the chapter by David Littlewood and Diane Holt, the focus of attention shifts to the developing world. Here, the authors explore the issue of social exclusion and, more specifically, the role of social purpose ventures in Africa. Using an in-depth case study approach, Littlewood and Holt examine six channels through which social purpose ventures contribute to tackling social exclusion in rural communities. Their chapter contributes to extant debates by identifying some of the key factors influencing the success of social purpose ventures, and thus, is of value to both practitioners and policy makers. The challenges facing farm animal veterinary enterprises in the United Kingdom is the subject of the chapter by Katherine Adam, Colette Henry, Sarah Baillie and Jonathan Rushton. Their conceptual review highlights the importance of the agricultural sector including farm animal

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veterinary practices to the United Kingdom’s rural economy. The chapter evidences that the commercial success of rural veterinary enterprises is critical to ensuring the future provision of high quality animal health services to both farmers and government. While some of the issues identified by the authors refer specifically to the veterinary practice sector, several also apply to other rural SMEs that provide knowledge-intensive services to farmers. A particularly novel perspective on rural enterprise is provided in the chapter by Mike Danson and Kathryn Burnett who consider enterprise and entrepreneurship on islands. Their exploratory study focuses on island enterprises and entrepreneurs in Scotland and considers islands as spaces and cultural places. The authors underline the importance of distance, isolation and peripherality as social constructions, with the conclusion that there is a need to recognise social relations locally. The need to proof policies and strategies for locational differences is also highlighted. Biodynamics is the subject of the chapter by Kate Lewis and Sue Cassells. Focusing on a selection of New Zealand rural firms, the authors draw on qualitative case studies to highlight the spiritual capital that does not yet appear to have been captured within traditional interpretations of capital. In their chapter, Diana Traikova, Judith Mo¨llers and Gertrud Buchenrieder explore rural entrepreneurship in Bulgaria. Based on interviews with farming households, the authors investigate start-up intentions and perceptions relating to start-up barriers. Their study highlights the crucial role of farming as a means of surviving in harsh environments. Rural female entrepreneurship is the subject of the chapter by Izzy Warren-Smith. Using the case study of WiRE (Women in Rural Enterprise) as an example, valuable lessons for supporting the entrepreneurial endeavours of women in rural environments are platformed. While the WiRE project demonstrates the contribution that women entrepreneurs can and do make to the rural economy, it also draws attention to women’s personal and family responsibilities, and demonstrates how these impact on their endeavours. In order to be effective, rural policy and support measures need to acknowledge such responsibilities. Our final chapter by Barry Quinn, Adele Dunn, Rodney McAdam, Lynsey McKitterick and David Patterson aptly considers policy and support for rural firms in a peripheral region. Focusing on food enterprises, the authors adopt an exploratory case approach to investigate the effectiveness of a local support programme for micro business development. Their findings suggest that effective integration of policy and practice in the design and implementation of a public/private partnership programme can

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enable micro businesses to benefit from government aid in a collective manner that would not have been possible in a government-micro dyadic relationship. Collectively, the chapters presented in this text explore the complex nature of rural enterprise at the regional, national and international level, and offer new perspectives on research, policy and practice that help contribute towards extant debates and future research agendas.

NOTE 1. This definition suggests that settlements with populations of 10,000 or more may be considered urban, and those with less than a 10,000 population are considered as rural.

REFERENCES Annibal, I., Liddle, J., & McElwee, G. (2013). Animating ‘bottom-up’ sustainable strategies in village settings. International Journal of Sociology and Social Policy, 33(11 12), 742 761. Carter, S. (1996). The indigenous rural enterprise: Characteristics and change in the British farm sector. Entrepreneurship and Regional Development, 8(4), 345 358. Carter, S., & Rosa, P. (1998). Indigenous rural firms: Farm enterprises in the UK. International Small Business Journal, 16(4), 15 27. CRC. (2005). The state of the countryside. Cheltenham, UK: Commission for Rural Communities. Defra. (2004). Rural strategy. Defra, London. Defra. (2005, November). Productivity in rural England. Rural Economics Unit, Defra, London. McElwee, G. (2006). Farmers as entrepreneurs: Developing competitive skills. Journal of Development Entrepreneurship, 11(3), 187 206. McElwee, G., & Annibal, I. (2010). Business support for farmers: The Farm Cornwall project. Journal of Small Business and Enterprise Development, 17(3), 475 491. McElwee, G., Pyysia¨inen, J., Anderson, A., & Vesala, K. (2006). Developing the entrepreneurial skills of farmers: Some myths explored. International Journal of Entrepreneurial Behaviour and Research, 12(1), 21 39. McElwee, G., & Smith, R. (2012). Classifying the strategic capability of farmers: A segmentation framework. International Journal of Entrepreneurial Venturing, 3(4), 111 131. McElwee, G., & Smith, R. (2014). Rural entrepreneurship. In A. Fayolle (Ed.), Handbook of research in entrepreneurship. Cheltenham, UK: Edward Elgar. McNally, S. (2001). Farm diversification in England and Wales What can we learn from the farm business survey. Journal of Rural Studies, 17(2), 47 257. OECD. (1996). Creating rural indicators for shaping territorial policy. Paris: OECD.

INVESTIGATING THE RELATIONSHIP BETWEEN SCOTTISH RURAL SMALL FIRMS’ SOCIAL NETWORKS, EXTRA-LOCAL MARKET DIVERSIFICATION AND INTERNET USAGE John Sanders, Laura Galloway and Jo Bensemann ABSTRACT Purpose This chapter reports a study that investigates the link between rural small firms’ social networks and their market diversification strategies in the context of the Internet. Methodology/approach Telephone interviews were conducted with a random sample of 142 Scottish small rural and urban firm owners in May 2012. The purpose of the telephone interviews was to understand how Internet usage impacted on the social networks and market

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 9 33 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004000

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diversification experiences of small rural firms. Analysis of the categorical data was performed using a variety of established methods. Findings Internet usage for many small Scottish rural firms was facilitating both their market reach and social networks. In addition, small rural firms’ most important social network contacts are highly correlated to their origin of sales, and this can be either locally or extra-locally based. Practical implications A positive relationship between Internet usage, social networks and market reach expansion offers support for further developing and improving the Internet infrastructure of rural communities. Originality/value Internet usage emerges as a critical tool for augmenting the social networks of Scottish rural small firms, which in turn helps to extend their market reach activities. Keywords: Small firms; Internet; social networks; market diversity

INTRODUCTION Throughout the literature there is speculation and evidence of lagging economic activity in some rural areas relative to urban locations (Ring, Peredo, & Chrisman, 2009; Terluin, 2003). Also identified throughout the literature is the idea that rural locations comprise a social and business environment characterised by strong network ties to the exclusion of weak ones, and that this adds to the closedness of networks and inhibits business activity by fostering greater insularity (Johannisson, Ramı´ rez-Pasillas, & Karlsson, 2002). However, there is also speculation that strong networks comprise an advantage for rural firms as they can allow for strong bonds of trust and mutual support (Westlund & Bolton, 2003). Furthermore, academic and practitioner commentary on the distribution and use of information and communication technologies (ICTs) hypothesise that the Internet, with its low barriers to entry to extended and global markets, now affords opportunities to extend market reach. While this applies to all small firms, the relative advantage it may provide is said to be greater for rural small firms than for others, and this is based on the idea that rural small firms are more limited to small, local markets than urban firms, and as a result have more to gain.

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The aim of this chapter is to report a study of the link between small firms’ social networks and their market diversification strategies in the context of greater opportunities to extend market reach facilitated by the Internet. In particular, the chapter looks at the difference between social networks in rural and in urban firms, and seeks to infer any effects of differences on market diversification experiences. Using a quantitative methodology, the study sought information on social networks and market reach from 789 firms throughout rural and urban Scotland. Consistent with Bibby and Brindley (2013), ‘rural’ was defined as comprising a settlement of fewer than 10,000 residents, and correspondingly, urban was defined as the converse.

MARKET REACH, THE INTERNET AND THE RURAL BUSINESS ENVIRONMENT The rural business environment is reported in numerous studies as changing from one dominated by land-based extraction and production, to one in which small, often micro, businesses dominate (Bosworth, 2009; Deakins, Mochrie, & Galloway, 2004; Smallbone, North, Baldock, & Ekanem, 2002). These small firms are concentrated in the retail, services and tourism-based sectors to a large extent and have a local market focus (Deakins et al., 2004; Smallbone et al., 2002). Huggins and Izushi (2002) suggest that rural reliance on local markets is, at least to some extent, due to rural firms’ remoteness from extended markets, with a link between this and lower economic activity in some rural areas (relative to urban locations) implied (e.g. Ring et al., 2009). The Internet has indisputably created opportunities to expand market reach, and by affording virtual inclusion has reduced the extent to which any individual or organisation that is connected can be considered remote. Further, users and critically, users who purchase online continue to increase in every country in the world. There is on-going expansion potential as new economies, including the Far East, develop digital inclusion (Internet World Stats, 2012), and as new technologies and means of getting online, such as through smart phones and televisions continue to emerge (BERR, 2008). Trade statistics bear out the realisation of this potential: for example, in 1999, an estimated 300 million users worldwide accessed the Internet, and nearly one quarter of them made purchases online. It was estimated that these purchases were worth US$ 110 billion. In 2013, it is

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predicted that global business-to-consumer e-commerce sales will exceed US$ 1.25 trillion (World Trade Organisation, 2013). With these constantly increasing usage figures in mind, Buhalis and Main (1998, p. 201) predicted more than a decade ago that the Internet ‘is particularly suited to small business, where it enables [them] to keep doors open 24 hours a day, at minimal cost to customers all over the world’. Since then, many commentators have agreed with this contention that with access to increasing markets throughout the world, businesses (including rural businesses) have a unique opportunity to expand either business-tobusiness, or business-to-consumer operations from the traditional and local to the global (Amit & Zott, 2001; Lawson, Alcock, Cooper, & Burgess, 2003; Reynolds, 2000). More detail in terms of the various ways in which the Internet can expand a firm’s reach is provided throughout the literature also, and these include increased profile (Tse & Soufani, 2003), brand building (Jacobs & Dowsland, 2000), and advertising and marketing (Turban, King, Lee, & Viehland, 2004). For rural small firms particularly, the Internet can mitigate the disadvantages of remoteness from markets insofar as it provides instant access to extended markets where previously only local markets were available (Smallbone et al., 2002). Further, just as there is evidence that Internet participation can prompt development at the firm level, so too is there evidence that this can extend to the local economic environment as a cumulative outcome (BCC, 2004; CEBR, 2003; Colecchia, 2002). The implication of this for rural locations, and particularly those that are experiencing economic contraction, is inviting. For rural firms the potential for growth via extended markets is implied in several studies (e.g. Fuller & Southern, 1999; Lowe & Talbot, 1999; Smallbone & North, 1999; Smallbone et al., 2002). In others, it is made more explicitly, such as in Zinkhan (2002) and Baourakis, Kourgiantakis, and Migdalas (2002) who found in their sample of Cretan agri-food businesses that one of the most important motivators for those who had adopted an e-commerce strategy was ‘penetration of new markets’ (p. 586). Other writers note, however, that rural economic development is more likely to involve maintaining competitiveness in a digital global economy whereby, to survive, firms require an online presence and capability, either because business systems have become ICT standardised, or because online availability of products and services has become expected as standard by customers such as is the case with, for example, tourism (e.g. Anderson, 2001; Buhalis & Main, 1998; Sparkes & Thomas, 2001). Combining a physical presence with the creative use of the web to target local markets can also lead to a better service to the local community (Steinfield & Whitten

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(1999); Steinfield, Mahler, & Bauer, 1999), and thus increased competitiveness and profitability (Lewis & Cockrill, 2002). Moreover, in a study of 25 Welsh small retail businesses, Lewis and Cockrill (2002) found that the majority intended to just serve their local markets through the use of their websites. Thus, the following hypothesis is proposed: Hypothesis 1. High Internet usage by Scottish rural small firms will be positively related to a local market focus. Relative to urban firms, rural firms are less likely to trade with non-local markets, and in the past this has been explained by remoteness from them. Since the Internet has now removed the problem of remoteness for many firms by affording low barriers to entry for virtual inclusion, we would expect rural businesses to be benefiting disproportionately from Internet use. This, however, is not reported in the literature. In fact, the opposite prevails: according to the literature, despite the advent, development and ubiquity of the Internet, trade in rural firms still tends to be based on local markets to a greater extent than in urban firms (Galloway & Mochrie, 2006; Galloway, Sanders, & Deakins, 2011; Telford, 2006). Thus, the following hypothesis was generated: Hypothesis 2. Scottish rural small firms will report lower external (nonlocal) market reach than urban firms.

MARKET REACH AND SOCIAL NETWORKS The importance of social networks to the success of rural firms was a valuable practical and theoretical discovery (e.g. Atterton, 2007; Floysand & Sjoholt, 2007; Ring et al., 2009). Certainly, much has been written about the value and importance of social networks to small firm development. Research into social networks states those businesses which are wellnetworked and well-integrated into local customs, institutions and ‘identities and symbolic activities’ (Phillipson, Gorton, & Laschewski, 2006, p. 40) are better able to access help, co-ordinate activities and collectively pursue opportunities than less well-networked firms. Zimmerman, Barsky, and Brouthers (2010) have described social networks as a source of social capital. According to Nahapiet and Ghoshal (1998) social capital is ‘the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit’ (p. 245). The social capital within a firm and the

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social capital external to the firm that can be accessed through social networks have been found to be critical to a wide variety of business functions (Houghton, Smith, & Hood, 2009).

Rural Social Networks Rural scholars view social networks as an important concept for understanding why place matters and how they allow rural places to overcome disadvantages of location and size (Ring et al., 2009). Indeed, the use of rural networks and social capital to overcome barriers associated with reduced economies of scale and lack of information is a common theme in the literature (Fitjar & Rodriguez-Pose, 2011; Lambert & Fairweather, 2010; Onyx & Bullen, 2000; Ring, Peredo, & Chrisman, 2010; Roper, 2001; Shields, 2005; Virkkala, 2007). Anderson and Jack (2002, pp. 469, 480) claim, for example, that social interactions within a rural setting creates a high degree of trust and reciprocity which ‘compensates for environmental constraints [i.e., isolation]’ by building economies based on ‘local knowledge, credibility and resources’. The unique quality of social networks and their relationships within rural settings is a recurring theme within the rural studies literature. For instance, Atterton (2007, p. 229) states that ‘informal networks have traditionally been stronger and more important in rural than urban areas and … social relations in rural communities have retained a distinct culture and dynamic’ that may facilitate co-operation and partnership. In the same way research conducted by Phillipson et al. (2006, p. 45) found that local co-operation in rural regions is primarily ‘based on long-established friendships or contact’ and is expressed through ‘symbolic activities [linked with] expressions of local identity’ and solidarity.

Social Network Strength Granovetter (1973) states that social networks are made up of strong and weak ties. Ties are the bonds, which hold members together and act as a bridge by which individuals and organisations access external resources and information. Strong ties comprise close relationships that engender trust and shared understanding. On the contrary, weak network ties are those associated with less close relationships. Some authors suggest a mixture of weak and strong network ties in the business context to be optimal. Houghton et al. (2009), for example, studied the effects of social networks

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on what they call ‘strategic complexity’, which they measured by breadth of product portfolio. They found that both strong and weak network ties are correlated to increases in product/service offering, and that both are required for this kind of development. Likewise, Lechner and Dowling (2003) found a correlation between both strong and weak ties and business growth. The need for both types of ties from these research findings appears to be appropriate, as you might expect close, trust-based relationships within the firm, alongside weak network relationships outside the firm that act as a critical method for obtaining information and resources. These findings mirror the empirical work carried out by Granovetter (1983), who discovered that weak ties to be more important than strong ties for social mobility, employment opportunity and occupational status based on extended ‘access to information and resources beyond those available in [a person’s] own social circle’ (p. 209). On the contrary, other studies, such as Zimmerman et al. (2010) found that strong ties can be a critical factor in terms of developing external markets for a firm. Regardless of whether ties are weak or strong, or a combination of both, they are important. Rural networks are most often described as strong and local. While strong ties are important, in that they provide support to the entrepreneur (Hoang & Antoncic, 2003), it is the so-called ‘weak ties’, to people or organisations from outside of the immediate circle, that are most likely to bring in new resources and information (Hoang & Antoncic, 2003). The more contact a small and medium-sized enterprises (SMEs) has externally, the more it will become aware of wider opportunities through its association with managers involved in external business who know of such opportunities. This has obvious implications for innovation; strong local networks may circulate existing information around the group, but inhibit the transfer of new information from elsewhere, unless weak ties are also present (Hoang & Antoncic, 2003). The reported tendency for rural firms to possess strong local ties has meant they are sometimes described as being caught in a ‘regional cage’ (Lagendijk & Oinas, 2005). The phrase ‘regional cage’ describes how a firm’s social network interactions and interdependencies can become so embedded within a specific local market context that it ends up overshadowing other equally important connections in extra-local networks (Lagendijk & Oinas, 2005). As Young (2006) argues, extra-local networks play an important role in entrepreneurial rural development as they provide external information and capital imports that all markets require in order to grow. While the majority view remains that extensive networks of weak

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ties do not exist in rural locations, the occasional study has found evidence to the contrary, with extensive external international networks recently being found in a highly innovative rural area of Norway (Fitjar & Rodriguez-Pose, 2011). For the purposes of the current study, the authors seek to understand the extent to which small firms’ market reach and their social network activities are related, so the following hypotheses were generated: Hypothesis 3. The location of important social network relationships will be positively related to the market reach of Scottish rural small firms. Hypothesis 4. Social network size will be positively related to a local rather than extra-local market focus for Scottish rural small firms. Hypothesis 5. Scottish rural small firms with strong social network relationships will focus on local rather than extra-local markets.

Internet Usage and Social Networks Media and communications literature has commented extensively on the relationship between peoples’ Internet usage and social networks, but it has not been widely investigated within the small business context. Specifically, the media and communications literature suggests that the impact of the Internet on social networks can be divided into two distinct viewpoints (Miyata & Kobayashi, 2008). First, there are scholars who state that the Internet has the ability to expand social networks both socially and geographically. For example, research conducted by Robinson, Kestnbaum, Neustadtl, and Alvarez (2000) reported that Internet users had wider social networks than people who did not connect to the Web. On the contrary, others state that the Internet can alienate people from becoming involved in deeper, more genuine relations. For example, Kraut et al. (1998) found increased Internet usage was associated with a decline in peoples’ social circles. Indeed, a time diary study by Nie, Hillygus, and Erbring (2002) discovered that increased Internet usage by people meant they spent less time with friends, family and colleagues. Despite these different viewpoints, a common theme within the communication literature is that Internet usage via e-mails or message texts both enhances social network size and helps to maintain strong ties for social

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support (Miyata & Kobayashi, 2008). Thus, we propose the following hypotheses: Hypothesis 6. High Internet usage by Scottish rural small firms will be positively related to social network size. Hypothesis 7. High Internet usage by Scottish rural small firms will be positively related to the importance of their social network relationships.

METHOD Three steps were undertaken to obtain the sample for this study. First, the terms rural and urban were defined to clarify the nature of the small firm participants involved. Rurality is defined as comprising a mainland settlement of fewer than 10,000 residents (Bibby & Brindley, 2013); however, Scotland’s rural areas are very diverse, with some areas very isolated and others relatively well served by an infrastructure that affords a proximity to urban centres. To account for the diversity of ‘rural’ Scotland a further criterion to help determine whether the physical address of a business was rural or urban was included. This further criterion specified that if a firm was located at least 30 minutes from an urban area (i.e. mainland settlement of more than 10,000), either by car or boat, then the researchers classified it as a rural business. Conversely, a firm was defined as being within an urban location if its physical address was situated in a settlement of more than 10,000. Second, Wikipedia (http://en.wikipedia.org/wiki/United_ Kingdom), the free online encyclopaedia, was used to alphabetically identify a list of Scottish cities, towns and villages. Scottish cities, towns and villages were straightforwardly categorised into either rural or urban locations using population information from the 2001 United Kingdom Population Census data. In addition, the 30-minute test previously described was employed for categorisation purposes to help determine rural and urban settlements. The outcome of this categorisation process was the creation of two alphabetical lists detailing urban and rural Scottish settlements respectively. To make the selection of small firms operating a website in either of these two locations as random as possible, every third settlement was investigated. If the settlement did not possess the necessary characteristics the next immediate settlement on the list was selected. Third, the United Kingdom’s Yellow Pages online directory of business services (http://www.yell.com/) was used to locate small businesses employing

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websites within relevant Scottish locations. The online directory’s search function enabled the researchers to classify potential small businesses by location and the products and services they offered. Data were collected using a questionnaire-based survey, administered by telephone, during May 2012. The questionnaire was designed to ask owners about their market reach, ambitions for market reach, and network access and use. It was also used to confirm the details that had been gathered whilst building up the database. All firms sampled were online, defined as those firms with an active website (i.e. one with greater functionality than just an advertisement for the firm). Using these procedures a database of 789 firms was created. Given the nature of the investigation Internet usage it may surprise readers that potential respondents were not contacted via an online survey; rather a telephone survey was used. It is acknowledged that due to low response rates, the effectiveness of telephone surveys has been questioned (Smyth, Dillman, Christian, & O’Neill, 2010). Nonetheless, it was decided to employ a telephone survey because it allowed the researchers to ensure that the geographic coverage of Scottish rural small firms was as representative as possible.

Dependent Variable The dependent variable used in this study was market diversity. We were interested in discovering why Scottish rural small firms would have any form of local-extra sales. To obtain this market diversity information, respondents were asked to indicate, on a six-point Likert scale item, the average annual percentage of firm sales made in the same village, town or region of Scotland as their business (value 1 being less than 5%, and value 6 being 81 100%).

Independent Variables Independent variables were used to measure network size and strength of network ties. These measures were adapted from work carried out by Zimmerman et al. (2010). Nine separate questions were asked to measure network size. These questions asked the firm’s general manager or owner to indicate on a Likert scale from 1 (zero) to 7 (more than 25) the approximate number of individuals they discussed their business decisions with on

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a regular basis within nine social network categories. The categories of social network individuals described to respondents are listed as follows: 1. For owners, general managers or directors of other businesses within the same industry. 2. For owners, general managers or directors of other businesses within other industries. 3. For suppliers. 4. For clients/customers. 5. For financial institutions. 6. For competitors. 7. For people from industry forums, trade associations, trade fairs or other industry events. 8. For government officials. 9. For relatives and friends. The scores of the nine measures were added together to obtain a single item score for network size (Cronbach Alpha equals 0.74). In a similar manner the strength of network ties was obtained by asking the firm’s general manager or owner to describe the importance of their relationship with the same list of nine categories of individuals using a Likert scale from 1 (very unimportant) to 5 (very important). Again, the scores of the nine measures were added together to obtain a single item score for the firm’s strength of network ties (Cronbach Alpha equals 0.87). Other variables used included Internet usage. This was measured with a single five-point Likert scale question (1 equals ‘Never’ to 5 ‘Always’) that asked about the degree to which firms use the Internet for conducting transactions with their customers. Urban and rural small firms were classified into a dichotomous variable with the value of 1 for urban firms and 2 for rural firms. The location of the most important people with whom the owner or manager discussed company business was measured by asking four separate questions. All four questions were measured with a single five-point Likert scale question (1 equals ‘Never’ to 5 ‘Always’). The four questions are listed as follows: 1. Are they located in the same village, town or region of Scotland as your business? 2. Are they located in Scotland, but outside the village, town or region where your business is based?

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3. Are they located in another region of the United Kingdom (i.e. Northern Ireland, Wales or England)? 4. Are they located overseas? From the original database of 789, a sample of 28 urban and 114 rural small businesses, providing a total sample size of 142, responded to the survey. These 142 firms represented a sample response rate of 18%. A wide range of different types of small firms were analysed including bakers, bed and breakfast establishments, restaurants, small hotels, car repair garages, adventure tourism operators, car and bicycle hire operators, computer repair retailer, food retailers and wholesalers, engineering and construction firms, specialty clothes retailers, landscape gardeners, accountants, farm consultants and a pest control company. Eighty-nine of the rural firms and all of the urban firms (28) were involved in the tertiary sector (services). Seven and eighteen rural firms were involved in primary (extracting raw materials or producing food products) and secondary industries (manufacturing) respectively. Fig. 1 illustrates the size of the companies surveyed by their total number of employees, while Fig. 2 highlights the age of the companies surveyed. Fig. 3 indicates the degree to which the companies surveyed used the Internet to transact with their customers. Non-parametric techniques such as Chi-square, Mann Whitney U Test and Spearman’s Rank Order Correlations were used for data analysis purposes in this study. The largely categorical nature of the data collected meant non-parametric techniques were deemed to be the most appropriate statistics for analysis purposes. 10 or more employees

Less than 10 employees

31 Rural 83

1 Urban 27

Fig. 1.

Number of Employees.

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Scottish Rural Small Firms’ Social Networks and Market Expansion 9 or more years

Less than 9 years

77 Rural 37

13 Urban 15

Fig. 2.

Number of Years Company in Operation.

Heavy users

Light users

49 Rural 65

11 Urban 17

Fig. 3.

Use of the Internet to Conduct Business Transactions with Customers.

FINDINGS It was hypothesised (H1) that high Internet usage by Scottish rural small firms would enhance their local market focus rather than be related to greater extra-local markets’ sales (see Table 1). However, the opposite association was discovered. High Internet usage was associated with greater use of external markets by Scottish rural small firms rather than local markets.

H# H1

H2

H3

Hypothesis High Internet usage by Scottish rural small firms will be positively related to a local market focus. Scottish rural small firms will report lower external (nonlocal) market reach than urban firms. The location of important social network relationships will be positively related to the market reach of Scottish rural small firms.

Findings

Findings Summary.

22

Table 1.

Statistical Test

Statistical Result

Outcome

High Internet usage was associated with greater use of external markets.

Chi-square

χ (1, N = 142) = 20.62, p = 0.00a

Not supported

Rural firms made greater use of external markets than urban firms.

Chi-square

χ2 (1, N = 142) = 5.68, p = 0.03

Not supported

There was a strong link between high local sales and important network ties being located in the same village, town or region of Scotland. There was a strong link between high external sales and important external network ties being located in another region of the United Kingdom. There was a strong link between high external sales and important external network ties being located overseas.

Spearman’s rank order correlations

0.28*

Supported

2

0.28*

JOHN SANDERS ET AL.

0.23*

Social network size will be positively related to a local rather than extra-local market focus for Scottish rural small firms.

H5

Scottish rural small firms with strong social network relationships will focus on local rather than extra-local markets.

H6

High Internet usage by Scottish rural small firms will be positively related to social network size.

H7

High Internet usage by Scottish rural small firms will be positively related to the importance of their social network relationships.

There was no difference between the social network ties of rural small firms that were focusing on local rather than extralocal markets. There was no difference between the strength of social network relationships of rural small firms that were focusing on local rather than extralocal markets. There was a significant difference between Scottish rural small firms social network size and Internet usage. There was no difference between Scottish rural small firms social network relationships and Internet usage.

Mann Whitney

U = 1390.0, Z = −0.80, p = 0.42, r = −0.07

Not supported

Mann Whitney

U = 1517.5, Z = −0.05, p = 0.96, r = −0.00

Not supported

Mann Whitney

U = 1125.5, Z = −2.68, p = 0.01, r = −0.25

Supported

Mann Whitney

U = 1382.0, Z = −1.21, p = 0.23, r = −0.11

Not supported

23

a An alpha level of 0.05 was adopted for this and all subsequent statistical tests. In addition, the Yates’ Correction for Continuity value was used for the Chi-square test because 2 × 2 tables were employed. * significant at 0.01 level (2-tailed).

Scottish Rural Small Firms’ Social Networks and Market Expansion

H4

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It was also hypothesised (H2) that urban firms would possess greater external market reach than rural firms (see Table 1). However, rural firms made greater use of external markets than urban firms. The third hypothesis (H3) investigated whether there was a relationship between network ties and market diversification for Scottish rural small firms (see Table 1). This analysis uncovered three important findings: first, small firms had strong local networks based within the same town, village or region in Scotland where they sold most of their goods or services. The second finding was that Scottish rural small firms with high external sales had strong external network ties with other parts of the United Kingdom. The final main finding was the existence of a strong relationship between high external sales and small firms having strong external network ties located overseas. These results demonstrate that there was a strong link between market reach and the location of important network ties. In addition, it was discovered that social network ties were not significantly different between rural small firms that were focusing on local rather than extra-local markets (H4). The strength of social network relationships was not significantly different between rural small firms that were focusing on local rather than extra-local markets as well (H5). Furthermore, there was a significant difference between Scottish rural small firms’ social network size and Internet usage (H6). Finally, there was no significant difference between Scottish rural small firms’ social network relationships and Internet usage (H7). All of the aforementioned findings have been summarised in Table 1.

DISCUSSION Hypothesis 1. High Internet usage by Scottish rural small firms will be positively related to a local market focus. The data indicated that there was not a positive relationship between high Internet usage and a local market focus. Rather, high Internet usage was positively related to Scottish rural small firms with an extra-local market focus. Thus, some Scottish rural small firms are expanding operations from the traditional and local, to the global (Amit & Zott, 2001; Lawson et al., 2003; Reynolds, 2000). Readers should note that ‘global’ in the context of this study means being focused on extra-local rather than international markets. This finding is consistent with expectations about the

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impact of the Internet extending market reach. For some Scottish rural small firms Internet usage is not just about a customer expectation that an online presence is a standard requirement (e.g. Anderson, 2001; Buhalis & Main, 1998; Sparkes & Thomas, 2001); rather, they are utilising the Internet to expand their markets. Nevertheless, it would appear that some Scottish rural small firms are just utilising the Internet as a standard requirement, because low Internet usage is inconsistent with the creative use of the web to better service local communities and markets (Steinfield & Whitten, 1999); Steinfield et al., 1999). Therefore, the findings demonstrate that a digital divide exists amongst Scottish rural small firms. Clearly some Scottish rural small firms are actively using the Internet for market reach purposes, probably based on their technological proficiency and entrepreneurial motivations, while others are more passive users satisfied with a traditional local market orientation. Hypothesis 2. Scottish rural small firms will report lower external (nonlocal) market reach than urban firms. The results indicate that rural small firms were less likely to depend on their local markets than urban small firms. This is contrary to earlier findings where, according to the literature, despite the advent, development and ubiquity of the Internet, trade in rural firms still tends to be based on local markets to a greater extent than in urban firms (Galloway & Mochrie, 2006; Galloway et al., 2011; Telford, 2006). This provides us with the basis for further research to confirm this finding with a larger sample. Hypothesis 3. The location of important social network relationships will be positively related to the market reach of Scottish rural small firms. From analysis of this data, three significant correlations were identified. First, high local sales are significantly related to their most important contacts (within the same village, town or region of Scotland). The findings of this study indicate that for both urban and rural firms their strongest ties were local. This seems reasonable, and in line with Social Network Theory (Granovetter, 1983). Further research on network type (strong or weak) and variation between urban and rural businesses is recommended. The second significant correlation was between external sales and small firms having external network ties with other parts of the United Kingdom. Zimmerman et al. (2010) find that strong ties are implicated as most valuable for firms, and the extent to which a firm has strong ties with

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international contacts can be a critical factor in terms of developing international market reach. Although not on an international scale, substituting ‘external’ for ‘international’, the findings from our study would seem to support Zimmerman’s ideas. Finally, the data show a third significant correlation between external market reach and overseas network ties, suggesting that the origins of sales are highly correlated with the location of a small firm’s network ties. Overall the results suggest that the origins of sales are highly correlated with the location of a small firm’s network ties. The extent to which this varies by urban or rural location and the relative usefulness of strong versus weak ties is not observable here and will be subjects of future research. Hypothesis 4. Social network size will be positively related to a local rather than extra-local market focus for Scottish rural small firms. The results indicated that social network size was not significantly different between Scottish rural small firms that were focusing on local rather than extra-local markets. It was assumed that the largest social networks of Scottish rural small firms would be locally orientated due to the reported tendency for rural firms to possess strong local ties, what Lagendijk and Oinas (2005) describe as being caught in a regional cage. The findings suggest that social network size was not a well-defined surrogate measure for understanding the strength of social network ties for Scottish rural small firms. Certainly, the relationship between social networks and market reach are probably more complex than the measure used in this part of the study. Further investigation is required into social networks, as the extant literature indicates that mixed results regarding whether ties are weak or strong, or a combination of both, have occurred. Hypothesis 5. Scottish rural small firms with strong social network relationships will focus on local rather than extra-local markets. The findings showed that the strength of social network relationships was not significantly different between rural small firms that were focusing on local rather than extra-local markets. This means the reported tendency for rural firms to possess strong local ties could not be confirmed via this study. Since strong network relationships do not appear to support any particular market diversity orientation, this may indicate that Scottish rural small firms are utilising some combination of weak and strong ties. This proposition would match the work of several scholars (Houghton et al., 2009; Lechner & Dowling, 2003) who state the need for both types of ties, that is the need for close, strong relationships within the firm, alongside

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weak outside contacts that act as a method for obtaining information and resources. Further research is required to understand the nature and characteristics of Scottish rural small firms’ social networks and how they affect market diversity decisions. Hypothesis 6. High Internet usage by Scottish rural small firms will be positively related to social network size. Analysis of the data demonstrated that there was a significant difference between Scottish rural small firms’ social network size and Internet usage. High Internet usage was positively associated with Scottish rural small firms possessing larger social networks. This confirms research concerning the Internet’s ability to expand social networks (Miyata & Kobayashi, 2008; Robinson et al., 2000). Thus, the results did not find any support for the viewpoint that Internet usage was associated with a decline in peoples’ social circles (Kraut et al., 1998). Hypothesis 7. High Internet usage by Scottish rural small firms will be positively related to the importance of their social network relationships. The findings indicated that there was no significant difference between Scottish rural small firms’ social network relationships and Internet usage. This was a surprising result as it was expected that small firms’ making greater use of the Internet would also employ it (i.e. use of e-mails and text messaging) to strengthen their social network relationships as predicted by the literature (Miyata & Kobayashi, 2008). Therefore, further research is needed to understand the link between Internet usage and social network relationships for rural small firms.

CONCLUSION The data indicate that many Scottish rural small firms have an expanded or an extra-local market focus. This disconfirms the stereotypical notion that rural small firms tend to be based on local markets. The data also showed that Scottish rural firms were to a greater extent externally focused than their urban counterparts. However, further research is required to corroborate this finding as the sample size of 28 Scottish urban was relatively small, particularly when compared to the number of rural small firms obtained. Further research may investigate whether there are unique products and services sold by some rural small firms that better enable them to obtain

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extra-local market sales. As Anderson and Jack (2002, pp. 469, 480) suggest for rural social networks there may be something intrinsically unique about rural small firms via their ‘local knowledge, credibility and resources’ that are attractive to extra-local customers. Overall, the results demonstrate that for many Scottish rural small firms Internet usage is probably more than a survival strategy, it is enabling them to gain the anticipated benefits such as an increased profile (Tse & Soufani, 2003), brand building (Jacobs & Dowsland, 2000) and advertising and marketing (Turban et al., 2004). It was also discovered that the origins of Scottish small firms’ sales were highly correlated to the locations of their most important social network contacts. Certainly this finding suggests that social networks play an essential role in Scottish rural small firms’ market diversity decisions. The extent to which this varies by urban or rural location and the relative usefulness of strong versus weak ties is not observable here and will be subjects of future research. Both Scottish rural firms’ social network size and strength of social network relationships did not demonstrate a positive relationship with a local rather than an extra-local market focus. As discovered in Hypothesis 1, it is now a myth to suggest that the Scottish rural small firms’ dominant focus is on their local market. Hence, it is not surprising that social network size and strength of social network relationships also reflected the absence of a local market focus. Certainly as Hypothesis 3 indicates, Scottish rural small firms’ social networks are now highly correlated to their origin of sales, and this can be either locally or extra-locally based. Predictably high Internet usage by Scottish rural small firms was positively related to social network size, that is the Internet is affording Scottish rural small firms opportunities to grow their social networks. Given the result for Hypothesis 3, it could be claimed that the Internet’s ability to expand social network size is crucial as it supports market expansion. In the case of Hypothesis 7, the absence of a positive relationship demonstrates that the maintenance and fostering of important social network relationships is not dependent on Internet usage by Scottish rural small firms. Social network relationships would appear to operate independently of Internet usage. This seems a reasonable assumption, as Internet usage describes the transactional process between customers and small firms, not the communication process between firm managers and their social contacts. The communication process would be critical for sustaining and cultivating social network contacts and relationships and this information was not measured in this study.

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When the hypotheses are considered together it appears that much of our understanding of rural businesses’ lower propensity to extend market reach is questionable. The new landscape created by the Internet appears to be impacting on and changing the abilities of rural firms, in particular, in terms of market reach and networks.

Limitations One possible source of error was the telephone interviewers who collected the data from respondents. Even with very structured training programs, interviewers exhibit considerable variability in their data collection for certain items (Bailar, Bailey, & Stevens, 1977). To overcome variability the three telephone interviewers employed for this study were given training in an effort to provide them with a uniform way of interpreting and asking questions, recording answers, and providing information to respondents about the survey (Saunders, Lewis, & Thornhill, 2009). A further limitation of this study was its cross-sectional design. Crosssectional studies do not provide a good basis for establishing causality. Nonetheless, the study’s correlative findings do offer some meaningful observations that provide insights for further investigation. Certainly, detecting causal interactions would require a longitudinal research design.

Implications In August 2013, Ofcom (the independent regulator and competition authority for the UK communications industries) revealed that average download speeds in urban and rural areas had widened. It may be that this rising variance is inescapable, given the lower population densities and lack of infrastructure in rural areas, to justify more ambitious intervention by the UK government. However, the activities of the high Internet-using rural small firms need encouragement and nurturing, as they are achieving economic growth via extended market reach. These findings provide strong support for enhancing the UK’s policy objectives for broadband speeds and coverage for rural areas. The results of this study also illustrate that Internet usage emerges as an important mechanism for enhancing and developing the social networks of Scottish rural small firms, which in turn helps to extend their market reach activities. Indeed, given the positive efforts of many Scottish rural small

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firms to expand their market reach, the UK government should obtain and make available information about the on-the ground experiences of these firms. Facilitating the exchange of lessons learned and best practices of Scottish rural small firms would offer persuasive information to others thinking about enhancing their own Internet usage, social networks and market reach activities. In summary, the study implies Internet usage is changing and enhancing the competitive behaviour of Scottish rural small firms as it offers opportunities for growing their social networks, which in turn leads to extra-local market expansion. These findings justify continued governmental policy attempts to support rural Internet infrastructure and rural small firms. The findings also illustrated that rural small firms making high usage of the Internet were succeeding despite their resource and infrastructure deficiencies. They are clearly offering something unique and different to their urban counterparts, and this requires nurturing for the national benefits it offers. In addition, increasing market reach via the Internet has important innovation and productivity as it supports the transfer of new information from elsewhere (Hoang & Antoncic, 2003).

REFERENCES Amit, R., & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22(3), 493 520. Anderson, A. R., & Jack, S. (2002). The articulation of social capital in entrepreneurial networks: A glue or lubricant? Entrepreneurship and Regional Development, 14(3), 193 210. Anderson, K. (2001). Teleworking in rural areas: Scotland 2001. Rural development lessons from the north [Online]. Aberdeen. Retrieved from http://www.abdn.ac.uk/irr/arkleton/ documents/scotland4.pdf. Accessed on March 11th, 2012. Atterton, J. (2007). The ‘strength of weak ties’: Social networking by business owners in the Highlands and Islands of Scotland. Sociologia Ruralis, 47(3), 228 245. Bailar, B., Bailey, L., & Stevens, J. (1977). Measures of interviewer bias and variance. Journal of Marketing Research, 14(3), 337 343. Baourakis, G., Kourgiantakis, M., & Migdalas, A. (2002). The impact of e-commerce on agrofood marketing: The case of agricultural co-operatives, firms and consumers in Crete. British Food Journal, 104(8), 580 590. BCC. (2004). Business broadband: A BCC survey. San Jose, CA: Cisco Systems/Oracle. BERR (Department for Business Enterprise and Regulatory Reform). (2008). E-commerce: The World Trade Organisation (WTO) work programme on electronic commerce, BERR [Online]. Retrieved from http://www.berr.gov.uk/europeandtrade/key-tradeissues/e_commerce/page22867.html. Accessed on July 16, 2013.

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EXPLORING RURAL ENTERPRISE: THE IMPACT OF REGIONAL STAKEHOLDER ENGAGEMENT ON COLLABORATIVE RURAL NETWORKS Felicity Kelliher, Elaine Aylward and Patrick Lynch ABSTRACT Purpose This study tracked rural network activity among regional stakeholders, including government supported agencies, educational institutes, indigenous business representatives, economic support organizations and rural community groups. It explored the relationships that exist between regional stakeholders in a collaborative rural network environment, offering insights into the relationship dynamic between stakeholder organizations. Methodology/approach A longitudinal case study method was utilized to identify the component elements of regional stakeholder network engagement.

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 35 57 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004002

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Findings Communication, resource sharing and prolonged social interaction were found to be key elements in promoting stakeholder trust. Furthermore, proactive stakeholders improve commitment to network relationships over time. A cyclical flow of these criteria is necessary for congruent understanding to develop between the stakeholders resulting in collaborative network engagement. Research limitations Limitations include stakeholder willingness to participate in the research study, potential participant and researcher bias and the possibility that certain features may be particular to the observed network. Practical/social implications The current research demonstrated that stakeholder engagement cannot be assumed in a rural network environment, thus the implementation of the network paradigm into national strategic plans for rural regional development is recommended. Originality/value This research contributes to the under-developed area of regional stakeholder network engagement and provides a basis from which to consider the relationships that exist between regional stakeholders in a rural network. A key outcome is the development of a Framework of Regional Stakeholder Network Engagement, which offers insight into how committed network relationships evolve and highlight the factors that promote and hinder sustainable regional stakeholder engagement. Keywords: Stakeholder; relationships; networks; engagement

INTRODUCTION In the rural context, extant research shows that inclusive regional stakeholder networks involving government supported agencies, third level institutions, indigenous businesses, economic support groups and rural communities are considered pivotal to successful and sustainable rural development (Do¨ring & Schnellenbach, 2006; Malewicki, 2005). Yet, it is also acknowledged that significant gaps exist regarding the content of network interactions and relationships in a rural environment (Jack, Drakopoulou Dodd, & Anderson, 2008; Murdoch, 2000; Pezzini, 2001). Considering these calls to research and the evident gaps in the literature, the focus of this study is inter-organizational rural networks. Put simply, a network is ‘a set of actors with some set of relationships linking them’

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(Hoang & Antoncic, 2003, p. 167). However, these relationships can only be developed if the stakeholders involved engage in exchange behaviours, as networks cannot function independently of the people who use them (Chell & Baines, 2000). Therefore, the social relationships and structures within which rural networks are embedded (Malewicki, 2005; Murdoch, 2000; Pezzini, 2001; Uzzi, 1997) are the primary focus of this study. This position is reflected in the research aim, which seeks to explore the relationships that exist between regional stakeholders in a collaborative rural network environment.

BUILDING INTER-ORGANIZATIONAL RELATIONSHIPS IN A RURAL NETWORK ENVIRONMENT Social exchange theory (SET) endeavours to explain inter-organizational relationships through the behaviour of individuals in economic exchanges (Homans, 1958). It is built on the premise that individuals enter into a relationship based on mutual exchange to achieve benefits for unspecified obligations. Such exchanges are conducted through reciprocation such that, over time and with the exchange of mutual benefits, trust and commitment develop (Ring & Van de Ven, 1994) (see Fig. 1).

Fig. 1.

Building Relationships in a Rural Network Environment.

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As highlighted in Fig. 1, the concept of embeddedness is characterized as the degree to which individuals are embedded in a social structure, created through inter-personal relationships that influence economic actions (Gulati, 1999; Uzzi, 1997). In peripheral areas, incorporating rural communities, these ‘shared understandings, values and practices are continuously being re-negotiated as people relate in everyday life’ (Johannisson, 2007, p. 9). Thus, embeddedness emphasizes the importance of inter-personal relationships in generating trust and discouraging opportunism and malfeasance (Granovetter, 1985), key mediating criteria in the engagement of stakeholders in a rural network. The incorporation of SET into this study offers value as it seeks to explore the relationships that exist between regional stakeholders in a collaborative rural network environment. Of critical importance to this study is that SET acknowledges the exchange (relational) element rather than the transaction (economic) element of the relationship.

Value of Regional Stakeholder Embeddedness According to MacGregor (2004) the benefits of network interaction are not just confined to tangible or economic properties; intangible benefits such as the multidirectional flow of information and a collective ability to learn and adapt to changes are becoming increasingly important within a rural network environment (p. 64). When contemplating value from an individual perspective, the personal contact, which is a feature of informal interactions, is an important part of being a member of a network (Fuller-Love, Midmore, Thomas, & Henley, 2006). By placing individuals in a network, which is composed of others from their region, along with agencies and individuals who can assist rural development (Kelliher, Holden, Lynch, & Aylward, 2010), the individual can engage with peers and professional advisers who can provide mentoring, support and information transfer to aid the process of capability enhancement (Morrison, Lynch, & Johns, 2004). Moreover, interacting with like-minded individuals can ‘help foster an environment in which knowledge can be created and shared and, most importantly, used to improve effectiveness, efficiency, and innovation’ (Lesser & Everest, 2001, p. 46). Here, the rural network provides a means for regional stakeholders to leverage information and access other resources that would otherwise be unavailable to them (Irwin, Isserman, Kilkenny, & Partridge, 2010).

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The ‘position’ that stakeholders hold within a network can also significantly contribute to the commitment to relationships they have with others (Aylward, 2009; Pezzini, 2001). This has profound implications for individuals who do not have access to a larger social system of relationships, such as that which may be present in rural areas. Therefore, SET provides a focus on the individual stakeholder and the context in which they operate, whilst taking account of the effect of embeddedness on network relationships (Fig. 1). Contrary to formal networks, the emphasis is on trust, on sharing information, and/or gathering new skills or joining together to solve a common problem (Huggins, 2000). Any or all of these goals can actually improve an individual’s prospects (Fuller-Love et al., 2006), which is an important motivation when considering rural network engagement. Finally, the ties linking regional stakeholders are critical in advancing our understanding of the structure of the relationships that may exist in a rural network. While much has been written in this area, it was Granovetter’s (1983) work on the nature of ties between dyadic relations that has primarily informed our understanding in this research study. Granovetter (1983) indicated that strong ties will primarily consist of family and friends and the information gained from this type of relationship may become redundant over time; while weak ties can provide access to important information and resources from distant parts of a stakeholder’s social system. It should be noted that networks are not always beneficial; they can serve to tie organizations into unhealthy relationships or constrain economic or social activities if they strengthen barriers that impede progress (Granovetter, 1985). Therefore, a key deliberation is whether ties between rural network stakeholders should be weak and sparse to allow for variety, flexibility and access to novel information or strong to facilitate trust and collaboration (Reagans & McEvily, 2003; Uzzi, 1997). In the rural network domain, ‘networks lay the foundation for securing and developing the attractiveness of the [rural] living and working environment’ (Drda-Ku¨hn & Wiegand, 2010, p. 92). Thus, the network appeal lies in its ability to rescue the often marginalized social dimension of the economic development process (ACSWC Secretariat, 1998), and is, therefore, seen as an important asset for increased economic inclusion of marginal rural areas (Miles & Tully, 2007). Here, committed network relationships can be created through a process of embeddedness (Fig. 1). The success of certain localities or regions when competing in a global economy has drawn attention to intangible assets such as trust, shared values and norms, faceto-face contact, innovation and learning. Individuals can draw upon these assets to solve common problems thereby enhancing coordination and

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cooperation for mutual benefit (ACSWC, 1998). Furthermore, the notion of trust and reciprocity (mutual benefit) as a cyclical motion are cited as key aspects relating to the realization of a network’s potential (Koch, Kautonen, & Gru¨nhagen, 2006). This is the inherent objective of the current research where it is argued that only by fostering committed relationships through collective action will the synergistic benefits contributed to collaborative network engagement be captured by regional stakeholders and the rural community in general. The remainder of this chapter is structured as follows: a synthesized discussion on the most salient aspects of the longitudinal interpretive case methodology employed in this research is discussed, and subsequently, the results of that analysis are presented. Based on the foregoing, a proposed framework for regional stakeholder engagement is presented. In the concluding section, observations are drawn on the theoretical and empirical contribution of the study.

METHODOLOGY The overarching aim of this study is to explore the relationships that exist between regional stakeholders in a collaborative rural network environment. Considering the research aim, and in accordance with commentators in the network literature (Hines, 2000; Reinl & Kelliher, 2014), and in rural studies (Anderson, 2000; Brennan & Luloff, 2007), a three-year longitudinal interpretive case study method was pursued in order to explore and identify the component elements of sustainable rural network engagement. The case commenced with a desk-based study to identify key rural stakeholders operating in the studied region, comprising five counties and serving a population of approximately 500,000. Following this process, 78 regional stakeholders were identified as being involved in rural networks, representing 49 organizations and comprising relevant city, town and county councils, enterprise boards, rural business support agencies, tourism, agricultural and rural representative bodies, educational institutes and rural community groups. Each was invited to participate in a workshop (WS) held at the one of the region’s higher education institutes, and 33 expressed an interest in the research, representing 28 of the identified organizations. This WS enabled the researchers to identify the relationships that existed between these stakeholders, which assisted in determining the issues that needed to be explored, and the order in which to explore them

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(Hannon, Patton, & Marlow, 2000). All 78 stakeholders were then invited to participate in face-to-face interviews held at their own workplace; 21 agreed to participate. Using both observation and semi-structured interview techniques to glean an appreciation of the individual (micro) perspective in each participant (P1 21) workplace, the researchers gathered over 100 hours of data over an eight-month period. Notably, as the on-site data exposed different types of stakeholders in terms of network engagement (labelled proactive, reactive and stationary by the researchers) it was deemed appropriate to study three ‘proactive’ stakeholders’ (CRN1 3) network activities in greater depth over a prolonged period (eventually amounting to 26 months in elapsed time), as ‘sometimes it is better to learn a lot from [an] atypical case than a little from a seemingly typical case’ (Stake, 2008, p. 130). During this time, the researchers observed these stakeholders’ at network meetings, at an industrial conference and at the launch of a national product (RO) to observe peer dynamics, group interaction and network engagement. Throughout the study, the researchers utilized semi-structured interviews (P1 21), round table discussions (WS), observation and reflective diaries (RO) as key qualitative research techniques in context, each of which helped in gaining a progressive in-depth view of the relationships that exist between regional stakeholders in a collaborative rural network environment. This in turn facilitated greater researcher engagement, through informal conversations with the observed stakeholder networks and with the participating stakeholders (Gulati, 1999), thereby allowing the researchers to ‘tell the same tale from different points of view’ (Denzin & Lincoln, 2008, p. 7). In preparation for data analysis, all documents, including transcripts, field notes and any other relevant written materials, were imported into NVivo8. Personal reflections were also incorporated using the memoing function in NVivo, as advised by Saldana (2009). These data were then combined before being arranged as nodes, which were further themed as required into free nodes and tree nodes. The ultimate goal in this approach was to provide a trustworthy account of a complex phenomenon in a holistic manner (Lincoln & Guba, 1985). By describing ‘facts’ (socially shared realities agreed upon by all participants) in this manner, the researchers could determine the way participants ascribe meaning to their separate realities by how they perceive cause and effect (Lacity & Janson, 1994). This cycle was repeated as often as necessary until saturation was achieved and the theory was stabilized, and this approach also aided framework development.

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Finally, in accordance with Pettigrew (1997), this research adopted a processual perspective to the content, contexts and processes of network engagement. Therefore, a chronological reporting style was applied to this longitudinal study as it offered greater insights into the relationships of regional stakeholders in a rural network environment under observation.

THE RURAL CONTEXT Agriculture and farming activities have traditionally been synonymous with rural areas, and these activities have historically been to the fore of rural development policies (OECD, 2006). However, it has been well documented, in both government and academic circles that the socio-economic characteristics of rural areas have changed rapidly in recent times. This has resulted in calls for a ‘new paradigm’ of rural development (Murdoch, 2000) and the need for a ‘new agenda’ in regional support approaches (OECD, 2006). As articulated by Van der Ploeg et al. (2000): ‘what we now need are new theories that adequately reflect these new networks, practices and identities’ (p. 394). This study has been informed by both extant literature and government policies, which recognize that rural regions are essential for economic prosperity on a national scale (Do¨ring & Schnellenbach, 2006; Malewicki, 2005). In context, there is a growing consensus that what actually constitutes rural development activities has expanded to include nature conservation, region-specific products and rural tourism (Van der Ploeg et al., 2000); thus, there should be a greater emphasis on non-farm agriculture activities, including agri-environment, on-farm diversification, rural/agriculture tourism and rural enterprise. Of relevance to this study is the fact that rural relationships are not always mutually co-operative and can be based more on competition (Tang, 2011; Tigges, Ziebarth, & Farnham, 1998). Rural network relations also tend to have quite distinct characteristics as ‘these relationships are embedded in place, occurring in and helping to define locality’ (Tigges et al., 1998, p. 217), potentially resulting in competition between localities to the detriment of regional development in the absence of collaborative network activity. While the observed region has predominantly used local partnerships supported by state owned, voluntary and private organizations to address the challenges of rural development in the past (Moseley, Cherrett, & Cawley, 2001), there is growing recognition that these stakeholders do not always engage successfully in rural networks.

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Moseley et al. (2001) found that some of the studied regional support organizations overlapped with cited confusion for client stakeholders, businesses and community groups operating in the rural environment. This approach may also create competition for resources among the support organizations (Tang, 2011) potentially creating a barrier to exchange (Fig. 1). Finally, as many of the observed regional stakeholders have been in existence for some time, this study should offer insights into mature network relationships (Morgan & Hunt, 1994) and the impact of past experience on the inherent relational dimensions of network engagement. The rural/regional context has provided a dynamic, albeit complex environment for this study. An important aspect of this research has been the recognition that relationships are developed over time (Morgan & Hunt, 1994) and that embeddedness promotes trust, which in turn enables stakeholders to utilize committed relationships by allowing them access to critical resources and information (Irwin et al., 2010; Tang, 2011). Thus, this study explores key indicators such as exchange/mutual benefit and the development of trust (Fig. 1) when considering rural network engagement and the evolution of committed relationships in context.

FINDINGS AND DISCUSSION What was particularly interesting from the findings was the wide variety of networks that were identified by case participants, with many examples of networks mentioned in isolation (far more than any other classification of stakeholder agency networks), showing a wide dispersion of networks and networking activity in the region under study (Fig. 2). As can be seen from Fig. 2, network interactions primarily existed at local and county rather than regional level, and were based around agencies including county development boards, town, city and county councils, and chambers of commerce. This finding was anticipated by Tigges et al. (1998), who found that regional stakeholders are ‘embedded in place’ (p. 217). Fig. 2 also draws attention to the amount of agencies working within the studied region, reinforcing the earlier findings of Moseley et al. (2001). Indeed, there was a general consensus amongst the case participants that with a population of less than half a million people, the array of stakeholder agencies is significant in context, and considered by some as being excessive: ‘… there is still too many of them [support agencies]’ (CRN-P1),

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Fig. 2.

Rural Networks: Web of Identified Relationships.

resulting in a view that: ‘you have to take the good with the bad [referring to agencies]’ (RO). Moreover, the findings also highlighted that interactions between these agencies were low in number and depth, creating a lack of stakeholder embeddedness in the region: No, I would say precious little [interaction with public sector bodies]. Should there be? Only in areas that are of direct relevance really, you know, to do with the business we’re in … and secondly then Is there a lot of interaction on the commercial side with other places? There’s more than we have with the public sector but it would need to improve or be more structured. (P6)

This disparate engagement with rural networks was considered a hindrance to regional development by some: … I suppose those that are on any groups or committees are very either county focused or locally focused and it’s trying to get the picture across that you know tourism is cross boundary. They [tourists] don’t recognize boundaries, so for us to try and link up with key strengths in other counties [is important]. (P9)

Participants acknowledged that regular communication has the potential to deepen relationships over time: ‘the more informed conversation you have each time … the more trust you can develop with any of our

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stakeholders the better’ (P2) and that national and regional support agencies helped in facilitating these collaborative activities as: ‘… [agencies] can facilitate more in-depth meaningful collaboration …’ (RO). Of note is the view that ‘… all the members of that can see a benefit and because there’s linkages to external agencies’ (CRN1-P). Agencies were also seen as a resource base through which rural work can ‘get done’ (RO). When asked why this level of collaboration was not always achieved, some blamed overwork: ‘… you could have more of an impact maybe if you could go more regional and national you know but [you are] … kind of pinning your collar doing your day’s work’ (P4), while others conceived a considered choice by certain stakeholders: ‘People don’t sign up to the concept of being from the [region]. They are from their county and province first and foremost’ (P2). This would suggest that stakeholders who were proximate to each other were more inclined to collaborate (Tigges et al., 1998), and as a result, cross-county competition may develop (Tang, 2011), creating a barrier to regional stakeholder interaction. When participants considered the impact of low or narrow (localized) network engagement, they highlighted the limitations of a short-term focus: ‘It just takes the focus away from the like longer term view’ (P5). Resource sharing was cited as a means of alleviating these pressures: ‘… today’s conference … came from the fact that [named stakeholders] said last year why are we holding two conferences on rural development, why don’t we come together?’ (CRN2-P). In this regard, resource sharing was seen as a catalyst for increased collaboration which ultimately leads to embeddedness: ‘Local networks need to feed into some structure that could make a difference’ (WS). However, knowledge exchange was not seen as optimized within the region: ‘they are very disparate and they work in a very insular manner’ (P9) which has left the region ‘… disjointed and people don’t have the information’ (P12). Over the course of the study, evidence that some stakeholders were ‘interested in bridging the gap and getting the information out there’ (P2) came to the surface. These individuals were labelled ‘proactive stakeholders’ by the researchers those who were deeply embedded and took the initiative to build strong social bonds with their networks (Johannisson, Ramı´ rez-Pasillas, & Karlsson, 2002). They actively sought opportunities to network and acted as representatives on a number of committees, as they believed: ‘All networking is give and take’ (P6). They were clearly able to depict their network activity and were able to articulate the essential information relating to networking as a reciprocal process: ‘you have to be willing to cooperate, all of it is based on trust, based on confidentiality’ (P6).

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They also had an unselfish perspective in relation to knowledge sharing; ‘I love sharing things so it’s the givers who get as far as I’m concerned’ (CRN3-P). These stakeholders were interested in building (or had already built) relationships with core rural support agencies at national level as well as with the main academic institute in the region; ‘I think it would be very beneficial if [educational institute] were able to bring their know-how in terms of facilitating meetings and bring a strategic focus to those meetings’ (P2). Based on observations, these individuals take a longer term strategic view of networking, seeking out the ‘bigger picture’ (CRN1-P) in relation to both network engagement and regional/state agency involvement. There was also recognition that networks need to be nurtured if they are to be sustained: ‘It’s not necessarily just about creating a network and moving on because you’ve to nurture that’ (CRN1-P). Of particular interest in the context of this research was the fact that these stakeholders saw themselves as committed to their networks: ‘My whole thing is bringing people together and getting them to work together’ (CRN3-P). On consideration, when contemplating network engagement, these individuals believed: ‘… there’s much more to be gained out of partnership than anything else’ (CRN2-P), suggesting that they place a value on stakeholder interaction and had strategic intent when considering the momentum required therein. These perspectives, and evidenced network activities, indicated that these stakeholders, whether consciously or unconsciously, were viewing networks as industrial as well as social tools of rural regional engagement. The stakeholders who fell under this proactive category were: CRN1-P, CRN2-P, CRN3-P, P2, P6, P10, P19 and P21, because through word and action, while having a strong affiliation to their own organization they also believed in regional rural development. With regard to trust, stakeholders agreed that: ‘… all of it [networking] is based on trust’ (WS), which has to be ‘built over time’ (P3), as ‘… we need to know each other to trust each other’ (P13), thereby acknowledging the principles of social exchange (Homans, 1958). It was also recognized that: ‘some [networks] are successful … those who know each other’ (CRN1-P). These findings are consistent with the work of Morgan and Hunt (1994) who found that trust between parties is built on collaborative momentum, and Ring and Van de Ven (1994, p. 100), who ascertained that parties to a transaction must share a congruent understanding, and that ‘communications among shared parties produce this shared interpretation and it often emerged gradually and incrementally’, reinforcing the time aspect of Fig. 1. However, the apparent lack of trust between some in the region, as discussed above, has led in some cases to competitive rather than

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co-operative behaviour (Tang, 2011; Tigges et al., 1998), contributing in part to a ‘disjointed’ regional perspective (P12). Notably, credence was given to the link between trust and relationship building in context: … so from an industry perspective [a] huge amount of business is done on the back of trust and personal relationships, so certainly I feel that the more trust you can develop with any of our stakeholders the better. (P2)

While the building of trust takes time, trust can be eroded very quickly, even among stakeholders who had regular interaction; ‘If you lose that trust factor … your engagement … could deteriorate significantly’ (P2). Notably, trust, or the lack of it, appears to be primarily evident at the intra-organizational rather than individual level, which in turn appeared to impede the development of a trust-commitment dynamic (Morgan & Hunt, 1994), and ultimately stunt collaboration at an intra-county and regional level: ‘County structures are very important so each county has to market itself and the region just has to do its best’ (P3). In the current study, this lack of trust between stakeholder organizations and localities resulted in a situation where ‘information share between agencies is a problem’ (WS), leading to difficulties in inter-stakeholder relationships: ‘The relationship between the organizers of the event, below the surface, is not great’ (RO). With regard to commitment, the regional stakeholders exhibited a stronger attachment to their own organization and their colleagues than that of the region. A number of the stakeholders had a tendency to network with their own work colleagues and with other stakeholders that were already known to them rather than making new contacts (RO), compounded by the ‘informal’ nature of the networks (P6), a reality anticipated by MacGregor (2004). In terms of organizational colleagues, it did not appear to matter in which office or county they were based, just that they were part of the same organization. Further, observation of CRN2-P revealed that at many networking events, he was inclined to spend a disproportionate amount of time with colleagues from his own organization. Of note was the perceived level of interaction between the stakeholder organizations at each of the observed events (WS; CRN2 3). CRN2-P stated that ‘there is not a lot of general interaction’ at network events, which was contrary to the researchers’ observations that interactions did take place at these events but were often confined to organization level engagement. Thus, while there was recognition from stakeholders that ‘networking is give and take’ (P6), and that ‘no one can work alone in business anymore’ (CRN2-P), evidence from the current study points to a deficit of trust and commitment as mediating criteria between the stakeholder organizations.

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Based on the preceding findings, it was apparent that collaboration between the stakeholder organizations was at a less than optimal level and, as a result, ‘we don’t [always] tell each other … exactly what we’re doing’ (P12). On observation, this facet of behaviour was manifested more at the intra-organizational rather than individual level, where a visible lack of collaboration between two key stakeholder organizations in the region was evident. This lack of collaboration was seen not only in interorganizational interactions at observed events but also through their mutual absence at networking events hosted by the other agency, a fact that did not go unnoticed by other attendees: ‘No one from [organization B] is here again today’ (emphasis in the original quote). The same lack of collaboration was also evident in the duplication of work that occurs in the region. Of relevance was the fact that many of the regional stakeholder organizations are semi-state and, in the majority of cases, there was overlap in their remits, reflecting the decade-old findings of Moseley et al. (2001) with little evidence of change in the interim decade. This was highlighted at WS where it was acknowledged that while the government set up the agencies in the first instance, it was the agencies’ responsibility to work together to avoid duplication. Of further note is that the challenge of ‘local networks’ and ‘parish politics’ (P2) also arose in this context, and while the regional remit was in the background, stakeholders realized this could only be achieved through genuine cooperation ‘but to do this all stakeholders must be involved and must support it’ (CRN2 event). When considering the concept of mutual benefit, there was recognition that ‘information must be shared …’ (CRN1-P) and that ‘sharing is both ways’ (WS); thus engagement is about ‘a phone call, a piece of advice … because if I share knowledge with you I actually increase my own knowledge because you have actually given me a viewpoint on that and you are learning the whole time’ (P10). CRN2-P acknowledged that if ‘… people are confident enough in their knowledge they have no problem sharing it’. However, his perspective appears to be in the minority as he recognized that this ‘sharing mindset’ is not prevalent in the region and that a change needs to happen in order for collaborative action to occur; this is consistent with the findings of Chell and Baines (2000) and Miles and Tully (2007).

Relationship Building in the Observed Rural Network While there was evidence that strong ties already existed among some stakeholders (Granovetter, 1983), particularly when there was a common

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goal, more in-depth analysis of the individual semi-structured interviews revealed that weak ties (Uzzi, 1997) were also being supported between stakeholders: ‘Many relationships are developed nurtured only for a specific purpose’ (P3). Stakeholders also realized that relationship strength could vary depending on the task at hand, and many of these ‘weak tie relationships’ had a short-term orientation: ‘Some of my relationships lack a long-term focus … they are only employed to fulfill a particular short-term goal’ (P3). Thus, the underlying goal of the majority of stakeholder interactions in the observed region dictated the type of ties (strong or weak) that the individual stakeholder had with other regional stakeholders and their organizations. It also influenced the level and regularity of interaction among these stakeholders, after which interactions went ‘back to normal levels’ (P6). The observed culture created an over-emphasis on the achievement of short-term tasks with a localized focus wherein ‘each county has to market themselves and the region has to do its best’ (RO). Implicitly, these stakeholders have created a social system where the primary objective is individual rather than collective gain (Granovetter, 1985; Uzzi, 1997), taking the focus away from sustainable rural regional development (Jack et al., 2008; Murdoch, 2000). The relatively close proximity of counties in the observed region meant that most of the stakeholders were familiar with each other, either from a professional or personal sphere or both: ‘Many of [these] relationships are long standing’ (P3) and informal in nature (MacGregor, 2004). However, this familiarity was generally superficial in nature, as stakeholders did not interact with each other in a meaningful manner; seeing themselves as being ‘from their county and province first and foremost’ (P2), thereby creating an atmosphere of ‘protectionism of their own boundaries’ (CRN3-P) within the region and resulting in a scenario where stakeholders were ‘… not always as open as we could be’ (P3). This reinforces Uzzi’s (1997) perspective that deep relationships cannot be formed while protectionism is present. Therefore, despite repeated recognition that ‘you have to be willing to cooperate’ (P6) in order ‘to nurture [network engagement]’ (P1), and that this can only be achieved through ‘informed conversation’ which improves ‘each time’ (P2); communication between the stakeholders was often guarded (RO), inhibiting the development of committed relationships. Indeed at numerous junctures throughout this study, competitive action (Tang, 2011; Tigges et al., 1998) and displays of distrust and scepticism were noted among the stakeholders, resulting in ‘greater competition rather than cooperation’ (P3) and

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inhibiting the formation and development of a strong tie ethos in the region. Generally, the stakeholders were aware that very little collaboration or cooperation was taking place between the support agencies in the region, and that relationships between some ‘are not great’ (CRN2-P), creating a potential barrier to sustainable rural development. The general consensus among stakeholders was that the network ties between rural organizations were relatively weak in the observed region, and when probed, they suggested this was due to a myriad of reasons, including the ‘fragmented nature of [the rural development industry]’ (CRN2-P), ‘Distance between counties’1 (P4) and the perception that ‘some of the [named agency] programmes are too restrictive’ (CRN2 event). Of note was the feeling that ‘there is a lack of motivation on the part of some local individuals to work with others’ (RO), suggesting a barrier to exchange, ultimately impacting on the level of embeddedness in the observed rural network environment. This was further compounded by a lack of connectivity between key agencies/regional stakeholders evidenced through low levels of exchange between these agencies and a lack of support for mutually organized events. Confusion as to which agency/stakeholder ‘to go to for help’ (RO) was also identified as a key barrier to network engagement, while connectivity was of concern among rural stakeholders: ‘We have little enough connection with the public bodies’ (P6). Finally, the need for a ‘sharing mindset’ arose throughout this study, particularly among the proactive stakeholders who considered it vital for this to occur in order to create, and benefit from, a regional perspective; this finding is consistent with Tang (2011). There was a sense of established boundaries around networks, encapsulated in the attitude that ‘we have everybody involved that needs to be involved’ (P3), ultimately creating a ‘locked in’ environment (Uzzi, 1997) that could hinder network capability enhancement (Morrison et al., 2004). Some stakeholders acknowledged that this perspective was holding back rural network development: ‘We should be talking to each other [otherwise] where are the ideas supposed to come from?’ (CRN2-P), showing a tacit understanding of the benefits of weak ties (Granovetter, 1983). Proactive stakeholders also believed that there was insufficient stakeholder interaction in the current network model: ‘The other [excluded] organizations may be made up of people from different faculties so you have a mixture of a whole lot of thinking within them [that we are not benefitting from]’ (CRN2-P). On consideration, stakeholders believed that their rural networks suffered from limited perspectives as a result of the aforementioned established boundaries:

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I think there needs to be a bigger picture … You do get people kind of just saying … ‘We’ll fund this project and move on’ or ‘We’ll do this and move on’ and they really need to see that that’s kind of a life-long commitment really. Their next piece then should be linking that with another one …. (P1)

When considering this level of engagement, stakeholders believed ‘the challenge is to be able to harness the energies of many disparate groups and direct them in one direction’ (P2). When asked what can be done to strengthen ties, insights provided potential for future collaboration among stakeholders: ‘A common purpose and pulling common objectives together should be done at the start to avoid conflicting expectations’ (P11). It was further suggested that a common ‘focus on the shared goals rather than the differences’ could be used ‘to overcome barriers’ (P2). Finally, there was acknowledgement that relationships were sometimes ‘… clouded by the fact that you are trying to pull a fast one2 on the rural route next door or whatever’ (P10), and there was a belief among certain stakeholders that interaction, when nurtured, could ultimately contribute to greater engagement in the rural network infrastructure within the region.

FRAMEWORK OF REGIONAL STAKEHOLDER ENGAGEMENT Prior to presenting the proposed framework, we believe it is important to draw attention to both the impact of the embeddedness criteria in the rural network context (Fig. 1) and the proposed refinement based on the research findings. Barriers to exchange may include: lack of time, limited resources, geographical dispersion of stakeholders, stakeholder attitudes towards sharing knowledge and the structure of the region itself (current research). Therefore, both communication and resource sharing are core release criteria in terms of fluid stakeholder exchange and the realization of mutual benefit. Commitment has been found to be strong among certain organizations in a rural community, while local politics or protectionism may affect its strength in other cases. Thus, it is the relationships between network members, including the assets they hold, such as trust, that comprise the relational dimension therein (Jack et al., 2008; Murdoch, 2000; Pezzini, 2001). With reference to the embeddedness effect, the regional stakeholders’ network position and their actions therein can contribute to the relationships they have with others in the

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Fig. 3.

Proposed Framework of Regional Stakeholder Network Engagement.

rural network. Central to the framework is the drive towards collaborative network engagement, leveraged through prolonged social interaction among regional stakeholders (Fig. 3). This evolutionary framework underpins an important assumption that the collective resources possessed by partners within a network (if they are leveraged and disseminated throughout the network) will have a positive bearing upon rural network success (Irwin et al., 2010; OECD, 2006). Based on the preceding discussion, the growing body of research on regional stakeholder relationships and rural network engagement indicates that greater gains can be achieved through sustained collaborative action within a network domain. This ‘prolonged regional stakeholder interaction’ seeks to establish and then reinforce the cycle of trust and commitment among regional stakeholders over time (Koch et al., 2006). Thus, engagement may begin with informal exchange, which does not require a large amount of trust (Fig. 3), as long as it ultimately contributes to long-term relationship building between regional stakeholders. This is a critical element of the proposed framework, because many of the observed stakeholder interactions currently exist at this ‘early evolution’ stage of network development (Ring & Van de Ven, 1994), as they are being developed to address a specific problem or pursue a specific opportunity rather than as a result of a long-term committed relationship.

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Regional stakeholder engagement is incorporated in the embeddedness effect (Fig. 3). Therefore, ‘network position’ recognizes that all stakeholders hold a position within a network, and that exclusion of individuals or cohorts will have a significant negative impact on stakeholder engagement (Uzzi, 1997) that could ultimately hinder network capability enhancement (Morrison et al., 2004). Over time, collaborative rural network activity enables release of exchange barriers, as stakeholders utilize evolving individual and collective relationships to access critical resources and information (Gulati, 1999; Irwin et al., 2010; Tang, 2011). In this regard, the notion of exchange, mutual benefit, trust and commitment as a cyclical motion are key aspects relating to the realization of a rural network’s potential (Koch et al., 2006). When considering embeddedness, it is important to recognize that these one-off deals evidenced in the studied environment have the potential to evolve into a collaborative relationship (Ring & Van de Ven, 1994), but only if respective stakeholders act in the spirit of mutual benefit (Fig. 3). It is of note that the fear of sharing information, and in turn the fear that this information would not be reciprocated, was an issue for some of the stakeholders in this study, while the proactive stakeholders were involved in the dissemination of knowledge throughout the network, in a fair and equitable manner. These individuals sought to develop close relations built upon the principles of trust and commitment in line with Koch et al. (2006), Malewicki (2005) and Murdoch (2000), which would in turn encourage closer, more cohesive ties to be built in the observed region and ultimately aid the tacit knowledge transfer process (Tang, 2011). The ultimate goal over time, and based on prolonged interaction within the network, is for commitment to build between regional stakeholders.

CONCLUSIONS This study tracked network activity among the observed regional stakeholders. Communication, resource sharing and prolonged social interaction were found to be key elements for promoting commitment to network relationships (Fig. 3). As highlighted in the research findings and in the proposed framework, a cyclical flow of these elements is necessary for congruent understanding to develop between regional stakeholders resulting in collaborative network engagement. The resultant collective resources of network partners could be leveraged and disseminated throughout the

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network, potentially improving individual performance and ultimately creating a positive impact upon rural network success. This study has contributed to the under-developed area of regional stakeholder social exchange in a rural network. With reference to social theory, this study focused not only on the social element of exchange but also on the context in which it was constructed. This allowed the salient criteria that promote stakeholder engagement to be highlighted (Hoang & Antoncic, 2003; Uzzi, 1997). It also provides a rich description of the relationships that exist between stakeholders; while a key outcome is the development of a framework of rural regional stakeholder engagement. The development of this framework is supported by cited calls to establish a basis for collaborative and networking activity at a regional level (Malewicki, 2005), and to use networks as a new paradigm for rural development (Murdoch, 2000). This framework identifies the factors that may hinder or promote sustainable collaborative relationships, and highlights the effect that the level of embeddedness has on regional stakeholder network engagement. As the study of individual relationships in isolation is misleading (Granovetter, 1985), this research also sought to inform the understanding of relationship commitment in a rural network environment. From a practical perspective, the current research demonstrated that knowledge exchange cannot be assumed in a network environment, as this study has identified existing gaps in resources and challenges relating to information access. This finding is in contrast with extant literature, which pre-supposes that once trust has been established open exchange of knowledge will occur (Huggins, 2000; Johannisson et al., 2002; MacGregor, 2004). Specifically, in this study, many of the reactive and stationary stakeholders expressed a fear regarding open access to all information, and also expressed a reticence as to whether they were happy to provide information without knowing whether they would get any (information) back in return. In contrast, the proactive stakeholders were generally selfless in their sharing of knowledge assuming it would be returned at some undefined point in the future. Therefore, the proactive stakeholder strongly facilitated the level of knowledge transfer and the depth of networking activity in the observed rural network. Finally, this study strongly endorses the view that the implementation of the network approach (as advocated by Murdoch, 2000; OECD, 2006; Van der Ploeg et al., 2000) should be integrated into national strategic plans for rural regional development. By devolving power to local governments, these local entities will have greater knowledge about the rural communities they serve and can develop policies to suit their specific needs, which in

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turn should encourage the participation and cooperation of all regional stakeholders. These foregoing interpretations are not designed to be a prescriptive contract that will guarantee successful stakeholder engagement in a rural network, but may be considered a blueprint for regional engagement of stakeholder relations and promote sustainable rural networks as a result. It was apparent from the study’s conclusions that stakeholder interaction at regional level was still in its early stages of development in the observed region, and it is hoped that the proposed framework and its inherent regional stakeholder network guidelines may offer some insight into the potential path to rural network interconnectivity at a regional level in the future.

NOTES 1. This ‘distance factor’ is despite the relatively small area in question (the region totals 9,406 square kilometres). 2. To ‘pull a fast one’ is a colloquial term meaning to deceive or trick.

REFERENCES ACSWC Secretariat. (1998). Valuing rural communities: An invigorated approach to rural development policy [Online]. Catholic welfare, Canberra, Australia. Retrieved from http://www.catholicwelfare.com.au/publications/Discussion_Papers/Discussion%20 Paper%20No.%2013.htm. Accessed on March, 2013. Anderson, A. R. (2000). Paradox in the periphery: An entrepreneurial reconstruction? Entrepreneurship and Regional Development, 12(2), 91 109. Aylward, E. (2009, September). Rural tourism development: Exploring rural stakeholder network relationships. Irish academy of management proceedings, GMIT, Ireland, UK. Brennan, M. A., & Luloff, A. E. (2007). Exploring rural community agency differences in Ireland and Pennsylvania. Journal of Rural Studies, 23(1), 52 61. Chell, E., & Baines, S. (2000). Networking, entrepreneurship and microbusiness behaviour. Entrepreneurship and Regional Development, 12(2), 195 215. Denzin, N. K., & Lincoln, Y. S. (2008). The landscape of qualitative research. Thousand Oaks, CA: Sage Publications. Do¨ring, T., & Schnellenbach, J. (2006). What do we know about geographical knowledge spillovers and regional growth? A survey of the literature. Regional Studies, 40(3), 375 395. Drda-Ku¨hn, K., & Wiegand, D. (2010). From culture to cultural economic power: Rural regional development in small German communities. Creative Industries Journal, 3(1), 89 96.

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MacGregor, R. C. (2004). Factors associated with formal networking in regional small business: Some findings from a study of Swedish SMEs. Journal of Small Business and Enterprise Development, 11(1), 60 74. Malewicki, D. (2005). Member involvement in entrepreneur network organizations: The role of commitment and trust. Journal of Developmental Entrepreneurship, 10(2), 141 165. Miles, N., & Tully, J. (2007). Regional development agency policy to tackle economic exclusion? The role of social capital in distressed communities. Regional Studies, 41(6), 855 866. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20 38. Morrison, A., Lynch, P., & Johns, N. (2004). International tourism networks. International Journal of Contemporary Hospitality Management, 16(3), 197 202. Moseley, M. J., Cherrett, T., & Cawley, M. (2001). Local partnerships for rural development: Ireland’s experience in context. Irish Geography, 34(2), 176 193. Murdoch, J. (2000). Networks a new paradigm of rural development? Journal of Rural Studies, 16(4), 407 419. OECD. (2006). The new rural paradigm policies and governance. Paris: OECD. Pettigrew, A. M. (1997). What is processual analysis? Scandinavian Journal of Management, 13(4), 337 348. Pezzini, M. (2001). Rural policy lessons from OECD countries. International Regional Science Review, 24(1), 134 145. Reagans, R., & McEvily, B. (2003). Network structure and knowledge transfer: The effects of cohesion and range. Administrative Science Quarterly, 48(2), 240 267. Reinl, L., & Kelliher, F. (2014). The social dynamics of micro-firm learning in an evolving learning community. Journal of Tourism Management, 40, 117 125. Ring, P. S., & Van de Ven, A. H. (1994). Development process of cooperative interorganisational relationships. Academy of Management Review, 19(1), 90 118. Saldana, J. (2009). The coding manual for qualitative researchers. London: Sage Publications. Stake, R. E. (2008). Case studies. In N. K. Denzin & Y. S. Lincoln (Eds.), Strategies of qualitative inquiry (3rd ed., pp. 119 151). London: Sage Publications. Tang, F. (2011). Knowledge transfer in intra-organization networks. Systems Research and Behavioral Science, 28, 270 282. Tigges, L. M., Ziebarth, A., & Farnham, J. (1998). Social relationships in locality and livelihood: The embeddedness of rural economic restructuring. Journal of Rural Studies, 14(2), 203 219. Uzzi, B. (1997). Social structure and competition in inter firm networks: The paradox of embeddedness. Administrative Science Quarterly, 42(1), 35 67. Van der Ploeg, J. D., Renting, H., Brunori, G., Knickel, K., Mannion, J., Marsden, T., … Ventura, F. (2000). Rural development: From practices and policies towards theory. Sociological Ruralis, 40(4), 391 408.

CONTRASTING PERCEPTIONS OF THE CHALLENGES OF RURAL SMEs: RECONCILING ENTERPRISE AND AGENCY VIEWS David Moyes, Mike Danson and Geoff Whittam ABSTRACT Purpose It is important that agency advice and support for SMEs in rural areas is congruent with how business-owners perceive their needs and challenges. To explore how well matched these two sides are, this chapter investigates the difficulties faced by small businesses operating in rural southwest Scotland. Methodology/approach In-depth interviews with business influencers (those whose activities affect businesses either through application of policy initiatives, development of policy or the giving of business advice) and owner-managers of rural businesses compare and contrast the perceptions of the challenges of rurality for small businesses. Findings Mismatches are revealed between the concerns of rural business-owners and what business influencers understand them to be. Business influencers consider that structural weaknesses and a ‘lifestyle’

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 59 79 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004003

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business culture in the region inhibit growth, but business owners are strategic in their business aspirations and approaches to growth. However, they are also highly critical of the promotion of the region and concerned about the misunderstanding of potential visitors that the region is remote and difficult to access. Research limitations This chapter reports experiences in a particular rural location; such experiences are typical of many rural regions and, thus, the findings should be transferable. Practical implications The region’s economic strategy focuses on reducing the significant prosperity gap with the rest of the country. Key to this is the development of indigenous business sectors. However, the policy interventions derived from a misapprehension of the constraints and underpinning culture of indigenous businesses are unlikely to be successful and may be counter-productive. Originality value Contrasting the perspectives of those who do business with those who influence business reveals issues of understanding which need to be addressed. Key words: Small business; rural policy; business constraints

INTRODUCTION In this chapter we examine the challenges faced by rural small-to-mediumsized enterprises (SMEs) in Southwest Scotland, an area where settlement sizes are small and the population, at 23 per square kilometre, is one tenth of the UK average. The area is heavily reliant on its small businesses and underperforms the Scottish average on a number of key dimensions such as the high outward migration of its young people, low educational attainment and prosperity levels (South of Scotland Alliance, 2006). Policymakers continually strive to ‘achieve sustainable economic growth’ by adopting policies that lead to ‘safeguarding the viability of the regional economy with policies seeking to achieve …’ and ‘… further innovation and growth within the large number of micro and small businesses within the South of Scotland especially high growth start-ups where quality of life is a key part of the location decision’ (South of Scotland Alliance, 2006). However, how do these laudable aims when unpacked and delineated

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into their separate drivers and objectives, and contextualised in the literature and the experiences of rural economies reside with a rural business community? With this in mind, this chapter contrasts the views of owner-managers and key influencers of business and rural policy. We also discuss the implications for regional development of the perceptual disconnects that we uncover. The chapter reveals an apparent contradiction; enterprise agency and local government stakeholders view businesses as lacking ambition, but the rural businesses we surveyed for this chapter are all ‘successful’. They are ‘successful’ in several respects: they have all been trading for a minimum of five years so they have weathered some storms; where growth was desired they have achieved it; and where growth has not been a strategic objective, the businesses provides a satisfactory income for their owners. The entrepreneurs operate in a strategic way, pursuing opportunities that are in their interests and not ‘buying into’ those perceived to be incompatible with their business objectives. This lack of buy-in, although in many cases a strategic option, gives the impression of a lack of dynamism. These apparently differing interpretations of the strategic objectives and approaches of SMEs in a rural context suggest that interventions to support entrepreneurs need to be developed and implemented within an understanding of the drivers of the local business community; if not, a policy disconnect will arise. This chapter analyses the research undertaken to examine the extent to which those who inform regional policy and support small business development understand the challenges faced by rural business. A disconnect in understanding may lead to not only unsuccessful policies but also a wasteful dissipation of resources and, at worst, policies that are counterproductive to the encouragement of entrepreneurship. The chapter is organised as follows: firstly, we examine rural policy towards SMEs generally; we then look at SMEs in the specific context of the rural environment; next we outline the methodology adopted, and this is followed by our findings. Finally, we focus on the differing perspectives identified between policymakers and SME owner-managers.

RURAL POLICY AND SMEs In general terms, policies for entrepreneurship and enterprise have evolved over time, sometimes in a structured and focused way, but also in reaction

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to national or global trends. As Huggins and Williams (2012) suggest, ‘despite the traditional emphasis on SMEs and market failure, enterprise policies have developed to become much more pervasive’ (p. 41). Citing a series of publications, they stress the separation of strategies to promote entrepreneurship from either a narrow interest in start-ups and small business growth or in terms of picking winners and supporting specific firms. However, the sort of distinctions that Lundstrom and Stevenson (2001) and Verhuel, Wennekers, Audretsch, and Thurik (2001) make between policy approaches to SMEs and other different elements of individual and business supports are often less apparent. Thus, while many policies are constructed at national or supra-national levels, delivery and interpretation of these interventions may be more place-specific, reflecting local conditions. This is especially the case in rural and more challenged environments where there is not the ‘luxury’ of identifying different enterprise forms and requirements, nor is there the institutional thickness (Macleod, 1996) required to distinguish between different types of firms and their needs. In peripheral and marginal regions, there may be a distance between what is proposed and understood as standard national policy, and what is actually offered in the locality (Fuduric, 2012). Barriers to entrepreneurial activity and evolution may also depend on a different and more nuanced balance of policies, rather than confronting urban and core businesses and development agencies. For example, a number of studies in rural Scotland have identified a lack of affordable housing, leading to labour supply shortages as a constraint on enterprise growth and development (OECD, 2008; Wilson & Edwards, 2008). Planning regulations and the understanding of farmers’ difficulties in pursuing diversification strategies were revealed as a leading barrier to change (Wilson & Edwards, 2008, p. 14), hinting at the different appreciations of problems and solutions at local and regional scales. In recognising that policy has tended to be overly urban-oriented, a report to Scottish Enterprise recommended that: ‘Support should aim to develop and encourage leadership and entrepreneurship to stimulate appropriate commercial and social enterprise within small rural communities’; [and] ‘there are implications for Scottish Enterprise and its future role in rural development particularly with regard to establishing a bridging role between national policy and local delivery and supporting local business development’ (EKOS, 2008, p. 4). Since then, and as a result of the recession, the changes in the macro-economic environment have dominated over specific rural enterprise policy developments. The main means of supporting the rural economy in Scotland, and in many other areas, has continued

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to be through and with the dedicated European Union ‘Scotland Rural Development Programme 2007 2013’ the structural fund programmes for the regions of Scotland (see http://www.scotland.gov.uk/Resource/ 0042/00421688.pdf for a description). While discussions around the next structural fund period propose closer targeting of micro and small enterprises, there is likely to be a high level of continuity going forward (Scottish Government, 2012). Non-urban Scotland cannot be treated as undifferentiated space (Burnett & Danson, 2004). Furthermore, social diversities and economic complexities of rural areas make generalisations problematic (Moyes, Whittam, & Ferri, 2012). Thus, in the rural domain, one size does not fit all. The challenges of each rural environment are both multi-facetted and unique, and they need to be fully understood by policy-makers. A disconnect between regional strategies and business needs may be both wasteful and counter-productive. This confirms that there is an inherent danger of those who engage with firms failing to appreciate the challenges, potential and appropriate policies for enterprises and entrepreneurs, as perceived and understood by these players in the rural economy.

RURAL SMEs IN CONTEXT As this section will discuss, rural small firms have been found to be growth averse and lack key marketing and planning skills. Small firm studies have focused on barriers to growth and growth orientation. The term ‘lifestyle’ has now come to be associated with poor quality and lack of ambition. However, in turbulent times, it could be that the achievement of long-term stability by local firms is an important contribution to regional well-being. A focus on growth-oriented business is insufficient in rural communities where the survival of firms may be as important as their ability to grow (Smallbone, Baldock, & North, 2003). The continuing decline of traditional industries is particularly manifest in the south of Scotland, and this has created a need for new jobs arising from small firms in the service sector. However, concerns have been raised about the longer-term competitiveness of SMEs in remote rural areas due to low levels of labour productivity, technological backwardness and poor skill levels within the workforce. Some form of planning is essential for firms to survive, but rural small businesses do not have the expertise, resources or time to plan effectively (Brown & Hall, 1999; Irvine & Anderson, 2004).

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The rural environment offers opportunities for firms to exploit the distinctive characteristics and ‘otherness’ of the landscape (Anderson & McAuley, 1999), and the localness of rural products has generated increasing consumer interest (Morris & Buller, 2003). Therefore, growth opportunities do exist for businesses to exploit an identifiable sense of the rural. Sustainable development of rural areas is now considered to lie in the development of their indigenous potential (Dinis, 2006), and this policy approach can be seen in the South of Scotland Competitive Strategy (South of Scotland Alliance, 2006). However, in order to develop the region’s own business base, rather than trying to attract businesses to the region, an appropriate and supportive business environment is required (Dinis, 2006). In rural areas businesses tend to be small (Smallbone, North, Baldock, & Ekanem, 2002), but it has been noted that the ‘thinness’ of the rural environment means that the addition of even a single job can have a disproportionate impact (Anderson, Osseichuk, & Illingworth, 2009). Thus, the encouragement of small firm growth can have a number of positive impacts including the creation of new employment and spill-over effects where additional opportunities for established businesses are created (Fritsch & Mueller, 2004). An example of this can be observed in this region where the development of a new, privately developed crematorium facility created not only five new jobs, but also work for a number of local professions and ensured that money which was previously spent outside the region on cremation facilities is now spent locally. However, the process of endogenous development of a rural area can be challenging if the SME owners lack the skills, experience and ambition necessary for growth (Deakins, Galloway, & Mochrie, 2003); this is especially the case if a large proportion are ‘lifestyle’ rather than entrepreneurial business-owners (Deakins & Freel, 2009). Small firms have been found to spend very little time on formal planning or gathering market intelligence (Hill, 2001), and networking theories have been employed to explore how small firms overcome their lack of access to formal market intelligence (Gilmore, Carson, & Grant, 2001; O’Donnell, 2004; O’Donnell, Gilmore, Carson, & Cummins, 2002; Stokes, 2000). Networks can provide trusted information which firms do not need to spend time validating (Collinson & Shaw, 2001). They can also provide firms with access to specialist resources. However, as contemporary views on this and, in particular, on rural firms demonstrate, networking has been found to be underdeveloped in rural areas (Dinis, 2006; Moyes et al., 2012), although it has been shown that networks can be externally developed (Jack, Moult, Anderson, & Dodd, 2010). Where the institutional

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framework is ‘thin’ which is the case in many rural regions a key question arises as to whether these networks or clusters can be created without the full involvement and participation of businesses and supporting institutions.

METHODOLOGY A qualitative design was adopted to explore the perspectives of both business-owners and key business influencers in the region those whose activities impact upon small businesses in the region through their support, advice, policy-making and policy implementation. Thus, the design of the study enabled the perspectives of those who do business, and those whose activities influence business, to be accessed and contrasted. Specifically, we sought to explore the challenges of doing business in a rural location and, in particular, gain an understanding of the goals of rural business-owners and the perspectives of business influencers within such a community. Purposive sampling was used to identify twelve small firm ownermanagers and eight influencers of business. So the units of analysis in this chapter are the business-owners and the eight influencers of business. The influencers were drawn largely from the public sector, reflecting its important role in the region. Southwest Scotland has a wide variety of service businesses, and this variety is shown in the business types selected for interview (Table 1). All Table 1.

Rural SMEs Owner-Managers.

Firm

Nature of Business

F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F12

Photography Travel agency Undertaker Petrol station Fishery Falconry Hotel Riding school Aircraft museum Gastro-pub Butcher Cafe´

Years Trading

No. of Employees

12 20 80 12 12 5 6 13 33 5 60 5

2 2 31 21 3 2 24 1 12 12 11 2

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Table 2. Business Influencers. Business Influencer

Job Title

B1

Chief Executive

B2

Operations Manager

B3 B4

Business Adviser Forest recreation Development Manager Chief Executive (retired 2 years) Regional infrastructure consultant Director of Roads and Transportation (retired 3 years) Business Manager, Economic Regeneration Group Manager for Energy Business Adviser, Planning and Environmental Services

B5

B6 B7 B8

Organisation Dumfries and Galloway Chamber of Commerce Prince’s Scottish Youth Business Trust (now Youth Business Scotland) Business Gateway Forest Enterprise, Scotland Scottish Enterprise Dumfries and Galloway Cumbria Council Dumfries and Galloway Council

Dumfries and Galloway Council Scottish Enterprise Dumfries and Galloway Dumfries and Galloway Council

have been trading for a minimum of five years and, therefore, each had experienced a period of economic turbulence when the research was being undertaken. A topic guide was developed from extant literatures and the research questions of the study. These questions were utilised to establish whether there is a mismatch of understanding between rural businesses and policy-makers. The interviews were recorded, transcribed and then analysed using qualitative analysis software. Our topic guide provided preliminary codes for analysis, but the data were also ‘run open’ (Shaw, 1999) in order to allow additional themes to emerge.

PERSPECTIVES ON RURAL BUSINESS This section presents our findings under three broad headings. We discuss: 1. Issues, constraints and opportunities of the rural location; 2. Perceptions of SME-owners’ goals and business orientation; 3. How business is done.

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In each section we firstly present the views of business-owners and secondly those of business influencers. At the end of the section we contrast the two viewpoints and draw out the main areas of disagreement.

Issues, Constraints and Opportunities of the Rural Location Business-Owners Business-owners’ opinions about the challenges of trading in a rural location were balanced, with respondents reporting both the challenges and the advantages of a rural location. Negative issues included the general perception that southwest Scotland is perceived to be more remote than it actually is; therefore, people are unwilling to visit. There was a view that rural customers would not pay urban prices for services. However, land and premises in the region were reported by the fishery owners to be significantly cheaper than in urban areas, thus reducing costs. The hotelier, photographer and restaurateur benefit from tourists who travel to southwest Scotland because of its rural environment. With outlets in both Dumfries (the region’s main town) and Newton Stewart (a smaller town in the west of the region), the petrol station owner considers that the former is urban whilst the latter is rural, thus demonstrating that business-owners may perceive different levels of rurality within one rural area. The issue of local proximity was raised by others who reported that, if translated into a good reputation, close relations with customers can help to retain customers and develop a regular, local clientele. A core customer base is particularly valuable for the hotelier and restaurateur in winter when tourist numbers decline. The interviews took place during the period 2009 2011, when the United Kingdom entered into a period of financial turbulence. None of the businesses indicated having been directly affected by the changing and challenging economic conditions; however, their comments showed they were aware of the impending downturn in consumer spending and its potential impact upon their businesses. For example, the hotelier is developing, in association with Scottish Enterprise, ‘adjacent’ income streams by offering motorcycle touring facilities. His research indicated that this would help build a base of relatively affluent customers whose discretionary spending would not be significantly affected by the economic downturn. Challenges to achieving business goals included lack of finance cited as an obstacle in only one case, the funeral director, who tried to access external funding for his crematorium development although two others

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indicated that their level of income was very low. Only the fishery owner felt that the low population of the region affected his business: ‘There just aren’t enough chimney pots’ (i.e. there are insufficient households to support his business). Two respondents (the falconer and the butcher) reported finding suitable staff as a problem, but both felt that this was common to their particular type of business and was not a regional issue. None of the owner-managers reported poor infrastructure or the region’s lack of political influence to be problems. The promotion of the region was considered by all the business-owners to be weak. Most respondents criticised the image of the region for lacking imagination and dynamism. The region’s strap-line, ‘The Natural Place’, was also criticised as lacking focus by the hotelier and the restaurateur. Outward migration and the ageing demographic were not believed to present problems. Businesses have adapted their service provision to their markets and for some, such as the butcher and the undertaker, the large number of older customers was seen as positive for their businesses. The undertaker and hotelier, who had both targeted growth, felt that the weak competition in their rural location allowed them to achieve their ambitions more quickly and more easily than might have been possible elsewhere. For the businesses that might benefit from tourist spending in addition to their core, locally derived income, such as the restaurateur, the fishery and the falconry, most customers come from within the region. Museum staff had carried out an analysis of post-codes and were surprised to find that over 70% of their visitors live in southwest Scotland. Business Influencers The region occupies an important location on the border between Scotland and England, and is also easily accessible from Ireland. However, it was noted by the Business Manager of the Economic Regeneration Group that it is a pass-through area rather than a destination. It was suggested by this respondent that the region is one of the largest under-developed, attractive rural locations accessible from major centres in the United Kingdom. Other respondents judged that the region has no clear identity and is not embedded in the national psyche in the same way as the Lake District, a contiguous neighbour, Loch Lomond and the Highlands of Scotland. As with some of the business-owners, the respondents criticised the region’s slogan ‘The Natural Place’ as lacking dynamism and reinforcing the region’s inability to clearly articulate its opportunities. This lack of a clear image, according to some, makes it difficult for businesses to exploit

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a marketable identity. The natural assets of the region were considered by the influencers to be its scenery, forests, walking and mountain biking trails. However, they reported little evidence of local businesses benefiting from and exploiting these aspects of rurality in their business models. Where the natural advantages, or ‘otherness’, of the region were exploited, the business advisers reported that it was generally by in-migrant businessowners or by local people who had left the region and subsequently returned. For all of the business influencers the consequences of the outward migration of young people were considered to be serious, creating particular problems for local businesses in accessing a pool of suitably qualified labour. Not all considered the ageing demographic to be a problem. For example the inward migration of older people was noted by the business adviser to bring with it not only disposable income, but also semi-retired incomers who represent a part-time pool of experience and skills which local employers can access relatively cheaply. An example was given of a start-up business, which recruited two highly qualified staff, one from Canada and another from South Africa, both having moved to the region for lifestyle reasons. The outward flow of young people was not seen as an issue in terms of the viability of the youth market. The quality and the flexibility of the local workforce were also seen as issues for businesses, with the regional infrastructure consultant describing the local workforce as not being dynamic. The impact of labour and skills shortages was reported by the business advisers to depend upon the size and aspirations of the businesses. Larger businesses struggle to find suitable, competent staff, but in smaller businesses the owner normally has the key competences, and recruitment of skilled staff was considered to be less of a concern. There was agreement among the influencers that the region’s low population impacted on businesses: few local market opportunities are available and SME-owners must work hard to generate growth. Respondents noted cost implications for businesses who try to serve the thinly spread population. Although private transportation is essential in a rural region, customers are generally unwilling to pay for firms’ travelling costs because they drive several miles themselves to access services. Therefore, business travel must be planned carefully to make trips worthwhile, for example by arranging to meet several customers in one visit. That means that a business may need to have several clients in each location to make travel feasible; many customers scattered throughout the region may not constitute a viable market.

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The volume of business available to make some sectors viable was seen by the business start-up adviser as an issue. Examples were given of business start-ups that tried unsuccessfully to replicate urban style, high street retailers. Low visitor numbers mean that business-owners in some sectors must build a loyal local customer base because they cannot rely upon an influx of visitors to compensate. However, some business-owners, particularly those in the food and alcohol sectors, were considered by the business advisers to be unconcerned with customer defection rates, confident that summer tourists would make up the difference. Examples were given of opportunities, which could be better developed and exploited, such as mountain biking, for which the region is becoming well known. Although considered to be a successful development in the region, it was felt by respondents that it could be improved and more profitably exploited with a more focused political strategy to support it. The former director of transport noted aspects of rural isolation exacerbated by weak transport connections, such as poor road links and the lack of an airport. Other influencers concurred that transport infrastructure was a barrier discouraging inward investment. The business manager for the Economic Regeneration Group disagreed, citing as an example one of the region’s market towns, which had not benefited significantly from its location adjacent to the M74 motorway.

Perceptions of SME-Owners’ Goals and Business Orientation Business-Owners The goals of the SME owner-managers were mostly expressed in terms of service quality rather than growth. There was a common ethos across all of the firms to strive to provide excellent service to customers; however, as discussed below, their service priorities focused on the quality of service tangibles and not on service delivery. For example, in southwest Scotland it is possible to receive an excellent meal, badly served in shabby surroundings. Where the owner-managers were ambitious for the business, those ambitions were expressed as improvements to facilities and businesses processes, rather than income targets: ‘We saw ourselves as being able to deliver a top-quality product equal to the rest of the country. By that I mean we would give them different species of fish and different waters’ (Fishery owners). As already noted, those who targeted growth achieved it, and did so relatively quickly. Others have taken strategic decisions to achieve

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a particular size, for example the butcher carried out a planned down-sizing to focus more closely on customer service and improve profitability: ‘As a small business the big boys are always pressing me for discounts. But I had a look at what I was charging and when they were paying me and I found out I was losing money and they were using me as a bank. Some of them owed me thousands. So I told them, I’m sorry, I can’t afford to supply you anymore’ (Butcher). There may be a misalignment of service quality priorities amongst the business-owners who are focused on product quality, despite a lack of market intelligence to support their investment decisions. Only the fishery owner knew from accessing a fishing discussion website how his business was perceived in the local area. A number of decisions are based on untested assumptions; for example some owner-managers consider that they have a quality advantage yet they are undercut by lifestyle or parttime businesses, which they do not consider to offer the equivalent quality of service. There are significant implications from this; some do not recognise threats and competitors, others may be investing resources in areas not valued by customers. In some cases, the owner-managers recognise a lack of understanding amongst customers with regard to what their business offers and the value of their service. Few of the owner-managers carry out market segmentation, but all were sensitive and responsive to the differing requirements of their various customer types. For example, the gastro-publican described his service as ‘one-size-fits-all’, but he also offers vegetarian and gluten-free options on his menu. The museum volunteers recognise that schoolchildren and war veterans have different needs. The riding school owner tailors experiences to the unique requirements of her disabled customers, and the fishery owners understand, and cater for, the requirements of both experienced and inexperienced anglers. Business Influencers When growth aspiration and entrepreneurship were discussed, all influencers cited the same few businesses as examples. The dominant business orientation was reported to be lifestyle, and growth aversion was noted. Some businesses are set up by in-migrants, often those who have retired, purely for lifestyle reasons, others by locals whose primary goal is to earn the salary which employment would otherwise have given them. Although accepting that the challenges of operating a business are exacerbated by a lack of resources and the difficulties of accessing finance, the key constraint on entrepreneurship was considered to be cultural. Business influencers believed

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there was a reluctance to grow because of the difficulties that growth might create in terms of planning, legal complications and because of the additional risks which growth might entail. The business advisers reported a lack of innovation, particularly in processes, and a focus on replicating existing businesses rather than on creating unique market propositions. The respondents painted a pessimistic picture of service quality amongst businesses in the region, which they blamed on the limited aspirations of lifestyle business-owners. There was also a view that the level of customer awareness was poor and that business-owners have little understanding of the value of a loyal customer. Little evidence was offered of businesses using their customer databases effectively to maintain contact to develop sales opportunities. A mystery shopper survey carried out on behalf of the businesses servicing the developing mountain bike sector was referred to by two of the respondents. Two key points emerged from this; service quality was found by the survey to be poor, and the reported standard of service quality was even worse than the respondents had anticipated. When the results of the survey were presented at a meeting of the businesses, very few of the business-owners who were surveyed attended. Where good service quality was cited, it was observed that there was an element of ‘homeliness’, and this was focused on a narrow aspect of the service proposition rather than on the entire service experience. Where service quality was observed to be excellent, it was in relation to the in-migrant businesses.

How Business Is Done Business-Owners Networks were considered to be important by all the businesses, and all are part of social networks. Two of the businesses, the photographer and the fishery, had tried unsuccessfully to develop professional networks in their sector, and felt that not only their businesses but also those of others in the sector could benefit from such networks. Where networks were referred to, they were either social or ad hoc. Few of the owner-managers are members of locally based formal networks, such as the Chamber of Commerce or Federation of Small Businesses. The publican has networked very successfully with local bed-andbreakfast businesses, which refer their guests to him for meals. The hotelier has a similar arrangement with local hotel owners who prefer not to open their kitchens in the evening. Neither the hotelier nor the publican instigated these arrangements, but, having recognised the pattern of business, sought

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to reward their partners with a glass of wine or a meal to reinforce the arrangement. The funeral director used social networks effectively when he added a crematorium to the business portfolio. As planning permission for crematoria is very difficult to gain, he used his social connection with one of the planning officers to informally eliminate unsuitable sites. This prevented both of them wasting time on unsuccessful planning applications. He also used his known business contacts for the project and commented that many project issues were solved informally. Business Influencers Although networking is highly developed in the business-to-business (B2B) sector, influencers recognised that in the business-to-consumer (B2C) sector, which is the focus of this chapter, there is a reticence to network. This ranged from a reluctance to participate to outright suspicion. Attempts to stimulate networks in the B2C sector have largely failed. Where networks in the B2C sector were reported, they tended to be driven by one or two key individuals who were generally in-migrants. Examples were given which showed that when these individuals moved on, the networks failed. There was also a view that firms in the region consider markets to be limited in size, their strategies aimed at competing for existing customers rather than collaborating with each other to develop the market. Therefore, there is a reluctance to share best practice or to support initiatives to develop markets through fear of losing market share. Experience of those respondents who provide business support showed that many internal planning and management techniques, such as cost-ofsales and working capital, are delegated to the firm’s accountant. Little evidence was reported of environmental scanning, market research or competitor analysis. This lack of planning was seen as an impediment to growth. Instances were cited of business-owners choosing not to tender for large, potentially profitable, projects because of the level of planning which these require. It was reported that much of the outsourcing of the region’s larger companies was contracted to businesses outside the region because the companies were not confident that local suppliers had the capacity to fulfil the contracts. One respondent commented that some local businesses did not want to expose themselves to the question of ‘are we good enough?’ (B7). Changes in procurement procedures by the public sector have favoured larger contractors and suppliers at the expense of smaller firms, with the bundling of contracts for administrative simplicity. This excludes many SMEs who do not have the resources to bid for the whole bundle. These

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procurement procedures can also be very complex which discourages some small business-owners from tendering. This was recognised as a significant problem because the public sector is reported to be the region’s largest spender.

Comparison of Perceptions Table 3 presents a comparison of the findings across a number of issues and summarises the key differences and similarities between the two sets of respondents. It reveals that there are significant disagreements between the groups on the challenges of rurality for rural firms, and it implies that the region’s policy priorities are not informed by a full understanding of the perceived needs of its businesses. The interviews with business influencers and rural SME owner-managers reveal different pictures of the business culture in the region. For business influencers, there is a lack of vitality, entrepreneurship, dynamism and planning within the region, but many of the owner-managers describe clear strategies to pursue their objectives. Demographic issues also featured highly in business influencer interviews and in the regions’ planning documents. Several policy initiatives are proposed to counter the migration of young people out of the region. Negative demographic trends were considered by business influencers to have resulted in a small and easily saturated market, as well as in skill shortages due to young and well-qualified people leaving the region. However, none of the business-owners considered the impact of the ageing demographic to present difficulties. This suggests that SME owner-managers have accommodated the ageing demographic in their service propositions. The SME owner-managers did not consider southwest Scotland to be a particularly Table 3.

Comparison of Perceptions: Key Informants and SMEs.

Issue Outward migration Geographical isolation Rural infrastructure Rural business culture Image of the region Service quality Networking Business aspirations

Key Informants

SME Owner-Managers

Key concern Major issue Major concern Not dynamic Major concern Poor; not customer-focused Weak Lifestyle

Not considered to be a problem Minor issue Not considered to be a problem Strategic Major concern Good; quality-focused Few opportunities. Possible threat Strategic

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challenging market, but noted that it is different to markets in larger cities. The region has an ageing demographic and a complex pattern of population mobility, and these can be observed in the ways in which people travel within the region and in the migration of people into and out of the region. Mochrie, Galloway, and Donnelly (2006) found that rural businesses rely upon their local markets. This was also found to be the case in this study. Businesses did not report any concerns about lack of access to the nearest motorway or the lack of an airport, but they feel they are suffering as a result of the region’s image problems, and are concerned that the region is perceived to be remote which is deterring visitors. Therefore, effective and focused marketing may provide a more cost-effective solution to remoteness than improvements in transport infrastructure. Southwest Scotland’s natural advantages are noted by several of the business influencers but by only one of the entrepreneurs, the equestrian centre owner. Even the fishery owners would prefer to be in an urban location: ‘You can have a fishery anywhere at all. It’s just that here you’re looking at land values. If we were to transport this 100 miles north or 100 miles south we’d be retired by now’. The interviews support the findings of previous research that rurality is tradable but that the exploitation of rural ‘otherness’ is generally done by in-migrants to the area (Anderson & McAuley, 1999). One of the region’s notable ‘success stories’ and developing sector is mountain biking, for which it has recently become internationally recognised. This market opportunity, now estimated by the Chief Executive of the Chamber of Commerce to generate £6 7 million in income per annum, was not developed by any of the indigenous businesses, but by Forest Enterprise Scotland, and the Business influencers believe that there are further opportunities to exploit the landscape for outward-bound and extreme sports. However, this seems unlikely to happen; two business influencers (the Chief Executive of the Chamber of Commerce and the Prince’s Trust Manager) reported that those business-owners who benefit directly from the growth in mountain biking are unwilling to invest in its marketing or to attend meetings to improve service quality in the sector.

CONCLUSIONS Growth orientation is not a common feature of rural SMEs (Deakins et al., 2003), and rural businesses are typically ‘lifestyle’ rather than entrepreneurial. Business influencers described local business-owners as mostly not

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growth oriented, relying on grant support to invest in business development and unwilling to engage with high-return developments which require a degree of up-skilling, recruitment or additional logistical demands. Only two of the owner-managers expressed their goals in terms of growth. Another was seeking to downsize as part of a planned strategy to withdraw from unprofitable markets, and others expressed their business goals in non-financial terms, including personal actualisation, service quality and heritage protection. The contention of Mochrie et al. (2006) that rural entrepreneurship is oxymoronic may only be true if entrepreneurship is measured financially. If entrepreneurship is defined by market agility and responsiveness (Collinson & Shaw, 2001; Gilmore et al., 2001) then rural businesses that have survived for some years in a difficult trading environment may qualify. Growth aversion is not necessarily synonymous with a lack of entrepreneurship, although its economic impact may be similar. This analysis suggests a dominant ‘not-for-growth’ business culture in the region. This may present an obstacle to one of the key goals of the South of Scotland Competitive Strategy (South of Scotland Alliance, 2006), which is to realise the full potential of indigenous business sectors. This objective will prove difficult to achieve if it is incompatible with the core objectives and business culture of local SMEs. Engagement with formal networks was found to be very limited in this study. Some business influencers reported that business-owners in southwest Scotland are suspicious of networks and are unwilling to share information. Two of the business-owners tried unsuccessfully to develop professional networks. Business influencers believed that better networking and sharing of information can ‘grow the market’, and there is some limited evidence of this in the developing mountain biking sector. This suggests that the full potential of formal networks is not being exploited in the business-to-consumer sector in the region. Those who evaluated service quality judged it to be weak, but those who provide service quality consider themselves to be quality-focused. The resolution to this apparent paradox is that rural SMEs have a quality focus, not a customer focus. They are product orientated, but not service orientated. They are not casual or indifferent in their strategies for service quality, but one of the implications of our findings is that business influencers underestimate how seriously rural SME owners take product quality. A quality improvement programme is unlikely to be seen as relevant by owner-managers who consider their quality to be good. Rural SME owner-managers are much less concerned about the region’s economic challenges than local public sector managers and support

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agencies. They are also mostly not motivated by a desire for growth. They are entrepreneurial in their responses to challenges, and are not ‘sleepy’. They are, however, formal network-averse and demonstrate a lack of understanding of the value of developing the market. Although they are keen to provide their own version of ‘quality’, the owner-managers have not researched customer wants, or who or what constitutes their competition. Local economic development priorities of developing the region’s indigenous businesses reflect current thinking in rural development, but they are unlikely to be successful without an improvement in the region’s service quality and ‘buy-in’ from the region’s businesses. The consumer service sector forms a significant part of the region’s tourism proposition. Whilst local consumers may be satisfied with a lower level of service, due partly to their low expectations and partly because of the lack of viable alternatives, the same is unlikely to apply to visitors to the region. In summary, policies aimed at improving structural weaknesses but which are not compatible with the business culture of the region are unlikely to succeed. Indeed, attempts to increase business and growth opportunities without developing a local business agenda to exploit them may be counter-productive and wasteful. This research implies that regional support agencies should consider taking steps to accurately assess the business culture that exists in their region, before undertaking strategic interventions to develop the region’s competitive position. In this case, those strategies may need to focus on developing entrepreneurial capacity, business planning and marketing skills, and networking opportunities for the businesses within the region. The benefits of networking may need to be ‘sold’ to businesses as an early intervention. Furthermore, as argued by OECD (2008) and EKOS (2008), ensuring that the regional development agencies and other business and economic development partners ‘adopt a pro-active role in developing partnerships and in further developing their role as a “rural advocate” can be critical’ (EKOS, 2008, p. 4). However, centralisation and concentration of expertise, professional staff and advocacy capacity in the metropolitan core has been undermining this strategic approach to encouraging and enhancing development (Danson, 2012). The establishment of regional intelligence and research facilities locally, such as the semi-autonomous East Norway Research Institute (http://www.ostforsk.no/) using European, national and regional funding, has been identified as a way to address this need for embedded support. In the region of the case study reported here, the Crichton Institute (http://www.crichtoninstitute.co.uk/) aims to fulfil a similar role in rural areas, promoting and applying the concept and means of the

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quadruple helix of business academia government community (Arnkil, Ja¨rvensivu, Koski, & Piirainen, 2010) in Dumfries and Galloway to overcome the challenges of mis-understandings between local partners and between the region and the centre.

REFERENCES Anderson, A., & McAuley, A. (1999). Marketing landscapes: The social context. Qualitative Market Research: An International Journal, 2(3), 176 188. Anderson, A., Osseichuk, E., & Illingworth, L. (2009). Rural small businesses in turbulent times: Impacts of the economic downturn. Paper presented at the 7th rural entrepreneurship conference, Cumbria. Arnkil, R., Ja¨rvensivu, A., Koski, P., & Piirainen, T. (2010). Exploring quadruple helix. Outlining user-oriented innovation models. Final report on quadruple helix research for the CLIQ project. Tyo¨raportteja 85/2010 Working Papers. University of Tampere. Brown, F., & Hall, D. (1999). Introduction. The paradox of periphery. Report No. 15. Research Centre of Bornholm, Nexo. Burnett, K., & Danson, M. (2004). Adding or subtracting value? Constructions of rurality and Scottish quality food production. International Journal of Entrepreneurial Behaviour and Research, 10(6), 384 403. Collinson, E., & Shaw, E. (2001). Entrepreneurial marketing A historical perspective on development and practice. Management Decision, 39(9), 761 766. Danson, M. (2012). Localism and regionalism in Scotland: Growth and development in another country. In M. Ward & S. Hardy (Eds.), Changing gear Is localism the new regionalism? London: Smith Institute and Regional Studies Association. Deakins, D., & Freel, M. (2009). Entrepreneurship and small firms (5th ed.). Maidenhead: McGraw-Hill. Deakins, D., Galloway, L., & Mochrie, R. (2003). The use and effect of ICT on Scotland’s rural business community. Stirling: Research for the Scottish Economists’ Network. Dinis, A. (2006). Marketing and innovation: Useful tools for competitiveness in rural and peripheral areas. European Planning Studies, 14(1), 9 22. EKOS. (2008). Rural communities and economic development. Final report to Scottish enterprise rural group. Scottish Enterprise. Retrieved from http://www.scottish-enterprise. com/about-us/resources/research/rural-research.aspx Fritsch, M., & Mueller, P. (2004). Effects of new business formation on regional development over time. Regional Studies, 38, 961 975. Fuduric, N. (2012). Entrepreneurship in the periphery: A resource perspective. In M. Danson & P. de Souza (Eds.), Regional development in Northern Europe: Peripherality, marginality and border issues (pp. 164 181). Abingdon: Routledge. Gilmore, A., Carson, D., & Grant, K. (2001). SME marketing in practice. Market Intelligence and Planning, 19(1), 6 11. Hill, J. (2001). A multidimensional study of the key determinants of effective SME marketing activity: Part 1. International Journal of Entrepreneurial Behaviour and Research, 7(5), 171–204.

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Huggins, R., & Williams, N. (2012). Entrepreneurship and economic development. In S. Carter & D. Jones-Evans (Eds.), Enterprise and small business: Principles, practice and policy. Harlow: Pearson Education. Irvine, W., & Anderson, A. (2004). Small tourist firms in rural areas: Agility, vulnerability and survival in the face of crisis. International Journal of Entrepreneurship Behaviour and Research, 10(4), 229 246. Jack, S., Moult, S., Anderson, A., & Dodd, S. (2010). An entrepreneurial network evolving: Patterns of change. International Small Business Journal, 28(4), 315 337. Lundstrom, A., & Stevenson, L. (2001). Entrepreneurship policy for the future. Stockholm: Swedish Foundation for Small Business Research. Macleod, G. (1996). The cult of enterprise in a networked, learning region? Governing business and skills in Lowland Scotland. Regional Studies, 30(8), 749 755. Mochrie, R., Galloway, L., & Donnelly, E. (2006). Attitudes to growth and experience of growth among Scottish SMEs. International Journal of Entrepreneurial Behaviour and Research, 12(1), 7 20. Morris, C., & Buller, H. (2003). The local food sector: A preliminary assessment of its form and impact in Gloucestershire. British Food Journal, 105(8), 559 566. Moyes, D., Whittam, G., & Ferri, P. (2012). A conceptualisation of the relationship capital of rural small service firms. Local Economy, 27(2), 136 151. O’Donnell, A. (2004). The nature of networking in small firms. Qualitative Market Research: An International Journal, 73(3), 206 217. O’Donnell, A., Gilmore, A., Carson, D., & Cummins, D. (2002). Competitive advantage in small to medium sized enterprises. Journal of Strategic Marketing, 10(3), 205 222. OECD. (2008). OECD rural policy reviews: Scotland, UK: Assessment and Recommendations. Edinburgh: Scottish Government. Retrieved from http://www.scotland.gov.uk/ Publications/2008/02/14143544/0 Scottish Government. (2012). Scope and remit of the rural economy working group. Edinburgh, Scotland. Retrieved from http://www.scotland.gov.uk/Topics/farmingrural/SRDP/ SRDP20142012/SRDP201420RuralEconomy/scopeandremitregroup Shaw, E. (1999). A guide to the qualitative process: Evidence from a small firm study. Qualitative Market Research: An International Journal, 2(2), 59 70. Smallbone, D., Baldock, R., & North, D. (2003). Policy support for small firms in rural areas: The English experience. Environment and Planning C: Government and Policy, 21(6), 825 841. Smallbone, D., North, D., Baldock, R., & Ekanem, I. (2002). Encouraging and supporting enterprise in rural areas. Report to the Small Business Service. London. South of Scotland Alliance. (2006). South of Scotland competitive strategy. Retrieved from http://www.sup.org.uk/PDF/south%20scot%20compet%20strat.pdf. Accessed on January 10, 2011. Stokes, D. (2000). Entrepreneurial marketing: A conceptualisation from qualitative research. Qualitative Market Research: An International Journal, 3(1), 47 54. Verhuel, I., Wennekers, S., Audretsch, D., & Thurik, A. (2001). An eclectic theory of entrepreneurship: Policies, institutions and culture. Amsterdam, NL: Tinbergen Institute Discussion paper TI 2001-030(3). Wilson, R., & Edwards, T. (2008). Barriers to rural economic development in Scotland. Report submitted to Scottish Enterprise Borders, on behalf of the Scottish Enterprise Rural Group and Partners. Scottish Enterprise. Retrieved from http://www.scottish-enterprise.com/about-us/resources/research/rural-research.aspx

THE ROLE OF ‘LEADER’ IN DELIVERING RESILIENT COMMUNITIES Ivan Annibal and Liz Price ABSTRACT Purpose The aim of this chapter is to challenge the assumption that top-down approaches to economic development and growth are the best way forward for rural areas. Looking at the work of the current LEADER programme and LEADER project examples, the chapter measures the impacts of small-scale, bottom-up approaches to foster rural development. It considers the importance of the LEADER approach as a key component of the current rural policy framework. Methodology The chapter provides a discussion of top-down versus neo-endogenous approaches to rural growth, drawing on policy and practitioner literature. Four case studies from the current LEADER programme are used to demonstrate how the LEADER approach brings about growth at a local level, and how this can be measured using a Social Return on Investment (SROI) approach. Findings LEADER, as a programme, can deliver sustainable and effective economic growth through a series of small-scale interventions

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 81 104 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004004

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by stimulating entrepreneurial activity in the context of neo-endogenous growth. This forms a useful complementary strand to the top-down policy of major sectoral interventions profiled in this chapter in the context of current England-wide policy approaches to economic development. The SROI approach provides an effective tool for capturing the longer term effects of LEADER. Practical implications Considering the broader SROI and sustainable credentials of LEADER-stimulated business development provides a new and more robust means of both communicating the achievements of the programme and a rationale for giving it greater prominence. Originality/value The chapter establishes a new place-based approach to considering the wider impact of LEADER projects through an SROI approach. The insights help provide new insights into the contribution of this programme to economic development in rural communities. Keywords: Rural development; sustainability; outcomes; outputs; leader; neo-endogenous growth

INTRODUCTION This chapter argues that a deeper and longer term analysis of the outcomes of the LEADER approach to economic growth provides a basis on which to rethink the current focus of economic policy on rural areas. It identifies LEADER as a driver of place-based neo-endogenous (locally owned and bottom-up) approaches to economic growth. It argues that the drive to stimulate top-down economic growth, such as that emphasised in Leaving No Stone Unturned, misses the subtle and long-term nature of what can be achieved in rural communities through approaches that build local ownership of and responses to economic challenges. It argues that such approaches deliver sustainable economic development. It suggests that one of the reasons LEADER has been undervalued previously is the challenge of recording and monetising its achievements, not just in relation to outputs but in terms of broader outcomes. The Social Return on Investment (SROI) methodology provides an effective approach for quantifying the broader outcomes of LEADER, and for understanding the contribution of neo-endogenous approaches to the sustainability of rural communities. This chapter sets out to demonstrate

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how this can be achieved, drawing on case studies from four LEADERfunded projects in England.

POLICY CONTEXT UK national economic policy has traditionally been market-led and topdown in character. With the creation of Regional Development Agencies by the Labour Government of 1997, there was little change to the predominant top-down approach to economic development, and no significant focus on localities as a means of addressing economic challenges. A decade later, the Sub-National Review of Economic Development (HM Treasury, 2007), introduced at the brink of the 2008 2010 recession, began the process of endowing local authorities with more responsibility for economic development at the local level. This move towards localities has continued with the creation of Local Enterprise Partnerships, which are based on subregions, by the UK Coalition Government through the Budget of 2010. Devolved economic development has been given still greater impetus by the recent Heseltine review of economic growth, which argues in favour of a return to cities as the urban centric building blocks for economic prosperity (Business Innovation and Skills [BIS], 2012). This document makes a very powerful argument for growth in terms of increased GDP as a central feature of economic policy. Tight central funding control and policy management through a network of regional government departmental staff after 2010 has continued, however, to limit the scope for very local determination of economic development. This has been exacerbated by a focus on cities that miss the importance of smaller scale and rural contexts within which economic development might be considered and managed. The abolition of the Sustainable Development Commission in 2011, which provided a focus for considering the wider impacts of economic development, has further exacerbated this. It is possible to argue, as the title of the Heseltine review suggests, that national policy is taking a ‘no stone unturned’ approach in seeking to drive economic growth with limited regard to wider rural and sustainability considerations. A recent Orgainsation for Economic Cooperation and Development (OECD) review of rural policy in England (OECD, 2011) highlights the centralised nature of the Government’s approach. It sets out a number of areas where this could be refocused to strengthen the rural economy,

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including joining up housing, planning and economic development strategies at the local level, and devolving more power from the centre to enable rural areas to determine their own needs. The LEADER programme provides an alternative to the predominant top-down approach. Despite this, guidance on economic development policy and activities issued to Local Enterprise Partnerships (LEPs) in March 2013 by the English Government (BIS, 2013) suggests that current thinking remains highly growth orientated and centralised. LEADER appears as an afterthought to the broader marshalling of European Structural Funds, which are to be directed from the centre and focused by growth policies developed but not financially controlled by LEPs.

THE LEADER PROGRAMME IN ENGLAND The LEADER approach, which has its origins in a series of EU initiatives dating back to 1991, seeks to deliver rural development at the neighbourhood level. The programme grew out of the Integrated Mediterranean Programmes of the 1970s, and was formally constituted in 1988 by the European Parliament. The current map of 64 LEADER territories (Fig. 1 and Table 1) was established in 2007. The role of LEADER is to deliver rural development in the context of the Rural Development Programme for England (RDPE). The RDPE was established as part of the European Agricultural Fund for Rural Development by the European Commission, the second pillar of the Common Agricultural Policy in 2005 (European Commission, 2006b). It defines rural development as having three components set out as axes: Axis 1: Improving the competitiveness of the agricultural and forestry sector Axis 2: Improving the environment and the countryside Axis 3: The quality of life in rural areas and diversification of the rural economy A fourth axis, which accounts for 5% of the overall budget of the RDPE, makes provision for LEADER to fund activity to deliver local led responses to Axis 1 and Axis 3. In England only LEADER partnerships in the South East and North West regions were allowed by RDAs to undertake activities linked to Axis 1 and Axis 3. Across the rest of England LEADER activities were limited to Axis 3.

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Fig. 1.

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Map of LEADER Programmes in England 2007 2014 (Annibal et al., 2013, p. 12).

LEADER in England has, therefore, been about a small number of interventions to improve the competitiveness of the land-based sectors and a significant number of activities focused on a remit for rural development. The rural development remit has been based on two themes: quality of life in rural areas and diversification. The linking of quality of life and diversification of the rural economy is a clear expression of the importance of sustainable rural development, which needs to be anchored in a ‘place-based’ approach to economic development. As the commentary on national government policy discussed earlier establishes, this approach provides a different, more rural, more local and potentially more sustainable focus.

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Table 1. ID 1 2 3

12 13 14 15 16

Aylesbury Vale & Rural Milton Keynes Bassetlaw Blackdown Hills & E Devon Bolsover The Brecks Central Warwickshire Chalk & Cheese Chilterns Clay Country Coastal Action Zone Coast Wolds Wetlands & Waterways (CWWW) East Cornwall East Peak Innovation Partnership Eastern Plateau Fens Adventurers Forest of Dean

ID

Name

ID

Name

ID

Name

17 Greater Dartmoor

33 North Warwickshire

49 South Oxfordshire

18 Greensand Ridge 19 Hereford

34 North Wessex Downs 35 Northants

50 North Dorset & South Wilts 51 Staffordshire

20 21 22 23 24 25 26 27

36 37 38 39 40 41 42 43

52 53 54 55 56 57 58 59

Isle of Wight Isles of Scilly Kent Downs & Marshes Lindsey Action Zone Loddon & Evesley East Durham Northumberland Coast North Pennine Dales

Cumbria Fells & Dales Mersey North Lancashire Pennine Lancashire Solway Border and Eden West Lancashire N York Moors Coast & Hills Peak Rural

Surrey Hills Sussex Downs & Low Weald 3 Harbours & a Coastal Plain Torridge & North Devon Wash Fens Waveney Valley Wealden & Rother West Cornwall

28 Northumberland Uplands 29 New Forest

44 Pennine Prospects 45 Salisbury Plain

60 West Kent 61 Western Somerset

30 Northern Marches 31 Norfolk Coast & Broads 32 North Lincolnshire Rural

46 Shropshire Hills 47 Somerset Levels & Moors 48 South Devon Coastal

62 Winchester & East Hants 63 Worcestershire 64 Yorkshire Dales

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4 5 6 7 8 9 10 11

Name

LEADER Programmes in England 2007 2014.

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The current LEADER programme in England was originally managed by Regional Development Agencies and, following their closure in 2010, by out-stationed Defra staff who oversee delivery at the regional level. In most cases a local authority manages the financial activities for each programme in the role of an ‘Accountable Body’. A local team, often employed by the Accountable Body, manages the bidding and project development process. A group of local stakeholders called a Local Action Group (LAG) is formed by the Accountable Body, and it is the role of the LAG to consider applications for funding and provide a governance structure for the programme outside of its legal and financial accountabilities. Each LEADER partnership works towards the achievement of a Local Delivery Strategy, which is established at the beginning of the programme, and sets out targets and activities to be achieved during the programme period. This is shown in Fig. 2.

Defra Regional Teams

Accountable Body (usually local authority)

Local Action Group

Local Delivery Strategy

Local Delivery Team (usually local authority employed)

Fig. 2.

Typical Delivery Structures for LEADER in England.

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The LEADER approach identifies measures for each axis, which set out the nature of projects that are eligible for funding. There are 18 measures: 8 for Axis 1, 8 for Axis 3 and 2 overarching measures (Axis 4) are used in England. These were chosen from a wider list of potential measures available for EU Rural Development Programmes, with each country choosing those measures at a national level which best fit the needs of its rural economy. Local businesses and community groups are invited to put forward applications for funding that fit within these measures. A diverse range of projects have been supported by the programme. Examples include funding for community facilities to be upgraded, farm diversification, local events, and business expansion. Data supplied by Defra identify that 3,834 projects were supported through LEADER between January 2007 and January 2013 (Annibal et al., 2013). Of these, 930 projects were supported through Measure 312 (support for the creation and development of micro-enterprises) and 831 projects through Measure 321 (support for the economy and basic services). These two measures, which together represent both sides of the rural development coin, account for just under half (46%) of all the projects funded through LEADER.

LEADER AS AN EXAMPLE OF NEO-ENDOGENOUS GROWTH Neo-endogenous growth refers to economic development policy that focuses on a bottom-up trajectory (Ray, 2006). The neo-endogenous approach favours public interventions based on localities rather than on broad sectors, and necessarily involves local communities in bringing about changes to their areas. LEADER as a programme stems from a similar philosophy, in that it is based around a less centralised approach to rural growth. A report by the European Court of Auditors (2010) emphasises the bottom-up nature of the LEADER approach to economic development: The assumption behind the Leader approach is that there is an added value compared with traditional top-down implementation. Bottom-up approaches and interaction between different sectors at local level should mobilise local potential. […] The community involvement achieved through the bottom-up approach can also lead to less tangible impacts, such as ‘capacity-building’ and ‘empowering the local population. (European Court of Auditors, 2010, p. 10)

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The approaches reflected in LEADER and in the 2011 OECD review of rural policy both stem from a place- rather than a sector-based view in relation to growth and development. This manifests itself in the seven principles of LEADER (EC, 2006) and the OECD New Rural Paradigm (OECD, 2006). Government policy continues to mix sectoral and placebased concepts in equal and confusing measure. This is reflected in both the content of its 2010 review of regional economic growth and in its subtitle, Realising Every Place’s Potential (BIS, 2010). Place-based approaches lend themselves far more practically to encouraging neo-endogenous (i.e. bottom up and locally owned) responses to the challenge of sustainable economic development. The recently published Review of LEADER in England (Annibal et al., 2013) identifies research that clearly establishes LEADER’s neo-endogenous credentials, that is as a driver to encourage local people to get things done on their own terms locally. Research cited in the review suggests that ‘While traditional modes of governing through top-down, sectoral policies still dominate European rural policy in terms of financial flows, partnership governance [through approaches such as LEADER] is increasingly accepted as an institutional means of promoting endogenous rural development’ (Furmankiewicz et al., 2010, p. 17). One of the most powerful arguments in favour of neo-endogenous, local approaches to sustainable growth is set out by Jackson in Prosperity Without Growth, his publication for the Sustainable Development Commission (Jackson, 2009). The central premise of the book is that the current global recession provides the impetus to forge a new economic system equipped to avoid the shocks and negative impacts associated with our reliance on growth. Jackson argues debt-driven consumption has created an unstable system, which puts jobs and livelihoods at risk, as well as damaging individuals psychologically and socially. Jackson sets out a vision of a more local, less consumption-driven approach to economic development, which is framed by social and environmental concerns. This offers the potential to make communities more resilient. The need to build more resilient rural communities is strongly referenced in Moseley and Owen’s (2006) work for Defra on the future of rural services. They argue that a number of drivers namely: demographic and social change, cultural change, increasing disposable income of rural residents, greater personal mobility for many, greater capacity for communication, Government policies (fiscal, social, employment, spatial and transport), demand from ‘non-rural residents’ that is rural businesses and visitors to rural areas, would lead to an increasingly uneven and ultimately

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unsustainable pattern of rural communities across England in 2015. LEADER has a successful but poorly communicated track record in addressing these challenges. If the impact of LEADER on addressing sustainable economic development challenges is to be effectively communicated, it is important that its outcomes should not only be monetised but put into a sustainability framework. Between 1997 and 2010, significant investment was made by the Labour Government to understand the operation of sustainable communities. In 2003 Sir John Egan was commissioned to undertake an assessment of the skills required to deliver sustainable communities. He identified 8 key indicators, which form a useful basis for considering the relative sustainability of places (Office of the Deputy Prime Minister, 2004). These have been codified into ‘The Egan Wheel’ as set out in Fig. 3.

Active, Inclusive and Safe

Well Served

Well Run

Environmentally Sensitive

Thriving

Well Designed and Built

Fair for Everyone

Well Connected

Fig. 3.

The Egan Wheel.

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MEASURING OUTCOMES AND THE SOCIAL RETURN ON INVESTMENT APPROACH In England, those evaluating public policy interventions are encouraged to follow guidance in the Green and Magenta books produced by HM Treasury (2011a, 2011b). For EU rural funded projects, the measurement framework is set out in the 2005 Common Monitoring and Evaluation Framework (European Commission, 2006a). Both these approaches have a strong focus on measurement of simple outputs and quick returns on investment. The 2013 review of LEADER has established that the local and neoendogenous outcomes of the programme do not fit comfortably into this output-reporting regime. This means that the effect of LEADER on localities may be under-estimated and that neo-endogenous approaches to economic development are under-valued. The 2013 review identifies: ‘that the true value of LEADER is not about financial outputs, but in building capacity and triggering a ‘mind shift’ among local actors which, in turn, can help to improve the economic performance and sustainability of rural areas over time.’ (Annibal et al., 2013, p. 20). This finding resonates with a report commissioned by Defra on the development of an evidence base for the mainstreaming of LEADER in England (Rural Development Company, Fraser Associates, & University of Gloucester, 2005). Although it is possible to identify the number of jobs created by each project and the nature of the services provided, there is currently no agreed approach for measuring the wider impacts of LEADER projects. In the absence of easily retrievable information on outcomes, LEADER programmes are judged on how well they achieve their spending targets, and this is used as a proxy for measuring their wider impact. This is a challenge for establishing the broader impact of LEADER on rural communities. It means that, while there are powerful arguments to justify stimulating the rural economy from the bottom-up and prioritising sustainable outcomes, the traditional means of measuring impact, that is jobs created and services provided, mask the broader impacts achieved. Such measures may not indeed be very relevant if economic growth was not the central purpose of that particular LEADER programme in the first place. A number of challenges need to be addressed in order to demonstrate the broader outcomes of LEADER. The first is to bring about a focus on outcomes rather than outputs within the LEADER programme, and specifically within each Local Delivery Strategy. The second is ensuring a consistent approach to outcome measurement. The European Evaluation Network for Rural Development has examined a number of approaches to

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outcome measurement and highlights a key challenge as the achievement of straightforward comparability between them (Grieve & Weinspach, 2010). Thirdly, as sustainability is integral to neo-endogenous growth, there is a need to interpret outcomes within a framework that emphasises sustainability. One approach not widely considered for the assessment of LEADER outcomes is the SROI methodology. This approach identifies the limitations of assessing value based solely on financial transactions and, instead, sets out a framework for ascribing a financial value to less ‘tangible’ outcomes. Through this process, it establishes a useful means of comparing and benchmarking the impact of LEADER projects in terms of their broader outcomes. The SROI approach can be summarised as follows: Every day our actions and activities create and destroy value; they change the world around us. Although the value we create goes far beyond what can be captured in financial terms, this is, for the most part, the only type of value that is measured and accounted for. As a result, things that can be bought and sold take on a greater significance and many important things get left out. Decisions made like this may not be as good as they could be as they are based on incomplete information about full impacts. Social Return on Investment (SROI) is a framework for measuring and accounting for this much broader concept of value; it seeks to reduce inequality and environmental degradation and improve wellbeing by incorporating social, environmental and economic costs and benefits. (Nicholls, Lawlor, Neitzert, & Goodspeed, 2012, p. 8)

There are six stages in a SROI process: 1. 2. 3. 4.

Establishing scope and identifying key stakeholders to identify impacts Mapping project outcomes with stakeholders Evidencing project outcomes and giving them a financial value Establishing project impact accounting for deadweight and displacement 5. Calculating the SROI 6. Reporting the findings from the assessment process The attribution of financial values to outcomes is a powerful tool in illuminating the broader value of LEADER and enabling its contribution to rural economic development to be fully understood. Use of the traditional SROI method for benchmarking has one significant weakness, however. As the indicators are chosen independently by project stakeholders, they can be compared on a monetised basis but their wider contribution to sustainability cannot be effectively considered. This is because each set of SROI indicators arise uniquely from the project they relate to and are therefore not directly comparable.

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Bringing the SROI approach and the key sustainability principles set out in the ‘Egan Wheel’ together provides a starting point for creating a rounded assessment of LEADER and its contribution to rural development. Two specific LEADER projects are considered here to test the value of a combination of an SROI approach and ‘Egan Wheel’ principles for demonstrating the wider impacts of LEADER on rural communities.

Middleton Mart and the Hill Farm Succession Scheme Middleton Mart in Middleton in Teesdale, County Durham (North Pennine Dales LEADER area 27 in Fig. 1), is owned by a group of livestock farmers. It provides facilities for the buying and selling of livestock. The Mart has also developed a series of outreach activities, which provide training and development activities for local people. In 2012 the Mart submitted a bid to the North Pennine Dales LEADER Partnership for funding to build a new cafeteria for its users. This was successful and, following a period of procurement and construction, the new facility opened six months later. The development of the Mart catering facilities was part of a business plan for the expansion of the business. This involved the evolution of the Mart as a ‘destination’ sales location for other activities, including antiques fairs and ‘fur and feather’ sales, and providing training activities and a facility for wider community use. Working with the team that developed the Mart facility, it has been possible to identify a range of outcomes against a number of Egan indicators (not every LEADER project will impact on every Egan indicator). These outcomes have then been quantified and monetised, as set out in Table 2. Based on norms drawn from the Mid-Term Evaluation of LEADER (Ekosgen, 2011), it is possible to calculate the gross impact of the funding, which is £947,364 over the 10 years up to 2023. This makes an allowance for leakage, deadweight and displacement respectively, which are the unique local circumstances which diminish the effects of an impact, the extent to which the impact might have arisen without project funding anyway and any negative impact arising from project funding on an established activity delivering in part the impact desired by the project (HM Treasury, 2011b). Input costs can be identified to have an overall cost of £309,886, projected for the next 10 years up to 2023 as shown in Table 3. Overall, it is calculated that the Middleton in Teesdale Auction Mart project has delivered a £3.06 return on investment for each £1 invested

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Table 2. Middleton in Teesdale Auction Mart Egan Indicator

Outcome Indicator

Facilities (services)

Outcome Value

Net Increase in village facility bookings by local groups 300 at 4 hours 4 × Car boot net average spend 4 × Fur and Feather net average spend 4 × Antiques Fair net average spend Local players drawn into organising events at the Mart

Services

Participation (governance)

Inclusive (social and cultural)

Net number of young and Elderly residents involved in events

Economy

Direct takings from the additional Mart activities Net additional takings by local businesses

Table 3.

LEADER Impact Table. 1,200 hrs at £10/hr £12,000 2,400 people Net average spend £12/person £28,800

30 people 15 events per person-each 4 hours 1,800 hours × £7/hr £12,600 15 groups, 5 people each, 10 events per year 20% young people, 50% elderly 150 young people sessions at £24 425 elderly sessions at £16 £10,000 Mart takings based on actual figures £12,000 Additional business benefits based on survey data £48,000

Middleton in Teesdale Mart Input Costs Table.

Input Enhanced established services

Input management contract Input build contract

Maintenance £2,000 p.a.

Cost Catering Employee £5,000 Food & supplies £5,000 Mart developer £5,000 Construction contract £115,000

Output 1 direct job 0.1 indirect jobs

1 job 3 temporary jobs (3 months fte) 500 m2 of new space for community use

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through LEADER. Following this approach it is possible to not only demonstrate the monetised value of the Mart outcomes but also to illustrate its impact on 4 of the eight Egan indicators: Well Served, Well Run, Active, Inclusive and Safe and Thriving. A full breakdown of the SROI assessment for the project is set out in Fig. 4. The Hill Farm Succession Scheme is a project developed by The Farmer Network in Cumbria. It has been financially supported by both the Solway Borders and Eden (SBE) and the Cumbria Fells and Dales Leader (CFD) projects (areas 36 and 40 in Fig. 1). The scheme has supported seven apprentices seeking to develop a career in hill farming. Working with the project manager for the scheme, it has been possible to identify three key indicators within the Egan wheel that have been addressed by the project. These, along with their monetisation, are set out in Table 4. Making an allowance for leakage, deadweight and displacement, it is possible to calculate the gross impact of funding as £922,104 over 10 years. Input costs can be identified to have an overall cost projected over 10 years of £193,013 based on the figures in Table 5. Overall, it is calculated that the Hill Farm Succession Scheme project has delivered a £4.78 return on investment for each £1 invested through the Leader process. Following this approach, it is possible not to demonstrate only the monetised value of the project outcomes but to illustrate its impact on three of the eight Egan indicators: Fair for Everyone, Well Run and Thriving. A full breakdown of the SROI assessment for the project is set out in Fig. 5.

SCALE OF IMPACT In emphasising the local and neo-endogenous focus of LEADER, there is a danger that its impact is perceived as small scale and largely ameliorative. This is despite its potential to provide a sustainable alternative to top-down growth policies that have not traditionally taken account of rural considerations. This section considers the impact of LEADER and points out that there is scope to argue the case for Leader as an alternative and effective growth policy. Neumann, Geissler, and Jakubowski (2012) argue in the German context that agglomeration effects (the beneficial impacts to businesses from

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3 temporary jobs (3 months fte) 500 m2 of new space for community use

Construction contract £115,000

Input Build Contract

Facilities

Net increase in village facility bookings by local groups 300@ 4 hours

Services

4 * Car boot - net average spend 4* Fur and Feather - net average spend 4* Antiques Fair - net average spend

Maintenance £2,000 p.a. Participation

1 job

1 direct job 0.1 indirect jobs

Mart Developer £5000

Catering Employee £5000 Food & Supplies £5000

Input management contract

Middleton in Teesdale Auction Mart SROI £3.06/£1

Enhanced Established Services

Overall cost inc inflation (10 years)

Inclusive

Net number of young and Elderly residents involved in events

Economy

Direct taking from the additional Mart activites Net additional takings by local businesses

overall Net Present Value inc leakage, deadweight and displacement (10 years)

Fig. 4.

2,400, people net average spend £12/person £28,800 30 people 15 events per person-each 4 hours 1800 hours *£7/hr £12,600

15 groups, 5 people each, 10 events per year -20% young people, 50% elderly 150 young people sessions @£24 425 elderly sessions @£16 £10,000

£947,364

Middleton in Teesdale Auction Mart Social Return on Investment.

Mart takings based on actual figures £12,000 Additional business benefits based on survey data - £48,000

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£309,886

Local players drawn into organising events at the Mart

1200hrs @£10/hr £12,000

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Table 4. Hill Farm Succession Scheme Impact Table. Egan Indicator Participation (governance)

Economy

Culture/heritage (social and cultural)

Outcome Indicator Additional involvement of local people in governance/ organisation

Extra-curricular activities of apprentices linked to their learning experience Jobs arising from the Number of scheme apprentices gaining employment Aspects of the local way Number of farms of life supported sustained by the scheme

Table 5. Input Other curriculum costs Payments to apprentices Teaching costs

Outcome Value 4 hours per apprentice per week £26,519 5 apprentices £514,149 5 farms sustained £26,036 income/farm (5 years) £483,892

Hill Farm Succession Scheme Input Table. Cost £10,600 £20,172 £141,204 £5,887 £41,209

Output Seven apprentices trained and placed with employers

clustering together) can be engendered and have a major impact at the neighbourhood level. A review of the activities of two LEADER partnerships in England suggests that where interventions are focused they can have a major impact. We seek to illustrate this point with reference to two specific projects below.

Cumbria Woodlands Cumbria Woodlands, supported by both Solway Borders and Eden (SBE) and Cumbria Fells and Dales LEADER (CFD) (areas 36 and 40 on the map in Fig. 1), has arguably assisted in the development of a woodfuel sector in Cumbria and delivered a number of agglomeration and wider social and community benefits.

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Hill Farm Succession Scheme Social Return on Investment.

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Fig. 5.

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Woodland management and businesses involved in the timber supply chain were identified as a priority for support in the Local Delivery Strategies for both CFD and SBE. Eleven of these businesses have been interviewed as part of the evaluation of both schemes and provide very useful data to support evidence of a LEADER-driven agglomeration effect. In establishing Cumbria Woodlands (CW) the two LAGs have provided funding of £400,000 each. The project has two principal strands: 1. Cumbria Woodlands Advisory Service 2. Skills for the Forest Training Programme There has been some matched funding from United Utilities towards the Advisory Service and individual/private sector contributions towards training courses. Training courses are typically offered with a 60 70% subsidy together with free events. The outputs from the CW project are conventionally expressed as training days delivered and numbers of businesses assisted. Individual business outputs focus on turnover and job creation. The outcomes of the CW project and other LEADER investments in the sector extend well beyond this and bring about a variety of wider benefits. These include the contribution the project makes to biodiversity, climate change mitigation, natural resource management, fuel poverty, wider economic development and the formation of a strong business network/community of practice in the woodland sector. CW is currently exploring alternative funding to sustain a ‘light’ advisory service to cover the transition period between the current and next RDPE programme. Over the past five years the value of raw timber has risen from £20 to £70 per tonne. The price of processed woodfuel has increased from £40 to £110 per tonne. This has created real momentum for the work of CW and offers the potential for many of its investments to be sustainable in the long term. In terms of hard economic outputs 37.5 full time equivalent jobs have been created. CW calculates that the GVA generated by the project is £694,270. In total, 149 training courses have been organised, which have supported 992 participants. A total of 3,319 training days have been delivered. An important outcome of LEADER investment in the woodland sector has been the establishment of a network or community of practice that will continue to operate beyond the programme period. CW has an executive board with private sector businesses, woodland owners and the public sector agencies all represented. The project organisers have assembled an extensive database of woodland owners, forestry training participants,

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contractors and primary users of wood. The network extends to specialist advisers, suppliers of equipment and services, and regulatory bodies. The CW project also has formal links with 12 land agents and private sector advisers to prepare management plans. A virtuous circle has been created which involves CW signposting businesses to Leader and beneficiaries then acting as mentors on training courses.

Coast, Wolds, Waterways and Wetlands The Coast, Wolds, Waterways and Wetlands (CWWW) LEADER programme in the East Riding of Yorkshire (area 11 on the map in Fig. 1) is nationally distinctive in having concentrated all its activity on one measure 323 Culture and Heritage. The CWWW LEADER area covers approximately 880 square miles and 155 parishes, and has a population of 151,985 (Mitchell & Annibal, 2013). The outputs achieved are summarised in Table 6, deploying just under £3 million in building a ‘narrow and deep’ heritage cluster. The CWWW programme has been based on a 5-theme approach: Theme 1 To maximise business opportunities throughout the delivery of the Programme that lead to the development of new and existing local enterprises. Theme 2 To build capacity and empower rural communities (by drawing on the potential of the area’s natural and cultural heritage). Table 6.

CWWW Outputs.

Number of villages where actions took place Number of rural heritage actions supported Number of training/advice days delivered Number of local networks established/created Information provided (research, mapping, reports, feasibility) Number of cultural/heritage activities supported Number of community services established/assisted Number of groups/trusts/forums established/assisted No. of community environmental activities established/assisted Number of businesses receiving environmental advice Number of jobs created/safeguarded Number of projects signposted to wider RDPE Number of skill acquisition and animation actions Number of participants in actions

52 89 283 30 157 120 20 127 69 32 9 32 31 214

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Theme 3 To stimulate the growth of the cultural and creative sectors through the development of creative space and capacity. Theme 4 Building on the potential of the area’s natural heritage opportunities, develop local ownership of and participation in environmental management, planning and interpretation. Theme 5 To develop facilities and networks of activity that create a focus and enable understanding and connectivity to local heritage and landscape. While the Cumbria Woodlands example provides evidence of the transformational potential of LEADER for the micro-enterprise support element of LEADER, the CWWW programme provides evidence of the impact of LEADER on social outcomes. The programme has engaged one third of all communities in its area directly in heritage and cultural activities and has created a significant new ‘cultural infrastructure’ across the CWWW area. This is at a time when top-down approaches such as provision of cultural and heritage services by local authorities are under considerable threat (Evans, 2012). There is clear evidence from the two examples cited earlier that LEADER can play a powerful role in stimulating local economic growth. However, while the LEADER approach deserves attention as a seedbed of emerging value chains, the relatively modest scale of LEADER funding means that larger scale interventions may in some cases be appropriate in order to expand these into economic clusters. Inflation of LEADER activity alone does not in itself guarantee success on a larger scale, a point argued in the Ex Post Evaluation of the Leader Plus Programme commissioned by the EU (Metis GmbH, AEIDL, & CEU, 2010).

CONCLUSION In 2013, the thrust of national policy on economic development is top down, urban centric and focused on macro-economic growth. This approach does not fit well with the needs of rural communities. It does not engage with the economic potential of rural areas, and it focuses on job and wealth creation rather than seeking to build the long-term resilience of these communities. Both the OECD in the New Rural Paradigm and the EU in its focus on growth balanced with community development through the European Agricultural Fund for Rural Development, suggest a different approach

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for rural areas. LEADER gives expression to this approach across a number of rural communities in England. The same is true for other countries within the United Kingdom, although they are not within the scope of this chapter. In addition to the alternatives to the urban-focused outcomes suggested by the OECD and EAFRD, there is a strong body of thinking which bolsters the case for building resilience as opposed to seeking growth. Jackson (2009) has argued that changes to the global macro-economic position mean that such an approach is ultimately unsustainable. The work on sustainable economic growth emanating from the 2003 Egan Review is still extremely valid but has been largely forgotten in the face of the 2008 global downturn. Currently the contribution of LEADER to rural development is judged in terms of jobs created and programme expenditure because of the dominance of the growth at any cost, and the ‘leaving no stone unturned’ agenda. This means that the impact of LEADER is not fully appreciated or described in terms of its role in building resilient rural communities. One of the most powerful, albeit modest in scale, antidotes to the impact of the recession on rural communities are therefore not well understood or reported. The SROI approach offers one solution for those seeking to measure the wider impact of LEADER. It is also possible to understand how LEADER contributes to the sustainability of rural communities, with reference to the Egan Wheel. The outcomes achieved by Cumbria Woodlands (in respect of woodfuel) and the CWWW programme (in respect of culture and heritage) demonstrate that LEADER can have a transformational impact on neighbourhoods. As the United Kingdom moves towards a new LEADER programme in 2014, it would be useful to consider how recording the wider impacts of LEADER can be embedded within the reporting framework for the programme. It is also important that, in the ‘dash for growth’ and the broader positioning of LEADER within the new EU Common Strategic Framework, its independent and local credentials are preserved. This is essential if LEADER is to continue to make an important and distinctive contribution to rural economic development in England.

REFERENCES Annibal, I., Bosworth, G., Carroll, T., Price, E., Sellick, J., & Shepherd, J. (2013). A review of the leader approach for delivering the rural development programme for England. Report for Defra, University of Lincoln.

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Department for Business, Innovation and Skills. (2010, October 28). Local growth: Realising every place’s potential. HM Government CM7961. Retrieved from https://www.gov.uk/ government/uploads/system/uploads/attachment_data/file/32076/cm7961-local-growthwhite-paper.pdf. Accessed on July 2013. Department for Business, Innovation and Skills. (2012). No stone unturned in pursuit of growth. The Rt Hon the Lord Heseltine of Thetford. Retrieved from https://www.gov. uk/government/uploads/system/uploads/attachment_data/file/34648/12-1213-no-stoneunturned-in-pursuit-of-growth.pdf. Accessed on July 2013. Department for Business, Innovation and Skills. (2013). Preliminary guidance for LEPs on development of structural and investment fund Strategies. HM Government. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/ 190880/13-747an-structural-and-investment-fund-strategies-preliminary-guidance-toleps-technical-annex.pdf. Accessed on July 2013. Ekosgen. (2011). National impact assessment of leader impact report. Sheffield, UK: Ekosgen. Retrieved from http://randd.defra.gov.uk/Document.aspx?Document=NationalImpact AssessmentofLEADER.pdf. Accessed on July 2013. European Commission. (2005). Council Regulation of 21 June 2005 on the financing of the Common Agricultural Policy. Official Journal of the European Union, Council Regulation (EC) No 1290/2005. Retrieved from http://europa.eu/legislation_ summaries/agriculture/general_framework/l11096_en.htm. Accessed on July 2013. European Commission. (2006a). Handbook on common monitoring and evaluation framework guidance document. Brussels: EC Directorate General for Agriculture and Rural Development. Retrieved from http://ec.europa.eu/agriculture/rurdev/eval/guidance/ document_en.pdf. Accessed on July 2013. European Commission. (2006b). The leader approach: A basic guide. Luxembourg: Office for Official Publications of the European Communities. Retrieved from http://ec.europa. eu/agriculture/publi/fact/leader/2006_en.pdf. Accessed on July 2013. European Communities. (2006). The leader approach: A basic guide. Retrieved from http:// www.environ.ie/en/Publications/Community/RuralDevelopment/FileDownLoad,29632, en.pdf European Court of Auditors. (2010). Implementation of the leader approach for rural development. Special Report Number 5. European Court of Auditors, Luxembourg. Retrieved from http://www.eca.europa.eu/Lists/ECADocuments/SR10_05/SR10_05_EN.PDF. Accessed on July 2013 Evans, G. (2012). The impact of cuts on UK museums. London: Museums Association. Retrieved from http://www.museumsassociation.org/download?id=770702. Accessed on July 2013. Furmankiewicz, M., Thompson, N. &Zielinska, M. (2010). Area-based partnerships in rural Poland: The post-accession experience. Journal of Rural Studies, 26(1), 52–62. Grieve, J., & Weinspach, U. (2010). Capturing impacts of leader and of measures to improve quality of life in rural areas. Working Paper. European Evaluation Network for Rural Development. HM Treasury (2007). Review of sub-national economic development and regeneration. London: HMSO. Retrieved from http://www.berr.gov.uk/files/file40436.pdf. Accessed on July 2013. HM Treasury. (2011a). The green book: Appraisal and evaluation in central government. London: HM Treasury. Retrieved from https://www.gov.uk/government/uploads/

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system/uploads/attachment_data/file/220541/green_book_complete.pdf. Accessed on July 2013. HM Treasury. (2011b). The magenta book: Guidance for evaluation. London: HM Treasury. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_ data/file/220542/magenta_book_combined.pdf. Accessed on July 2013. Jackson, T. (2009). Prosperity without growth: The transition to a sustainable economy. London: Sustainable Development Commission. Retrieved from http://www.sd-commission.org.uk/data/files/publications/prosperity_without_growth_report.pdf. Accessed on July 2013. Metis GmbH, AEIDL, & CEU. (2010). Ex post evaluation of LEADER+ Report for the European Commission, Metis Gmbh, Vienna. Retrieved from http://ec.europa.eu/agriculture/eval/reports/leaderplus-expost/fulltext_en.pdf. Accessed on July 2013. Mitchell, D., & Annibal, I. (2013). CWWW leader programme evaluation. Beverley: East Riding of Yorkshire Council. Moseley, M., & Owen, S. (2006). Future of rural services in England A scenario for 2015. Countryside and Community Research Institute, University of Gloucestershire. Neumann, J., Geissler, H., & Jakubowski, P. (2012). Agglomeration economies in the neighbourhood? Evidence from German Cities. Local Economy, 28(1), 51 65. Nicholls, J., Lawlor, E., Neitzert, E., & Goodspeed, T. (2012). A guide to social return on investment. SROI Network. OECD. (2006). The new rural paradigm: Policies and government. Paris: OECD Publishing. OECD. (2011). Rural policy reviews. England: United Kingdom Publication. Office of the Deputy Prime Minister. (2004). The Egan review: Skills for sustainable Communities. London: Office of the Deputy Prime Minster. Ray, C. (2006). Neo-endogenous development in the rural EU. In P. Cloke, T. Marsden, & P. H. Mooney (Eds.), Handbook of rural studies. London: Sage. Rural Development Company, Fraser Associates & University of Gloucester. (2005). An Evidence base for mainstreaming leader in England. London: Defra. Retrieved from http://webarchive.nationalarchives.gov.uk/20080108002802/http:/www.defra.gov.uk/ rural/pdfs/leader/mainstreamingleader.pdf. Accessed on July 2013.

ADDRESSING RURAL SOCIAL EXCLUSION IN THE DEVELOPING WORLD: EXPLORING THE ROLE OF AFRICAN SOCIAL PURPOSE VENTURES David Littlewood and Diane Holt ABSTRACT Purpose This chapter considers social purpose venturing as a vehicle for addressing social exclusion in the rural developing world, illustrated with reference to case examples across a range of East and Southern African countries. Methodology/approach Data was collected during in-depth case study research with social purpose ventures in various African countries. Qualitative research methods were primarily employed including interviews, stakeholder focus groups and observational research. Findings Six channels through which social purpose ventures contribute to tackling social exclusion amongst rural BoP communities are identified. These include ventures with the BoP as employees, producers,

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 105 131 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004005

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consumers, entrepreneurs, service users and shareholders. Characteristics for successful social purpose ventures are also discussed. Research implications The chapter adds to knowledge in the field of social purpose venturing in the developing world. It identifies various channels through which such ventures help tackle rural social exclusion and also factors influencing their success. Practical implications The chapter provides insights for practitioners and policy makers, particularly in relation to facilitating successful social purpose venturing. Social implications This chapter contributes to better practice in rural development in the Global South. Originality/value Insights relevant to academic and practitioner audiences are provided, as the chapter addresses a subject area and region that have received limited attention. Keywords: Rural development; Africa; social exclusion

INTRODUCTION In this chapter we identify and explore six channels through which social purpose ventures contribute to tackling social exclusion amongst the rural poor, illustrated through a range of case examples of African enterprises. Often the phrase ‘Base of the Pyramid’ or BoP is used to describe the 4 billion poor people globally who are living on less than US$2.50 per day. In Africa it is estimated that 90% of the continent’s rural population (over 430 million people) reside in this BoP segment (IFAD, 2010). Of the world’s very poor people (defined by IFAD (2010) as those living on less than US$1.25 a day), at least 70% are rural. In sub-Saharan Africa over 300 million people, equating to more than 60% of the rural population, fall within this grouping (IFAD, 2010). While income boundaries differ in terms of delineating the poor/absolute, poor/ultra-poor across various statistical digests, in rural societies in the developing world the poorest members are often subsistence farmers and rely on survivalist activities to generate income. Poor rural households in Africa and the wider developing world face numerous development challenges, including threats to agricultural production stemming from environmental degradation, climate change and water

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scarcity; the impacts of disease, including HIV/AIDS; financial insecurity, insecure employment and livelihoods, and difficulties in how and on what terms markets are accessed. In many instances these challenges reflect, and are compounded by, the economic, social and political exclusion and marginalisation of rural households, communities and regions (Bird, Hulme, Moore, & Shepherd, 2002). This exclusion can manifest in limited access to services that are frequently of a low standard, while livelihood and employment opportunities particularly in the formal sector are also often constrained. Access for rural dwellers to markets to sell products, and to buy even basic necessities, may be similarly restricted. Innovative solutions are needed to these varied and complex rural development challenges. Social purpose venturing is increasingly looked upon as a key mechanism for tackling the kinds of ‘wicked’ sustainable development problems faced by rural communities in the developing world (Rittel & Weber, 1973). The enthusiasm currently surrounding these types of ventures is exemplified by the United Nations SEED Initiative which identifies alternative social and environmental ventures as critical for improving incomes, strengthening livelihoods, and tackling marginalisation and poverty in Africa, in ways that are sustainable and conserve natural resources and ecosystems (SEED & IISD, 2009). However, despite the enthusiasm currently surrounding social purpose venturing, and its potential role in sustainable development in Africa, research in this area remains relatively fragmented and emergent. While there is a growing body of literature examining social purpose ventures in Africa (Kerlin, 2009; Thompson & Doherty, 2006), including some empirical case study research (Masendeke & Mugova, 2009), there are many questions and areas that require further inquiry. Such research areas include the routes by which successful social purpose ventures foster inclusion for the marginalised rural poor in societies through their enterprise activities.

SOCIAL PURPOSE VENTURING AND THE RURAL BOP The ‘development through enterprise’ agenda has emerged over the last decade, informed by early work on the BoP and subsistence market place approaches to development by authors like CK Prahalad, Ted London and Stuart Hart. In their initial incarnations these approaches argued that the poor should be re-imagined as consumers, and it was suggested that there

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was ‘a fortune at the bottom of the pyramid’ for those companies, especially multinational corporations (MNCs), that could tailor their products or services to tap into this low-income segment (Prahalad, 2004). These approaches drew criticism for their positioning and for what some regarded as exploitation of the poor (Karnani, 2007a, 2009); for transplanting unsustainable Western values and lifestyles to the developing world; and for an overemphasis on MNC involvement (Garette & Karnani, 2010). However, recent discussions in this area have focussed on the need for the ‘co-creation’ of value (Hart, 2005; London & Hart, 2004, 2010), with the poor incorporated as partners in venture design, product development and innovation, and implementation and production (London, 2007). Emphasis has also shifted away from MNCs, with growing interest in non-traditional multi-stakeholder partnerships, for example, collaboration between nongovernmental organisations (NGOs), state actors, social enterprises, local community groups and micro-entrepreneurs. We discuss some of these types of partnerships within our case examples. In this chapter the term ‘social purpose venture’ is used in favour of social enterprise, social business or trading non-profit, to reflect the diverse, complex, hybrid landscape of social entrepreneurship and innovation in Africa. Social purpose ventures in Africa trade for social and/or environmental purposes. However, they often have quite complex organisational forms, which may include both for-profit and non-profit components, as well as drawing upon and leveraging the skills of multiple stakeholders and partners. Such ventures may comprise a standalone social enterprise or a ‘proto social enterprise’ NGO engaging in trading activity (Munoz, 2010). Alternatively, they may be more profit-oriented green businesses with an environmental mission selling green goods or services. In other instances they are inclusive businesses, drawing together and leveraging the skills and competencies of private sector investors, social enterprises and community businesses or cooperatives. Social purpose ventures are now recognised as key actors in and vehicles for reformed BoP approaches, both as partners for MNCs and as independent initiators of BoP programmes and interventions (Wheeler et al., 2005). Many BoP ventures target the rural poor, with a growing body of literature documenting such initiatives. Hindustan Lever Ltd (HLL), a subsidiary of Unilever PLC (Prahalad & Hart, 2002), is an example of a more aditional MNC-led BoP intervention. In this initiative HLL responded to competition from a local firm Nirma Ltd, which began selling low-cost detergent products in BoP markets, by developing and launching a new product called Wheel, with decentralised production, marketing and

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distribution channels more suited to this low-income segment. Other examples of MNC-led BoP initiatives targeting the poor include the rapid growth in engagement in micro-lending to the BoP by leading commercial banks, inspired by the success of the Grameen Bank in Bangladesh (Karnani, 2007b). However, MNCs are also now selling micro-insurance to rural BoP farmers, helping to reduce vulnerability to natural disasters and mitigate for longer term climate change risks (Manuamorn, 2007). The co-creation of value and involvement of the poor as partners rather than just consumers and producers has been described by some authors as ‘BoP 2.0’ (Simanis & Hart, 2008). This second generation of BoP approach emphasises ‘creating a fortune with the BoP’, and embedded structural innovation (Hart & London, 2010). Key components of such approaches include: the need for dialogue rather than consultation, better marrying of capabilities, embracing new sustainable technologies and for MNCs to develop more meaningful and direct relationships with both NGOs and BoP segments. For example, the BoP 2.0 venture involving the Indian tobacco giant ITC (formerly the Imperial Tobacco Company). ITC provides Indian micro-entrepreneurs with training and equipment helping them to establish E-choupal meeting places in rural communities. Through these E-choupal meeting places rural farmers gain better access to information on market conditions, prices and potential buyers, which increases their bargaining power with middlemen purchasers (called ‘mandis’), which in turn enables them to get a fairer price for their soy crops, while also providing additional livelihoods for E-choupal entrepreneurs. All of this also benefits ITC which has been able to source agricultural commodities at more favourable prices (Hart & London, 2005). In another example introduced by London (2009), the enterprise VisionSpring uses a microfranchising model to provide vision care to the poor. VisionSpring recruits ‘vision entrepreneurs’ giving each a kit dubbed a ‘business in a bag’ containing an inventory of glasses, eye screening materials, marketing materials and sales forms. The entrepreneurs also receive training in how to conduct screenings, how to refer people to hospital and how to run a small enterprise. Increasing engagements by social enterprises, non-profit NGOs, cooperatives and wider social purpose ventures with low-income groups through, and as initiators of, BoP programmes are recognised in the literature (Wheeler et al., 2005), as are their successes (Bronstein, 2004; London, 2007). For example Prahalad (2004) uses Jaipur Foot and Arvind Eye Care, both India-based non-profits, as positive examples of BoP ventures. Another widely cited example is the for-profit social enterprise Honey Care

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Africa founded in 2001 in Nairobi Kenya (see Hart & London, 2005). They work in partnership with local communities, private sector and development actors to generate beekeeping livelihood opportunities for rural BoP farmers. Honey Care Africa procures and sells all of the equipment required to establish a beekeeping micro-enterprise to a development sector partner, which in turn leverages local social capital to provide microcredit financing to small farmers for the purchase of equipment. They provide farmers with training in beekeeping, and commit to purchasing all the honey they produce, guaranteeing them a regular income, and gaining a consistent supply of high-quality honey. The loan for equipment is gradually repaid through farmers’ additional earnings (Hart & London, 2005). In the remainder of the chapter we find similarities between the published case examples described earlier, and the six channels for social inclusion identified in the cases from our fieldwork in Zambia, Kenya, South Africa and Mozambique.

SOCIAL EXCLUSION, POVERTY AND DEVELOPMENT Social exclusion is a multidimensional concept, widely recognised in both developed and developing countries as playing a role in absolute and relative poverty, and in forms of marginalisation and disadvantage. Tackling various forms of social exclusion is an important underlying theme within the Millennium Development Goals (MDGs). Increasingly international institutions and national development agencies are also engaging with social exclusion (e.g. the World Bank, International Labour Organisation and the UK Department for International Development (DFID) have adopted social exclusion as a multidimensional framework in their work, integrating social exclusion issues into some of their programmes (Beall & Piron, 2009)). In this chapter, while the term ‘social exclusion’ is used, its political and citizenship dimensions, and in particular its economic aspects are also recognised, especially given the often strong economic inclusion impacts associated with social purpose ventures, which in turn can be linked to improved social and poverty alleviation outcomes. The term ‘social exclusion’ is relatively recent, and is primarily attributed to writing in the 1970s by Rene´ Lenoir (e.g. Lenoir, 1974/1989). Social exclusion has been linked to a wide range of social and economic problems amongst specific groups of individuals who might be excluded from secure employment, property, land, citizenship, education, skills, respect or services (Silver, 1994). The intersection of social exclusion, poverty and

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deprivation has received considerable attention by authors such as Amartya Sen (2000), who highlights how the concept of social exclusion complements understandings of poverty as capability deprivation. Sen argues that social exclusion may be considered as directly part of capability poverty, whereby a capability deprivation (e.g. not being able to appear in public without shame) takes the form of social exclusion. However, he also suggests that being excluded from social relations can lead to other kinds of deprivations, further limiting living opportunities (e.g. being excluded from the opportunity to be employed, to access markets or to gain credit can lead to deprivations like malnourishment or homelessness). For Sen (2000), social exclusion is thus both a constitutive part of capability deprivation and an instrumental cause of capability failures. De Hann (2001) also distinguishes between passive exclusion where deprivation is caused without deliberate intent (e.g. through a weak economy) and active exclusion (e.g. where certain groups, such as women, are deprived of access to services, employment opportunities, citizenship or political participation). While discussions in this chapter are framed around the notion of social exclusion, some conceptual limitations are also recognised, as is its relationship with constrained or unfavourable inclusion. Hickey and Du Toit (2007) raise concerns about the relatively uncritical exportation of ‘social exclusion talk’ from policy debates in industrialised countries to poverty debates in ‘developing’ countries. The issue of what ‘exclusion’ means in different cultural contexts is highlighted by Du Toit (2004). An additional area of concern relates to agency and the potential risk of portraying the excluded as helpless victims (Francis, 2006). Finally it may be argued that the underlying narrative shaping much social exclusion research is that ‘inclusion’ is intrinsically good, ignoring the potential for limited, inequitable or disempowering forms of inclusion, described as ‘unfavourable inclusion’ or ‘adverse incorporation’ (Hickey & Du Toit, 2007).

BACKGROUND TO THE RESEARCH This chapter draws upon research undertaken as part of a project examining social purpose ventures in Eastern and Southern Africa and their role in sustainable development and poverty alleviation (see www.trickleout. net). Here we draw upon data collected from a group of eight rural based social purpose venture case studies (see Table 1). Qualitative methods of data collection were primarily employed including over 100 interviews and

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Table 1.

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Case Study Social Purpose Ventures, Their Countries, Areas of Activity and Inclusion Channels.

Organisation Name/ Country Ecofinder Kenya Kenya

Cookswell Enterprises Kenya

ToughStuff Solar Kenya (Uganda, Malawi, Zimbabwe, Mauritius, Madagascar, Tanzania, Ethiopia and developed world)

MICAIA family of organisations (including the Mozambique Honey Company, Ndzou Camp and other inclusive business ventures) Mozambique

Mezimbite Forest Centre Mozambique

Activities Green energy technology; water and sanitation; ecocultural tourism; tree-based enterprise; research and consultancy; social marketing; training and capacity building; advocacy; craft production, marketing and sale. Production, sale and marketing of energy-efficient charcoal stoves, ovens and kilns; tree planting; forestry related consultancy and research; sells multi-use packets of tree seeds. Global sale of solar products. Works with commercial and non-profit partners on Business in a Box (BIAB) interventions with solar village entrepreneurs. Disaster relief work for example in the aftermath of Haiti Earthquake. Inclusive business ventures. Eco-tourism, Ndzou and Binga Camps and Mozambique Ecotours; food and agricultural markets, fruits of the forest processing business; the Mozambique Honey Company, capacity building of beekeepers; Baobab processing business; research and consultancy. Production of high-quality furniture and homeware for export; jewellery; farming and harvesting of natural products; tree planting; consultancy, research and education.

Inclusion of the Rural BoP Entrepreneurs; service users; producers; customers; employees (including as volunteers)

Producers; customers

Entrepreneurs; customers

Shareholders; producers

Employees; producers

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Table 1. Organisation Name/ Country The Mumwa Craft Association Zambia

Tribal Textiles Zambia

The Book Bus Zambia (Malawi and other developing world)

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Activities Craft production, marketing and sale; craft training and capacity building; afforestation; construction rural water wells; HIV/AIDS interventions; biomass energy; fish farms. Production of unique handpainted textile products for domestic and international sale; philanthropic donations to local charities and schools. Book buses tour schools, hospitals and orphanages to promote literacy; works in poor rural communities and Maheba UNHCR refugee camp; donation of books; library development; school to school links; volunteers pay to participate paying for running costs.

Inclusion of the Rural BoP Producers; service users

Producers

Service users

focus groups, as well as observational research and analysis of secondary materials such as annual reports.

SOCIAL PURPOSE VENTURES, INCLUSION AND THE RURAL BOP During the research we identified six channels through which social purposes ventures potentially contribute to tackling social exclusion amongst the rural BoP in Africa and the wider developing world. Inclusion through Employment An example of this route for addressing social exclusion is the for-profit Zambian rural social purpose venture Tribal Textiles based in the remote

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South Luangwa Valley. Artist, director and owner Gillie Lightfoot set up the business more than 20 years ago, to produce unique hand-painted textile products decorated with African and contemporary designs (see Fig. 1). In a poor, geographically isolated region, Tribal Textiles uses fair trade business practices to generate sustainable local employment within the BoP. The business has over 100 staff, and is a major local employer. Many more people are supported locally, both directly and indirectly, through employee wages, wage spending and company procurement. The business also supports local services through charitable giving and provides business opportunities for local micro-entrepreneurs. Viewed more explicitly through the lens of social exclusion, those directly employed by Tribal Textiles and their households benefit from an increase in income, which can enable them to better access health and education services. They may also be better able to purchase goods and participate in local economies, while additional livelihood opportunities can be generated, for example wages generating extra capital that can be used to start small businesses.

Fig. 1. Bags Produced From Recycled Maize Sacks Made by Tribal Textiles at Their Mfuwe Workshop. Income generated from their sale is donated to the local charity Project Luangwa.

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Formal employment with a regular wage income can improve a household’s ability to save, improving resilience to shocks. Positive change can also occur in household relationships and power dynamics (when women become the main or more significant earners). From a capabilities perspective Tribal Textiles helps reduce the exclusion from employment opportunities of rural BoP communities and households in the South Luangwa area, as well as providing scope for addressing the wider deprivations they experience. The fair trade dimension to the enterprise’s work also helps to ensure inclusion/incorporation on more favourable terms. Tribal Textiles is a for-profit enterprise with a strong social ethos, operating a non-profit maximising fair trade approach. These cumulative characteristics problematise attempts to define it (as a social enterprise or traditional business) and, at a wider level, illustrate the complexity and ambiguity surrounding the nature of social purpose venturing in Africa.

Inclusion as Consumers In the second channel social purpose ventures engage with the BoP as consumers of products, as illustrated by the for-profit environmental business Cookswell Enterprises, which produces, markets and sells innovative energy-efficient charcoal cook stoves (see Fig. 2) and ovens to a range of customers, including the BoP, across Kenya and internationally. The Cookswell story began in 1982 when Kenyan Dr Max Kinyanjui started work designing energy-efficient stoves (jikos), with support from the World Bank and national organisation Kenwood. As part of the funding for this project, there was provision for the setting up of a company, Wood Energy Technologies, and the training of technicians (fundis) in jiko making. The success of Dr Kinyanjui’s work in Kenya led to him undertaking similar activities with the World Bank in Malawi during the late 1980s, and in Tanzania in the early 1990s. In the early 2000s Dr Kinyanjui’s son, Teddy Kinyanjui, returned from overseas study and began working in the business. Identifying limitations in company capacity relating to marketing and distribution, Teddy established Cookswell Enterprises as a separate company to address these deficiencies. Teddy continues his late father’s work, and acts as a leading advocate and practitioner for sustainable ‘seed-to-ash’ cooking (Littlewood & Holt, 2012). In line with BoP 2.0 approaches, the innovative sustainable design of the Cookswell products reduces charcoal use in cooking, saving customers money whilst also helping to limit tree cutting and preserve Kenya’s forests.

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Fig. 2. Innovative Energy-Efficient Charcoal Cook Stoves Produced by Cookswell/Musaki Enterprises and Sold to the Rural BoP Along With Small Packets of Multi-Use Tree Seeds.

This small environmental enterprise is also active in tree planting, as part of its commitment to a sustainable cycle of cooking in Africa, and has started selling indigenous multi-use tree seeds in small packets focussing on BoP customers, encouraging customers to grow their own fuel source in their smallholdings and plots of land. A variety of potential benefits are identified stemming from Cookswell’s products and activities across economic wellbeing, opportunity and relational dimensions. For example, reduced energy bills may mean more money is available for food, health and education costs, while household members particularly women are also exposed to fewer particulates in cooking, and potentially have more income within households. Viewed in terms of social exclusion, capability and deprivation, more specifically BoP purchasers gain access to healthier and more nutritious means of cooking; through tree planting they can also develop long-term household energy security, while increased income is useful in addressing other deprivations.

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Inclusion as Producers Illustrating inclusion through the production of goods, the Mumwa Crafts Association is a membership association and non-profit enterprise based in Zambia’s impoverished Western Province, working in the field of craft production, marketing and sales (see Fig. 3 for details of Mumwa’s products). It was founded in 1994 under the leadership of a local Zambian community leader, Mr Kekelwa Mundia. Prior to Mumwa’s establishment, there had been a history of craft projects in Western Zambia initiated and supported by international donors and led by expatriates. Unfortunately, these projects had frequently failed to become self-sufficient, and had ceased either at the end of donor funding or upon the loss of expatriate staff. The failure of these previous projects generated scepticism on the part of international donors about the feasibility of any large-scale craft project in Western Zambia. Various consultancy studies commissioned by the European Union and Irish Government amongst others in the early 1990s reinforced this perception, concluding that while such a project might be possible it

Fig. 3.

Mumwa Craft Association Products.

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would require substantial start-up capital and on-going support from donors (Littlewood & Holt, 2013). It was with this backdrop and in contrast to previous craft projects in Western Zambia, that the Mumwa Craft Association was founded with limited capital and donor support by committed local people with the aim of using crafts as a vehicle for community development and poverty alleviation. Mumwa developed organically from the bottom-up building on the commitment and ‘zeal’ of its members. From its inception member participation and ownership of the organisation have been central to the way the organisation operates. The organisation now has over 3,500 members, many of whom are BoP informal microenterprise craft producers living in remote rural communities. Mumwa facilitates market access for its members, supporting and providing livelihood opportunities, and increased household incomes. Mumwa sells products nationally and internationally with the surpluses generated used for community development activities, including building rural clinics and water wells. Positive social and poverty alleviation impacts stemming from their activities are recognised across a range of stakeholder groups, but particularly amongst craft producer members, their families and dependants. These groups often experience an increase in individual and household incomes, which can be used to counter deprivations in access to food, shelter, education, health, etc. Relational benefits may also occur, for example increased status for producers within households and communities. Western Province is Zambia’s poorest region. It is economically and politically marginalised, with limited formal employment opportunities and private sector investment. The Mumwa Craft Association is thus an important actor at a regional level tackling rural marginalisation and underdevelopment. Social purpose ventures can also positively include the poor as producers of commodities, particularly agricultural commodities. For example EcoMICAIA and the Mozambique Honey Company purchase honey from BoP producers who have been provided with training in beekeeping, and given loans for the purchase of hives. The Mozambique Honey Company pays producers a premium price for their honey, and guarantees to purchase honey produced using non-environmentally destructive techniques. This intervention facilitates market access, while the additional income producers’ gain can be used to address capability deprivations and failures. Eco-MICAIA is a Mozambique-registered social enterprise, developed as part of the family of initiatives by the British charity MICAIA UK. The Mozambique Honey Company was established in 2010 through a tripartite arrangement involving V&M Grain Co., the Honey Producers Cooperative

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and Eco-MICAIA. Eco-MICAIA’s role within the MICAIA family is to help communities and local people gain better access to local markets and to secure a stake in owning and managing successful enterprises. It also provides mission-related services to funders, investors, NGOs and communities. Any net profits made by Eco-MICAIA are used to help sustain the MICAIA Foundation’s core programmes. Eco-MICAIA aims to show that community economic development does not have to be about small-scale ‘income-generating projects’. Rather, it can be about serious investment in viable businesses that have the potential to grow and to create lasting opportunities for local people. Eco-MICAIA’s founding directors are Milagre Nuvunga and Andrew Kingman.

Inclusion as Entrepreneurs In this channel the BoP are included as micro-entrepreneurs. MNC-led examples include VisionSpring’s ‘vision entrepreneurs’ and ITC’s E-choupal entrepreneurs (Hart & London, 2005). In our case examples, both ToughStuff Solar and EcoFinder Kenya utilise micro entrepreneurship development approaches involving the sale or rental of solar lights. ToughStuff Solar operates across a number of African countries, where in collaboration with commercial and non-profit partners, it runs a microenterprise ‘Business in a Box’ (BIAB) programme. In this programme local Solar Village Entrepreneurs (SVEs) are selected, they are equipped with a proven business model, and their efforts to build a profitable microbusiness are supported. In the ToughStuff example the SVEs sell solar products to people in their communities, while in the EcoFinder Kenya case a rental approach is adopted (see Fig. 4). In both instances the initial cost of the lights is recouped by the organisation at a mutually agreed upon rate from the entrepreneurs. These interventions have positive inclusion benefits for both microentrepreneurs and their customers and communities. For the entrepreneurs an additional livelihood and source of income is created which can facilitate participation in local economies, and allow them to address deprivations in health, education, nutrition, etc. The low requirements for entry in terms of skill, initial capital outlay, time and physical labour also mean this livelihood is ideally suited for individuals and groups that may be constrained from other livelihood activities and opportunities, for example the elderly, people with disabilities, the sick, those with limited skills and education. For those purchasing or renting the lights, it may enable them and

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Solar Lights to be Distributed to Local Community Solar Entrepreneurs by EcoFinder Kenya.

their families to work in the evening that is children doing homework. There is also an inherent wellbeing component in having access to lighting. ToughStuff is an example of an international social enterprise headquartered in the United Kingdom. It was founded by Adriaan Mol and Andrew Tanswell in June 2008 to provide affordable solar-powered products for low-income people. ToughStuff started trading in Madagascar in July 2009, with 125,000 units sold in the first two months. Following its success in Madagascar, the enterprise moved into Kenya in July 2010. The company continues to grow and is expanding rapidly into neighbouring East African territories. ToughStuff is planning further expansion, initially into Western and Southern Africa, then internationally, capitalising on ongoing pilot programmes. In 2010, ToughStuff moved into emergency relief. Since the 2010 earthquake over 30,000 ToughStuff emergency kits have been distributed in Haiti by the company’s partner organisations. In contrast, Ecofinder Kenya grew from a community-led initiative. It was formed in 1995 by a group of like-minded young people residing in

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Kisumu near Lake Victoria who shared a common desire to help their community tackle the many social, environmental and development problems facing it. Reflecting its formation by young people, EcoFinder Kenya was and remains particularly concerned with the challenges faced by young people. Initially EcoFinder Kenya was founded under the name the EcoFinder Youth Movement; however, this name was deemed to have political connotations and was soon changed to the EcoFinder Youth Group. EcoFinder began primarily as a drama group undertaking social marketing for NGOs. Over time, this drama group evolved into a registered self-help group and Community Based Organisation (CBO) for young people, expanding its areas of activity. EcoFinder Kenya recently changed its legal status and is now a registered non-governmental organisation. Ecofinder Kenya uses solar lights supplied by ToughStuff in one of their livelihood initiatives.

Inclusion as Service Users The rural BoP frequently have limited access to services which are often of a low standard. There are a variety of ways in which social purpose ventures can engage with service provision for such groups. One approach is illustrated with reference to the Book Bus Foundation, a UK based notfor-profit social enterprise which works to support education service provision in rural areas in Zambia and Malawi (and elsewhere in the world through other programmes). The Book Bus Foundation was established in 2007 by Tom Maschler. Over the course of four decades in the publishing industry, Tom nurtured the careers of many of the twentieth century’s most esteemed authors, as well as coming up with the idea for the Booker Prize. His inspiration to start the Book Bus came after a trip to Zambia where he witnessed firsthand the role of literacy as a key life skill in uplifting a child from poverty to prosperity. Through Tom’s hard work and the assistance of donors and supporters, including children’s author and illustrator Quentin Blake who remains a charity trustee, the first Book Bus (Tiger) was purchased and equipped. After a send-off party in Trafalgar Square London, Tiger arrived at Southampton docks stocked with over 5,000 donated books. It was at this stage that the Book Bus Foundation entered into partnership with the for-profit travel company VentureCo. VentureCo specialises in adventure travel and was set up in 1999 by David Gordon and Mark Davison. Each has over 25 years of experience driving overland trucks and running

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expeditions around the world. VentureCo brought a wealth of knowledge and expertise to this partnership, as well as relevant Air Travel Organisers’ Licensing (ATOL). Through this partnership the present Book Bus volunteer programme was devised, which is administered through VentureCo as a strand of their wider portfolio of volunteer and adventure tourism activities (Holt & Littlewood, 2013). The Book Bus Foundation operates mobile book buses which tour schools, hospitals and orphanages in rural areas, promoting reading to children who would otherwise have little or no access to books. In addition to providing a mobile library service, on-board volunteer crews, who pay to travel with the Book Buses sustaining its activities, engage with children and teachers to promote literacy. Since its inception the Book Bus Foundation has also donated over 39,000 books to schools in Africa. The Mumwa Craft Association invests some of its surpluses in supporting local health services, for example providing funds to build an additional maternity room at the Mabumbu rural health clinic. This more philanthropic interaction with service provision was encountered in other case studies. Finally social entrepreneurship approaches may be applied to service delivery, whereby ventures provide services such as water, electricity and sanitation at a low price suitable for BoP markets. Alternatively BoP segments may be assisted in developing their own local service delivery solutions. For example EcoFinder Kenya helps households in Lake Victoria wetland communities to pay for the construction of ‘eco-san’ compostable toilets (see Fig. 5). These toilets have positive benefits in terms of health and sanitation, food security through the production of fertilizer, human wildlife conflict as farmers are less likely to send cattle into Lake Victoria mangrove swamp areas to graze where they come into conflict with wildlife, and finally in terms of dignity and freedom from shame.

Inclusion as Shareholders In this final channel the rural BoP gain inclusion through shareholding in a social purpose venture. This can be illustrated by the Mozambique social enterprise Eco-MICAIA, which works with communities and private sector partners on a number of inclusive business ventures. Their Mozambique Honey Company is a good example of this approach, whereby almost 5,000 rural BoP honey producers are organised into cooperatives with a 45% shareholding in the business. These honey producers receive profit dividends, and through their representatives have input into company

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‘Eco-san’ Toilet in Lake Victoria Wetland Household.

decision making. Eco-MICAIA also works with communities in the Chimanimani Conservation Area on an eco-tourism venture, where through the Associac¸a˜o Kubatana Moribane these communities have a shareholding in the Ndzou Camp. The six inclusion channels identified above are not mutually exclusive. A good example of this is the Mezimbite Forest Centre, a social purpose venture based in central Mozambique producing high-quality crafts for export and with a strong focus on environmental sustainability. The Center was founded in 1994 by Allan Schwarz, an architect, environmentalist and former teaching fellow at MIT, and gained formal legal status in 1996. Mezimbite works to eliminate poverty in forest communities by providing sustainable economic alternatives that protect and restore the forest ecosystem. It provides employment opportunities for members of the rural BoP, while also purchasing agricultural produce from local producers, and providing livelihood training to local households in areas like honey production and agro-forestry. The six channels are also not exhaustive; there are undoubtedly other channels through which social purpose ventures contribute to tackling rural social exclusion. Moreover, the potential for social purpose ventures to negatively impact on inclusion, or for adverse or unfavourable incorporation, must also be recognised. In the following section, drawing upon

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the case examples, some common characteristics of successful social purpose ventures are identified from the cases.

CHARACTERISTICS OF SUCCESSFUL RURAL SOCIAL PURPOSE VENTURES Intervening, Integrating and Innovating for Environmental Sustainability Across the cases, environmental sustainability was encountered as a key theme informing the operational practices of rural social purpose ventures. In some instances it was also a central component of their development interventions, while in others the products or services they sold were environmental in nature. In a number of cases operating in a way that was environmentally sustainable was considered key to long-term venture survival. For example, in the case of the Mumwa Crafts Association, education and outreach work was undertaken with craft producers, encouraging tree planting and the uptake of techniques for the sustainable utilisation and harvesting of natural resources in craft production. In interviews with senior staff the example of a Zimbabwean-based social purpose venture producing craft products from bamboo, which had collapsed after two years through overuse of local natural resources, was cited as a cautionary tale. Similarly, the Mezimbite Forest Centre, which produces high-quality crafts from indigenous Mozambican hardwoods, has integrated a largescale tree planting programme into its operations. Both ToughStuff Solar and Cookswell Enterprises innovate for environmental sustainability through their products. In the case of Cookswell the business developed following a World Bank funded programme aimed at creating energy-efficient stoves, which could be sold to the BoP. The strong green credentials of the company and the accredited status of its products give Cookswell an advantage over competitors, as does the inclusion of tree seeds, with every purchase aimed at encouraging positive environmental behaviour change. In ToughStuff Solar’s case, a concern for environmental sustainability, alongside meeting the need for appropriate context specific lighting technologies, is central to its business model. For many of the case study ventures being green added value; this was particularly the case where the businesses were selling internationally. Finally, for some of the ventures addressing environmental sustainability

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concerns was a central component in their community development interventions. For example the holistic approach adopted by EcoFinder Kenya in its work with communities in the Lake Victoria wetlands recognises the intersection of environmental sustainability with social and economic development and poverty alleviation efforts.

Participation, Embeddedness and Native Capability In recent years there has been recognition of the need for the co-creation of value, with the poor included in venture design and product development. It has also been acknowledged that initiators of BoP programmes need to engage with the BoP as partners rather than simply viewing them as potential customers or producers (Hart, 2005; London, 2007; London & Hart, 2004). Listening to and engaging with the BoP in more meaningful, inclusive and equitable relationships was a characteristic also observed amongst our rural social purpose venture case studies. This was evidenced in the inclusive business ventures initiated by the social enterprise Eco-MICAIA, where, for instance, in the case of the Mozambique Honey Company, producers have input through their representatives in company-level decision making. In the Binga Camp eco-tourism venture, meaningful dialogue with the community also occurs through the Associac¸a˜o Kubatana Moribane. Utilising a slightly different approach, the Book Bus Foundation Zambia has run workshops with local teachers, school principals and wider local education representatives, with the aim of both building local capacity and acting as a forum for programme design and development, and to ensure that the activities of the Book Bus add real value to education provision. In the Mumwa Craft Association, and in some of the other case studies, participation is further married with accountability to the BoP. All Mumwa members pay a relatively nominal annual fee to the Association, and this is used for programme activities and administration. The Association also has an Annual General Meeting (AGM) where the members are represented by elected craft group leaders and, at these meetings, Mumwa’s board is held accountable to the members, with the management team accountable to the board. The Mumwa case study is also illustrative in demonstrating the benefits and importance of leveraging local or native capacity; it also shows that ventures are embedded in local communities. Before Mumwa’s establishment in 1994 there were numerous failed attempts to set up craft project ventures in Zambia’s Western Province. However, Mumwa was

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founded ‘bottom up’ with almost no capital funding and under local leadership. Mumwa takes its name from a particularly resilient tree used in craft production, and it was Mumwa’s local embeddedness, the capacity and long-term commitment of its local staff to mobilise resources and leverage relationships that have been so integral to its survival over time. However, this does not suggest that internationally led social purpose ventures cannot achieve such local embeddedness, or that targeted support by international donors and development actors have not played an important role in Mumwa’s success and growth. Overall, Mumwa’s experience illustrates the benefits of complementary multi-stakeholder partnerships in bringing together organisations with different skills, knowledge and competencies.

Outlook and Orientation, Business Fundamentals and Market Selection The average age of the case ventures in this study is 16 years. The oldest has existed, albeit in various guises, for 31 years; the youngest for five years. Another four ventures are around 20 years old. These are mature social purpose ventures. They have survived and flourished because of the factors mentioned previously, such as their recognition of environmental sustainability concerns and local embeddedness, participation and utilisation of native capacities. However, they have also selected their markets well; are outward and in some instances internationally orientated; have developed complementary linkages with MNCs and major retailers (in some cases this has entailed entering into supply chains, in others it has taken the form of more philanthropic corporate social responsibility type interactions); and finally, they have sensibly moved away from grant or donor funding to become more self-sufficient through trading. The success of the case study ventures in selecting their markets, and the basis on which they compete, can be illustrated with reference to craft producers like Tribal Textiles, the Mezimbite Forest Centre and the Mumwa Craft Association. The former two businesses in particular produce unique, high-value products for sale to domestic and international customers. They differentiate themselves from competitors on the basis of quality and uniqueness, as well as on their wider social and environmental story around production and sale that allows for a social premium. The Mumwa Crafts Association is also working with international partners to develop more

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advanced products integrating multiple materials that can be sold for a higher price. Cookswell Enterprises competes with domestic and international lowcost competitors in formal and informal economic spaces on the basis of its product quality and positive environmental credentials. Cookswell has also been successful in getting its products into larger regional retailers and supermarkets. Several other case enterprises also have supply contracts with larger retailers at domestic, regional and global levels. The regular bulk purchasing associated with such contracts can be critical in venture growth. In the case of the Book Bus Foundation, its interactions with MNC publishers have been more philanthropic, taking the form of largescale mutually beneficial book donations. Despite frequently operating in quite remote and marginal rural regions and communities, these case study ventures are often well-networked internationally both in terms of customers and with regard to wider supporters and advocates. These networks and relationships are drawn upon to aid business growth, and also during times of crisis. Finally, amongst the case study ventures, and particularly those older and more environmentally oriented, importance was attached to operating efficiently and effectively, and on being self-sustainable through trading. Income generation was not an afterthought or an added extra but a central concern. In interviews scepticism was often encountered about charities and traditional NGOs engaging in trading activity and moving into social venture spaces, with one entrepreneur outlining his fear of appearing ‘too NGOish’ with repercussions for the reputation of his business. Amongst the cases many of the founder entrepreneurs came from more traditional business backgrounds, bringing this knowledge, skills and experience to bear in addressing a social and or environmental problem. Some scepticism was also encountered in interviews with entrepreneurs about development practitioners setting up social purpose ventures. However, entrepreneurs were willing to recognise some of their own limitations and gaps in knowledge and capacity, especially with regard to the social and development side of their venture. In general, the case study ventures had achieved a high level of income through trading activity. This benefitted them in terms of resilience, and also helped ensure they were not dictated to by international donors and external actors, or had to invest constant time and resources bidding for funding. This kind of funding and activity was often an added extra, for example, in the case of the Mumwa Craft Association’s work with the Zambian Government in constructing rural water wells.

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Implications for Policy, Practice and Research This chapter adds to knowledge in the field of social purpose venturing in Africa and wider developing world environments, helping to address a gap in empirical research. Discussions in the chapter contribute to questions and debates about the definition and nature of social purpose ventures in Africa. Furthermore, they shed light on interactions between social purpose ventures and the BoP, and highlight how such ventures can contribute to addressing social exclusion in its various guises, as well as sustainable development in rural households, communities and regions. This chapter is also unusual in its use of multiple rural venture case studies, across a number of countries. Additionally, this chapter has implications for research in terms of themes for future exploration such as: fostering and encouraging local embeddedness and participation; explicitly mapping and measuring social inclusion impacts of social purpose ventures; and the influence of founder entrepreneurs’ characteristics and the wider context in which startup processes occur. This chapter also has various implications for practice. In particular, from the case examples, various common characteristics or traits, which appear to factor into the success of social purpose ventures, are identified. Notably these are: engagement with environmental sustainability concerns; the benefits of local embeddedness, participation and utilising native capabilities; the importance of outward and often international orientation for success and up-scaling, the value of developing complementary links with MNCs and larger businesses; and more generally getting the business fundamentals in place with self-sufficiency through recognising trading as a key objective. Alongside the stories and insights presented on successful enterprise characteristics, this chapter also describes better practice examples of how social purpose ventures can operate and engage with the BoP to contribute to positive social inclusion. The social exclusion and capabilities lens outlined may also be useful as a framework for social purpose ventures to help them understand their positive and negative impacts. Finally, this chapter has implications for policy. It illustrates the potential of social purpose ventures for addressing social exclusion, poverty and disadvantage in rural regions and communities. Furthermore, it presents insightful examples of up-scaled initiatives, which collectively argue for more appropriate policies, legislation and support for such ventures as vehicles for rural development. This applies to both state actors in the developed and developing worlds, and wider international institutions.

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The chapter also presents a snapshot of the complex and heterogeneous landscape of social purpose venturing in Africa. It illustrates the great potential of social purpose venturing for addressing issues like social exclusion, and for contributing to development on the Continent and globally. Nevertheless, many questions remain, particularly in relation to whether, and if so how, the potential of social purpose venturing as a catalyst for sustainable development will be realised.

ACKNOWLEDGEMENTS The authors would like to acknowledge the financial support of the Economic and Social Research Council (ESRC grant reference RES-06125-0473). We would also like to thank all the participants in our interviews and focus groups, and the access granted to us by the case studies. All views expressed in this chapter are those of the authors only. For further information, see http://www.trickleout.net/index.php/casestudiesmenu

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CHALLENGES FACING RURAL FARM ANIMAL VETERINARY ENTERPRISES IN THE UK Katherine Adam, Colette Henry, Sarah Baillie and Jonathan Rushton ABSTRACT Purpose Agriculture and associated services are central to the rural economy of the United Kingdom. Rural veterinary enterprises are important providers of services to livestock producers, but are now facing concerns over their future economic viability. The objectives of this chapter are to outline the changes occurring in the veterinary and agricultural sectors, and to explore the main issues affecting veterinary enterprises in a changing business environment. Methodology This is a conceptual chapter contextualised mainly within the United Kingdom. As such, the methodological approach comprises a critical review of current academic literatures, as well as government reports and relevant media articles. Findings The findings demonstrate that the commercial success of rural veterinary enterprises is critical to ensuring the future provision of high-quality animal health services to both farmers and government. The

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current issues facing farmers are likely to affect their willingness and resources to invest in veterinary services. Furthermore, farmers may have doubts as to vets’ ability to provide business-focussed services that add value. In addition, many public services are outsourced to private veterinary enterprises, and forthcoming policy changes are expected to lead to reduced income from public sources for both vets and their livestock farming clients. While wider issues affecting agriculture are beyond the control of private veterinary practitioners, veterinary enterprises will need to ensure that they can deal with such challenges and, where required, adapt their services accordingly. Research limitations The chapter is based on a review of extant literatures, and the scope of the research is therefore limited to existing knowledge about the farm animal veterinary business landscape. Originality/value The chapter summarises current knowledge of the challenges facing rural veterinary enterprises. While some of the issues described are specific to the veterinary sector, many are also relevant to other rural SMEs providing knowledge-intensive services to farmers. The chapter also describes areas requiring further empirical research. Keywords: Veterinary; rural; farm animal; enterprise; challenges

INTRODUCTION Livestock production and associated services are central to the UK rural economy. Rural veterinary enterprises are important providers of animal health services to their farming clients. Most veterinary practices are small to medium rural enterprises, as are the majority of their farming clients. In recent years, concerns have been raised about the capacity of the veterinary profession to provide the services required by farmers and to implement government strategy on animal health (EFRACom, 2003). As many public animal health services are provided by private veterinary practices, the future availability of these services is linked to the economic viability of individual veterinary enterprises (Brown, 2004). The UK veterinary business landscape traditionally consisted of independent practices owned and managed by veterinary surgeons, either as partnerships or as sole traders. Farm animal veterinary services are provided by farm animal specialist practices, which only treat farm animals, and by mixed practices, which also treat other species. Approximately one

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quarter of the veterinary practices registered with the Royal College of Veterinary Surgeons (RCVS) are listed as treating farm animal species, and the majority of these are located in rural areas (Robertson-Smith, Robinson, Hicks, Khambhaita, & Hayday, 2010). Within mixed practices, there may be separate teams for different species, or mixed practitioners treating all species (VDC, 2012). Only 2.9% of vets reported that their main area of employment was exclusively in farm animal practice, while 21.7% work mainly in mixed practice which may involve varying proportions of farm animal work (Robertson-Smith et al., 2010). Although many rural veterinary enterprises also provide companion animal services, this chapter will focus exclusively on veterinarians’ roles as service providers to the UK livestock industry. This area of research is important because the issues facing farm animal veterinary practice reflect many of the wider challenges currently facing other rural businesses providing professional services to the agricultural sector. In this chapter we explore the current trends and main challenges facing veterinary enterprises in a changing rural business landscape. The methodological approach comprises a critical review of current academic literatures, as well as government reports and relevant media articles. The chapter describes the farm animal veterinary sector in the United Kingdom and the services provided to farmers, and reviews current trends and driving factors behind the changes occurring in the sector. Finally, we consider how the veterinary profession is adapting to these changes.

TRENDS IN FARM ANIMAL PRACTICE A survey of UK vets in 2010 found that the proportion of veterinary time devoted to farm animals has halved in recent years: less than 10% of veterinary time in the United Kingdom was spent on food animals in 2010, compared to over 20% in 1998. Furthermore, over 50% of respondents believed that farm animal work would continue to decline (RobertsonSmith et al., 2010). An increasing focus on companion animals within the veterinary profession is clearly evident, but it is difficult to determine if there has been an absolute decline in the number of vets and practices treating farm animals, or if the proportional decline observed is due to an increase in companion animal work. The driving factors behind the current trends in farm animal practice have been the subject of much debate, including whether the observed

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decline is predominantly driven by changes occurring in the veterinary profession (i.e. supply) or in agriculture (i.e. demand). Much of the relevant literature to date has focussed on the supply side, and particularly the quantitative supply of veterinary graduates in relation to a putative manpower shortage. A shortfall in supply, which would leave farmers unable to access the veterinary services they require, would also affect farmers’ businesses and also negatively impact upon animal health and welfare. However, there is little evidence of farmers struggling to access veterinary services: a survey of farmers in England found that only 2% of farmers had ever experienced difficulty in accessing veterinary services (Defra, 2008). The number of farm animal vets in the United Kingdom currently appears sufficient to meet demand, although there may be some localised shortages in remote areas, as well as issues with the quality of the services provided and how well these meet farmers’ needs (Lowe, 2009). It seems most likely, therefore, that the observed decline is primarily driven by reduced demand as a result of changes occurring in agriculture. Rural veterinary enterprises must have a critical mass of farm clients to make it viable for them to provide farm animal services, and some practices are choosing to give up farm animal work as a result of declining demand from farmers. There are concerns that this will lead to remaining practices covering very large geographical areas, which will make the legal requirement for vets to provide 24-hour emergency coverage very challenging (Orpin, 2003).

INTRINSIC CHALLENGES FOR VETERINARY PRACTICES In order to understand the business environment in which veterinary enterprises operate and the challenges they face, it is necessary to understand the services that they provide. Rural veterinary enterprises provide professional services to livestock farmers throughout the United Kingdom. While extant literatures exclude healthcare and specialist service providers to resourceintensive sectors such as agriculture from the definition of ‘knowledgeintensive business services’ (KIBS), it could be argued that there are elements of KIBS in the professional support services provided to agricultural businesses by veterinary practices (Muller & Doloreux, 2007). Veterinary services have been classified as curative (or reactive) services, preventative services, production of pharmaceuticals and human health protection (de Haan &

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Umali, 1992). The main challenges for rural veterinary businesses associated with each group of services are discussed here in more detail.

Clinical Services

Preventative and Reactive

For many years, the veterinary profession has attempted to move away from the traditional, reactive, “fire-brigade” approach of treating sick animals when problems arise, towards the role of the farm vet as a trusted advisor on animal health, working with the farmer to prevent animal illness and injury on the farm. It is widely agreed that this would offer benefits to the farmer, as it would result in better overall animal health and welfare by preventing disease from occurring and reduce the costs associated with disease (Statham, 2011). However, despite efforts by the veterinary profession to make this shift to preventative medicine for over eighty years, it is still not as widespread as might be expected. It has been observed that the correct combination of social, economic and political factors must be present for the widespread adoption of preventative medicine by vets and farmers, and that there is little empirical evidence for the cost-effectiveness of preventative services (Woods, 2012). A limiting factor in demand for preventative services from veterinary practices may be competition from outside the profession. UK legislation prohibits anyone other than a registered veterinary surgeon from diagnosing animal disease, performing medical and surgical treatments or prescribing controlled veterinary medicines, but consultancy services are not legally protected. Farmers have access to advisory services on the management of their livestock enterprise from a wide range of sources, including feed suppliers, agricultural consultants and industry organisations (Atkinson, 2010). One of the major challenges facing farm animal vets is to prove their worth in providing animal health consultancy services to farmers. While sick animals must be treated for legal, moral and economic reasons, investing in preventative services is optional, and farmers must be able to see the benefits of this investment. It is essential that vets show how they can add value, help farmers to meet their statutory requirements and improve productivity and profitability. History demonstrates that the demand for veterinary services can be influenced by education and policy. The veterinary profession identified and developed a new market for its services by sharing a common goal of improved dairy productivity at a national level with farmers and government after the Second World War. A group of influential veterinary

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surgeons strongly promoted the unique contribution that vets could make to achieve this aim by improving reproductive efficiency in dairy cows. Through a combination of government support, education of practising vets and marketing of the services available to farmers, demand for dairy fertility services became widespread (Woods, 2007). The effect of this campaign can still be seen today, when routine fertility work is central to modern dairy practice (Hudson, Breen, Bradley, & Green, 2010) and demonstrates how vets can influence uptake of the services that they are able to provide.

Medicines In 2001, the Competition Commission ruled that vets in the United Kingdom had a monopoly over the supply of prescription-only veterinary medicines, and must offer their clients other options, such as supplying a prescription if requested. As a result, vets are now facing competition in the supply of veterinary drugs, which was previously a major source of income for many practices. Practices which previously subsidised the provision of other services through medicine sales must now reconsider their pricing structure.

Human Health Protection Vets have an important role to play in protecting human as well as animal health, particularly in farmed animals, which form the first stage of the food chain. In a survey of what UK farmers wanted from their vets, farmers’ requirements for preventative services, reactive services and supply of medicines were clearly reflected; however, there is a notable absence of demand from farmers for public health services (Lowe, 2009). This is likely to be linked to poor market signals on food quality and perhaps a lack of understanding of farmers’ legal responsibilities under EU food safety legislation (EU, 2004), and emphasises that demand for these services comes primarily from government, not from farmers. A range of public veterinary services, such as surveillance for animal diseases which can be transmitted to humans, are now provided by private practitioners as a result of the general neoliberal shift in policy making (Enticott, Lowe, & Wilkinson, 2011). Rural veterinary practices do not receive any direct financial support from government (with the exception of

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the Highlands and Islands Veterinary Services Scheme, which subsidises veterinary services in remote areas of Scotland), but many practices are contracted to provide government-funded public health services, such as bovine tuberculosis testing. However, this can leave private practices vulnerable to changes in policy. For example, when bovine brucellosis testing was suddenly withdrawn, it removed a major source of income for many rural veterinary businesses (Lowe, 2009).

BUSINESS CHALLENGES The main issues affecting rural veterinary enterprises are centred around financial and staff management, as for many small businesses. However, farm animal veterinary practices face some specific intrinsic business challenges. Financial In a survey of UK veterinary practices providing farm animal services, over half of the respondents identified financial issues, including maintaining profit and turnover, and collecting payment, as the main challenges currently facing their businesses (VDC, 2012). This finding supports concerns about the future economic viability of farm animal practices, and while it reflects declining demand for farm animal services due to changes in the agricultural sector, it may also be related to issues with the management of rural veterinary enterprises. Surveys of vets in the United States have found that they often did not apply the management and marketing practices available to them due to a lack of business skills, and that they sacrificed income as a result (Brusk, White, Goehl, & Dhuyvetter, 2010; Cron, Slocum, Goodnight, & Volk, 2000). It seems highly probable that similar issues are occurring among UK vets. This may be because vets see themselves primarily as clinicians and scientists rather than as businesspeople, and undervalue the services that they can provide, both to individuals and to society (Lievaart, Noordhuizen, Buckley, & Van Winden, 2008; Lowe, 2009). The traditional veterinary career path culminated in practice ownership and around half of UK veterinary surgeons are self-employed, compared to one in ten of the general working population in the United Kingdom. It has been suggested that some vets will have become business owners,

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perhaps against their own inclination, as this was the only career path available to them (Wright, 2011). The importance of good practice management and marketing to optimise the services available to farmers (Jensen, English, Menard, & Holland, 2009) and promote practice growth (Brusk et al., 2010) have been highlighted in the United States, and a recent UK report concluded with a series of recommendations for the profession to improve the business skills of practicing vets through ‘a structured programme of training, consultancy and mentoring’ (VDC, 2012).

Staff Staff issues were rated second only to financial issues as challenges facing veterinary businesses (VDC, 2012). As providers of knowledge-intensive services, veterinary businesses rely on the professional knowledge and skills of their staff. However, practice owners often say that they find recruiting and retaining good farm vets extremely challenging (Brown, 2004). Increasing the supply of veterinary graduates with an interest in farm animal work has been proposed as the solution to this issue. In the United States, experts predicted substantial future deficits in the supply of food animal vets (Andrus, Gwinner, & Prince, 2006), and interventions such as loan repayment programmes were implemented to encourage graduates to enter farm animal practice in rural areas. Within only a few years, there were early indications that these interventions may have resulted in an oversupply of food animal focused veterinary graduates (AABP, 2011). Interestingly, there is recent evidence that the proportion of UK graduates who wished to enter mixed or farm animal practice (BVA, 2009) was higher than the proportion of vets working in those areas (Robertson-Smith et al., 2010); indeed, there does not appear to be any current shortage of UK veterinary graduates prepared to work with farm animals. The difficulties that veterinary businesses report with recruiting and retaining farm animal vets may reflect staff management issues. Research from the United States emphasises the importance of the recruitment process in selecting the right candidate, and notes that this is often challenging for independent, rural veterinary enterprises that do not have access to specialist human resources staff (White, Gwinner, Andrus, & Prince, 2007). There may be a shortage of experienced farm animal vets as opposed to new graduates with an interest in farm animal work as many vets move away farm animal work early in their career due to a lack of support in the

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transition from university to practise and to negative employment experiences (Robinson, Hooker, & Barber, 2004). Discrepancies between the expectations and preparation of veterinary students and the realities of farm animal work also contribute to the difficulties with retention: both vets and farmers in the United Kingdom have raised concerns that new graduates are not adequately prepared for farm animal practice (Brown, 2004; Robertson-Smith et al., 2010). A list of the specific competencies required of new graduates for each farm animal species has been compiled through detailed consultation with experienced practitioners in the United States. The importance of both clinical and non-clinical skills, including a detailed understanding of agricultural production systems and relevant terminology, is emphasised (Miller, Hardin, Cowart, & Ellersieck, 2004). Students from a farming background were consistently found to be more likely to enter and remain in farm animal practice in several countries including Germany (Kostelnik, Lotz, Soetje, & Heuwieser, 2010), France (Sans, Mounier, Be´net, & Lijour, 2011), the United States (Gwinner, Prince, & Andrus, 2006; Villarroel et al., 2010) and Australia (Heath, Hyams, Baguley, & Abbott, 2006). This may be due to a better understanding of agriculture and more realistic expectations of rural practice among students with previous experience of farming, and suggests that students without a background in agricultural are not always gaining this knowledge from their training.

EXTRINSIC CHALLENGES AGRICULTURAL ISSUES AFFECTING DEMAND FOR VETERINARY SERVICES Demand for farm animal veterinary services comes from farmers and government, and the agricultural business landscape therefore strongly influences the demand for services (Henry, Baillie, & Rushton, 2011). UK food animal production is shaped by agricultural policy, as well as market forces at local, national and international levels. The UK agricultural industry is currently facing a number of challenges, which may affect demand for veterinary services and contribute to the observed decline in farm animal veterinary work. The veterinary profession is clearly aware of this, as practising vets cited ‘agricultural sector/farming issues’ amongst the major challenges facing the UK veterinary profession in recent years (Robinson & Hooker, 2006; Robertson-Smith et al., 2010).

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Agricultural Policy Agriculture in the European Union (EU) receives substantial financial support through the Common Agricultural Policy (CAP) in the form of direct subsidy payments to farmers, market management and general support for rural development. Previous CAP reform led to the introduction of the Single Farm Payment Scheme in 2005 and the decoupling of subsidy payments from production, whereby subsidies were no longer calculated according to the number of animals on the farm. This is likely to have contributed to the continuing decline in UK livestock numbers (Oglethorpe, 2005) which will, in turn, reduce demand for veterinary services. In the past, improving productivity has been a major incentive for farmers to seek veterinary input, but if productivity is no longer directly linked to subsidy payments, part of the financial incentive for farmers to involve vets is lost. This is particularly relevant for the beef and sheep sectors, which rely most heavily on subsidy payments and generate little income from agricultural production (Defra, 2013). Further CAP reform in 2015 will reduce the overall budget available for agricultural subsidies in the UK (Defra, 2014). The United Kingdom is already undergoing a shift towards a more marketorientated approach to the provision and funding of animal health services. This has occurred previously in other countries such as New Zealand, where all subsidies and other state supports to agriculture were withdrawn in the 1980s. In response, self-regulation of animal health issues by the industry has developed, and costs are shared between farmers and the state (Bicknell, Wilen, & Howitt, 1999; Enticott et al., 2011). Cost sharing and responsibility for animal disease control and surveillance between farmers and government are currently under review in the United Kingdom, with the aims of increasing farmers’ engagement in animal health and reducing public spending (Defra, 2010). This will also create new challenges for farmers, in terms of both taking on new responsibilities and meeting associated costs in the future, and is also likely to affect veterinary businesses.

Agricultural Markets Despite support via the CAP, UK agriculture is still vulnerable to fluctuations in market prices for the commodities consumed (e.g. grain for feed) and produced (e.g. meat, milk, wool) by livestock farms. For example, income on grazing livestock and dairy farms in England decreased in 2013 due to high feed costs (Defra, 2013). Conversely, price spikes such as high

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livestock prices in 2010 create optimism among farmers (Rowntree & Clifford, 2011). Due to uncertainty and decreasing profit from agricultural production, many farmers have diversified into other, non-agricultural activities to boost their income. As these activities are unlikely to require veterinary input, this trend may further reduce demand for vets’ services (Henry et al., 2011).

Animal Health Animal disease may have serious financial implications for farmers, in terms of both decreased productivity and loss of markets due to trade barriers. A survey of UK farmers found that animal health issues were important, and predominantly negative, drivers of farmers’ confidence in the future of their enterprise (Rowntree & Clifford, 2011). This may reflect farmers’ experiences of severe disease outbreaks, which have occurred in recent years in the United Kingdom, including foot and mouth disease, bovine spongiform encephalopathy (BSE) and bluetongue. The recent emergence of Schmallenberg virus in cattle and sheep (VLA, 2012) demonstrates the constant possibility of outbreaks of novel or exotic disease, and the need for vigilance and preparation from vets and farmers. The demand for farm animal veterinary services will increase sharply in response to animal disease, as occurred in the 2001 outbreak of foot and mouth disease (Thompson et al., 2002), and the profession must be able to respond appropriately to this when required. In addition to responding to new diseases, farms implement control programmes for statutory endemic diseases such as bovine tuberculosis, nonstatutory diseases such as Johne’s disease and bovine viral diarrhoea, and management-related health problems such as mastitis. These conditions may have less obviously devastating effects than exotic disease outbreaks, but nonetheless constrain production, affect animal welfare and require veterinary surgeons to engage farmers in proactive approaches to herd health (Statham, 2011).

Farm-Level Factors Farm characteristics such as the size of the farm enterprise, the species produced and the goals of the individual farmer can affect both the type and quantity of veterinary services required. The more intensive agricultural

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sectors (dairy, pig and poultry production) make greater use of routine services than extensive grazing livestock farms, whereas the cattle and sheep sectors (dairy and grazing livestock) use more emergency services than pig and poultry farms, probably because of the higher individual value of the animals. Dairy farms, as intensive production systems with high value individual animals, have the most frequent veterinary visits (Defra, 2008). There is also variation within sectors according to factors such as farm size. For example, Lievaart et al. (2008) found that larger dairy farms in the Netherlands required a more structured, business-orientated approach from their vets, while smaller farms generally demanded a more informal service which dealt with problems as they occurred. Livestock production is particularly important in less favoured agricultural regions, which are unsuitable for arable farming. These tend to be more remote, upland areas where most farms produce beef cattle and sheep. Beef and sheep farmers spend the least on veterinary medicines and services in absolute terms, but spend the most as a proportion of their total production costs. They also use the lowest proportion of planned services and the highest proportion of emergency services, possibly reflecting their limited resources to invest in preventative veterinary services but the necessity to provide emergency care for high value animals, particularly cattle. A small proportion of farms in less favoured areas report that they never use a vet, but it is not clear whether these farms are unable to access services or choose not to use them (Defra, 2008). A survey of Scottish farmers comprising mainly beef and sheep producers found that a third of respondents felt that vets added no value to their enterprise (Lowe, 2009). This information suggests that farmers producing beef cattle and sheep, particularly in less favoured agricultural areas, face the greatest challenges in accessing veterinary services and make the least effective use of veterinary services at present. Veterinary businesses in these areas, therefore, face particular challenges which may affect their long-term viability (Orpin, 2003). One of the central issues in aligning supply and demand for farm animal veterinary services is ensuring that vets understand and are able to meet the needs of their farmer clients. This may prove challenging, as vets’ and farmers’ priorities and beliefs are often widely divergent. A combination of fluctuating income levels and uncertainty about the future of their farm business is likely to affect farmers’ willingness to invest in non-essential veterinary services. There is also evidence that some farmers lack the specific business skills to maximise the potential of their enterprise (McElwee, 2006) and, therefore, to optimise their use of the veterinary services available. A study of UK dairy farmers and vets found that vets’ preferred style

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of engaging with farmers differed widely from the approach favoured by farmers, and that vets tend to overestimate how frequently they raise important topics for discussion and liaise with other professionals in comparison to farmers’ perceptions. There is also a tendency among vets to assume that profit is the primary motivator for farmers, which is not always true. Farmers’ value orientation varies widely between individuals, and it would appear that the art of veterinary practice lies in selecting the appropriate strategy for building a successful working relationship with each client (Hall & Wapenaar, 2012; Statham, 2012).

CONCLUSIONS This chapter has reviewed current trends in farm animal veterinary practice, and has explored some of the challenges facing vets and farmers, which may be driving these trends. Through a review of relevant extant literatures, and adopting mainly an inductive approach, the chapter found that substantial changes are occurring in the UK veterinary and agricultural industries. The observed shrinkage in farm animal practice appears to be driven predominantly by declining demand for services from farmers as a result of the changes occurring in agriculture. Smaller livestock populations, increasing intensification in farming and a resultant shift towards more preventative, population-level approaches to animal health will all result in reduced demand for farm animal veterinary services. Farm animal practice is becoming a minority activity for the UK veterinary profession, and it seems that farm animal services will be provided increasingly by a small number of specialist vets. This trend is already well established in intensive livestock production such as the poultry sector (Glisson & Hofacre, 2006). There is little evidence to suggest that there is a shortage of vets entering farm animal practice, or that vets are no longer willing to provide farm animal services. However, it appears that there are some difficulties in equipping veterinary graduates with the increasingly specialist skills required, and also with retention of vets in farm practice, all of which will lead to a potential shortage of experienced and suitably skilled farm animal vets. The importance of business skills and a broader understanding of food production have been highlighted as major issues to be addressed in UK veterinary education (VDC, 2012). At present, most veterinary practices are owned and managed by vets who may have little or no formal training in business management and limited access to support in these areas. Veterinary graduates’ business skills were recently rated poorly, both by

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employers and by the graduates themselves (Bachynsky, Dale, Kinnison, Gazzard, & Baillie, 2013), suggesting that veterinary educators are currently failing to ensure that their graduates are sufficiently prepared for this aspect of their future careers. This is particularly important for those graduates who choose to work in rural, farm animal practices because a basic understanding of business management is essential if vets are to be able to advise clients effectively on how to improve their farming businesses. Changes to animal health policy aim to reduce regulatory pressure on farmers and encourage the food industry to take ownership of animal health issues that were previously considered to be the domain of government (Defra, 2010; Lowe, 2009). As a result, the relationships between government, industry and the veterinary profession are being redefined. These changes are undoubtedly creating challenges for the future viability of rural veterinary practices, which rely on the provision of services to agriculture, but these are ultimately beyond the control of the average rural veterinary practice. Rather, practices must adapt to survive within this changing business landscape. Rural veterinary enterprises have adopted a range of innovations to help them adapt to the challenges that they face, such as introducing subscription herd health schemes for their clients, engaging external facilitators to assist with management issues and involving veterinary nurses in farm animal work (VDC, 2012). Since the Royal College of Veterinary Surgeons (RCVS) decided in 1997 that lay persons could own veterinary practices, there has been rapid growth in new business models such as franchises or joint venture businesses, particularly in the companion animal sector (Henry et al., 2011; Wright, 2011). Farm animal veterinary practices are also exploring new ways of working in a changing business environment, such as group practices where independent practices work together, bringing benefits such as improved purchasing power and shared access to business support such as human resources and financial services. Despite the challenges facing the veterinary and agricultural sectors, farmers are optimistic about the long-term future of their industry and consider animal health to be very important (Rowntree & Clifford, 2011). It is now up to rural veterinary enterprises to consolidate their position as providers of high-quality animal health services to both government and industry.

ACKNOWLEDGEMENTS The authors gratefully acknowledge Norbrook Laboratories Ltd for funding this work.

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Enticott, G., Lowe, P., & Wilkinson, K. (2011). Neoliberal reform and the veterinary profession. Veterinary Record, 169, 327 329. EU. (2004). Regulation (EC) No 853/2004 of the European Parliament and of the Council of 29 April 2004 laying down specific hygiene rules for on the hygiene of foodstuffs. Official Journal of the European Union. Glisson, J. R., & Hofacre, C. L. (2006). The future of veterinary medicine in poultry production. Journal of Veterinary Medical Education, 33, 492 495. Gwinner, K. P., Prince, J. B., & Andrus, D. M. (2006). Attracting students into careers in food supply veterinary medicine. Journal of the American Veterinary Medical Association, 228, 1693 1704. Hall, J., & Wapenaar, W. (2012). Opinions and practices of veterinarians and dairy farmers towards herd health management in the UK. Veterinary Record, 170, 441. Heath, T. J., Hyams, J., Baguley, J., & Abbott, K. A. (2006). Effect of different methods of selection on the background, attitudes and career plans of first year veterinary students. Australian Veterinary Journal, 84, 217 222. Henry, C., Baillie, S., & Rushton, J. (2011). Exploring the future sustainability of farm animal veterinary practice. 9th Rural Entrepreneurship Conference. Nottingham Conference Centre. Hudson, C. D., Breen, J. E., Bradley, A. J., & Green, M. J. (2010). Fertility in UK dairy herds: Preliminary findings of a large-scale study. Cattle Practice, 18, 89 94. Jensen, K. L., English, B. C., Menard, R. J., & Holland, R. E. (2009). Livestock producers’ views on accessing food-animal veterinary services: Implications for student recruitment, training, and practice management. Journal of Veterinary Medical Education, 36, 30 38. Kostelnik, K., Lotz, F., Soetje, L., & Heuwieser, W. (2010). Feminization of the veterinary profession and the shortage of food supply veterinarians. Tieraerztliche Praxis Ausgabe Grosstiere Nutztiere, 38, 156 164. Lievaart, J. J., Noordhuizen, J. P. T. M., Buckley, D., & Van Winden, S. C. L. (2008). The marketing of herd health and production management services on Dutch dairy farms: Perceptions of dairy farmers and their veterinary surgeons. Irish Veterinary Journal, 61, 668 676. Lowe, P. (2009). Unlocking potential: A report on veterinary expertise in food animal production. Department for Environment, Food and Rural Affairs. Retrieved from http://archive. defra.gov.uk/foodfarm/policy/animalhealth/vservices/pdf/lowe-vets090806.pdf McElwee, G. (2006). The enterprising farmer: A review of entrepreneurship in agriculture. Royal Agricultural Society of England Journal, 167, 66 75. Miller, R. B., Hardin, L. E., Cowart, R. P., & Ellersieck, M. R. (2004). Practitioner-defined competencies required of new veterinary graduates in food animal practice. Journal of Veterinary Medical Education, 31, 347 365. Muller, E., & Doloreux, D. (2007). The key dimensions of knowledge-intensive business services (KIBS) analysis: A decade of evolution. Retrieved from http://nbn-resolving.de/urn: nbn:de:0011-n-549957 Oglethorpe, D. R. (2005). Livestock production post CAP reform: Implications for the environment. Animal Science, 81, 189 192. Orpin, P. (2003). Farm practice in areas of low stock density: A blueprint for survival. In Practice, 25, 161 165.

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Robertson-Smith, G., Robinson, D., Hicks, B., Khambhaita, P., & Hayday, S. (2010). The 2010 RCVS survey of the UK veterinary and veterinary nursing professions. London, UK: Royal College of Veterinary Surgeons. Retrieved from http://www.rcvs.org.uk/ document-library/rcvs-survey-of-the-veterinary-professions-2010/ Robinson, D., & Hooker, H. (2006). The UK veterinary profession in 2006: The findings of a survey of the profession conducted by the Royal College of Veterinary Surgeons. London, UK: Royal College of Veterinary Surgeons. Retrieved from https://findavet.rcvs.org. uk/publications/rcvs-survey-of-the-professions-2006/ Robinson, D., Hooker, H., & Barber, L. (2004). Veterinary career choices. Brighton, UK: Institute for Employment Studies. Rowntree, C., & Clifford, D. (2011). NFU confidence survey: 2011 overall results. Stoneleigh, UK: National Farmers Union. Sans, P., Mounier, L., Be´net, J.-J., & Lijour, B. (2011). The motivations and practice-area interests of first-year French veterinary students (2005 2008). Journal of Veterinary Medical Education, 38, 199 207. Statham, J. (2011). Cattle health schemes. In Practice, 33, 210 217. Statham, J. M. E. (2012). Encouraging active health planning. Veterinary Record, 170, 439 440. Thompson, D., Muriel, P., Russell, D., Osborne, P., Bromley, A., Rowland, M., … Brown, C. (2002). Economic costs of the foot and mouth disease outbreak in the United Kingdom in 2001. Revue Scientifique Et Technique de l’Office International Des Epizooties, 21, 675 687. VDC. (2012). The Veterinary Development Council report 2011–2012. Veterinary Development Council. Retrieved from http://www.bva.co.uk/public/documents/VDC-Report-20112012-May-2012.pdf Villarroel, A., Mcdonald, S. R., Walker, W. L., Kaiser, L., Dewell, R. D., & Dewell, G. A. (2010). A survey of reasons why veterinarians enter rural veterinary practice in the United States. Journal of the American Veterinary Medical Association, 236, 849 857. VLA. (2012). Veterinary laboratories agency: Schmallenberg virus. Retrieved from http://vla. defra.gov.uk/science/sci_schmallenberg.htm White, B. J., Gwinner, K. P., Andrus, D. M., & Prince, J. B. (2007). Unique educational methods to improve the veterinary employment selection process for rural mixed-animal practices. Journal of Veterinary Medical Education, 34, 517 523. Woods, A. (2007). The farm as clinic: Veterinary expertise and the transformation of dairy farming, 1930 1950. Studies in History and Philosophy of Science Part C: Studies in History and Philosophy of Biological and Biomedical Sciences, 38, 462 487. Woods, A. (2012). Is prevention better than cure? The rise and fall of veterinary preventative medicine, c.1950–1980. Social History of Medicine, 26(1), 113–131. Wright, M. (2011). Practice ownership Past, present and future. In Practice, 33, 354 356.

ENTERPRISE AND ENTREPRENEURSHIP ON ISLANDS Mike Danson and Kathryn Burnett ABSTRACT Purpose This chapter contributes to addressing the gap in the literature on entrepreneurs and enterprise in island and remote rural environments. Approach The research, policy and practice literature on island enterprises and entrepreneurs is reviewed, taking Scotland as a focus within wider international contexts. Islands as spaces and cultural places are recognised in terms of ‘otherness’ and difference, not least in respect of tourism and culture. The importance of distance, isolation and peripherality is discussed as social constructions myths and narratives as well as in their mainstream measured equivalences. Agencies and policies are introduced at different levels and given significance reflecting their particular relevance in remote and isolated communities. The significance of the dominant paradigm founded on agglomeration, clusters, connectivity, proximity and competitiveness in the peripheralisation of those establishing and running businesses on islands is explored critically. This is contrasted with experiences from comparative northern European locations of smart specialisation, innovation and resilience, and the underpinning key roles of social capital, relationships and cultural values and

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 151 174 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004007

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norms are identified. Sectoral case studies and enterprise are offered to examine these issues in context. Findings As this is an exploratory study, results are neither comprehensive nor definitive. However, they are indicative of how forces and obstacles apply in island and remote rural environments. Research, practical and social implications The study confirms the need to recognise social relations locally, and for policies and strategies to be proofed for locational differences. Keywords: Islands; remote rural areas; Scotland; place; enterprise; entrepreneurship

INTRODUCTION There has been increasing interest in rural enterprises and entrepreneurship in recent times. However, relatively little has been written within the specific environments of islands. As well as having all the issues facing small and medium enterprises (SMEs) and new start-ups of rural areas anywhere, enterprises on islands tend to face different, additional and exaggerated problems. However, there is but sparse material published on neither these firms nor how entrepreneurs and agencies cope with the harsher business environment. While there is a significant general literature in the multidisciplinary island studies, social science research tends to focus on sociological and anthropological descriptions of life with limited consideration of enterprises and entrepreneurs. Taking the characteristic ‘otherness’ of islands as the starting point, this chapter aims to address this gap. We review the research, policy and practice literature on island enterprises and entrepreneurs, taking Scotland as a focus within wider European and global contexts. The role and activities of agencies and strategies at EU, UK, Scottish and regional levels are introduced given their particular relevance in such remote and often isolated communities. The significance of the dominant paradigm founded on agglomeration, clusters, connectivity, proximity and competitiveness in the peripheralisation of those establishing and running businesses on islands is explored. This is contrasted with experiences from comparative northern European locations of smart specialisation, innovation and resilience, and the underpinning key role of social capital, relationships and cultural values and norms is analysed. Specific sectoral case studies and enterprise are studied to examine these

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issues in context and, although neither comprehensive nor definitive, they are indicative of how forces and obstacles apply in island and remote rural environments. They suggest that previous work, by Baldacchino (2006), Kelman (2007) and Danson and de Souza (2012), continues to confirm that, even with advances in information communication technology (ICT) and Internet connections, there are inherent disadvantages in these distant locations but that the characteristics of remoteness and otherness provide some countervailing benefits to entrepreneurs. In addition to examples from the Northern Isles, community land buy-out areas in the northwest are used to demonstrate the different nature and forms of linkages, enterprise and entrepreneurial drivers in different geographies. Finally, the chapter summarises whether the terms ‘enterprise’ and ‘entrepreneur’, and their derivatives, are defined and applied differently in island and mainland contexts. We conclude that there is a need for policies and strategies to be proofed for locational differences, and for further research to be undertaken to understand the opportunities offered by islands in a world economy where place and space are increasingly valued; indeed, not all aspects of remoteness should be considered as negative (Dubois, 2013).

ISLANDS AS SPACE AND PLACE: RESEARCH POLICY AND PRACTICE The idea of islands as particular spaces and places has been culturally well defined for a number of centuries. Islands as spaces and cultural places are understood to offer ‘otherness’ and difference, not least in respect of tourism and culture (Baum, 1996; DeLoughrey, 2007), but also too in terms of environmental claims of ‘pristine’ and ‘isolated’ terrains (Hennessy & McCleary, 2011) even if such notions of otherness and difference are variously contested or complexly empathised from ‘within’. The idea that islands can be examined in their own terms, which is that they might occupy a particular frame of focus, has been increasingly advocated not least by ‘island studies’ perspectives (Baldacchino, 2006; Fletcher, 2011; McCall, 1994). We note, contrary to persistent accounts, that islands are not simply bounded places of defined ‘otherness’ but rather are complex, layered and highly contested spaces of cultural and socio-economic distinction. Islands are physically understood as entities set apart from other land mass, and yet each are always bound into relationships with their relative neighbours of either other islands and/or of ‘mainland’. Islands are entities

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that rather than being ‘set apart’ from modernity are very often indicators of modernity’s inexorable reach, and emblematic of both the opportunities and challenge of modern capitalism (Nicolson, 2002). This, it can be argued, is the case not least in recent modern history in Scotland (Burnett, 2011). It was Lyotard who noted that ‘a self does not amount to much, but no self is an island; each exists in a fabric of relations that is now more complex and mobile than ever’ (1984, p. 15, cited by Urry, 2000, p. 185). This might also be particularly apt in terms of islands in that no island is itself but rather is understood in relation to the ‘other’ islands and non-island places and spaces beyond its own shores. The connected nature of islands (connectivity) as social entities of economic, cultural and political realities and this would include uninhabited islands, for they are in turn locked into geopolitical and cultural frames of reference is useful to reflect upon here. While isolation is a key ‘trope’ and certainly a reality for much of island experience, environment and social functionality, it is also well understood that islands are very much spaces that link and map into relational activity and events around them. With the increasing emphasis on social capital and networking in enterprise studies, this becomes all the more apposite for island studies (Atterton, 2007; Atterton, Newbery, Bosworth, & Affleck, 2011). Distance, isolation and peripherality are, therefore, social constructions (Danson & de Souza, 2012) myths and narratives as well as more assumed measurable terms of mapped difference (see Lowe, Ray, Ward, Wood, & Woodward, 1998). The shifting nature of discourse and representation is, we think, important here. Across the world scholars continue to examine the nature of island case studies and comparative experience, as well as debating the very concept of ‘islandness’. Hay (2006) most especially cautions against an ‘essentialising’ tendency to privilege islands and indeed island residents as most especially ‘other’, or indeed to obscure actual geographic realties of islands by the privileging of literary or fictive imaginaries (Fletcher, 2011). Recent focus within the ‘trans-disciplinary’ field of island studies has fostered responsive research to the nature of island economics, environments and culture (see, e.g. Island Studies Journal, or Shima, the International Journal of Research into Island Cultures). More recently island business and entrepreneurship has been explored by Baldacchino (2005, 2012) and Atterton et al. (2011) amongst others, and this complements earlier collections on rural and remote enterprise such as Curran and Storey (1993) and Smallbone, Baldock, and North (2003). .

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Islands have been variously claimed as spaces of value and neglect. In Scotland the Hebrides, Orkney and Shetland have each been categorised as both economic and indeed cultural backwaters throughout the twentieth century, although each has occupied pivotal positions in global trade and industry in previous times. By the late twentieth century, not least with the discovery of North Sea oil (especially in Shetland’s case), and with a re-invigoration of cultural heritage, coupled with a so-called alternative tourism focus on championing indigenous ‘ways of life’, histories and environment, it was clear that policy was shifting to reappraise the ‘localness’ and particularity of each island’s history and landscape. Today, island economies are an increasingly confident matrix of natural and cultural product, each mapped to the ‘strengths’ of their island situation. Island life, island environments and island ‘situatedness’ each offer aspects for research and examination in terms of enterprise and entrepreneurship in Scotland, and this echoes with discourse pertaining to rural and remote rural situations more widely.1 Such focus will require an understanding of both historical shifts over time and comparative reference to experiences elsewhere. Our commentary here on Scotland’s islands is with a view to building knowledge from similar regional experiences in the North Atlantic, the Nordic region and beyond. Ireland, for example, has experience in researching the ‘peripheral’ context of small business and much can be usefully shared here with the Scottish island situation in respect of the role of networking intermediaries (O’Gorman & Evers, 2011) or on island co-operatives. Similarly, the work on small islands in Britain and Greece (Armstrong, Ballas, & Staines, 2006) and globally (Armstrong & Read, 2003; Baldacchino, 2010) suggests some common ground on how island enterprise might be further examined in a Scottish context. Much of the talk and policy attention from the 1990s onwards focused on clusters, which literally marginalised and peripheralised SMEs outside the core (Danson & de Souza, 2012, p. 2). Indeed the last few decades have progressively been concentrating development in central regions and privileging cities and city-regions, stressing the benefits of proximity and agglomeration economies, to the detriment of the rural enterprise (Danson & de Souza, 2012, pp. 11 12). As globalisation and the prioritisation of ‘competitiveness’ have driven these self-reinforcing moves to large urban areas, we might expect the disadvantages of rural locations to become ever more apparent. Generally, it follows that, to understand performance and behaviours of enterprises and entrepreneurs, an exploration of the local environment is essential. In terms of examining Scotland we might note that research on island enterprise and entrepreneurship requires

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contextualisation and qualification. The scale of islands is important to note. Research within island studies varies between that which applies to (large and small) island states such as Malta, Australia or Iceland to those studies that examine the particularities of island regions as ‘peripheral’ within a larger state territory including, work on Japan’s ‘remote islands’ or on the Faroes and the A˚lands in Europe’s northern periphery (Efimova & Kuznetsova, 2012). In Scotland, the population and geography of our island communities is ‘small’ and research that has examined island enterprise is broadly representative of Scottish island experience in general, while noting the specificity of the research context in each case. As yet, there has been little sustained attention given to the nuanced differences of enterprise between islands and amongst island regions of Scotland. This is an area we suggest is ripe for more sustained research focus. There are features of rural Scotland, such as crofting and Gaelic that are specific to the Highlands and Islands and have no current equivalent in England (cf. Rowe, 2011). Peripheral northern Scotland shares some socioeconomic and cultural similarities with Ireland (see Royle, 2008), Canada’s Atlantic islands, northern Scandinavian and Arctic region; consequently research and policy exchange is strategically useful. Regarding Scotland’s approach to rural policy, Rowe notes the criticism levied by the OECD over concerns that the policy lacked integration and was ‘too sectorally driven’. The response was an attempt by the Scottish Government at ‘rural proofing within a more decentralised, mainstreaming framework [which] would help to overcome some of the weaknesses of the sectoral approach’ (Rowe, 2011). Scottish Government in its commitment to rural life, rural communities and the rural economy appears to be both politically and practically aware of the nuanced needs of rural Scotland within all its policies. However, we might note, as Rowe (2011, p. 16) argues, the question still remains as to the extent to which rural is ‘fully and centrally in the minds of policy-makers across all Directorates of the Scottish Government’.

AGENCIES AND POLICY CONTEXTS Addressing both these mainstream economic and entrepreneurial issues and the long recognised distinctive problems and challenges inherent to these remote and peripheral areas, social and economic development in the Highlands and Islands of Scotland has been supported by a dedicated

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regional development agency since the mid-1960s. Originally established as the Highlands and Islands Development Board and since 1990 as Highlands and Islands Enterprise (HIE), the agency has had a broader remit than all other Regional Development Agency (RDAs) throughout its history (Danson & Lloyd, 2012). It has a particular responsibility for the fragile areas, which typify many of the island and remote communities; in its own words: ‘Strong communities are essential to the continued success of the Highlands and Islands. Social and economic development is complementary in achieving growth, particularly in remote, sparsely populated areas’.2 The partnership principle, which is key to the Scottish approach to economic development, underpins HIE’s activities and programmes, including business support services. Working with local authorities and Scottish Government who have responsibility for services such as transport, housing and infrastructure, and with communities and the EU HIE implements ‘specific interventions in these places to improve connectivity, employment opportunities and population growth’ (op. cit.). The Scottish Structural Planning framework (Danson & Lloyd, 2012), European Programmes (http://www.hiep.org.uk/about-us/) and Scottish Government economic strategy (2013) therefore should be aligned at the community and regional levels to deliver support for both private and social enterprises. For the islands in lowland Scotland, Scottish Enterprise fulfils similar roles (Danson & Lloyd, 2012). Just as HIE stresses marine renewable, digital healthcare and innovations amongst its SMEs, so both the strategic development of the EU over the coming years (CEC, 2010) and the proposals for the next programming period for European structural funds capture three similar key priorities: (i) innovation; (ii) SMEs; and (iii) energy issues and recognises that funding will be variously targeted to the needs of a ‘new’ Europe. Interestingly, the Scottish Parliament notes that the new policy will seek to emphasise: ‘local involvement, but in doing so will carefully balance the higher cost of administration. Key aspects of localness will be encapsulated in the Rural Development LEADER3 programme as well as Community Planning Partnerships’ (Scottish Parliament, 2012, p. 34). Promoting innovation, enterprise and specifically small business growth in rural communities is a priority for the UK and Scottish Governments (DEFRA, 2012; Scottish Government, 2011). The Scottish Government’s (2011) Our Rural Future emphasises the need to promote and support community and social enterprise. Scottish policymakers are also clear about the potential link between innovation in rural areas and economic development the proposed Scotland Rural Development Programme

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2014 2020 promises ‘to assist in the sharing and implementation of innovative ways of improving working practices’ (Scottish Government, 2013). More broadly, the new EU priorities for Rural Development include ‘fostering knowledge exchange and innovation’ and ‘promoting social inclusion…and economic development’ (CEC, 2011a). LEADER, with its emphasis on innovation and building social capital and networks to facilitate economic and social development, is planned to play a key role here (Dargan & Shucksmith, 2008; Scottish Government, n.d.). Despite this battery of strategies, though, there is consensus amongst researchers and practitioners that established rural development approaches may not be fit for purpose in addressing the needs of more remote and island economies. The OECD (2008) Rural Policy Review: Scotland identified socio-economic and wellbeing benefits associated with some (generally more accessible) rural areas; but also that remote and island communities faced significant disadvantage, and that there remains a policy focus on the land-based sector. Policy recommendations included further action to support rural SMEs through policies targeting the access to and deployment of technology, and what might be viewed as human resources development, engaging cultural and social capital resources more productively. In this we might refer to recent attention given in the context of Nordic rural economies to the importance of cultural and intellectual capital, an emphasis on the potential for ‘open’ and not closed networks of relationship, and the enhanced ‘new localisation’ of technologically enhanced economies (Norden, 2013). Within these more disadvantaged areas, these island communities of Scotland broadly map to the Highlands and Islands region in terms of European Structural Fund support. To what extent the location and spatial resources are key to enterprise activity is a topic worthy of further examination in the island context. Localness is both a physical and cultural frame of reference. Issues include spatial distance in real time distance from markets, limitations placed on travel due to transport such as ferries and planes ‘timetabled’ and often disrupted, and dispersed population which have implications for both workforce and local market potentials. Culturally, ‘remoteness’ as distance is also understood in various terms; island enterprise may well experience the complexities of how local communities and individuals relate to ideas of ‘peripherality’ and ‘distance’, and consequently to ‘remoteness’ as relative and negotiated. Island communities may well operate particular networks of relationship with other island communities (Danson & de Souza, 2012, p. 12) and indeed mainland centres that do not map simply to physical proximity, local governance structures, or

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notions of ‘the regional capital’. Scotland’s west coast islands are a case in point where, over several decades, and indeed centuries, various sociocultural frameworks have connected islands and communities within islands in various ways; but, in more recent times, local authority and governance structures have not always successfully fused with the sense of ‘connectedness’ historically imagined. Education and health children and patients are just two examples where the institutional structures and their ‘regional’ remit will determine where individuals may be schooled offisland, or be medically treated within an island service, or elsewhere on ‘the mainland’. Furthermore, in some cases island communities are managed by local authorities with largely non-island remits and this has created issues, although perhaps most especially for the Inner Hebrides. The sense of both actual and perceived distance is felt by many island residents where the key power structures are often seen to be ‘outwith’ their own island community experience. The sense then of locality and ‘localness’ is a key nuanced aspect to an understanding of island life, work and culture.

COMPARATIVE PERIPHERALITY AND INNOVATION This contrasts with the dominant paradigm of the last century, which has led progressive concentration and centralisation of economic and social activities in multinational and multi-product enterprises located in core regions and capital cities. However, the Nordic countries account for three of the four most innovative member states of the EU (CEC, 2012) while analysis also reveals that there are ‘the economically successful regions with below average accessibility. Often they are sparsely populated and remote. They can be found in the Nordic Countries,…Scotland…. Apparently, accessibility is not a decisive factor for the economic development of these regions. Regions in the Nordic Countries, for example, have overcome their peripheral location by capitalising on current strengths in relation to ICT, research, educational and environmental opportunities and less on improving their accessibility’ (ESPON, 2010). Evidence to support this has been provided from island economies in Denmark (Lindegaard, 2012) and the Highlands and Islands of Scotland (Davies, Michie, & Vironen, 2012), with arguments that distance and peripherality need not be detrimental to innovation (Galloway, Sanders, & Deakins, 2011).

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The current EU promotion of the concept of smart specialisation (CEC, 2011b) aligns with this research well and alludes to the potential for particular niche enterprises to enter into wider markets. And this generates the question of whether, given their natural and virtual resources, is there evidence that the Scottish islands realise their potential for such enterprise and entrepreneurship?

Cultural Value

Peripherality ‘Meaning’: Discursive Narratives

Enterprise policy and economic development strategy repeatedly reference Scotland’s natural assets of rural spaces and resources, although this has not been without challenge (Lowe et al., 1998; Royal Society of Edinburgh, 1998).4 The idea of Scotland is intimately bound with both visual and cultural aesthetic of peripherality (distanced margins) and remoteness but it is also socio-economically understood as a nation and region of clear differential between its relatively heavily urbanised central belt and the island regions of the north (Orkney and Shetland) and the west (Outer and Inner Hebrides). How peripherality is both made meaningful and deployed as useful is interesting. Scotland is, we argue, well defined as a country that has or is islands. Scotland’s branding as a nation generally is still as a place of rich cultural heritage and wilderness space, and these are often ‘visually’ communicated through island images and tropes. Peripherality is an idea a social construct that is represented to us, and made meaningful, via literature and visual culture, including film, art and advertising but also via news, policy discourse and environmental references. The tropes of distance, margin, and ‘edge’ are exemplified widely and historically over time. The current marketing campaign5 developed by Outer Hebrides Tourism Industry Association (http://www.visitouterhebrides.co.uk/) offers one example amongst many whereby the discourse positions island spaces and actors as meaningfully ‘apart’ yet ‘special’: Situated on Europe’s Atlantic edge, the Outer Hebrides is a unique and diverse chain of inter-connected islands with their own unique way of life, offering a vibrant activity, food, music, art, craft and Gaelic culture. Set in an outstanding and diverse natural environment rich with wildlife and heritage, the Outer Hebrides comprise a very special chain of islands; ideal both for those who are seeking peace and tranquility and also those looking for active adventure with a taste for a different way of life.

Such definitive branding exercises are easily noted as examples of how development and economic growth must make full use of perceived local

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assets, not least in the highly mediated yet competitive environment of cultural product. Ferries, whisky, jewellery, ponies, cheese, knitwear, diving and hotels are just some examples of ‘island product’. But so too are island events and spaces. Festivals and events (sporting, conferences, cultural) each present a showcase opportunity for the merits and the particularities of island life, work and leisure. One example of cultural event is that which is more singularly defined though media. This current ‘experience islands on the Atlantic edge’ campaign maps strongly to an externally conceived branding exercise of another key institution. The BBC, an institution charged with representing the variety and uniqueness of the British viewing public’s own worlds and aspirations via public service broadcasting, recently screened their Hebrides: Islands on the Edge documentary series (2013). The series offered audiences the opportunity to consume island life natural environment and culture via the comfort of one’s home television screen. With high production values, singular attention to the beauty and allure of the Hebridean landscape and wildlife, this television product (enterprise) presents just one in a number of examples where the synergy of selling place through media works both ways. In essence the BBC’s documentary clearly ‘sells’ the Hebrides as places worth going to and experiences worth having. In return, and this is perhaps especially interesting, by privileging the Hebrides via a ‘flagship’ series the BBC in turn adds value to itself. A symbiotic media event that positions ‘all that is good about the BBC’ by what’s ‘great’ about the British Isles. There’s more to consider here, however. The capacity for enterprise and entrepreneurship in islands must be viewed in the Scottish context of key growth areas such as renewables, food and drink, and creative and cultural industries. The BBC product was itself appropriated by Scotland’s own government and key sectors as a ‘successful’ and appropriate image-making enterprise (Ferguson, 2013). The intersectoral added value of such relationships (e.g. the interplay between broadcasting, tourism, food, environment) should not be underestimated.

Enterprise

‘Accepted’ Wisdom: ‘Place’, ‘People’ or ‘Policy’

Why business entrepreneurs seek to locate within rural remote regions generally has been examined by Smallbone et al. (2003) and Atterton et al. (2011). There are a number of well-established ‘pull’ reasons for this location choice, with natural environment, strong community values and broader quality of life indicators clearly key. Islands, arguably, occupy a

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more particular niche in our cultural realm of space; they are considered special and particular and consequently resources and practices are imbued with ‘added value’. The perceived ‘islandness’ of certain businesses and production can appear to offer a degree of competitive advantage that goes some way to counter the socio-geographic ‘costs’ of island remoteness. The ‘lure’ of islands to those who ‘come in’ (migrants) to develop business as well as the powerful draw islands have for those already ‘rooted’ is considerable. Baldacchino describes it thus: Central to the ‘quality of island life’ is its rich ‘social capital’, defined as ‘networks, together with shared norms, values and understandings that facilitate cooperation within and among groups’ (Helliwell, 2003, p. 9). This is in sharp contrast to the frenetic, stress-laden and competitive environment of the city and can be strong enough to draw would-be entrepreneurs back to their island, and to encourage others to immigrate. It is the ability to become ‘glocal’ (after Courchene, 1995) combining the desirability of the island milieu with the necessity to be globally competitive that is a major, but not impossible, challenge. Both island roots and off-island routes need to be privileged (Clifford, 1997). This detail cannot be stressed enough: interviewed island based entrepreneurs were convinced that they were likely to enjoy larger turnovers if their businesses had been located in metropolitan areas: but they remain determined to keep their firm located ‘on the island’ because of the ‘quality of life’ factor. (Baldacchino, 2005, p. 14)

The historical context of ‘quality of life’ requires consideration, however. Islands have not always been ‘good’ places to migrate into. Ray (1999) examined the prospect of an endogenous approach to cultural development and argued that it is used particularly for areas, which have relative socioeconomic problems. The Highlands and Islands region of Scotland is one such ‘problem’ area (Burnett, 2011; Munro & Hart, 2000). As Ray has noted, the aim of territorial identity construction is to ‘devise strategies and put in place structures that enable the locality to mediate more effectively exogenous forces that, historically and contemporaneously, have undermined the socio-economic well-being of the locality’. Ray (1999) details how the approach tries to ‘attach people and their innovation, entrepreneurship and capital (financial and intellectual) to place’, with particular reference to his own fieldwork research examining Scottish cultural development on the island of Skye. Gaelic was one particular arena whereby Ray explored how local entrepreneurs and enterprise projects were able to appropriate aspects of Gaelic language and culture to ‘raise the consciousness of locality as the unit of development policy and action’, and indeed as the ‘geocultural’ unit upon which the meaning of development may be constructed (Ray, 1999).

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Research on the role of Gaelic in ‘meaningful’ development has been undertaken by Chalmers and colleagues where they have explored the role of community, private and public agency enterprises in activities to support the revival of the language. Noting the powerful centripetal forces which have concentrated the growth of high-quality Gaelic employment and enterprises in the metropolitan core of Scotland when it might have been anticipated that such developments would have been located in the Ga`idhealtachd itself, they highlight the key barriers and challenges facing any entrepreneur or business operating in island and rural areas (Chalmers & Danson, 2012; Chalmers, Danson, Lang, & Milligan, 2012). If even the media, culture and arts of the Gael struggle to resist the pull of the centre, then it is clear that the comparative advantages of the remote rural and island must be particularly strong for any specific venture or lifestyle forces to dominate if economic activity is to be attracted to the periphery. Further, while this paradoxical pattern of development is impacting on the Hebrides to a lesser extent than might be expected, the northern isles of Scotland also have unique cultures. These offer the potential for cultural and creative enterprises to be established on the basis of their stronger Norse roots and richly hybrid minority language cultures including Shetlandic and Orcadian Scots, as promoted by the development agency HIE (http://www.hie.co.uk/community-support/arts-heritage-andculture/).

Sectors and Markets With the constraints and barriers described above facing any entrepreneur establishing and growing a new venture on an island in a remote or vulnerable setting, there are decisions to be made on which sectors and markets will succeed or be pursued. As discussed earlier, lifestyle businesses and service and production enterprises supplying local markets may be able to ward off competition from larger mainland operators, but usually this involves higher prices for customers, low incomes for owners and staff and restricted development opportunities. However, the promotion by HIE and partners of renewable energies, high value added food and drink lines, and tourism and cultural industries confirms that niche markets may offer themselves up occasionally. The prospects for each of these in the Outer Hebrides, for example, demonstrate some parallels with previous booms (Prattis, 1979) and of the recent oilrelated history of Shetland. These are evolving areas of promised

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comparative advantage but whether they can be established in a sustained manner or fail through under-capitalisation, poor support by UK offices (e.g. Ofgen6), higher costs, labour supply difficulties or other factors exaggerated by their location will only become apparent through time. Outwith the enterprises which are strongly based on their natural characteristics of renewable energy sources or primary sectors for instance, generally niche markets for island firms will be in areas where monopolistic competition is possible. Examples can be readily identified in cultural and food and drink sectors, such as micro-breweries on Arran, Unst and Skye (Beatty, Cabras, Danson, & Galloway, 2013), and the smoked salmon from the Salar Smokehouse on Uist (Danson & Burnett, 2004) each offering a taste of the islands as a key ingredient of their unique selling point (USP).

People and Media How entrepreneurs themselves identify with various sector influences and growth capacities is one area we are particularly interested in for future study. One key element of analysis of discourse in general is its capacity to ‘frame’ and position various identities and relationships via representation. Policy discourse invites external agencies to engage ‘in’ and ‘with’ islands (for so much appears to be reliant on this strategy, rather on what islands and islanders might lay claim to both within and beyond, for themselves); the nature of power (agency) and access to the resources of power, including a command of media institutions and technologies, becomes especially worthy of further analysis. Both the debates on community ownership (land buy-out) and renewable energies in the context of islands (Callaghan, Danson, & Whittam, 2012) offer just two opportunities for more focused study around how media power informs entrepreneurial agency and vice versa. Simply, the changing terrain of media via social media, usergenerated content and a broadly expanding digitally literate populace has clearly informed how enterprise can be undertaken and evaluated in island contexts. Entrepreneurs are invited to ‘train’ and up-skill where necessary in digital technologies (e.g. HIE offer a range of support in this regard7); the cultural framing of products is increasingly understood within an interactive social media landscape that crucially includes both visual and narrative accounts of product but also opportunity for consumer input that might include Facebook ‘likes’ or consumer comments on blogs generated by small business entrepreneurs in situ of their living, producing and selling environment. No longer is ‘advertising’ of itself selling products but rather

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the narratives of one’s enterprise and product as an island-based ‘journey’ and ‘reflection’ has become a basis by which one might enterprise further, as well as simply ‘sell’, not to mention how both producers and consumers might measure ‘quality’, ‘localness’ or ‘success’. In short, an entrepreneur’s ‘islandness’ informs this process and further research on the nuanced nature of this within a range of island and work contexts would be welcome here in Scotland. The research on rural work and enterprise within Scotland’s island regions is limited. There is much more on the situation of rural enterprise and entrepreneurship more generally across the UK rural regions. This rural research offers some insight to how we might understand island experiences. In addition it is important that further shifts in the nature of work itself are noted in terms of how work within a remote island (or indeed rural) context might be examined. The expansion of cultural and creative work has most especially impacted on the rural sphere as both an opportunity for enterprise but also offering a framework by which rural residents can map their lifestyle ambitions to particular working ideals (Luckman, 2012). Wider policy discourse suggests that rural spaces in general are significantly noted for their ‘creative and cultural’ resource potential and in this islands appear to both follow suit but interestingly to also set the agenda where necessity of peripherality, distance and ‘situatedness’ defines cultural work practice (Burnett & Harling-Stalker, 2013). The issue of cultural work is one aspect worthy of further examination. Island spaces attract individuals seeking to work directly with cultural resources such as language, the arts, food, heritage both historical (cultural) and environmental (natural) and migration often demonstrates the powerful pull capacity remote rural spaces have in terms of migrants engaging with cultural work. Artists, craftworkers, food and drink, heritage, literary or media-related professionals are often drawn to remote and peripheral spaces in order to capitalise on key raw materials, or inherent cultural experiences that sparsely populated, environmentally rich and culturally distinct regions offer. The critique of cultural work itself is arguably still under-researched in relation to non-urban environments, not least in a UK context, although key findings such as the precariousness of income security, isolation, and often sporadic or necessarily ‘mobile’ and ‘fluid’ employment patterns (Gill & Pratt, 2008) are arguably only enhanced further in remote rural and island settings. Issues around inmigration to rural and island spaces are broadly well known and certainly well rehearsed as media tropes in terms of ‘crisis in paradise’ narratives where ‘incomers’ or ‘white settler’ styled accounts have circulated over the

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last four decades or so in the British press. The ‘otherness’ of in-migrants who are seen as economically, socially and culturally different, or ‘at odds’ with a resident community, is not without its myths but also a certain degree of ‘truths’ (Burnett, 1996, 1998; Jedrej & Nuttall, 1996). Nonetheless the nature of migration within island spaces, and remote rural regions generally, is singularly complex. Notwithstanding the not inconsiderable realities of resident local net out-migration as individuals and families move to seek work, or different non-island lifestyle opportunities elsewhere, inmigrants are similarly not easily categorised into any singular type, or experience. Following the 2011 census returns, both Shetland and Orkney island regions experienced small population growth, and the Hebrides, although still slightly contracting, has broadly stabilised its previous decades of depopulation haemorrhage. Nonetheless Scottish island communities are ageing more than the national norm, the returns evidence lower birth rates and many younger and potentially economically active individuals continue to seek employment, and education or training elsewhere. These broader patterns of demographics each inform the nuanced nature of island enterprise opportunities and realities (cf. Royle, 2008, on Ireland’s offshore islands). As well as any attempt to definitively categorise migrants by origin, ethnicity, class or indeed residency, notwithstanding the value of such an exercise the nature of migration and perceived impacts and benefits is complex and shifting. Subsequently, narratives and discourses pertaining to the make-up and persuasions of in-migrants are politically charged both in Scotland and elsewhere. How such discourse impacts within sectors is interesting. So, for example, whether cultural heritage enterprise requires certain ‘localness criteria’ that perhaps renewable technology enterprises may not is just one such question worthy of exploration if we might drill down further into how enterprise is accounted for and engaged with by small scale communities themselves, as well as at national or regional levels of growth aspiration. Islands offer particular nuanced relationships to ‘work’ as they appear to present both the repository of cultural and social traditions and practices often seen as ‘lost’ or deracinated elsewhere but they also present considerable working challenges. While small island life might offer considerable ‘closeness’ and cohesion by virtue of small population centres and the nature of both kinship and variously local ‘community’ networks the proximity to neighbours, friends and families can present barriers to development and change (cf. O’Gorman & Evers, 2011). ‘Strong’ ties of family and close community may limit the development of ‘weak’ ties, which arguably

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may stultify networking potential and market growth (cf. Atterton, 2007). Furthermore, while a sense of local social trust may well be cited as a key indicator for ‘good working’ environment born often from the ‘everyone knows each other’ and ‘everyone looks out for each other’ ideals, there is the counterpoint that ‘local community’ trust may well be demanded as a condition of island working partnerships without necessarily allowing for alternative ‘trust’ and business relationships to be developed. In addition to what might be interesting to examine around the research on creative and cultural work we might also add the observations made on the nature of labour in late modernity as an exercise in reflexivity ‘imperative’ (Archer, 2007). The emphasis on us all not just to reflect but to actively manage our reflections is something that has impacted on the discourse of work and life. This pressure to define success as ontological sureness to have selected a careful path to identity and action appears to underpin a considerable public rhetoric on rural and island ‘enterprise’ success. The media, both news based and more feature style magazine form, offer numerous examples of the ‘success’ story of rural, and more specifically island, lifestyle entrepreneurs as those individuals who have ‘followed their dream’, ‘found their place’ and won out apparently against modern capitalism’s working strictures by locating their business in a remote rural island setting. In this they have found a ‘quality of work life balance’, pleasing environment, community centred social structure, low crime and so on. This echoes much rural lifestyle entrepreneur research from across the developed world (Galloway & Mochrie, 2006; Hindle, 2007; Johnson & Rasker, 1995). Motivations of business owners in rural areas, generally, have been explored in some depth by a range of authors with an evolving consensus that they are less oriented to growth than the norm across the economy (Deakins, Galloway, & Mochrie, 2003; Galloway & Levie, 2001; Galloway & Mochrie, 2006). Positive correlations between business orientations and ambitions towards growth and experiences of success have been identified by these and other researchers (Culkin & Smith, 2000; Reynolds, Bygrave, & Autio, 2003), with those purchasing enterprises as likely to have such motivations as start-up entrepreneurs (Galloway & Mochrie, 2006). So-called high-growth entrepreneurs are noted within the broader cultural accounts of island enterprise and yet the overall rhetoric is ‘small’, niche, often ‘crafted’ and ‘local’. This may simply be as a direct result of the limitations on growth that island enterprise might expect. It may also be linked to the nature of island-based enterprise more broadly where priority is given to meaningful quality of life factors (sustainability, low impact presence, work life balance) rather than more singular profit and

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expansion motifs. Concern has been expressed at this reliance on lifestyle businesses in rural areas where they may lack the skills, experience and ambition necessary for growth (Deakins et al., 2003) and lack of entrepreneurship (Deakins & Freel, 2009). As Ray (1999) notes, endogenous development (particularly privileging of local territory and resources) would focus on what makes an area unique and of value to the local people, and how this contributes to their wellbeing and so defining the development trajectory options available. Furthermore, entrepreneurs bring potential resources into being and in doing so they make them available for use generally. That is, various local actors relate to the territorial identity in different ways and processes of cultural valorisation are undertaken across sectors and everyday narratives of what is ‘good’ about islands. Development and economic enterprise are therefore understood to contribute to a sense of ‘wellbeing’ and, in Ray’s terms, so ‘defining the development trajectory options available’. This can be noted in terms of the renaissance effect of community wellbeing and revitalisation: Thus, in the case of a Scottish LEADER initiative whose territorial/development identity incorporated a cultural rhetoric (Ray, 1998a), the raising of a Gaelic culture consciousness was not just an end in itself, nor merely an instrumental marketing technique, but a framework to give deeper meaning, and broader enabling context, to local peoples other identities: not just a Gael, but a Gael/woman, or a Gael/business proprietor. (Ray, 1999, p. 262)

Music, film, visual art, literature and craft are all broadly embracing the territorial advantage of islands. So too are museums, language and historical enterprise. Other sectors are also noted as being reasonably advanced in their ‘islandness’ positioning. Food and drink, for example, are reasonably well established as small business opportunities that have especially capitalised on the referencing of locality and the uniqueness of places. Niche markets have successfully developed around global tendencies to reaffirm the value of ‘local’ as particular, physically rooted and/or culturally distinct. The adding of value (Danson & Burnett, 2004) has been embraced by rural enterprise broadly in food terms but islands too have perhaps even more specifically harnessed the singularity of their experiences and geographic situation to define USP and appeal to market. How each business can successfully compete within an increasingly crowded island marketplace is perhaps a question worth posing. We might ask just where thresholds do operate in respect of the particularity of island product and experience. Where might economies of scale, for

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example, or the demand for raw materials and the competing sustainability agendas be realised, and what learning have we to gain from this? Salmon farms, whisky and cheese might each offer useful further case studies but so too might craft, campsites or boat tours? There is, at some point, usually a very real (embodied) sense of where limits are being reached. It might simply be the available capacity of summer ferries in the busier tourist months, the push and squeeze of too many customers in too little an ‘authentic’ island work space, or it might be that if all are offering ‘unique’ island experiences where might the consumer find the singularly ‘undefined’ experience? (Burnett & Harling-Stalker, 2013). As we have already noted, the cultural references available to position market instrumentally enterprise, resources and product are not just ‘economic’ drivers but socio-political also. The meaningfulness of resources and products has become a key concern and an arena for considerable discursive framing and ‘narrative’. That is, the telling of stories over product and business is not singularly a matter of economic success but is rather a complex account of the validity of one’s entrepreneurial success in the context of a wider social-economic morality of sustainability, ‘good practice’ and social good. This is arguably most especially so for the specifically ‘island’ entrepreneur who may be situated variously as ‘insular’ and within a relatively ‘flat’, ‘strong’ ties structure of community and practice, and this will be further nuanced in respect of class, gender and ‘local/non-local’ identity positions (Burnett, 1996, 1998; Olwig, 2007). Simply, in small island communities there is nowhere to be inconspicuous and enterprise activity must be seen to be, at the very least, activity that is broadly welcomed (valorised) and ‘supported’ locally.

CONCLUSIONS The complex nature of enterprise and entrepreneurship in island contexts has been introduced and explained here within a number of dimensions and philosophies. The exploratory nature of the analysis has suggested an agenda for deepening the research on conflicts, trust and co-operation, strong and weak ties and networks. The need to avoid a simple transfer of sectoral and national strategies and policies to such peripheral and marginal regions also demands further exploration of behaviours and attitudes to island enterprise and entrepreneurship both from within

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and without the local environment. As always, how each considers the ‘other’ defines and informs wider debates and discourses.

NOTES 1. Scottish Centre for Island Studies Round Table event, Rural Enterprise Conference, University of the West of Scotland, Dumfries 2013. 2. http://www.hie.co.uk/about-hie/our-priorities/strengthening-communities-andfragile-areas/default.html 3. ‘The aim of LEADER is to increase the capacity of local rural community and business networks to build knowledge and skills, and encourage innovation and co-operation in order to tackle local development objectives’ (Scottish Government, n.d.). 4. http://www.royalsoced.org.uk/489_TOWARDSADEVELOPMENTS TRATEGY FORRURALSCOTLAND.html 5. http://www.allmediascotland.com/media-releases/48964/boost-for-outer-hebrides-tourism-industry/ 6. http://www.bbc.co.uk/news/uk-scotland-highlands-islands-23128813 7. http://www.hie.co.uk/about-hie/news-and-media/archive/initiative-launchedto-boost-digital-skills-in-highlands-and-islands.html

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THE SPIRITUAL DIMENSION OF BIODYNAMICS: AN ALTERNATIVE SOURCE OF CAPITAL IN THE RURAL CONTEXT Kate Lewis and Sue Cassells ABSTRACT Purpose Biodynamics is a specific form of organic production with spiritual underpinnings. This chapter explores it as a form of rural entrepreneurship using the capitals framework of Bourdieu as a conceptual tool. Methodology The chapter draws upon 11 qualitative case studies of New Zealand firms engaged in biodynamic growing methods. Data collected via in-depth narratively oriented interviews inform the chapter, along with other relevant secondary material. Findings The chapter suggests that the spiritual underpinning of the biodynamic approach imbues the experience with a form of spiritual capital that is not captured within traditional interpretations of capital. We conceive of this as a form of alternative capital and offer a conceptualisation as an attempt to capture that difference.

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 175 191 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004008

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Research limitations This is a niche, small scale, exploratory study limited to one geographic context (New Zealand) at one particular point in time. Originality/value This chapter offers a modest expansion to previous conceptualisations of capital in the rural context. Keywords: Rural entrepreneurship; Bourdieu; spiritual capital; biodynamics; New Zealand

INTRODUCTION Rurality has been described as a dynamic entrepreneurial resource (Stathopoulou, Psaltopoulos, & Skuras, 2004). In turn, rural entrepreneurship has been proven distinctive by virtue of its context (e.g. geographic, industry, farm cf. other forms of enterprise) (Grande, Madsen, & Borch, 2011); the various forms it can take (e.g. diversification, pluriactivity, portfolio approaches) (Alsos, Ljunggren, & Pettersen, 2003; Carter, 1998); the spatial and social milieu in which it is enacted (e.g. in terms of embeddedness, social networks, community frameworks) (McElwee, 2008; Vesala, Peura, & McElwee, 2007); and, the inherent challenges that emerge as a result of its aforementioned distinctive character (e.g. in relation to resourcing, capitalisation and operationalisation) (Fuller-Love, Midmore, Thomas, & Henley, 2006). Given its distinguishing features, rural entrepreneurship attracts research attention, but has yet to develop a coherent set of explanatory frameworks peculiar to the phenomenon itself. Typically, theoretical frameworks from other disciplines have been applied using the rural context as a particular lens to understanding and/or as a means of extending the theory into another context, field or discipline. Given that such explorations could best be described as niche, whilst the challenges reported to face rural enterprises could be described as systemic, there exist significant gaps in terms of the rural entrepreneurship literature. The character of the field as it stands, therefore, offers the opportunity for novel approaches. As a result, it is a topic within the entrepreneurship research community that is gaining increasing traction in recent years. One of the factors contributing to the demand for research, and in which the implications for policy and practice are drawn out, is the fact that the economic contribution of the agricultural sector/rural community is critical

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to so many countries across the world (frequently due to its dominance). This chapter adopts Bourdieu’s capitals framework to explore a particular rural entrepreneurship experience: that of the specific form of organic growing called biodynamics. The framework is seldom applied in the rural context and in an even more limited fashion in terms of subsets of rural entrepreneurial firms. The biodynamic experience is a rich empirical context in which to situate such an exploration given the tensions inherent between the holistic spiritual approach to production and the business model necessary to get to market. The objective of the chapter is to highlight how the biodynamic experience (within the context of rural entrepreneurship) points to inconsistencies relative to how ‘capital’ in rurality has, hitherto, been understood. Within the chapter we put forward the notion that the spiritual underpinning of the biodynamic approach imbues the experience with a form of spiritual capital that is not captured within traditional interpretations of capital.

FORMS OF CAPITAL Rurality renders the enactment of entrepreneurship as different to its urban counterpart (Stathopoulou et al., 2004). As such, it is feasible, and has been proven, that the processes of capital acquisition, accrual and deployment also vary in character within the rural context (Meccheri & Pelloni, 2006). The embeddedness of enterprises in the rural social and spatial milieu has implications not only for what sources of capital are utilised, but for how they are converted, valued and pursued (Skuras, Meccheri, Moreira, Rosell, & Stathopoulu, 2005). The forms of capital put forward by Bourdieu have been applied in varying contexts to give explanatory power to the resourcing issues faced by entrepreneurs and in entrepreneurial ventures. However, limited consideration has been given to its application in the context of rural entrepreneurship. Glover (2010, 2011) described how the symbolic actions of generations of farmers ensured that the family farm provided a store of capital. Sutherland and Burton (2011) established that reputation in the rural context can be established visually and in two main ways: displays of farming ability (embodied in cultural capital) and through a reputation for complying with unwritten reciprocal agreements within the farming community. Some dimensions of capital have been explored and could be considered to be relatively well understood (e.g. social capital Zontanos & Anderson, 2004), in that evidence points

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to their evolution as being indistinct from those in an urban setting, or if the difference is notable it can be accounted for and/or explained by virtue of the rural context. Bourdieu’s capitals framework is a conceptual tool theorised as a contribution to understanding the social world (Jenkins, 1992). It comprises three generic forms of capital (economic, social and cultural) that can be present, acquired and accumulated according to their varying characteristics. All capital forms are produced by and, to a degree, are reducible to labour (rather than economic capital) (Bourdieu, 1986). Economic capital, what Bourdieu describes as the root capital (as it is the most readily convertible into other forms), comprises all the various forms of tangible financial resourcing that can be brought to bear (e.g. material assets, money, income). Cultural capital, in essence, represents the value of the knowledge, skills, expertise and experiences embedded in an individual, and derived from their social origins (Bourdieu, 1991). It can exist as two different types: incorporated i.e. ‘experiences and habits acquired during the socialisation process and manifested in an actor’s knowledge’, and institutionalised, i.e. ‘which consists of formal educational qualifications’ (van Aaken, Splitter, & Seidl, 2013, p. 355). Social capital is that which is embedded in the complex web of interpersonal relationships in which human beings participate and can take structural (e.g. contacts and dialogue) and relational (e.g. trust) forms (Fuller & Tian, 2006). Bourdieu asserts that the shape and form of social capital are inevitably influenced by the cultural, material and symbolic status of the individual and/or family concerned (Bourdieu, 1990). He describes social capital as the ‘aggregate of the actual or potential resources, which are linked to possession of a durable (long-standing) network of more or less institutionalised relationships of mutual acquaintance and recognition’ (1986, p. 248). Social capital is viewed as a correlate of economic and cultural capital (i.e. the higher the stocks of both the latter, the higher the stocks of social capital are likely to be) (Field, 2003). Accordingly, some forms of capital are assets already held by the individual, whilst others are those that can be identified as being in deficit and/or more worthy of accrual. The crux of Bourdieu’s thesis in regard to the value of the aforementioned forms of capital is that they can accumulate over time and can potentially reproduce in an identical (and/or expanded) form (Bourdieu, 1986). Therefore, people (and enterprises) can be stores, users and producers of the various forms of capital both economic and non-economic (Glover, 2010). Additionally, these capitals are available to be converted into another form of capital: symbolic capital. Symbolic capital alludes to

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the possession of symbolic resources, is defined by Bourdieu as any one or combination of existing capitals (economic, social or cultural) in circulation, and is attributed as being possibly the most valuable form of capital accumulation in society (Bourdieu, 1986). Symbolic capital then furthers the accumulation of other forms of capital and/or can be utilised for economic gain in its own right. Symbolic capital can be a proxy for prestige, reputation and credibility, and can be used to enhance legitimacy, but is somewhat dependent on how the power of the associated symbolic resources is mastered (De Clerq & Honig, 2011). It is a stock that can be projected using a variety of methods including narrative, identity, symbol, awards and publicity (De Clerq & Voronov, 2009). The capacity for symbolic capital to amplify perceptions of legitimacy is said to enhance the ability of the individual to deploy it to attract and deploy further stocks of the other primary forms of capital (i.e. economic, cultural and social). Therefore, setting up a circular rhythm of accrual, deployment and conversion, with each cycle seen as a means of enhancing the value of the capital stores, the potential convertibility of each and the power of the symbolic capital it spawns.

ORGANICS One facet of the rural entrepreneurial experience prompting research inquiry is ‘organics’. Organic food production has long possessed a symbolic power. Its transformative potential has historically been seen to embody the promise of an alternative to conventional agri-industrialisation (Morris & Kirwan, 2011; Reisner, 2003). Proponents of organic food production in New Zealand argue that there is a vibrant future ahead for the sector, with much of it dependent on the recent proliferation of innovative small and niche export businesses (Coombes & Campbell, 1998). This surge in both focus and activity in the organic space has been stimulated by factors on both the local and global scale, including the trends around sustainability generally and the heightened awareness of food origins and production methods specifically (Morris & Kirwan, 2010). Existing traditional, large scale, ‘chemical farming’ food production systems continue to attract negative attention and, in turn, stimulate consumers to seek out products that reflect eco-conscious consumer choices (Sage, 2003). Certainly, the data in the New Zealand context evidences the both current and potential value of the sector: the number of organic enterprises is

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growing rapidly, as is the land area under certification (in 2012 the total was 106,753 hectares which is an increase of 67% since 2007); organic exports were valued at between NZ$215 and $225 million in 2012 (which represents an approximately 25% increase since 2009), and, in parallel, the demand within the domestic market is also strong with an estimated value for certified organic products of between NZ$126 and $133 million (Cooper et al., 2012).

BIODYNAMICS Biodynamics is a specific form of organic production within the sector and was one of the first alternatives to modern agriculture. Biodynamics is typically seen as a manifestation of an acute awareness of the relationship between person and environment, and as a spiritually grounded endeavour. As its practices incorporate some unconventional farming applications, biodynamics can be taken to embody an inherently novel approach. It is a method of high quality food production that, proponents argue, works in partnership with nature and is underpinned by an ethical ecological spiritual approach to agriculture, food production and nutrition. It has sometimes been described as the most strictly defined class of organic food production due to the prescriptive nature of the principles put forward by its founder, Rudolph Steiner (1861 1925) (Campbell & Liepins, 2001) and his philosophy of anthroposophy. Steiner’s eight lectures (given in 1924 and published as the book An Agricultural Course) are widely considered to be the birth of the biodynamic movement (Kirchmann, 1994). In biodynamic agriculture, the farmer seeks to enhance and support the forces of nature that lead to healthy crops and rejects farm management practices that damage the environment, soil, plant, animal or human health (i.e. the use of inorganic fertilisers and pesticides). At its core, the approach has a spiritual worldview and a holistic interpretation of the interrelationship between soil, plants and animals as a self-nourishing system. In biodynamic food production the farm is conceived of as an organism, a self-contained entity with its own individuality: ‘This holistic system of agriculture aims to help spiritual development as well as heal the living Earth. The farm is seen as an enclosed system where planting and harvesting follows the Stella Natura Calendar, which takes cognisance of cosmic energy. Farmers spread biodynamic “preparations” on the land’ (McMahon, 2005, p. 99). The

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preparations also take on a somewhat ritual significance as they are performed at a particular time of the year and are both physical and repetitive (McMahon, 2005).

THE CASES Our chapter draws on data from 11 purposively selected case studies of biodynamic food producers in New Zealand. Whilst an exact count of the number of biodynamic growers in New Zealand is not available, the Bio Dynamic Farming and Gardening Association has around 800 members (however, not all are biodynamic producers). Participant firms were identified via publicly available information and specifically from those who selfidentified as ‘biodynamic’. Certification as such was not a prerequisite; however, we did not recruit those who were in the process of converting their operation to ensure we accessed a group with some accumulated experience in the biodynamic domain. Site visits were made to each case operation and in-depth, narratively oriented interviews were carried out with one of the owners (and/or managers) using a semi-structured protocol. The interviews were recorded and transcribed, and the interview data were analysed using elements of both narrative and content analysis (from a social constructionist perspective). Other secondary material pertaining to the firms (e.g. via media coverage and/or company websites) also informed the data analysis. As a result of this approach the cases span a diverse range of characteristics. Table 1 presents a summary of the characteristics of the 11 cases. The interviewees were from six vineyards, three orchards, a mixed farm and a dairy product operation. The cases spanned a range of regional rural locations with six from the North Island of New Zealand (Wairarapa, Manawatu-Wanganui, Hawke’s Bay, Bay of Plenty) and five from the South Island (Canterbury, Central Otago, Marlborough). Six of the interviewees were male and five female. All but two of the cases identified as family businesses, with six of those being run by copreneurial couples. The scale of enterprise varied from 6 hectares through to 300 (in part a function of what was being produced), as did the length of time as a biodynamic operation. The enterprises varied in terms of the number of staff they employed on a permanent basis (ranging from no employees through to 20 full time). The majority supplemented their workforces to varying degrees using casual or seasonal workers (on a part-time and/or contract basis) or

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Table 1. Case

Entry

Case Study Details.

Region

Family Business

Staff

Certified

Turnover NZ$

Exporter

1

Orchard

Hawke’s Bay

Bought (2001)

Yes

2 full time + 10 15 casuals

Yes

1.3 million

Yes (70%)

2

Vineyard

Central Otago

Started up (1970s)

Yes

8 9 full time + 4 5 seasonal

No

Not disclosed

No

3

Vineyard

Central Otago

Started up (2007)

No

4 full time + 2 part time

No

Pre-production

No

4

Orchard

Bay of Plenty

Started up (early 1980s)

Yes

0

Yes

Not disclosed

No

5

Farm

Hawke’s Bay

Started up (1997)

Yes

Casuals as needed

Yes

Not disclosed

No

6

Vineyard

Central Otago

Started up (1991)

No

8 full time + 15 casuals

Yes

3 5 million

Yes (65%)

7

Vineyard

Canterbury

Started up (2000)

Yes

3 full time + 2 casuals

No

Not disclosed

Yes (70%)

8

Orchard

Bay of Plenty

Started up (1970s)

Yes

1 + casuals as needed

No

Not disclosed

Yes

9

Dairy

Manawatu

Started up (1985)

Yes

20 full time + casuals

Yes

3 million

No

10

Vineyard

Marlborough

Started up (1999)

Yes

2 full time + seasonal as needed

No

Not disclosed

Yes

11

Vineyard

Wairarapa

Started up (1998)

Yes

1 full time, 1 part time + 10 casuals

Yes

Not disclosed

Yes

KATE LEWIS AND SUE CASSELLS

Type

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WWOOFERs (Willing Workers on Organic Farms, a global community that promotes awareness of ecological farming practices through the provision of opportunities for volunteers to live and work on organic properties). Turnover ranged from NZ$3 5 million to those firms that were insufficiently established at the time of interview to be returning a profit. Six of the 11 case firms were exporters, and 6 were either formally certified as biodynamic or undergoing certification. Five held Demeter certification (a worldwide system that certifies the biodynamic approach, in New Zealand the Demeter trademark is owned and administered by the Bio Dynamic Farming and Gardening Association) (Herberg, 2007), two were Bio-Gro certified (New Zealand’s leading organic certification agency founded in 1983 a not-for-profit organisation accredited by the International Federation of Organic Agriculture Movements) and one was dual certified.

THE MEANING OF BIODYNAMICS A definitional thread relating to the spiritual dimension of biodynamics emerged strongly when participants were asked to reflect on the meaning of the approach to them. Whilst not always the starting point for their narrative, it appeared consistently and strongly enough for it to become clear that biodynamics is a ‘package’ per se in that it is extremely unlikely that you would pursue a biodynamics pathway if your worldview is inconsistent with that underpinning its principles. If you believed in the underlying environmental principles in isolation it would be more likely that you would pursue organics (rather than this type of ‘organics plus’ approach). With biodynamics you put your thoughts and your consciousness into the food that you are growing … I think that’s the difference between biodynamics and organics: that you’re putting the effort of thought and emotion into the whole energy of the plant.

Additionally, biodynamics is clearly a blueprint for living: a spiritual and philosophical worldview, and an ethos and set of values rather than merely a set of practices by which the production of natural products occurs. To divorce spirituality from biodynamics would be to ensure you were not ‘truly’ biodynamic at all.

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It’s a way of life … it’s a set of philosophies that has educated me … showed me a different way of looking at life. I have a much more open-minded approach to my relationship with the earth and the cosmos. We are really aware of the rhythms … from what we do here right through to the planet and the universe ….it does affect you quite profoundly.

However, the primacy given to the spiritual dimension did vary by participant. For some it was accepted, but at the level of being the origin of the practices and preparations only. For others, it was a central point from which they considered all elements emerged and the spirituality (in their lives and in their growing practices) was central. Biodynamics is about holistic living for us, and it’s about the farm being the centre of that, recognising that it is the life giver.

The extent to which the spirituality of the biodynamic experience was salient in the lives of the participants was in some respects dependent on the degree to which spirituality, and/or a relevant philosophical standpoint, was embraced prior to engagement with biodynamic growing. For those who had a historic engagement as such, biodynamics was viewed as a natural extension of that in which they already believed. For others, it was a corollary to other faith-based value systems that they already enacted (e.g. Christianity and/or other forms of ‘organised’ religion). Biodynamics incorporates the spirit world side, hugely … respect for nature, respect for the land, and that energy … it’s an incredible process, it’s absolutely mind blowing. I find I’m just in awe of nature.

There were some for whom acceptance of the spiritual underpinnings was a rational choice that best honoured their commitment to what was best for the land and the wider environment, and their belief that the approach created a better quality product with heightened levels of authenticity. I had the base passion and understanding for natural farming or organics, but before biodynamics I hadn’t associated it with the spiritual element, that association of ‘hold on, the moon does have an influence on people and their energies’. I think the spiritual side is really important and I think it is relevant ….everyone starts to freak out when biodynamics is part mystical ….but it’s really just quite mechanical the way I see it.

For all participants the meaning of biodynamics was impossible to divorce in sense-making terms from its spiritual underpinnings (or inherent value systems) but the degree to which they engaged varied according to worldview, personal history and consistency with personal perspectives.

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However, not one interviewee could be described as viewing it as utilitarian in nature, pragmatic or as an agricultural system only. Rather the biodynamic influence radiated out beyond the immediate domain and into the wider locale and web of associated relationships. Biodynamics talks about irradiating the goodness of the farm right out to the marketplace. So, it’s also about connecting this farm with the people who pull a bottle of our yoghurt off the shelf.

It also drove how the growing operation was managed and the management practices and approaches to human resources that were enacted (Lewis, Walker, & Cassells, 2011). What we found was that we thought we would bring in a person in a new finance role, but what was actually really important was that it was carried out in a biodynamic way … we didn’t know that was important until we found out that he was dealing with people only from a business point of view. When you are working with the rhythm of the vine and the calendar you have something that is telling you when something is going to happen. You get to the second week of September and you look at the lunar calendar and if there is going to be certain leaf day you know you are going to have bud growth that day. If it’s the ascending period or the descending period that’s like a tool.

Overall, it would seem that whilst being biodynamic may have been a choice made by one individual, it was seen as having benefits for all involved. This is an unsurprising conclusion if you interpret biodynamics as a spiritually grounded construct, but less so if sense of it is made only from an agricultural standpoint.

BIODYNAMICS AS SPIRITUAL CAPITAL It was possible to postulate that biodynamics acted like a form of symbolic capital, converted to symbolism based around narrative, ‘good farming’ practices (Burton, 2004), and niche, artisanal approaches to food production particularly as symbolic capital fulfils ideological functions (Joppke, 1986). However, such a conceptualisation implied that the notion of the primary forms of capital (i.e. economic, cultural and social) was as relevant to the biodynamic context (and were operationalised in the same way) as traditional conceptualisations of capital in other rural contexts. It also would have necessitated buying in to the proposition that the biodynamic growers manipulated that capital to exert power and influence in relation

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to capital generation and relationships (De Clerq & Honig, 2011) neither of which was consistent with the case narratives. Instead, participant narratives alluded to a form of capital that was absent from Bourdieu’s conceptualisation and similarly absent from understandings of rural entrepreneurship that were not in the realm of biodynamics (unsurprising given it is a particularly innovative and dynamic aspect of the rich rural tapestry). A number of ‘alternative’ capitals have sprung forth on the basis of Bourdieu’s original work, and some of them have been evidenced and applied in the context of entrepreneurship. These additional forms of capital include: career capital (Duberley & Cohen, 2010); intellectual capital (Kong, 2010); identity capital (Coˆte´, 1996); entrepreneurial capital (Erikson, 2002); moral capital (Hollows & Jones, 2010); community capital (Emery & Flora, 2006); ethical capital (Bull, RidleyDuff, Foster, & Seanor, 2010); and, finally, that which emerged as resonating strongly with the biodynamic experience: spiritual capital. Spirituality and work has been the subject of a vast array of investigations in the wider context of management and organisational studies. Additionally, there exist a number of specific investigations in relation to spirituality in terms of entrepreneurial endeavours (e.g. Jue, 2007). These can be divided into those that consider spirituality in the religious sense (i.e. that particular to organised religions, and/or those groups/communities sharing a common religious faith) (e.g. Dana, 2010) or those that come at it from a more holistic perspective: grounding their interpretation of spirituality around issues of ethics, morals, values and worldview. Studies from both vantage points have taken the firm, the individual and/or the faithbased community or group as the unit of analysis. Examples include: businesses that identify as religious publicly and/or are underpinned by a spiritual framework (Jackson & Konz, 2006); how religion or spirituality motivates individual entrepreneurs in terms of entry, start-up or business and management practices (King-Kauanui, Thomas, Rubens, & Sherman, 2010; King-Kauanui, Thomas, Sherman, Waters, & Gilea, 2008; King-Kauanui, Thomas, & Waters, 2005); and how religious communities utilise their shared faith to work together in varying forms of enterprise to benefit those who live in their community or share the same faith e.g. entrepreneurship and the Amish (Dana, 2007), and the Amish brand as symbolic capital (Kraybill, Nolt, & Wesner, 2011). Chu (2007) proposed five specific categories of spiritual assets (love; guidance and intuition; creativity; higher personality traits; and cultivated skills and knowledge) and that spiritual capital represents their collective utilisation. Identifying the relevance of spiritual capital to biodynamics as a

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form of rural enterprise (Bosworth, 2012) led us to consider how it then fitted within existing, and robustly evidenced, understandings of ‘capital’ in the context of entrepreneurship. Bourdieu’s position is that capital is accrued, over time, and by virtue of concerted efforts to accumulate. It is then converted into symbolic capital which is, in turn, deployed to attract further tranches of the primary forms of capital and, so, the cycle is repeated. One approach, based on our data, is to suggest that spiritual capital is a distinct form of capital in its own right, and that it needs to be accommodated within the stable of capitals. Further, that it should be considered as one of the asset bases from which symbolic capital can subsequently be derived and that it attracts back to the individual and/or enterprise additional sources of traditional capital to stimulate the capital conversion cycle. A substantive flaw in this approach to reconciling the biodynamic experiences and narratives with existing understanding is that it is predicated on the basis that spiritual capital was (or could be) bounded. That is, it is a discrete form that could potentially be separated off as a distinct type and convertible into a particular type of symbolic capital. However, accepting such a premise does not account for the pervasive influence of spirituality in the biodynamic context. It does not parallel the extent to which it underpins biodynamic activity, and the centrality it held as ‘core belief’: the wellspring from which the practices, protocols and processes of living, working and growing the biodynamic way emanate. To attempt to separate it for theoretical purposes is not only divorcing theory from data, but also imposes an antithetical interpretation onto an experience that was described as entirely holistic.

CONCLUSIONS Biodynamics is a form of organic production that is underpinned by nonreligious spirituality. It is based around common values, practices and ideology that guide how those who live and grow biodynamically occupy their space in the rural context. It is not just a method of growing, but a way of being, of living, and of making meaning. In overlaying the biodynamic experience with Bourdieu’s conceptualisation of capital, it emerged that not all facets of the framework reflected what had been captured in the narratives of the producers. Various manifestations of the act of being biodynamic could plausibly have been conceived of as symbolic capital, but for the reasons outlined this did not offer sufficient explanatory

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power specifically because it excluded consideration of the spiritual elements of the phenomena in their own right. It would have subjugated them to the periphery, rather than emphasising their centrality. Further, such an interpretation implies that the biodynamic experience only became salient in terms of the capitals framework when considered as an outcome of the capital conversion process (albeit an alternative one), and in a previously recognised form (i.e. symbolic). Rather, we have argued that there is an additional form of capital at work in biodynamic operations, one that is spiritual in nature and that cannot be bounded as a discrete form; to do so would be to isolate it, when our data strongly emphasised its infusion throughout the biodynamic experience (in terms of people, place and production). We conceptualise spiritual capital in the biodynamic realm as a ‘supra-capital’: one that amplifies other forms of capital to ensure their distinctiveness as biodynamic in character, rural in context. As supracapital the spiritual resources invoked in being biodynamic feed the other capital forms (be it consciously or sub-consciously), rather than being an outcome of them or separate to them. Relatively speaking, and in terms of biodynamic meaning, spiritual capital is ‘supra’ to the ‘micro’ of the other traditional forms.

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POST-COMMUNIST RURAL ENTREPRENEURSHIP IN BULGARIA Diana Traikova, Judith Mo¨llers and Gertrud Buchenrieder ABSTRACT Purpose This chapter takes a qualitative snapshot of rural entrepreneurs in Bulgaria. The aim is to shed light on the formation of non-farm start-up intentions in rural post-communism communities. Methodology A qualitative ethnographical methodological approach centred on a theoretical framework, based on Ajzen’s (1991) Theory of Planned Behaviour. Primary survey data are drawn from the village of Kostandovo, in the Pazardjik region of Bulgaria. Findings A holistic perspective reveals entrepreneurship to be just one facet of complex rural livelihood strategies. Distrust in formal institutions by rural entrepreneurs dominates the Bulgarian business climate. A culture of informality in business is accompanied by widely accepted corruption. Crucial factors affecting the start-up decision in post-communist economies are social capital, a lack of experience of the entrepreneurs, and by public administrators.

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 193 213 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004009

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Practical implications The presented evidence highlights different dimensions of the theoretical constructs. Future research could focus on the impact of inefficient/corrupt institutions on the decisions of potential rural entrepreneurs. Originality/value By coupling universally applicable intention predicting theory with unique ethnographic evidence, the chapter gives a face of the otherwise abstract entrepreneurial agents. The perceptual perspective tackles the most relevant start-up aspects of the post-communist context, providing insights applicable beyond the case country. Keywords: Rural Bulgaria; entrepreneurial intentions; livelihood strategies; transition; inefficient institutions

INTRODUCTION For the purpose of this chapter, rural entrepreneurship is defined as running one’s own business (both formal and/or informal) in rural areas. In former socialist countries individual economic decisions were shaped by factors different from those in Western developed economies. During communist times, it was rarely possible to openly demonstrate private entrepreneurial initiative; in fact, the regime prosecuted such attempts (Smallbone & Welter, 2010). ‘Capitalist’ was an insulting word, but this did not mean that entrepreneurship was not practised. Despite providing waged jobs for all, the state could not stop some individuals from recognising and exploiting business opportunities. A dynamic and vibrant informal entrepreneurial sector evolved and co-existed interwoven with the official collectivist system (Henken, 2005; Puffer, McCarthy, & Boisot, 2010), and a corresponding set of informal institutions emerged during the communist regime. Within these informal institutions, knowing the right people meant having access to resources, information and protection. Reliance on a limited set of trusted contacts, payment of bribes and the exchange of favours were of utmost importance for the survival of the mostly small-scale informal businesses (Bo¨ro¨cz & Southworth, 1998; Henken, 2005; Luthans, Stajkovic, & Ibrayeva, 2000). Thus, in recent years research on postcommunist entrepreneurship has been increasing (Bruton, Ahlstrom, & Obloj, 2008; Kiss, Danis, & Cavusgil, 2012; Manev & Manolova, 2010; Puffer et al., 2010). However, its main focus is on urban areas, while

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research on rural entrepreneurship is still scant (e.g. Collantes, 2009; Gurau, 2009; McElwee, 2013; North & Smallbone, 2006; Stathopoulou, Psaltopoulos, & Skuras, 2004; Vaz, Morgan, & Nijkamp, 2006).

THE RURAL ECONOMY IN COMMUNIST TIMES During communist times the economic make-up of rural areas consisted mainly of a combination of agriculture with large non-farm state-owned enterprises. However, after 1990, the rural state-owned enterprises collapsed due to the disappearance of markets with other socialist countries. Caught in a political, institutional and economic crisis, the state was unable to provide support for rural businesses. For the majority small-scale or subsistence agriculture was the last resort after being laid-off work or made redundant and without alternative non-farm employment available (Mo¨llers, Buchenrieder, & Csaki, 2011). Others moved away and almost 25 years after the beginning of transition, out-migration has left scars on the face of Eastern European rural areas; an aging population and lower educational attainment are just two of the issues (European Commission, 2012). Nonetheless, today there are people pursuing entrepreneurial opportunities in Eastern Europe’s rural areas. Who are these transitional entrepreneurs? What drives them and what are the problems they face? This chapter seeks to provide some answers to these questions by introducing the reality of two entrepreneurs from rural Bulgaria. Their experiences are likely to be similar to those of fellow entrepreneurs in other postcommunist countries. In the next section, we explain and justify our methodological approach. This is followed by two case stories as an illustration of the rural entrepreneurial reality. Then theories are introduced on which the fieldwork is based, followed by an illustrative application of the theory to the case data. The chapter closes with conclusions and recommendations.

METHODOLOGY Recently, Aldrich (2012) noted a tendency in entrepreneurship research to concentration aspects which can be quantified. Jayawarna, Rouse, and Kitching (2013) share similar concerns and advocate for more qualitative

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work on revealing the motivational drivers of entrepreneurs. Indeed, previous work has highlighted entrepreneurship as one of many possible ways to make a living in rural areas (Mo¨llers & Buchenrieder, 2005; Mo¨llers et al., 2011; Smith & McElwee, 2013; Traikova, 2013). To better understand the start-up choices, we adopt a livelihood perspective and using ethnographical methods dive in the perceived reality of rural people. The data presented here were collected in the Bulgarian language by the first author in 2009, complementing a larger quantitative survey. Forty verbal narratives from rural entrepreneurs were collected using semistructured interviews. Existing theoretical literature on entrepreneurship was used to determine which aspects to cover. But also some new lines of enquiry, suggested as important by the respondents, were pursued. This method belongs to the traditional toolbox of entrepreneurship researchers (Drakopoulou-Dodd, McElwee, & Smith, 2014; Neergaard & Ulhøi, 2007). The recorded life stories of the rural entrepreneurs document their attempts to make sense of the past. It is very likely that they are influenced by diverse biases (e.g. hindsight) and do not mirror the objective reality (Mckenzie, 2007). However, it is exactly in this biased form that they are highly relevant for the start-up decision. Our cases certainly reflect features that are typical for transitional rural economies. Yet, generalisations should only be made with great caution as internal realities may differ between subgroups of rural inhabitants.

START-UP DECISIONS IN THE BULGARIAN VILLAGE OF KOSTANDOVO We present two selected cases of start-up decision-making in rural Bulgaria, both of which relate to an entrepreneur and his/her family living in the village of Kostandovo, in the Pazardjik region of Bulgaria. Kostandovo reflects all the typical properties of a post-transitional rural area in terms of its population, employment and economic structure. Kostandovo is a rural village with some 4,300 residents. The area is mountainous and scenic and the nearest city is Velingrad, the spa capital of Bulgaria. The main non-farm income in the city is generated by tourism. Lake Tzigov Chark is close by, a well-known destination for weekend trips. However, Kostandovo cannot compete as a tourist destination; its streets are run-down and there are virtually no hotels. Most of the residents either commute to the city or are employed in agriculture.

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Before 1990, the main source of employment in the village was a brick factory but it was privatised, downsized and eventually closed. Subsequently, the locals decided to make use of the surrounding forest, and after 1990 a large proportion of the households became engaged in the timber business, with many men involved in logging, wood-processing, timber collecting and carpentry. The forest is state-owned, yet there were no effective measures to protect it from overuse. During the construction boom of 2000 2010, there was steady demand for wood products. Anyone who could raise money purchased machines and opened small informal workshops processing wood in their garages or barns. However, this business model turned out to be unsustainable: de-forestation became an issue. More than half of the wood-cutting was illegal and the products did not have the necessary papers stating the origin of the wood. The final downturn came with the financial/economic crisis in 2008 when the construction business in the country came to a standstill. The investment in machines, many of which were financed by (informal) credit, was lost. Practically the whole village became unemployed and life became harsh. Many relied on their gardens and the local agricultural cooperative to provide food. In the mountainous region depicted in the case studies, farming plots are small and not many crops are suitable for the local conditions. The take-up rate for support measures, for example subsidies, offered by the state and European Union (EU) to farmers is low. Education is seen as an important determinant to open up non-farm income sources by the locals. However, at the time of the survey, few were working in the field of their expertise. Due to widespread unemployment, the majority were willing to take any work available, regardless of an educational mismatch. The mayor reported a strong de-population trend driven by out-migration, particularly of young people seeking employment in other regions or even abroad. This description mirrors the reality of many Bulgarian villages and provides the context for the entrepreneurial decisions of the local people in the ongoing transition process.

Distress-Push Towards a Business Idea

The Case of Elena

The story of Elena’s family showcases entrepreneurial activities developed under the harsh local conditions just described. At the time of the interview, Elena (aged 44) is head of a nine-person household of three generations living under the same roof. The household comprises husband

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Emil (aged 46), two daughters, Maya (24) and Rumyana (22), sons-inlaw, Aleksy (28) and Radi (31) and three granddaughters. Elena and Maya are qualified cooks. Elena is not happy that her younger daughter has married early and did not continue school after primary education. Her sons-in-law also only completed only primary school and now work as timber collectors. This heavy work requires a lot of physical strength and Elena does not believe that it will bring in sufficient income to support their families. Due to the economic crisis, the employer of one son-in-law has not payed wages for more than six months. The prospects of getting the delayed money are not good, because there are high stocks of timber and there will be no money for wages till the stocks are sold. The other son-inlaw, employed by a state-owned company, is still paid regularly, which is one of the reasons why the public sector is the preferred employer in the village. Emil, the husband of Elena, is a mechanic with secondary education. He worked for 15 years as a turner, but was laid off after the privatisation of the state-owned machine-producing enterprise. Then he moved to a private wood-processing firm. For 10 years, this firm was a good employer, but then the main customer (IKEA) terminated the contract and the firm went broke. Next, he found a job in a company, which produces wooden furniture in Velingrad. At the time of the survey, he has spent about 10 years there. For most of this time he was satisfied, but in the last couple of years the market had shrunk. The owner cannot pay full wages and Emil has taken non-paid leave due to the lack of orders. As a young mother with a baby, Rumyana stays at home. Her sister Maya got a temporary job as a post woman at the mayor’s office. The pay is low, but every penny helps. Elena herself has the most diverse job history. After qualifying as a cook, she worked in a pizzeria in the next town (Rakitovo). She was the chief cook. Pizza dough needed to be prepared early in the morning and the transport at this early time was a big inconvenience for her. After four years the owner died and the successor changed the working conditions for the worse more work for less money. At this point, she decided to quit. Her next job was in agriculture. A Dutch firm invested in the production of high-quality seeds for the Bulgarian market. This new work gave Elena invaluable insights into how to produce high-yield potatoes under the difficult local farming conditions. She worked as a simple farm worker, but the know-how she got helped her later, when after the death of one of the owners the company collapsed.

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Equipped with 10 years of experience from this farm, Elena decided to start a commercial potato-production business on her own. This was her first step into entrepreneurship. She persuaded the family to rent some land and pay for machine services. For three years, she benefited from the support. Then she found that the paperwork was too complex and, more importantly, the related transport costs were prohibitively high. The family had no car and Elena needed to travel to the city of Pazardjik more than 10 times at an average round trip cost of 7 Euros to complete the paperwork. These costs were unbearable in the face of the average monthly wage in Kostandovo being only about 125 Euros. Farming became an important income-generating strategy for the household, but it is risky prices fluctuate, markets are uncertain and yields are weather-dependent. It was thus important for the household to find some complementary non-farm activities. Elena took any occasional job she could get. Most of the rural jobs are short term and she joked that when she looks back, the only job she had not yet done is that of a priest. Among others, she had been a chambermaid in a hotel located in the recreational area Tzigov Chark. But, in her words, the owners ‘exploited the misery and unemployment situation in the region by paying little and treating the workers badly’. She had also been a seasonal worker at the greenhouses in the neighbouring village. But after one woman died on the field due to the inhuman working conditions, Elena quit. She got more and more tired of the insecurity of job-hopping and her desire to be independent developed. After realising that she would not be able to find a decent, secure and long-term waged employment, which would have been her first preference, Elena ‘reinvented’ herself. She started dreaming of having her own solid business, a non-farm one a business that generated income throughout the whole year and provided a decent and secure livelihood for her and her family. However, defining a goal is one thing, achieving it another. Two factors stopped Elena from immediately starting a business: a lack of money and a lack of a solid business idea. Nevertheless, she actively started to seek business opportunities. For example, she contacted the local Roma community and offered her services as a cook for wedding festivities. Elena found a niche here and offered a catering service. Together with the other occasional jobs and potato production, it helped the family to make ends meet, but this business was not enough to provide a stable living. Through her neighbour she heard about a non-governmental organisation (NGO), which promoted the region as a tourist destination. She received this information at an early stage of the initiative and wanted to

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be among the first to make use of it. Both Elena and her neighbour own big houses, which are located quite centrally in Kostandovo, and ideally suited to hosting tourists. This is how another business idea took shape Elena wants to build her own hotel. The main constraint is finding sufficient financial capital. She was looking for a solution when one evening on television she saw an advertisement by the labour office offering interviews for candidates wanting to take up farm work abroad. She decided to apply. This step might seem quite desperate. In more developed countries, one usually applies for a bank loan in order to finance a business idea when savings are not sufficient and there are no friends or family to help. But Elena and Emil had already had a bad experience with credit. They borrowed some money from a bank to finish the construction of their home and agreed that the instalments will be transferred directly from Emil’s salary. Month after month he received less money and believed that the difference went to the bank. But after a year the bank complained that none of the instalments reached it and imposed a fine of 1,000 Euros. The family paid. When asked why they did not go to court and enforce their rights, Elena explains ‘… It would have been much more expensive and we would have lost. These people have good lawyers. The factory has used our money but will never admit it. It is better you do not let it go so far and avoid the corrupt court system whenever you can’. This negative attitude towards the law is also based on previous personal experience. The family tried to fight for land rights at an earlier time and after two years were almost broke and ultimately lost at trial. The moral for the household was never to use bank credit again and not to rely on the legal system. But Elena did not give up so easily. She went for a job interview in Spain, was accepted and worked as a temporary farm worker. Emil remained at home and took care of the potatoes, while continuing with his waged job. On the commercial farm, Elena saw how high-quality seeds could increase productivity. However, she could not afford to make the initial investment without taking credit or increasing own funds. So it was only after she had left for Spain that she could send her first salary to Emil to buy high-yield potato seeds. The Spanish farm liked Elena’s work and invited her to return for the next task strawberry planting. This involved two additional months of work. In total, she spent seven months in Spain and was able to send home a significant sum of money. The family decided that, despite the emotional hardship of being separated, it was worth working abroad to accumulate capital. At the time of the survey, Elena is

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preparing to leave again for a fourth time. The future will show if the envisioned business idea would become a reality. The story of Elena illustrates the typical hurdles that necessity-driven entrepreneurs encounter. The educational mismatch, common for the transitional generations, puts the middle-aged and the elderly in the position of beginners, only rarely can they use the training they have. Instead, necessity pushes them to take any employment. The younger generation (aged 25 plus) does not appear to have recognised any adequate promising local sector, which could provide them with the possibilities for professional development. In the long term, this might fuel further rural poverty and/or out-migration but in the short term, this condemns many rural people of an active age to job-hopping. The lack of long-term perspective also diminishes the motivation of employers to invest in the human capital of their employees. So informality appears to provide the natural equilibrium solution in this situation. As long as there is a labour supply for informal employment contracts, there will also be entrepreneurs tapping into this cheap resource. Subsequently, the desire to take control of the situation and protect oneself from being exploited is a common start-up reason. In the first two decades after the fall of the socialist system, the family strengthened its role as ‘the safe harbour’ offering moral support, stability and protection in the hostile transitional environment. Employment strategies (including entrepreneurship) cannot be fully understood without analysing the context of the general family livelihood situation. Due to this cultural peculiarity of post-socialism, sometimes individuals could not exploit the opportunities they recognised, because family duties had a higher priority and held them back (Elena started accumulating capital late because she was busy raising children and taking care of sick family members). Farming appears to be just one of many income-generating alternatives in the household portfolio. Subsistence agriculture has a long tradition in rural Bulgaria, and the change to market participation is a rather big step for most households. In its small-scale version, farming often does not provide a sufficient source of main income. Seasonality, climatic shocks, price fluctuations and the insecurity of informal contract enforcement make the need for diversification obvious. In addition, transitional rural entrepreneurs have to deal with inefficient institutions. These are the obstacles to the advancement of business ideas and may not protect the family from unjust financial loss. The problem is so pronounced that it pays to give up the seemingly lucrative subsidy money because interacting with an inefficient administration is too costly.

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A Born Entrepreneur

The Case of Ivo

Unlike Elena, Ivo never worked for someone else. He is the entrepreneurial type; he wants to invest regardless of whether the situation is a distresspush or a demand-pull one. Ivo was born and lives in Kostandovo. Twenty-eight years old, he is the head of a young family. His wife, Detelina, is 25 years old, and they have four-year-old twins, a boy and a girl. Ivo is a carpenter and Detelina is a qualified forester. Since he was 18 years old, all the money Ivo had earned was the result of his own initiative and self-employed businesses. Ivo was inspired by his grandfather, who was also a carpenter. Ivo invested in the workshop, extending the set of machines they had. Ivo’s wife did not find a stable job after leaving school. She married and soon afterwards the twins arrived. Since then she had been a housewife. Her job prospects are not good. After the financial/economic crisis, the number of forester positions drastically decreased. She applied for occasional farm jobs. Ivo is the main breadwinner. He latched onto the construction boom and was able to accumulate some capital before the crisis. He employed some qualified men and organised them into a brigade and travelled around the country looking for potential customers. Usually, he targeted hotels because they had strong investors. In the end, he managed to get a contract for making the wooden parts of 10 villas in one of the most famous ski resorts in Bulgaria Bansko. However, after completion, no further orders followed. Interestingly, it was not the crisis that hindered his business. According to him, it was unfair competition. The investor he worked for told him that he had been confronted by a few powerful local mafia firms who ‘persuaded’ him to accept their construction offers. So the investor had no choice since he had long-term plans in Bansko and did not want any complications from the mafia. Ivo had to accept that he was too small and weak to fight for his rights. He realised that no court in Bulgaria could help him to solve this problem. Having experienced the ‘wild private sector’ he directed his attention to the seemingly more predictable public one. But even there, the procedure for the announcement and tendering (often co-funded with EU money) is not very transparent. As he puts it, ‘they did not let me drink water from the spring’. He has no first-hand and timely information and thus no chance to meet the tender specifications. He further insists that the requirements of

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these tenders are tailor-made for the few big mafia firms to exclude any other potential bidders. Nevertheless, Ivo deems it important to invest, and not only to consume. In the past, he invested in new machines for processing wood and also built a new house for his family. He bought a few minibuses for the transport of his workers. However, at the time of our interview, construction is no longer taking place. He now concentrates on small orders for wooden products (furniture, windows, doors and parapets) mostly coming from his home region. Since he settled down he also concentrates more on his hobby beekeeping. In the last five years the number of hives has steadily grown. Since he is interested in the newest developments in this field, Ivo went to some seminars for beekeepers. There he made contact with another participant, a banker, who shares the same passion. He is one of the big honey producers in the region and also owns a consulting company. They share a sincere friendship and the more experienced man helps Ivo with useful advice. He taught him not only how to take care of the bees, but also how to apply for subsidies and how to avoid the traps of the administrative system. He also gave him early insider information about the Young Beekeeper support programme. Ivo decided to apply, but for that needed to have at least 70 hives. Additionally, one had to be registered as a farm producer for no longer than three years (Ivo has exceeded this limit). He complains in reality, no young beekeeper is able to meet these criteria unless there is sufficient start-up capital to buy a large number of hives at the beginning. If one tried to produce one’s own queen bees, it would take much longer than three years to reach 70 hives. To overcome this, Ivo registered the hives in the name of his brother who was not known to the registry system. He is not proud to have cheated, but is convinced that in its current form, this ‘support’ programme actually inhibits small producers from entering the large market for honey. Compared to the affairs he witnessed with the public infrastructure projects, this appears ‘as not so big a crime’ to him. He wrote a business plan and completed all of the documents. After unsuccessful attempts to locate the office, he had to call a contact in the National Agriculture Fund and then finally found it in a residential block behind an ordinary apartment door. The service was more than unfriendly, but Ivo was persistent and pushed until everything was signed and sealed. The rules stated that he would hear within three months, but instead eight months passed without any notification. This was no surprise the post-socialist public administration was struggling to adapt to the EU mode of work and was constantly overwhelmed. Finally he got a

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letter informing him that he had been approved for EU subsidies. The first instalment of 12,500 Euros would be followed by another 12,500 Euros three years later if he fulfils the conditions set out in his business plan. This is a large amount compared to the national average wage at that time of around 200 Euros per month. Ivo started to work with the first payment towards achieving the promised increase in the number of hives. His family does not own big plots of land apart from their garden. Furthermore, the climate of mountainous Kostandovo is unfavourable with low temperatures and much wind. These conditions are not optimal for bees, so Ivo adjusted the design of the hives to allow him to close and transport them. He moved some hives to the forest with his minibuses. At that time, he had about 50 hives, 35 of which were moved. The trees provided enough bee pasture and wind protection. The forest was far away and he checked on the bees every second day. All seemed well and he was preparing for the sustainable growth of his business. However, one day he was shocked to find that all the forest hives had disappeared. Desperate, he went to the police and reported the theft. Six months later, they sent him a letter saying that the case would be closed due to lack of progress. There is no insurance for beehive theft, only for fire, flood and some diseases, so Ivo had no choice but to accept his bad luck. After that he never dared to leave his hives unattended and this limited their productivity. He realised two things. Firstly, the local authorities could not help him to protect his property, even when the law allowed him to position hives in the forest. Secondly, he needed additional sources of income; the honey business had developed too slowly and was too uncertain. He knows he could always find a waged job the locals know him as a high-quality carpenter and would offer him one of the few available positions, but the remuneration is far below Ivo’s needs. He needs another solution. Ivo started looking for new opportunities and at the time of the interviews has developed a new idea. While others are complaining about the crisis, he sees it as a chance. Many owners of land plots located there are ready to sell, pushed by the economic hardship. The land price is at a record low. This is the perfect time to buy. And Ivo knows what he would do with this land this would be the start of a small holiday resort, consisting of small wooden houses, which he would construct himself. There are many tourist sites around, and the famous city of Velingrad usually absorbs the mass of tourists. But Ivo has a vision of targeting a special group those who want to avoid the crowds, cook for themselves in a

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separate kitchen and fish at the lake. In Kostandovo, there are hot mineral springs. Their water could be used for smaller scale spa tourism. Although beyond his control, Ivo hopes that Kostandovo would one day develop into an attractive tourist destination. He deems it important to avoid the common mistake of concentrating on mass tourism and, through preserving the local spirit and traditions, Kostandovo could stand out. His small wooden houses complex would fit into this concept and position Ivo’s household well for the future. Although Ivo is unaware of the NGO and its existing plan to promote the region as an eco-tourism destination, he believes in his idea. Such a business model works all year and can be promoted through Internet. The money would come from bank loans. He wants to research support programmes and advisory services that would help him. The construction work would be done by his brigade, and the marketing and the hosting would be the responsibility of his wife. It all makes sense at once everything comes together. At the time of the survey, he is quite convinced that he would pursue his idea until it becomes reality. As he puts it: I am from the younger generation. I have never worked for the big communist enterprises. To me the sense of security is unknown. Apart from that I am not ready to work for peanuts for someone else. I have learned to live with the risk, to rely on myself and I know I can do it.

The story of Ivo reveals the reality of an opportunity-driven entrepreneur. Here, different challenges are identified. Even when wanting to comply with all the market rules, he faced unfair competition from the already-established mafia structures. The prevailing impression is that the police and justice cannot handle the problem; actually, sometimes they are even seen to be part of it. Against the seemingly omnipresent agents of the mafia, the courts are considered not objective in resolving disputes. The issue of maladministration is a typical side-effect of the drastic reforms of the administrative system in transitional countries. Still, only those who are willing to confront it will receive a chance to gain expertise in dealing with it and receive a push in the form of public funding. Elena gave up applying for subsidies, Ivo was convinced that this would give him a chance to kickstart his business. Both Ivo and Elena would have benefited from a clear vision about the development of their village, accompanied by coordinated efforts by the locals to make it happen. But instead, an individualistic spirit dominates the atmosphere in Kostandovo: People are afraid to share information with each other and no cooperation takes place except within the immediate

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family. This culture of individualism is labelled by several respondents as ‘allergy towards collective undertakings’. Neither Ivo nor Elena likes the idea of cooperating with other producers to achieve, for instance, economies of scale of their production. The NGO has not managed to involve the residents of Kostandovo in the discussion about the future of their village. Such uncooperative, solitary behaviour coupled with distrust in the rule of law, lack of transparency and strong reliance on social capital seems to lead to inferior development results in rural transitional areas. Informality and/or small-scale operations are the natural response to the new post-transitional reality.

FROM NARRATIVE TO THEORY To link our insights with already existing knowledge we now introduce the theory on which the study is based and discuss it together with the results of our cases. Entrepreneurship certainly has to be seen as a process (van der Zwan, Verheul, & Thurik, 2011). There are different stages of a business: for example first comes the idea, then some information is collected and different types of capital are marshalled, then eventually a firm is formally registered. In this study, we restricted our views mainly to entrepreneurial intentions, the earliest stage of this process. We chose this because a complex activity such as starting a business can only happen as a result of careful planning. The intention exactly mirrors the plan and by analysing it one can understand which factors cause rural transitional entrepreneurship to differ from the one in developed countries. The questions with which we approached the rural people in Bulgaria were influenced by three theoretical concepts: (1) the concept of push or pull motivation, which allows us to distinguish necessity from opportunity-driven decisions; (2) the Theory of Planned Behaviour (TPB) as a fundamental theory to explain individual decisions; and (3) the institutional setting in which employment decisions are embedded; it not only influences the incentive structure but determines the transaction costs. Of particular interest was the perception of corruption within the institutional setting and its influence on entrepreneurial intentions in a period of transition. Distress-Push and Demand-Pull Motivation The cases of Elena and Ivo illustrate the two types of motivation, known in entrepreneurship research as necessity and opportunity or distress-push

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and demand-pull (Reynolds, Camp, Bygrave, Autio, & Hay, 2001). Necessity (push) is observed in the rural context when people feel pushed into self-employment due to adverse economic conditions and distress shocks. Wage employment is often not available to them. These entrepreneurs are usually forced to act on opportunities, where entry barriers are not so high (Acs, 2006). Push motivated businesses mostly create few (if any) jobs (Congregado, Golpe, & Carmona, 2010; Mandelman & Montes-Rojas, 2009). Often many competitors share a relatively slim profit margin. Remember how Elena out of necessity systematically scanned for undiscovered opportunities and acted on them, even when the profitability was low (e.g. cooking for Roma weddings). Opportunity (pull) based entrepreneurship comes into play when individuals are motivated by a recognised lucrative market opportunity. Opportunity entrepreneurs expect their businesses to grow more and provide more new jobs compared to push entrepreneurs (Acs, Desai, & Hessels, 2008). Ivo recognises the financial crisis as an opportunity; his start-up idea goes beyond securing the immediate subsistence needs of his household and targets non-local customers.

Attitudes, Norms and Control How the Individual Perception Influences Start-Up Intentions Ajzen’s (1991) main idea is that planned behaviour can be predicted by looking at the intention to conduct it. He identified three direct intentional determinants: attitudes towards behaviour; subjective norms; and perceived behavioural control. We have identified about 20 other studies, confirming the validity of TPB in the entrepreneurship domain (e.g. Dı´ az-Garcı´ a & Jime´nez-Moreno, 2010; Shook & Bratianu, 2010; Yordanova & Tarazzon, 2010). Attitude can also be understood as whether one likes or dislikes the idea of a start-up. Elena’s attitude became more positive with time. Obviously her first preference was a waged job, but after failing to find a stable and fairly-paid position, this changed. Ivo favoured entrepreneurship from the very beginning; he has never worked for someone else and holds certain expectations about the minimum acceptable level of payment. Ajzen suggests social norms as a second determinant. What would others of importance say about the start-up plan? Would they support the idea? And is the potential entrepreneur ready to follow the expectations of his/her peers or is he/she ready to go against the norm? Elena is the

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household head, but she involves the whole family in the decision about the hotel. Similarly, Ivo seeks the moral support of his wife. In the process of gathering information and know-how he advised also others, for example the banker friend and the wooden house complex owner from the Black Sea. Still, the main decision to start a new business initiative or not is taken within the family. Perceived control corresponds to the belief in one’s own ability to control the factors that play a role in the realisation of a start-up. The reader should bear in mind that the first step is a careful consideration of all relevant factors. Here, each individual has his/her own perspective, which may be distorted in specific ways (perception is biased). After collecting experience through her diverse job history, Elena developed a healthy selfconfidence in her ability to build and manage a small hotel. Ivo drew on all his skills and resources (experience of building houses, access to advice and bank credits, awareness of potential support programmes and the role model of his friend on the Black Sea coast). Both Elena and Ivo are distinct from the non-entrepreneurial farmers in Kostandovo by their resilience to shocks, desire to learn and the ability to reframe their course of action depending on the changes in their perceived environment.

The Corrupt and Non-Transparent Business Environment as a Barrier to Rural Entrepreneurship Institutions provide the incentive structure in an economy by defining the set of choices available to potential entrepreneurs. In particular, institutions determine the transaction and production costs and hence the profitability and feasibility of engaging in economic activity (North, 1991). In the case of rural Bulgaria, it is important to place a special focus on corruption and the rule of law. Corrupt norms represent an informal institution and are highlighted by several authors as a major obstacle for doing business in the transitional context (Aidis, Estrin, & Mickiewicz, 2012; Amoro´s, 2009; Manolova, Eunni, & Gyoshev, 2008; Puffer et al., 2010; Smallbone & Welter, 2006). When facing corruption, potential entrepreneurs react differently: some give up, while others explicitly rely on bribes and use them to advance their business. For example, the mafia structures from Ivo’s case have gained their dominant position by bribing the state administration, which prepares the bidding procedures. The long years of political dominance by a particular party lead to nepotism. This becomes a problem when outsider entrepreneurs try to interact with the formal institutions.

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Especially complicated procedures and long waiting times are fertile soil for bribe payments (Johnson, Kaufmann, McMillan, & Woodruff, 2000; Pashev, 2008). Another aspect is that in transitional economies with weak social systems the needy individuals estimate the benefits of legally operating a business as not worth the costs of obtaining them (Webb, Bruton, Tihanyi, & Ireland, 2013). For example, uncertain social security and infrastructural investments in utilities in rural areas do not motivate disadvantaged rural entrepreneurs to take on the burden of paying taxes and undergoing complicated heavy administrative procedures. Thus businesses may prefer to operate informally, or even illegally (McElwee, Smith, & Somerville, 2011; Smith & McElwee, 2013). Elena and Ivo distrust the courts. When it came to pursuing their rights through the legal system, they preferred to step back and search for another way. The price they paid (monetary loss for Elena and benefits foregone for Ivo) was high, but they estimated the potential harm of the court process as even higher. They were forced to adjust in a sub-optimal way. Still, in times of crisis formal institutions may offer some possibility of receiving funding. A proven strategy for such problems is to have wellpositioned personal contacts. Ivo is actively networking in search of useful contacts.

CONCLUSIONS Bringing together real cases of rural start-up intentions with theory is a fruitful exercise. All theoretical concepts are reflected in the cases, but reality is characterised by the complexity of drivers behind start-up intentions. Nonetheless, we are able to point at factors that seem to be of general importance, such as attitudes, norms and perceived control, the capital endowment and institutional environment. Within these factors there are certain aspects and themes that are especially relevant for the transitional context; for example, weak executive and judicial institutions that allow a corrupt business environment to flourish. Attitudes determine what one considers an attractive business opportunity and what not. Here it is crucial to collect data on the job history of the decision-makers. Many of the rural people currently of working age have experienced the dismantling of the centrally planned system. This has inevitably influenced what they know, what they remember as lifestyle, what they like or dislike in the present. This is the key for understanding the leading start-up motivation: is it an attempt to secure at least a minimal

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income to guarantee the survival of the household, or is it more a way of living out the dream of being independent and finding new combinations of the available resources? The norms are influenced to a large extent by culture. A special aspect for rural post-socialist societies is that often many generations live under the same roof and individual preferences must be balanced with the desire to ensure the welfare of the whole family. The duty to take care of needy family members and/or close kin is deeply rooted in the cultural norms of Eastern Europe. The strong role of the family should always be considered, though that of other relevant peers (e.g. colleagues, friends, extension officers) may vary. In terms of Perceived Control, the lack of financial capital appears to be the main start-up obstacle, as in Western societies. The access to public information though is much more difficult. The transparency standards of the West are not yet incorporated in the public administration. Knowing the right people is much more important if one envisions doing business in transitional settings. Another issue is the accessibility of the institutions (working times, transport cost). Furthermore, there is still no established culture of dealing with the administration in a productive and fair manner. One usually expects long processing times and bribe requests. This is one of the reasons why usually rural people try to avoid public administration whenever possible. As a final theoretical point, we conclude that the dynamically changing pull- versus push-motivation of potential entrepreneurs is also influenced by the institutional environment. The social security systems in transitional countries are usually not able to provide for meeting the basic living needs. This may be a partial explanation for the prevalence of mostly push-driven business ideas with small growth potential. People struggling to make ends meet are ready to stay informal in order to avoid paying taxes. Even if such a business manages to create jobs, it does not provide the social benefits foreseen by the law and thus worsens the social security situation of the employed workers in the long term. On the other hand, pull-motives may partly be based on the possibility of acting without the knowledge of the official authorities and the prospect of evading taxes easily.

ACKNOWLEDGEMENTS The authors gratefully acknowledge the financial support from the European Community under the Sixth Framework Programme for

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Research, Technological Development and Demonstration Activities, for the Specific Targeted Research Project ‘SCARLED’ SSPE-CT2006 044201. The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission (http://www.scarled.eu).

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SUPPORTING FEMALE RURAL ENTREPRENEURSHIP: A CASE STUDY OF WiRE (WOMEN IN RURAL ENTERPRISE) Izzy Warren-Smith ABSTRACT Purpose The aim of this chapter is to evidence the requirements for successfully facilitating female entrepreneurship in rural areas. Methodology Using a case study approach based on WiRE, the chapter outlines the practical support that has evolved from research into the complexities of supporting women’s rural business activity. It provides a brief history of the WiRE organisation and presents the findings of a UK West Midlands European Social Fund sponsored project. Findings Female rural entrepreneurs contribute to the regional economy; however, practical business support needs often become blurred with personal demands, such as caring roles, particularly with respect to farm-based enterprises.

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 215 232 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004010

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Research limitations Findings are concentrated around one regional case study. Further research could make comparisons across a range of similar projects. Practical implications The case study highlights the importance of location and circumstance in the development of FREs. It provides a clear research-based template for both rural policy makers and support agencies that should be used to inform the design of future supports for FREs. Social implications FREs are important to the rural economy and have a valuable contribution to make to economic development, both in terms of wealth creation and employment. However, the complexity of circumstantial, community and family factors affects the success of support offerings, highlighting the need for plaiting support. Originality/value WiRE is the only ongoing support organisation for FREs. There is a paucity of research around support to FREs, which this chapter aims to rectify. Keywords: Rural; female; entrepreneurship; support; farm

INTRODUCTION Current UK government strategy has clearly identified entrepreneurship and enterprise development as the solution to the twin economic aims of growth and employment (HM Treasury, 2011). Since the beginning of the twenty-first century, there has been a rapid increase in the number of female-led rural enterprises in the United Kingdom (Harding, 2006). This has been driven partly by the continuing demographic in-migration of professional workers into rural areas and partly by the growing number of ‘non-farm but on-farm’ enterprises being developed by female members of farm-based families (Bock, 2004; Warren-Smith & Jackson, 2004). Despite this, business support policy remains disconnected from the rural entrepreneur (Alsos, Carter, Ljunggren, & Welter, 2011). More specifically, both Bock and Warren-Smith highlight the lack of either suitably directed policy or positive support for ‘non-farm but on-farm’ female entrepreneurs, each identifying the preponderance of male/urban focussed role models and interventions of detriment to the female entrepreneurs.

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This chapter concentrates on the insights gained from one example of successful practical support specifically for female rural entrepreneurs (FREs) Women in Rural Enterprise (WiRE). The chapter reviews rural enterprise support research and outlines the background and brief history of WiRE and how it started. The next section provides a more detailed overview of the workings and findings of a UK West Midlands European Social Fund (ESF) sponsored project led by WiRE. The chapter then explains the process through which WiRE identified the particular issues that are key to FREs; it explains what these issues are and describes how it presented solutions to best facilitate FRE development. The case study described in the chapter emphasises the influence that geographical location and personal circumstances (such as care responsibilities) have on the development of FREs. It also explores factors that could encourage the growth and development of FREs (see, e.g. Countryside Agency, 2003; Warren-Smith & Jackson, 2004; Warren-Smith & Monk, 2007). The chapter also discusses the practical needs of FREs and, in elucidating how WiRE operated, suggests the most effective means of providing support to FREs. It concludes by noting that the added dimensions of circumstantial, community and more importantly, family, results in a differentiation of need between ‘the personal’ and ‘the business’, and that successful support will always acknowledge this complexity.

REVIEWING RURAL ENTERPRISE SUPPORT Reviewing enterprise support in rural areas shows a fragmented and often contradictory picture where need is disconnected from provision. Lowe and Ward (2007) found that geographical location (i.e. rural) meant that support for rural enterprise was funnelled through the narrow lens of agricultural policy. A similar narrow focus on ‘rural’ is reflected in fundamental inhibitors to enterprise development across rural areas, such as a lack of access to broadband and restrictive planning regulations, all of which seem to be predicated on a more ‘socially constructed nature of rurality’ (Smith & McElwee, 2013, p. 112) than that required for enterprise development. For example, Martin et al. (2013) highlighted that rural small business support needs are often overlooked by an ‘urban centric’ focus, and that business training needs were unlikely to fit the often uniform pattern of provision available. Harding’s (2006) findings that the increasing proportion of women who wish to, and do, start a business represent one of three key challenges for

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the UK government. Shaw, Carter, and Brierton (2001) along with Marlow and Patton (2005) identified that business start-up for women in general is still an uphill struggle when compared to their male counterparts due to issues surrounding access to finance. In the rural farm-based context, access to finance is often even more complex (Warren-Smith & Jackson, 2004), with the collateral required for finance to be released typically being tied to the generational ownership patterns of the family farm. Indeed, the main difficulties facing FREs are mostly location specific. This is supported by Welter (2011), who also notes that entrepreneurship needs a fully contextualised framework that takes into account both location and circumstances in order for it to be properly addressed. Taking the context of enterprise support on farms by way of example, it is the farmers who are targeted, yet it is the wives and children of farmers (Bock, 2004; Parsons & Warren-Smith, 2001; Warren-Smith & Jackson, 2004) who are often the main drivers involved in non-farm but on-farm enterprise start-up. These females are often constrained by the contexts of both family and farm. Notwithstanding the above, Warren-Smith and Monk (2000) and Parsons and Warren-Smith (2001) suggest that the impetus for change in rural areas is coming from women who are launching many new businesses ranging from clothing manufacture to language translation centres as a desire to adapt to economic changes and provide a sustainable future in the countryside for their children, that is both ‘push’ and ‘pull’ diversification. Additionally and concurrently, Countryside Agency (2003), Warren-Smith (1999a) and subsequently Harding (2006) noted that many female professional in-migrants into rural areas were also drivers of rural enterprise start-up, although Atterton, Newberry, Bosworth, and Affleck (2011) noted that this was not strictly confined to female in-migrants. Other issues identified in the literature include: feelings of isolation, a lack of basic business services in rural locations (e.g. transportation), a lack of specific planning and environmental knowledge, access to finance, confidence and time management due to other care commitments. There is a clear need for female friendly business support, help and advice, with marketing, access to finance, pump priming and ‘hand holding’ offered in the initial stages of business start-up. This finding corroborates previous research (Warren-Smith, 1997b), which found that little targeted and sustained help has been available for female entrepreneurs since the 1980s, barring tacit government recognition, via the Small Business Service between 2001 and 2008 (Department for Trade and Industry and Small Business Service, 2003). More notably, in the last five years, there has been a rapid decline in support provision, due to government cutbacks.

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Government is dependent on enterprise development to stimulate economic growth. Entrepreneurship across rural areas is thriving (Lowe & Ward, 2007), and there are higher levels of female enterprise start-up across rural areas than urban ones (Harding, 2006). Yet extant literature suggests that generic rural enterprise support, where it has been available, is neither targeted nor capable of reaching those who need it. Much of the problems in relation to female enterprise support exist due to the gendered and paternalistic approaches used across the enterprise support and service sector, and ‘one size’ clearly ‘does not fit all’. The need for other constructive support measures to encourage and engender sustained levels of female-led rural enterprise is clear. WiRE was established to provide such support.

WiRE BACKGROUND WiRE was initially launched in Shropshire, England, to provide advice, networking, training (some accredited), website, mentoring, conferences and a signposting helpline for rural businesses. The initiative evolved as a result of a number of coalescing factors. One was a conference funded by a farm-based project running at Harper Adams University, known as the Marches Farm Enterprise Project (MFEP). The MFEP had a remit to provide on-farm enterprise grants and support, and had noticed that most applications came from farmers’ wives. One of the project’s aims was to provide a dissemination output, and thus it was decided to fund a conference for FREs. Acknowledging the cultural mores of the area at that time, invitations were sent to rural women via their husbands using the MFEP database. It was anticipated that there could possibly be 30 or 40 attendees from the Shropshire and Herefordshire regions who might be interested. The event surpassed all expectations with an attendance of 400 FREs from as far as Orkney to the Scilly Isles, and the need for an organisation to meet the specific support needs of the FREs was established. Feedback from the conference confirmed findings from two other studies (Warren-Smith 1997a; Warren-Smith 1999b) that had been undertaken, and outlined the need for pump priming help (access to finance and grants), focussed training and support, and networking that acknowledged all the complexities that geographical location, care commitments and, in some instances, the farm, created for FREs.

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STRATEGY PROCESS: THE WEST MIDLANDS PROGRAMME Prior to commencing full scale enterprise support, a project strategy and viability exercise was undertaken through the further monitoring of trial groups using questionnaires, evaluation forms, telephone follow up and focus groups (Countryside Development Unit [CDU], 2001). The investigations found that FREs were very specific in their requests and had a clear understanding of their business development needs. Most requests from FREs included: marketing, Information and Communication Technology (ICT) training including e-commerce, business planning, book-keeping, finance, planning regulations, and taxation and legal advice specific to rurally based businesses. As such, all training and support had to be provided in a way that was easily contextualised to a micro-business environment and capable of addressing the locational and personal circumstances of the FREs. The early market research (CDU, 2001) identified and confirmed that root locational and personal circumstances created practical logistical problems for FREs, and that these needed to be overcome. These included, isolation, lack of confidence, lack of collateral, poor timing and ‘strings attached’ training, access to finance due to other caring commitments, and the problem of being a ‘one man band’ with location-specific problems. Given that potential solutions to such issues could prove expensive, WiRE developed a policy of ‘demand-driven support’, that is never providing support that had not been specifically requested by the FREs.

Addressing the Practical Domestic Issues of Rural FRE Support Childcare/care, access (transportation) to training and networking provision to address isolation were the first personal and circumstantial issues that needed to be overcome. In response, WiRE designed a provision template that involved setting up networks and training solutions in the areas and locations identified as being most readily accessible and appropriate in Shropshire. Most of the training provision was delivered during one specific week each month, but repeated in up to three rural/market town locations per county. It was anticipated that if an FRE was unable to attend a session on a particular day, then she could catch up by attending the same session in a different location on a different day in the county. At the request of the FREs, the training/networking sessions were held during

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lunchtime with food provided. This arrangement facilitated those with childcare responsibilities. WiRE also organised a large networking conference, which presented aspirational role models from within the network, as well as providing bite sized developmental training sessions. The research that had been undertaken both prior and subsequent to the inception of the WiRE project enabled it to cater for the FREs specific training requests. This resulted in a method and stylised manner of delivery that was unique, and proved both popular and effective. As a result, WiRE grew by personal recommendation and word of mouth. The combination of locating the best sites for delivery addressed many of the ‘root problems’ that existed for the FREs. Travel and childcare costs were reimbursed, where required. However, fewer women than anticipated actually sought such reimbursement. What was noteworthy, however, was the social, moral and practical support that the participants gained through networking, which in turn resulted in women offering each other lifts and sharing childcare; it seemed that each venue had started to develop its own microsupport community. Interestingly, it was the provision of food at these events that the FREs seems to value most; not only did the lunch allow them time for useful networking, but it also provided a partial solution to the problem of isolation.

Addressing Business Support Issues The business-related issues were no less exacting. Routes to market, marketing and access to finance were all highlighted, and the delivery of request-based training programmes were not sufficient to overcome some of the FREs’ more complex concerns. One such concern revolved specifically around farm-based FREs who were strongly opposed to ‘another grey suit [male or female] telling us what to do’. The bureaucratisation of farming, which in many cases had been left to the farm-based FREs to absorb (i.e. in their capacity as the office-based farm managers), had resulted in them feeling disempowered. The FREs were vociferously specific in their request to understand the processes that needed to be learnt in order to run their businesses effectively, rather than ‘pay another grey suited consultant silly money for not very much’. This desire to develop human capital translated itself into self-mentoring within the time allocated for networking. More generally, the FREs did not want trainers/advisors who had neither run their own rural business nor understood their specific situation, yet who appeared to have a superior knowledge. Rather, what they wanted

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was someone who had been in a similar situation to theirs but who had managed to find a solution and a way forward; they wanted someone with whom they could discuss their own specific solution. Once again, WiRE found that although the training was useful in many cases, it was the ‘selfhelp mentoring’ through networking that was of most value to the FREs. Equally valuable was the help provided to overcome the problem of access to market. As micro-businesses, many FREs had neither the initial cash flow nor the expertise to effectively market and sell their products. The development of ‘umbrella marketing’ was established to help with this. WiRE undertook and absorbed the preliminary costs of booking floor spaces or marquees at a range of product marketing venues, from local shows to national shows, such as the Country Living Fairs in London. Members who had sufficient levels of production were encouraged to attend preparatory training on issues such as visual merchandising in exchange for subsidised stands within the marquee. WiRE provided individual training on how to sell products at exhibitions and shows; this included risk assessment, planning for booking stands and electricity supplies, and thorough checks on all aspects of the process from costing to tracking sales. This was followed by an evaluation training workshop which enabled them to assess the suitability and/or success of the venture. This ‘hands on/hand holding’ approach proved to be very empowering for the FREs. It absorbed the risk of high financial investment with no known promise of return, which a fledgling micro-business could not absorb. In addition, this approach gave the FREs practical knowledge and facilitated reinforced learning through interaction with other members. The initiative proved so successful that it was subsequently contextualised to an export situation, with the first Trade mission in partnership with United Kingdom Trade and Investment (UKTI) being hosted in January 2006. Access to finance was another important but interesting issue. As revealed through the FRE survey, contrary to academic research (see, e.g. Carter, Anderson, & Shaw, 2001; Carter et al., 2000; Marlow & Patton, 2005; PROWESS, 2006; Shaw et al., 2001), the uptake of loans by FREs was not as low as possibly suggested. Indeed, preferential loans from HongKong and Shanghai Banking Corporation (HSBC Bank plc) were negotiated and arranged through WiRE, with the help of Business in the Community (BiTC). An exclusively preferential loan of £15K at base rate, paid back over five years for WiRE ‘members’, was used to help overcome the lack of immediate finance accessibility that had been highlighted through the research. Interestingly, the much lauded provision of microcredit as a solution for female entrepreneurs was consistently derided by

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the WiRE FREs. Verbal feedback from FREs attending a WiRE Conference revealed that they found it pointless to try and start a business with the low levels of finance that could be offered through micro-credit; they were also frustrated with the time commitment needed to access such finance. There was an over riding sense, especially amongst the farmbased FREs, that the process of accessing micro-credit lending was patronising. Thus, a combination of research and a thorough understanding of the rural client base enabled highly targeted practical provision to be established.

Outcomes WiRE’s success appears to have been due to a symbiotic relationship between customer-focused delivery and WiRE brand ‘loyalty’. For the ESF component of WiRE, the project target was set at 600 rural women engaged in a minimum of two hours training over the two and half year period; the women were to be encouraged to start their own businesses or be up skilled in order to better develop their existing businesses through WiRE membership. The Regional Development Agency (RDA the regional government body at the time) required that 250 businesses receive six hours of help and advice; 30 individuals receive 30 hours of learning (skills development); and 5 new businesses begin trading and been trading for 12 months, along with numerous milestone outputs. The milestone outputs were negotiable but were the added bonus to the important indicators or ‘hard outputs’ used by most RDAs to assess the level of success relative to investment. However, the project results, chronicled in the following section, showed that by the end of the period not only were outputs greater but their impact was potentially wider reaching. In term of generating the required outputs, based on its understanding of ‘knowing what the customer wanted’, an open ended ‘pick and mix’ approach to learning, training and networking attendance was adopted. This was a high-risk strategy with which the RDA initially had difficulty. Claiming monthly payments from the RDA with no discernible outputs to justify payment in the early stages meant that the risk was borne by both WiRE and the RDA. In the short term, the RDA had to report the improved output targets to government using pre-defined economic and performance indicators. By the end of the programme, the required targets of 30 individuals ‘reached’, and over 70 individuals with 30 learning hours were both met, outperforming the set target by 127 per cent.

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At the start of the WiRE project in 2003, the national business start-up rate in the United Kingdom was cited as one female-led start-up to every three male-led start-ups (Carter et al., 2001). In terms of total selfemployment numbers, the West Midlands region is below the UK average and counter to the rising national trend has been falling in recent years. In 2000, for example it was 6 per cent, but by 2003 it had fallen to 5.5 per cent. Of this 6 per cent of the national total, Female Total Entrepreneurial Activity (TEA) fell from 3.4 per cent in 2003 in the West Midlands to 2.5 per cent in 2004. Overall TEA in the West Midlands was the lowest of all the English regions. In contrast, however, recent Global Entrepreneurship Monitor (GEM) research conducted for PROWESS (2006) highlighted that: Differences in entrepreneurial activity by urban-rural split are statistically significant overall. Female entrepreneurial activity is higher in the most deprived rural wards than male entrepreneurial activity (6.6 per cent compared to 5.1 per cent). Women are also more entrepreneurial than men in more affluent wards (13.9 per cent compared to just 8.4 per cent of men).

Within the GEM figures analysed for the West Midlands, the most significant increase in Female TEA was in rural Shropshire. Table 1 also highlights the positive picture in term of self-employment with respect to WiRE members in rural areas. The WiRE project facilitated a number of women to enter the labour market and become economically active; this would otherwise have been Table 1. Employment Profile of West Midland WiRE Members (%) Relative to National Statistics.

% Full Figures fulltime % Part-time Figures parttime Total (=100%)

West Midlands WiRE Members

UK SelfEmployed Females* 000s

UK SelfEmployed Males* 000s

UK Female Employees* 000s

UK Male Employees* 000s

55 307

50 48,7

87 2,307

58 7,087

90 11,495

45 252

50 48,5

13 344,

42 5,118

10 1,238

559

97,2

2,651

12,205

12,733

Source: Adapted from WiRE TE3 research, with data from summer 2005 (seasonally adjusted) and Labour Force Survey data, Office for National Statistics.

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difficult due to rural isolation and caring responsibilities. Indeed, the WiRE project completion report in 2006 (WiRE, 2006a) indicated the extent to which the local labour market and economy were supported through an increase both in the number of employed and self-employed individuals. There was a notable increase in the number of women-owned businesses employing one or more employees, and in the provision of parttime jobs, which are especially valuable and scarce in rural areas. A retrospective evaluation survey (203 respondents, a 31 per cent response rate) showed that FREs had increased levels of employment and growth. Of the 177 respondents who gave information on the number of staff employed, 125 started their business before they joined WiRE. Of these, 81 were sole traders, but by the end of the project 14 of these sole trader businesses were employing at least one additional member of staff. A further 12 businesses had increased the size of their workforce by the end of the project, one of which had grown from 2 to 12 people (8 part-time, 4 full-time). There were 52 new start-ups over the period of the project, 37 of who were sole traders, and the remaining 15 employed at least one additional person. By the end of the project one business was employing 15 members of staff, 11 of which were part-time (WiRE, 2006a). A result of 25 per cent of new start-ups employing at least one person within three years, while not necessarily ‘high growth’, indicates a positive economic response for rural areas. The social and personal benefits (the ESF component), however, were of equal importance to many of the beneficiaries. For example, academic research has stated that confidence is a key barrier; in this regard, Harding (2006) noted that: Women are less likely than men to think that they have the skills to start a business, to know an entrepreneur and to think that there are good business opportunities. Nearly 37 per cent of women said that fear of failure would prevent them from starting a business in 2005 compared to 32 per cent of men.

Indications from the WiRE ESF project suggest that once the right kinds of support and training are put in place, many barriers are relatively easily and inexpensively overcome. For example, the WiRE Staffordshire Network Officer noted in her closing comments that: Peer Group mentoring was of key importance. Anecdotal evidence indicated that great value was gained by participant businesses through informal and formal peer mentoring both in groups such as at networking events, and on a one-to-one basis where individuals were paired with other people facilitated by the Network Officer, who felt had experienced the same challenges or may be able to helpfully share some

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experience and moral support. Again some of these relationships are being sustained beyond the life of this project. (WiRE, 2006a)

Members’ comments highlighted the importance of networking that enabled many personal and social barriers, such as feelings of isolation, lack of confidence, lack of opportunity for skills development to be overcome. Signposting to other networking organisations was of key importance to the FREs. Again, as noted in the project closure report (WiRE, 2006a), local boundaries regularly meant a proliferation of support staff who did not have a thorough understanding of supports available outside of their own boundary areas. The different boundaries and staffing levels (often referred to as ‘postcode lottery’) were a constant source of confusion when FREs tried to access business start-up help. WiRE, which had one knowledgeable network officer working across the county, was considered to be a valuable resource for members. More concerning was the instability that many government support agencies constantly suffered from. It was noted: that Business Link [a government funded business support agency at the time] had been going through a series of structural changes over the last two years. The consequences of which had meant that key contacts had left the organisation. It has therefore been difficult to get an understanding of the structure of the organisation, find out whom to signpost to and build new relationships with individuals in Business Link. (WiRE, 2006a)

Similarly, there were also challenges with some Business Links that were primarily target/project but not customer-focused: The understanding is that Business Link achieves all its targets for supporting rural and women led businesses so does not need contact with WiRE. (WiRE, 2006a)

While, clearly, there were challenges and frustrations, the WiRE project was successful; it achieved positive results, produced a healthy return on investment and established a number of best practice principles with regard to encouraging and supporting FRE start-up.

RECOMMENDATIONS: A BETTER WAY OF RURAL ENTERPRISE SUPPORT? The WiRE project resulted in the incubation and development of a significant number of new female-led rural micro-enterprises and diversifications, all of which have contributed to a more sustainable rural economy in the

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West Midlands (Harding, 2006). WiRE’s research showed that positive local multiplier effects, such as local employment, were created by the newly established FREs. The combination of locally and export-oriented FREs created present a picture of positive economic growth, not only for the rural, but also for the national economy, resulting in an almost paradoxical reversal of ‘rural’ from that of a ‘subsidy-driven problem’ to a potential economic ‘solution’.

Contextualising Rural Enterprise Support As previously outlined, increasingly, the debate surrounding female entrepreneurship has begun to move into the realm of public consciousness, and thus, onto political government agendas. In terms of female entrepreneurship support, the tripartite requirements of ‘gender’, ‘rural’ and ‘policy’ each need to be met in future support scenarios; this is conceptualised in Figs. 1 and 2. What is clear from the WiRE case study is that the combination of gender and rural location issues require a very specific type of support. Agency theory could be used as an explanatory platform for WiRE intervention, and its use implies that FREs require additional resources to fulfil their entrepreneurial potential. Eisenhardt (1989) however, noted that

Policy

WiRE

Gender

Fig. 1.

Rural

Tripartite Requirements.

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ENTREPRENEURSHIP AND RURAL: IMPACT OF PLACE, ENTREPRENEURSHIP AND POLICY:

ISOLATION AND ACCESS,

ENTREPRENEURSHIP AND GENDER:

CULTURAL ISSUES,

CARING COMMITTMENTS,

BUREAUCRATISATION OF FARMING, CASUAL POORLY PAID EMPLOYMENT, FEWER SERVICES, POOR ACCESS TO SUPPORT PROVISION, POOR ROUTES TO MARKET

NEED TO ENCOURAGE GROWTH IN WEALTH AND EMPLOYMENT,

TIMING ISSUE, UP-SKILLING REQUIRED,

HARD OUTPUTS REQUIRED TO JUSTIFY PUBLIC SPENDING,

SOCIAL CAPITAL DEVELOPMENT,

EXOGENOUS APPROACH,

HUMAN CAPITAL DEVELOPMENT,

POOR UPTAKE OF URBAN FOCUSSED SUPPORT PROVISION,

DISEMPOWERMENT IN THE INTERFACE OF POLICY AND RURAL, POOR ACCESS TO SUPPORT PROVISION AND MARKETS

POOR UPTAKE OF MARKET GROWTH INCENTIVES

WiRE AS AN ‘INTRAPRENEURIAL’ AGENT/INTERFACE

Re-empowerment through Overcoming rural based issues by providing access to transportation,

Provision of networks facilitating social capital development,

training in culturally acceptable locations,

Developing human capital through upskilling,

care, committment, facilitation,

Creating access to markets through unbrella marketing,

creating routes to market through umbrella marketing, creating access to finanace, overcoming isolation through networks training and conferences in real time, not creating online or virtual services

Creating access to finance, Creating accessible "just head of you" practioner support and role modelling, Aspirational role model conferences

Fig. 2.

Properly researching the need and demand for Focussed training provision that was demand driven, Facilitation by coming alongside rather than exogenous or 'top down' provision, Hiding the inhibiting bureaucratic processes, Delivery of outputs and additional outcomes

WiRE Agency.

agency theory while controversial offers a unique insight into information systems, outcome uncertainty, incentives and risk, and is an empirically valid perspective, particularly when coupled with complementary perspectives. Such perspective provides an interesting framework upon which to base the success of WiRE’s approach, not only in facilitating rural female entrepreneurship, but also with regard to policy implementation for public sector bodies. WiRE has also empowered female entrepreneurs to combine their collective bargaining power to bring about both political and economic change. Managing policy objectives requires support organisations to adopt a particular level of entrepreneurial thinking. To date, initiatives based on government-driven targets seem to have been ineffective. At the fundamental level, practical solutions to FRE business support need to be mindful of the many commitments that rural women have to manage. Support systems need to empower women, and generate a culture of independence rather

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reliance; this is especially the case with farm-based FREs. This, in turn, will build confidence and achieve up-skilling on an incremental basis. One of the keys to WiRE’s success was its customer-focused, demandled offering, which ensured targeted outputs were met. Similarly, the use of appropriate and realistic role models proved highly effective, with aspirational messages presented in an attainable manner. A key driver for the farm-based FREs and those who had grown up in a rural area, was their rural identity and their ‘sense of place’, that is their ‘community’. Interestingly, for the in-migrants, this was one of the main reasons they had moved into rural areas, as the following quote from an ‘in-migrant’ WiRE member demonstrates: Belonging to WiRE is important. It’s not just the business support it’s a sense of belonging, a sense of being part of a rural family. (WiRE, 2006b)

This sense of belonging was further developed through simple mediums such as the provision of catering and the opportunity for networking in appropriate locations that were both familiar and accessible to rural FREs.

CONCLUSIONS The case study of WiRE as a business networking and support organisation has enabled many FREs to effect economic and social change, and to resist the inexorable change that has caused many rurally based families to have to leave their farms. It has also facilitated many in-migrants to effect changes in rural areas through their new methods, ideas and businesses. Perhaps, more importantly, it had enabled the interaction of the two disparate in-migrant and farm-based/rural groups to mix, and unite through the common identity of FRE development. The provision of networking opportunities, informal training and skills development enabled the commonalities rather than differences between the two groups to be explored. The FREs’ participation in WiRE has enabled a common vision (i.e. the well-being of their businesses, families and communities) that focused on overcoming the barriers that were common to all. This was best facilitated, however, through the peer mentoring (WiRE, 2006b). The ongoing exchange of ideas and advice (i.e. the human and social capital of the WiRE members themselves) is WiRE’s single biggest asset, which all members use to positive effect in the development of

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their businesses. Through strengthening essential network ties, business to business interaction flourished, as did essential community knowledge exchange, such as that relating to planning permission, or getting help with caring responsibilities when required. At the most fundamental level, WiRE is an example of rural business support which is both ergonomic and inexpensive, and provides what its customers need. This has been observed in published reports, as follows: In terms of their business support, women need three things: appropriate finance, mentoring and access to ‘network’ or social capital. This holistic approach to the demand and the supply side is key to an effective approach to women’s enterprise and examples of best practice exist that could be rolled out at a national level. (PROWESS, 2006)

At a more sophisticated level, however, an organisation like WiRE, which facilitates the combination of social and human capital for FREs, can provide a powerful hub that supports the sustainability of rural society.

ACKNOWLEDGEMENTS This project was funded by the European Social Fund, Advantage West Midlands and Harper Adams University.

REFERENCES Alsos, G. A., Carter, S., Ljunggren, E., & Welter, F. (Eds.). (2011). The handbook of research on entrepreneurship in agriculture and rural development. Cheltenham, UK: Edward Elgar Publishing. ISBN 978 1 84844 625 0. Atterton, J., Newbery, R., Bosworth, G., & Affleck, A. (2011). Rural enterprise and neoendogenous development. In The handbook of research on entrepreneurship in agriculture and rural development (p. 256). Cheltenham, UK: Edward Elgar Publishing. ISBN 978 1 84844 625 0. Bock, B. B. (2004). Fitting in and multi-tasking: Dutch farm women’s strategies in rural entrepreneurship. Sociologia Ruralis, 44, 245 260. doi:10.1111/j.1467-9523.2004.00274.x Carter, S., Anderson, S., & Shaw, E. (2001, August). Women’s business ownership: A review of the academic popular and internet literature. Discussion paper. DTI small business service research report. Available from British Library Document Supply Centre DSC:7773. 666(002/01). Carter, S., Ennis, S., Lowe, A., Tagg, S., Tzokas, N., Webb, J., & Andriopoulous, C. (2000). Barriers to survival and growth in UK small firms. Glasgow, Scotland: Federation of Small Business.

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Countryside Agency. (2003). The role of women in the rural economy: An important rural resource. Cheltenham: Countryside Agency Publications. Countryside Development Unit. (2001, September). A feasibility study of East Shropshire market towns. A report for the East Shropshire Market Towns Initiative. Unpublished. Harper Adams University, Edgmond Shropshire, UK. Department for Trade and Industry and Small Business Service. (2003). The strategic framework for women’s enterprise. Sharing the vision: A collaborative approach to increasing female entrepreneurship. DTI/5000k/04/03. URN 03/867. Eisenhardt, K. (1989). Agency theory: An assessment and review. The Academy of Management Review, 14(1), 57 74. Retrieved from http://www.jstor.org/stable/258191 Harding, R. (2006). GEMUK 2005 report. London Business School. Retrieved from www. gemconsortium.org HM Treasury. (2011). The plan for growth 2011. London: HMSO. ISBN 978-1-84532-842-9. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_ data/file/31584/2011budget_growth.pdf. Accessed on June 16, 2013. Lowe, P., & Ward, N. (2007). Sustainable rural economies: Some lessons from the English experience. Sustainable Development, 15(5), 307 317. doi:10.1002/sd.348 Marlow, S., & Patton, D. (2005). All credit to men? Entrepreneurship, finance, and gender. Entrepreneurship Theory and Practice, 29(6), 717 735. doi:10.1111/j.1540-6520.2005. 00105 Martin, L., McNeill, T., & Warren-Smith, I. (2013). Exploring business growth and eco innovation in rural small firms. International Journal of Entrepreneurial Behaviour & Research, 19(6), 592–610. Parsons, S. T., & Warren-Smith, I. (2001). Women and rural enterprise. Royal Agricultural Society of England, 162, 47 57. PROWESS. (2006, December). Stairways to growth: Supporting the ascent of women’s enterprise in the UK. A report prepared for PROWESS by GEMUK. Norwich, UK. Shaw, E., Carter, S., & Brierton, J. (2001). Unequal entrepreneurs Why female enterprise is an uphill business. Policy paper for the Industrial Society, London. Smith, R., & McElwee, G. (2013). Confronting social constructions of rural criminality: A case story on ‘illegal pluriactivity’ in the farming community. Sociologia Ruralis, 53(1), 112 134. Warren-Smith, I. (1997a, June 19 20). Networking for females Is it there? Does it work? A Shropshire case study. Paper presented at Networking and Small and Medium Enterprises, organised by Economic Development Unit and Innovation Centre, University of North London and Universita degli Studi di Bologna, Italy. Warren-Smith, I. (1997b). Women into business Making it work. Closing report for EU/ DFEE/SCCTE funded project. Unpublished. WIB, Wolverhampton, UK. Warren-Smith, I. (1999a). Micro solution to macroeconomic change: Rural management and human resources. Journal of the Agricultural Manpower Society, 2(1), 7 20. Warren-Smith, I. (1999b, October 14 17). Women in micro, small and medium enterprises in Shropshire: The result of social and economic change. Paper presented at the international conference: ‘Gender and Rural Transformations in Europe’, Wageningen University. Warren-Smith, I., & Jackson, C. (2004). Women creating wealth through rural enterprise. International Journal of Entrepreneurial Behaviour & Research, 10(6), 369 383. doi:10.1108/13552550410564707

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Warren-Smith, I., & Monk, A. (2000, April 13 14). The deindustrialisation of agriculture and the importance of the rural service sector: A case for the participation of women. Paper presented at the 2000 International Sustainable Development research conference, University of Leeds. Warren-Smith, I., & Monk, A. S. (2007). The socio-economic contribution of farm based female entrepreneurs. Journal of the Royal Agricultural Society of England, 168, 88 97. Welter, F. (2011). Contextualizing entrepreneurship Conceptual challenges and ways forward. Entrepreneurship Theory and Practice, 35(1), 165 184. doi:10.1111/j.15406520.2010.00427.x WiRE. (2006a). Project completion statistics submitted to European Social Fund via Government Office West Midlands. ESF project closure report. Unpublished WiRE, Harper Adams University, Edgmond, Shropshire. WiRE. (2006b). Online Member Evaluation Survey 2006. Unpublished WiRE, Harper Adams University, Edgmond, Shropshire.

‘SEEDS’ FOR GROWTH? POLICY AND SUPPORT FOR MICRO RURAL FOOD ENTERPRISES IN A PERIPHERAL REGION Barry Quinn, Adele Dunn, Rodney McAdam, Lynsey McKitterick and David Patterson ABSTRACT Purpose This study explores policy and practice in relation to a peripheral rural region food support programme for small (micro) food enterprises and the impact on business development and innovation. Methodology/approach An exploratory case study methodology is employed focusing on the effectiveness of a local support programme for micro business development in the food sector, in a European Union peripheral, rural location. Findings The effective integration of policy and practice in the design and implementation of a public/private partnership programme can enable micro businesses to benefit from Government aid in a collective manner that would not have been possible in a Government micro enterprise dyadic relationship.

Exploring Rural Enterprise: New Perspectives on Research, Policy & Practice Contemporary Issues in Entrepreneurship Research, Volume 4, 233 257 Copyright r 2014 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 2040-7246/doi:10.1108/S2040-724620140000004011

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Research limitations/implications The study focuses on one region and on one particular support programme. However, the research highlights the potential benefits that can accrue to micro food producers, and micro companies more generally from participation in such a programme, and identifies the types of support that are particularly effective for these types of organisations. The research identifies the possibilities and challenges of applying the South Eastern Economic Development type programme to other regions. Practical implications The success of such support programmes depends on identifying the needs of the participants at an early stage in the programme and in tailoring training and support accordingly. There are benefits from local government working closely with private consultants as brokers for micro enterprise business development and innovation. Social implications Micro enterprises play key economic, social and cultural roles within their local rural community. Collectively they offer opportunities for rural employment and tourism development. Originality/value The chapter addresses a major gap in knowledge around the role of policies and supports in assisting business development and innovation in relation to micro size enterprises, and more specifically food micro enterprises based in peripheral, rural regions. Keywords: Agri-food; innovation; micro; policy; peripheral; rural

INTRODUCTION A wide range of studies exist on the small food sector, including for instance, supply chains and networks (Beckeman & Skjoldebrand, 2006; Ja¨msa¨, Ta¨htinen, Ryan, & Pallari, 2011), marketing management (Gellynck, Banterle, Ku¨hne, Carraresi, & Stranieri, 2012), food tourism (Tikkanen, 2007) and technology adoption (Bhaskaran, 2013; Simmons, Durkin, McGowan, & Armstrong, 2007). However, little research has been conducted into the role of policy and support and how policy-based programme interventions can impact upon innovation, growth and competitiveness of the micro sized food producer. This deficiency may be due in

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part to a conception of small food production as specialist activity, often artisanal in nature where the predominant goals are lifestyle oriented rather than commercial growth. Yet, the business motivations of owner-managers of small rural enterprises are often complex and are driven by a combination of commercial growth and lifestyle-orientated factors (Tregear, 2005). Furthermore, the activities of small rural enterprises can play a key role in increasing economic activity in peripheral areas (Alonso & O’Neill, 2010). Government policy can have a major influence on the type and quality of businesses created in a country or region (Smallbone & Welter, 2010). It has been argued that small business policy should be designed to help assist small firms improve their performance and overcome barriers to growth (Crichton, 2007; Kaikkonen, 2006) and ability to innovate and, in short, to help increase regional competitiveness (Bennett, 2008). The need to develop sustainable business environments and entrepreneurial conditions to support growth and innovation is more paramount today than ever before due to the need for sustainable production (Lamminpa¨a¨, 2008; Thompson, Scott, & Downing, 2012). Governments are even more aware of the importance of creating a business support infrastructure that is innovative and progressive (Annibal & McElwee, 2010; Beaver & Prince, 2004; Martin, Schofield, & Warren-Smith, 2013; Smallbone, Xiao, & Xu, 2008). However, there is a limited understanding of the needs of small to medium sized enterprise (SME) owner-managers in relation to business support and the characteristics of business support interventions that are deemed to be ‘successful’, or not (Lewis, Massey, Ashby, Coetzer, & Harris, 2007). A number of studies (for instance Cooke, 1996; Skuras, Tsegenidi, & Tsekouras, 2008; Soderquist, Chanaron, & Motwani, 1997) have shown that small businesses from peripheral regions are less competitive and innovative in comparison to more centrally located companies. Such geographical or regional limitations are compounded with innate small business skill limitations (Pinho, 2008). In light of the above, this chapter considers the challenges facing small food producers within the context of one such specific location, where small businesses contribute heavily to the economy and where there is a focus on increasing innovation and entrepreneurship. Northern Ireland is an example of a peripheral, rural economy, which consists heavily of small and micro sized enterprises, particularly within the food sector. Northern Ireland has a strong reputation for its local food produce with clear provenance and authenticity, and traditional food crafts such as butchery, bakery and distilling have a long and proud history. Against a backdrop of

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food scares and concerns around food security (e.g. BSE, Horsemeat crises) the market has seen an increasing demand in recent times for fresh produce and local food (Mintel, 2012). Micro enterprises play a vital role in sustaining the local food culture and social fabric of rural communities, but they face a range of challenges as they seek to innovate and promote their products and brands. The innovation capacity of small food producers, and the agri-food sector more generally, has been identified by Government as a priority area (Department of Agriculture and Rural Development, 2004, 2011; Department of Enterprise, Trade and Investment, 2013; InterTradeIreland, 2011). Indeed, figures from the UK’s biennial innovation survey indicate that innovation levels for Northern Ireland in the sector have fallen (Department of Enterprise, Trade and Investment, 2011). However, there are a number of challenges facing Government and support agencies in increasing innovation capacity in the sector in Northern Ireland, including the peripheral nature of the Northern Ireland economy, the diversely located population base and the skills shortages facing the sector in the areas of marketing and senior management leadership (AgriFood Strategy Board, 2013; Northern Ireland Food and Drink Association, 2012). The aim of this study is to explore the role of policy and business support programmes in the development of micro sized rural food enterprises in peripheral regions. The research focuses on a successful support programme provided at a local council level in Northern Ireland. The research has a number of objectives. Firstly, it seeks to examine how the design and development of the programme sought to address policy and practice limitations for micro food producers in the region. Secondly, it seeks to examine the benefits and limitations of the programme for participant micro food producers. Thirdly, it seeks to examine the challenges of applying this type of programme to other regions. The chapter begins with an evaluation of the current knowledge policy supports, in practice, for micro food businesses in one European Union (EU) peripheral region Northern Ireland. The methodology adopted here involves a case study of one particularly successful programme that has impacted on micro size food enterprises the South Eastern Economic Development (SEED) Food and Fisheries Programme in Northern Ireland. The chapter concludes with a discussion of the case in respect to the literature and of the implications for the development of such programmes in other regions.

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POLICIES AND SUPPORTS FOR MICRO FOOD ENTERPRISES IN NORTHERN IRELAND The agri-food sector (agriculture and food and drink processing) is one of the key drivers of the Northern Ireland economy and it is the largest manufacturing sector in Northern Ireland. It employs directly up to 50,000 people (NIFDA, 2012) with approximately 20% of all Northern Ireland private sector employment being derived from the agri-food sector (Goldblatt & McGuigan, 2010). Government estimates there is the potential to help grow the Northern Ireland economy through the creation of an additional 15,000 jobs by 2020 (NIFDA, 2012). However, figures from the UK’s biennial innovation survey indicate that innovation levels for Northern Ireland in the sector have fallen (Department of Enterprise, Trade and Investment [DETI], 2011). There are a number of challenges to policy makers in addressing innovation levels, including the peripheral nature of the Northern Ireland economy, the diversely located population base and the skills shortages facing the sector in the areas of marketing and senior management leadership (NIFDA, 2012). The agri-food sector in the Northern Ireland region is mature and has a highly developed network of stakeholders with responsibility for policy formulation and programme development and implementation. Table 1 presents a summary of the key stakeholders and an analysis of the reach of their programmes. There have been numerous proposed strategies for growth of the agrifood sector in Northern Ireland in recent years (see for instance the 2013 Agri-Food Strategy Board report ‘Going for Growth’). The development of a regional agri-food strategy is identified in the Northern Ireland Executive Programme for Government and the subsequent Economic Strategy identifies the sector as one of five areas of the economy with the greatest growth potential. Both these policy instruments, at a more general level, also recognise the importance of SMEs to the economy and identify programmes to foster innovation and growth. However, there are only a few instances where programmes are identified specifically for small enterprises. Two departments in the Northern Ireland Executive have primary responsibility for the development of policies and programme actions relevant to the agri-food sector and more generally to small businesses: the Department of Agriculture and Rural Development (DARD) and the DETI respectively. DARD assists the competitive development of the agrifood sector and has a leading role in the development of policy and

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Table 1.

Key Stakeholders for Micro Food Enterprises in Northern Ireland.

Stakeholder

Policy Informant

Programme Development Role

Programme Implementation Role

Reach (International, National, Regional, Subregional)

No Yes

Yes Yes

Yes Yes

Yes Yes

International Regional

Yes Yes

No Yes

Yes Yes

Yes Yes

Regional Regional

Yes No No No No No No

Yes Yes Yes Yes Yes Yes Yes

No Yes Yes Yes Yes Yes Yes

No No Yes Yes Yes Yes Yes

Regional Regional International International Subregional Regional Regional

No

Yes

Yes

Yes

International

No No

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Agri-Food Biosciences Institute Department of Agriculture and Rural Development including CAFRE Department of Employment and Learning Department of Enterprise Trade and Investment including Invest NI Food Standards Agency Northern Ireland Food Strategy Board Further and Higher Education Colleges InterTradeIreland Local Authorities Northern Ireland Chamber of Commerce Northern Ireland Food and Drinks Association Queen’s University Belfast including the Institute of Agri-Food and Land Use Rural Development Council University of Ulster including Northern Ireland Centre for Diet and Health

Policy Development Role

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programmes for this sector. At a policy level the DARD Draft Strategic Plan 2012 2020 (Department of Agriculture and Rural Development [DARD], 2012) identifies the need to support research and development, knowledge exchange, innovation and skills to support the sustainable economic development of the sector. Policy implementation in this area is through funded programmes such as the Agri-Food Research Challenge Fund and also through the provision of innovation and skills development services at the College of Agriculture, Food and Rural Enterprise (CAFRE). CAFRE offers a range of training programmes to help small agri-food enterprises meet their legislative requirements and enhance their technical competencies and business skills. They also offer a broad range of innovation services to support product and process development including incubation facilities for new enterprises. Programmes have been designed specifically for small food enterprises, for example, initiatives such as the Food Enterprise Development Programme (FEDP) provide the opportunity to market test ideas where no immediate investment in food manufacturing equipment and facilities are required. Aligned to these economic development roles, the DARD Draft Strategic Plan also identifies the need to support rural communities and a key programme in this area has been the Rural Development Programme. The programme exists primarily to implement EU policy and support in this area including funding measures to support primary producers in the marketing of products or capital expenditure to support processing. In summary, DARD provides a wide range of programmes to support the specific needs of the agri-food sector and there is evidence that supports provided by CAFRE have been designed to meet the needs of small rural food enterprises. However, evidence of the impact of these programmes is more difficult to establish. At a more general level in the region, DETI formulates and delivers economic development policy for Northern Ireland including the agri-food sector. The Draft Innovation Strategy 2013 2025 (DETI, 2013) is a key policy and is designed to support the delivery of the innovation objectives articulated in the Northern Ireland Economic Strategy. This strategy is focused on knowledge generation relating to high value-added technologies for priority areas such as the agri-food sector. The strategy will also focus greater attention on collaborative and open innovation approaches to enhance knowledge exchange and develop the regional infrastructure to support and accelerate knowledge exploitation. However, these interventions may be more relevant to larger food enterprises with the capacity to innovate (Akman & Yilmaz, 2008).

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Under the leadership of the Northern Ireland Executive, DARD and DETI have jointly set up the Agri-Food Strategy Board made up of agrifood stakeholders. The aim of the board was to develop the existing ‘Focus on Food’ Strategy into a longer term vision for the sector. The resultant report ‘Going for Growth’, presents a strategic action plan for the agrifood sector in the region (Agri-Food Strategy Board, 2013). The major focus of the plan is on development of the food supply chain regionally to enable greater efficiency and greater focus on export markets. The plan identifies that the region has a growing base of small and artisan producers and acknowledges the innovation, provenance, taste and quality they bring to food products. It also recognises the opportunity to build stronger alliances between food and tourism and the important role for small rural food enterprises in this regard. Invest Northern Ireland (Invest NI) is the regional development agency and has a dedicated Food Division which encompasses all food industry development activity including food start-up activity. This team supports market development and sector engagement with other Invest NI programmes. The division is mainly focused on supporting export focused food enterprises and engagement with small rural enterprises that are focused on local markets is limited. The Invest NI Corporate Plan acknowledges that increasing the innovation capability of SMEs remains a significant challenge and identifies this as a priority area (Invest NI, 2011). Consistent with the Economic Strategy, there is also an increased focus on support for business collaboration (Collaborative Network Programme) and business to academia collaboration (Innovation Vouchers, Knowledge Transfer Partnerships, Competency Centres). Innovation Vouchers are a key scheme used to build innovation awareness in small enterprises. The target for this scheme is small enterprises or medium enterprises, which have not engaged with any form of innovation support previously. From 2010 to 2013, 170 innovation vouchers were awarded to food enterprises representing 22% of the total awarded. These figures suggest that this programme has successfully introduced small food enterprises to introductory innovation support from Invest NI. The scheme also offers the potential for small businesses to work collaboratively and pool vouchers, however, none of the food enterprises availed of this option to date as it was not widely advertised or known about. Over the same time period applications for research and development support was lower particularly among small/micro enterprises (Table 2). Similarly, there were no applications to the collaborative network programme from small food enterprises. This suggests that these more

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Table 2.

Breakdown of Food-Related Research and Development Applications to Invest NI (2010 2012). Year 2010

Total food applications Applications from small food enterprises

22 7 (32% of food applications) Applications from micro food 5 enterprises (71% of small enterprises)

2011 12 9 (75% of food applications) 4 (44% of small enterprises)

2012 19 9 (47% of food applications) 2 (22% of small enterprises)

Source: Invest NI.

advanced forms of innovation support may be less relevant to the needs of small food enterprises or they may lack the capability or resources to engage in these innovation programmes that require collaborative approaches. In summary, Invest NI provides a comprehensive range of generic innovation programmes and there is evidence that micro rural food enterprises are engaging at the introductory levels of this support.

AN APPRAISAL OF POLICY SUPPORT FOR MICRO FOOD ENTERPRISES IN A PERIPHERAL LOCATION With an emerging market demand for locally produced food (InterTradeIreland, 2011; Mintel, 2012), food sector micro enterprises are a key component in developing a diverse, sustainable economy that reflects local cultural heritage and pride in local food and its provenance and authenticity. There is, however, a challenge for policy makers around how best to support the growth of the sector. Within Northern Ireland, Government plans for the growth of the food sector are largely focused on export led growth and thus do not directly address the needs of small rural food enterprises. This reflects a longer term position among business development agencies in Northern Ireland towards a ‘growth pyramid’ model as described by Massey (2006), whereby support has been focused on those companies with the potential to grow in a very traditional sense, that is through exporting. In Northern Ireland, post start-up companies have traditionally received very little bespoke business development support unless

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they were of a size or focus to meet agency criteria. Generally this required companies in manufacturing and tradeable services to have a turnover of minimum £100,000 per annum and/or be able to generate 25% of turnover from exports. Support for smaller companies outside these criteria was limited to accessing occasional generic training support. There is a significant gap in knowledge around the effectiveness of business support for small, micro enterprises in peripheral, rural regions. However, there is an argument that support programmes, to be successful in terms of take-up, should clearly identify existing market provision, address gaps and be marketed at the local level (Bennett & Robson, 2003). Furthermore, research indicates the restrictions of central Government support directed solely from national policies and highlights a requirement for ‘solid economic policies’ at the local level (Mawson, 2009). Within Northern Ireland there is evidence of the needs of micro rural food enterprises being addressed at local authority level. Micro rural food businesses have relevance to economic development, rural development and tourism in local areas and there are examples of programmes designed specifically to meet business development needs. These programmes typically are supported by EU funding and other regional funding and tend to engage clusters of council areas. The chapter will now turn to discuss the impact of one support programme targeted at micro food enterprises based in rural locations.

METHODOLOGY There are a range of business supports that micro food producers can avail of. One programme was selected for a more in-depth case analysis: the ‘SEED’ Food and Fisheries programme. ‘SEED’ was a local authority business development programme for micro food producers in the South East region of Northern Ireland. It was managed by Down County Council on behalf of the SEED group of councils. The SEED programme is one of the few programmes of its type in Northern Ireland. The programme was identified and selected for further study due to the publicised success of the programme. A number of participating businesses had been awarded ‘Great Taste awards’ and the programme was recognised by the NI Food and Drink Association (NIFDA) and given an award for Training Excellence. The organisers of the programme were contacted for more details on the programme, including its structure and support provided, and the impact on the programme participants. In addition, three focus groups were

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arranged and held with programme participants (owner-managers) from September 2012 to April 2013. A focus group enables the gathering of data about opinions from people who share common interests (Collis & Hussey, 2003). Listening to the views of others persuades people to express their own views, and group interaction produces data and insights that would be less accessible without the interaction found in a group (Morgan, 1988, p. 12 as cited in Collis & Hussey, 2003). An interview guide was developed to create and maintain participants’ interest and in order to keep the group focused on the topic in hand and to provide structure (Saunders, Lewis, & Thornhill, 2012). The topic was introduced and at the outset participants were assured their identity would remain confidential and were asked for their consent on the discussion being recorded (Collis & Hussey, 2003). Typically each group was made up of between 6 and 10 respondents (Blumberg, Cooper, & Schindler, 2005). Respondents were asked to discuss the impact that the SEED programme had on their business and to provide examples of what they had done differently as a result of the programme. Focus groups were transcribed and analysed using qualitative thematic analysis. The analysis of the SEED programme that follows seeks to address a number of research questions: RQ1. How has the design and development of the SEED programme sought to address policy and practice limitations for micro food producers in a peripheral UK region? RQ2. In relation to the operation of the SEED programme, what are its benefits and limitations for participant micro food producers? RQ3. What are the challenges of applying the SEED type programme to other regions?

LOCAL SUPPORT NETWORK CASE STUDY: THE ‘SEED’ FOOD AND FISHERIES PROGRAMME Background The SEED Food and Fisheries programme was designed in the context of the joint DARD/DETI ‘Focus on Food’ strategy to stimulate private sector enterprise and support innovation within and between small companies in

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the food sector, as a highly relevant approach to overall development of the sector and to contribute to economic recovery within the five council areas of the SEED region (Ards, Armagh, Craigavon, Down, and Newry and Mourne). The programme arose from the recognition that the food sector in Northern Ireland and in the SEED region was a growth industry, in contrast to many other sectors in the economy following the economic downturn from 2008 onwards. A range of larger farm-based businesses have emerged in the SEED area specialising in added-value and premium products (for instance Willowbrook Farm providing ready to use salads; Mash Direct specialising in ready cooked mashed vegetables; Finnebrogue Venison, now the largest producer of farmed venison in the United Kingdom). Local provenance and transparent supply chains are central to these brands, and their contribution to sustainable local employment is key to local economic development agencies’ interest in supporting them and other local quality food producers. Additionally, Northern Ireland is shaking off its ‘war torn’ image after many years of engagement in a peace process and is emerging as an attractive tourism destination, with Belfast recently identified as one of the top European cities to visit. However, the Northern Ireland Tourist Board had pointed to the comparatively poor level of local cuisine available as part of the tourism offering and the need for more restaurants and hotels to ‘up their game’ and promote local food with quality products of local provenance. In this context the SEED Food and Fisheries Programme was developed. Led by Down District Council, the programme was one of a number of collaborative programmes delivered in the South East Economic Development area of Northern Ireland. SEED councils have worked together to deliver a series of sectoral programmes and share costs and achieve economies of scale. Following successful application to the EU Sustainable Competitiveness Programme for Northern Ireland (EU Structural Funds) the SEED Food and Fisheries Programme was 50% supported by EU funds with each of the five councils contributing 10% of costs (50% match funding). The main programme aim was to address business development and support requirements of small scale food producers, particularly those located in disadvantaged rural areas, to increase their economic sustainability and to create new employment and tourism opportunities. The project had a number of specific objectives: • To develop new quality products; • To investigate new markets;

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• To identify collaborative opportunities in production, storage and distribution, and marketing; • To stimulate and develop the artisan and small food production sector in the SEED area; • To facilitate companies’ learning from expertise elsewhere. The target companies for the programmes included micro businesses in the food sector employing less than 10 people located in the SEED area that could benefit from a tailored business development programme providing both individual support, and significant opportunities for collaboration in NPD, market development and promotion, and access to new supply chains with larger established companies in the sector. Only those companies that for reasons of scale, location or for other suitable reasons were unable to access Invest NI or DARD programme support, were recruited to the programme. The programme was widely promoted across the five participating council areas and 21 companies were recruited. The programme ran from November 2009 to March 2011.

Programme Structure The structure of the programme is highlighted in Table 3. The range of sources of support used through the programme was very broad. The overall rationale for the content was to support the development of smaller local food sector businesses, improving individuals’ capacity to manage and to extend their business into new markets. This was approached both on an individual and on a collective basis. To do so the programme provided: • A structured programme of daytime workshops across business management topics (including for instance, finance, sales, marketing and product development) with an allocation of individual company mentoring to develop new business plans; • The opportunity for companies to learn about each other, learn from each other, and to develop a collaborative ethos and to identify potential collaborative opportunities, for instance through sourcing complementary products from each other; • A food and tourism element. This was primarily collaborative, assisting companies to come together to promote products on a joint basis at local markets. Companies also collaborated on a council area basis to pilot food tourism trails.

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Table 3. SEED Programme Support Type

Type of Supports. Description

Baseline assessments Carried out with each business on their premises at the outset of the programme. Monthly workshops 14 full-day workshops (9 different ones) which were interactive, and focused on the businesses and issues affecting them. One-to-one 4 days (32 hours) one-to-one mentoring per business which covered a mentoring range of topics and issues and was tailored to the support needed by each participant. Residential training Two residential training events to develop links and networking among participants, as well as providing a valuable block of time to cover larger areas of work. MTB events Two MTB events. Study tour A two day study tour to London to meet buyers from large companies, to look at product trends, packaging trends, innovation and good practice. Business A tailored business improvement plan was developed with each improvement plan participant at the end of the programme.

The focus and content of the programme resulted in part from limitations placed on local councils by the regional business support agency, Invest NI and its parent department and funder the Department for Enterprise, Trade and Investment. As discussed earlier in this chapter, Invest NI works primarily to support greater export business for Northern Ireland. In 2008 the agency stipulated that the SEED programme should not address export markets, nor should (generally larger) firms already with a working relationship be recruited, leaving these to access Invest NI support. As a result the focus of the programme was limited to working with smaller local firms ‘beneath Invest NI’s radar’ and requiring a greater focus on identifying and exploiting new local markets. This restriction was actually the catalyst for redefining the raison d’etre of the programme and enhancing the focus on supporting ‘local food for local markets’. The programme content was developed based on the needs of the local companies and following consultations with local food body representatives. The content was not derived from any preceding programmes. The focus of support activities changed over the duration of the programme, ranging from structured training at the start of the programme to networking development and collaboration later in the programme. Baseline assessments were carried out with each participating business at the start of programme to assess their business development needs. The

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organisers were then able to respond to the needs of participants and tailor the workshops accordingly.

Programme Impact Of the 21 companies who participated, 18 completed the programme. The participants were highly positive towards the programme and commented on the valuable support received. Overall the attendance rates and feedback were very positive. The whole programme had an average attendance of 71%, which was attributed to the workshops being tailored to the needs of the participants. For the mentoring support, however, the uptake was 100%. Mentoring provided individual expert support to an individual business, assisting the business to address specific development issues. As such it was a resource open to participating businesses to define the most appropriate support required at the time and for mentors to provide this where possible within the limits of the resource available. In some instances the support provided extended beyond an advisory role and the programme delivery consultant provided specific services according to need. Examples would include undertaking market research or redesigning the company’s account system. The impact of the programme may be measured in quantitative and qualitative ways, as highlighted in Table 4. A number of important impacts of the programme are now discussed in more detail. New product development and innovation were promoted throughout the programme. All companies were encouraged and actively assisted to investigate new product development. Mentors worked on a one-to-one basis with companies to assist with this process. It was also promoted through a dedicated workshop on New Product Development and Innovation. In addition, the role models/guest speakers addressed this and stressed the importance of continuous product development. Innovation and new product development was also addressed on a London study tour. This led to several new opportunities and new customers as well as new geographical markets. Examples of new product development and innovation included expansion of product ranges, new flavours, improved packaging and improved branding. One particular example of an innovative application around a staple product was the introduction of a convenient, microwaveable, ready-to-eat potato-based product. Networking was a central part of the programme and led to extensive opportunities for the participating companies. The programme developed a

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Table 4. Type of Output Networks

Exporting Innovation Sales

Jobs creation Awards recognition

SEED Programme Outputs. Details

At least 17 examples of collaboration between participants, ranging from shared distribution, to new recipe development and other trading relationships. 39% of participants gained several new export market customers as a direct result of the programme. 12 businesses collaborating with local agencies to develop new products and services. Sales leads developed a minimum of 100 leads for 18 participants. At least two-thirds of businesses increased sales. Total reported growth in sales in one year was £586,000. Twenty-eight full-time jobs and 17 part-time jobs created. Three businesses awarded seven Great Taste awards, and several other companies entered the Great Taste awards 2011. The programme was recognised by the NIFDA and given an award for Training Excellence.

network of buyers and developed a food-related database. Opportunities for collaboration were strong and companies worked effectively together, recognising there were opportunities for learning from each other, using each other’s skills and supplying each other’s products. A common bond between the companies was forged on their similarity as small businesses all trying to survive and grow. The producers were essentially small companies ‘ploughing their own furrow’ balancing the producing side of the business with the need to gain sales, plan ahead and maintain family relationships. Feeling isolated in their struggle, the programme provided a level of peer-to-peer personal support. Structured networking in the form of arranged ‘Meet the Buyer’ (MTB) sessions was an important and very effective part of the programme. Of particular significance was the training provided to companies prior to the arranged MTB sessions with supermarkets and distributors, which enabled owners-managers to approach buyers in a clear, confident and organised way. A number of participants commented on the networking benefits from the programme: … one of the best things was actually to network with other businesses in the area, whether you actually did business with them or not … I think the best practice visit … . to London was quite useful, just to see what is out there in terms of innovation and even things that maybe you shouldn’t be doing. (Owner-manager, Company 1)

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The networking facilitated knowledge transfer and learning from fellow programme participants: … good to meet and talk to other small producers possibly get more information from them than anything else. They have gone through or are going through the same problems as I am and there is sure to be one of them with the solution to my problem. (Owner-manager, Company 2) … has allowed us to pick up ideas from other members in the group, and come together in certain projects, which help all parties involved. (Owner-manager, Company 3) The programme has helped with networking, ideas, and helped us to see new possibilities. (Owner-manager, Company 4) I enjoyed it and found it very interesting and very encouraging … great to talk to other people and take on the advice of others. (Owner-manager, Company 5)

A further benefit of the networking was the sharing of costs through collaboration: … so we were doing more collaborative work with other companies as well, so that was very useful, even when you are just starting out being able to share stands in bigger, you know, lower costs and in bigger shows that we wouldn’t have gone to before. (Owner-manager, Company 6)

An interesting point was highlighted in relation to how the networking received helped to develop business relationships between the participating companies. This in turn led to an increased focus on local food and improved food provenance: Just because it’s local doesn’t mean it’s good, so you have to seek out the best local produce and as well as that, if those people are doing well, and you are buying off them, it makes everybody else, it ups their game because they want a bit of that action too, so it can only but help everybody. (Owner-manager, Company 1)

The increase in confidence levels from the exposure to buyers and trade networks was noted by several participants. For instance: There were a couple of days when you were able to meet people, buyers and whatever, and that did help but I think the main thing it did was that it gave you the confidence to go out and do it. (Owner-manager, Company 7)

Collaboration was curtailed to a degree, however, by the experience and development differential between some of the participants. Effective and productive collaboration requires a base level of activity and complementarity knowledge and skills between companies (Chesbrough, 2011). A small number of the companies recruited were start-ups or failed to develop during the programme period and as such were not

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suitable entrants as individual companies and could not contribute significantly to collaboration.

Consultant as Knowledge Broker The private consultants, who were employed to deliver the programme, played a key knowledge broker role throughout the programme (Batterink, Wubben, Klerkx, & Omta, 2010). They brought two key areas of knowledge and expertise: experience of working with small/micro businesses and experience of working with companies in the food sector. These were key criteria sought in the programme tender to deliver, and the appointed consultants were experienced in both. There was a significant level of individual company mentoring undertaken with each participating company, with an allocation of time for focused mentoring as per individual company requirements. This was provided by the consultancy team with each company assigned a mentor according to their expected development needs, with the ability to draw on particular specialisms, for instance accounts management, where appropriate. In some cases part of this time was used to undertake some practical work, for instance market research, where this was appropriate to the company’s development plan. Most company owner-managers were highly appreciative of the enthusiasm and committed support by mentors and valued the personal rapport often built up between their mentor and themselves. For small business owner-managers experiencing the ‘loneliness of leadership’, the opportunity to work through problems and to discuss options with a supportive mentor was a key part of the programme.

Programme Sustainability The sustainability of the network, following the end date of the programme, was highlighted by participants as an issue. There was a feeling among participants that networking became more difficult and lost momentum once the formal part of the programme was completed: It’s the management of the group once the programme is over, and the cooperation within the various members of the group really, that sort of just seems to fall away, the group seems to go their own way afterwards, and … when the group is on-going and in this programme, we are all networking, we are all talking, we are all learning from each

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other or whatever, and it’s when you break up there seems to be … everybody is distant and they go their own way …. (Owner-manager, Company 8) … there is no infrastructure to maintain, all the good work that has been done up to that, just dissipates, and I suppose that is the nature of this programme. (Ownermanager, Company 1)

A post programme evaluation identified a need to continue to support network development and collaborative working in order to generate innovative activities. A follow-on programme in the SEED region was initiated in 2013 involving some of the SEED Food and Fisheries participants as well as a new intake of additional companies. There were a number of key areas of learning from the first programme and these included: • Participation in the programme would be restricted to companies that have demonstrated a level of on-going viability, even if currently small/ part-time; • The follow-on programme would introduce industry-based mentoring to be provided by 12 larger companies, including advice on marketing, distribution, and also designed to foster links and opportunities for local supply chain development; • There would be an opportunity for companies not on the programme to take part in select events and to be part of a wider collaborative network; • A stronger emphasis on marketing activity in response to the lack of marketing expertise among the micro food companies; • Links would be developed between the companies and the tourism and hospitality sector in the SEED councils area, and in particular support would be provided for joint marketing of products at local festivals and tourism events; • Several collaborative clusters that were developed in the first programme would be continued. The consultancy intermediary from the first programme was involved again and a further highly significant network facilitating role played by the consultancy intermediary delivering this follow-on programme was the establishment of a branded company specifically to market high quality food products in luxury markets as one means of providing new market opportunities for the participating companies. While the sustainability of the network was an issue highlighted by some participants with the first programme, this intervention by the intermediary has provided a sales vehicle for the participants’ products, thus maintaining a sales network.

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DISCUSSION The existing actual policy and support framework pertaining to a region such as Northern Ireland does provide a range of relevant policies and programme supports. However, it is evident that the majority of these supports have more relevance to medium to large food businesses with greater capacity to innovate and collaborate (Akman & Yilmaz, 2008) and have been more focused on ‘traditional’ forms of growth through exporting; the ‘growth pyramid’ approach highlighted by Massey (2006). There is strong evidence that innovation policy support is changing in Northern Ireland, with a move away from individual grant support (Abreu, Grinevich, Kitson, & Savona, 2011) towards ‘softer’ forms of support. There is some evidence of programmes that do support the business development needs of micro rural food enterprises but there appears to be a lack of integration or progression among these interventions (a policy practice gap) highlighting the need for relevant stakeholders for food, that is government and business agencies, to work together to foster collaboration between micro producers and between micro producers and external agencies; to make recommendations on national strategies to support innovation and growth; and to reduce the barriers to growth. The particular needs of micro food producers, who are specialist and artisanal in nature, have not been addressed at central Government level. The literature on small business support suggests that support programmes, to be successful in terms of take-up, should address gaps and clearly identify market provision, and be marketed at the local level (Bennett & Robson, 2003). The SEED programme discussed in this chapter provides an example of the effectiveness of support provided at the local level. It is acknowledged in the literature that localised programmes have a greater level of participation due to stronger promotion capabilities (Robson & Bennett, 2000). From the SEED programme it can be seen that local, council-run programmes can be a valuable ‘first step’ for micro businesses who can then move on to larger scale activity and more specialised support. The SEED programme led to several outputs for the participating companies including new products, increased sales and job creation. It has been found in previous studies (Storey, 2004) that job creation in small businesses only occurs in a very small proportion of these firms as a result of receiving assistance. The SEED programme proves to be one of the few examples of success in this respect. So what were the key factors that led to this success and what lessons can be learned, for possible application to other peripheral regions? There

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were a number of key factors. Firstly, the success of the programme could be largely attributed to a focus on identifying and responding to the needs of the participants at an early stage in the programme and in tailoring the training and support accordingly. Tailored support, taking into consideration the participants’ characteristics was key. In doing so, the programme organisers addressed the heterogeneous nature of the participants (the firm owners) and their firms (Massey, 2006). Secondly, expert support through mentoring to the individual business, assisting the business to address specific development issues, was a major strength of the programme. Thirdly, networking was a central part of the programme and led to new business opportunities for the participating companies. This networking facilitated knowledge transfer and learning among the participants. A cross cutting factor was the knowledge broker role played by the external consultant, not just in delivering the programme but in facilitating actual new market opportunities for the participating companies. For these companies lacking in marketing and branding skills, the access to new markets through the programme was critical. The SEED programme provides an interesting example of a public/private body collaboration and delivery model for business support. In this case, the lead local authority on the programme contracted the services of a private consultancy to design and deliver the programme. The consultancy played a key intervention role, in providing support beyond a purely advisory role. Therefore, there were a range of benefits for the participating companies. The main limitation of the programme was a certain lack of complementary knowledge and skills between companies and the sustainability of the networks established following the completion of the programme.

CONCLUSIONS There is a gap in knowledge around the most effective provision to assist micro rural food enterprises in an EU peripheral region. This study examined the role of policy and support for micro rural food enterprises in one country, Northern Ireland and in one region of Northern Ireland. Thus the findings are very much bound to the location. However, there are a number of recommendations and challenges for the development of programmes in other peripheral regions for micro businesses across various sectors, not just food. Firstly, agencies should review types of support currently available and tailor the support to the needs of small and micro food producers,

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where necessary to foster innovation. In doing so, the range of motivational factors driving these types of enterprises should be considered (Tregear, 2005). Secondly, a strong emphasis should be placed on mentoring and a business development role to provide sector-specific expertise, and the development of a mentoring programme matching larger industry specialists with the micro enterprises. Thirdly, agencies should develop a strategy for the development of collaborative networks for micro food producers, including creating awareness of existing provision and the supply of incentives for collaboration. In relation to this, attention should be focused on the measures to be put in place to ensure the sustainability of networks following the completion of the programme. Our focus on the effectiveness of support in relation to the micro size food producer makes a contribution to knowledge, as little previous research has addressed the issue to any extent. The focus on the micro food producer is timely, given recent concerns around food security and food traceability. This examination of one support programme highlights the potential benefits that can accrue to micro food producers, and micro companies more generally, from involvement in such programmes, and identifies the types of support that are particularly effective for these types of organisations. Future studies may focus on various types of support programmes in other regions, and particularly interesting insights may be gained from longitudinal studies that explore the development of micro firms prior to, and following on from, their engagement with support programmes.

ACKNOWLEDGEMENT This research has been carried out as part of the Local Food as an Engine for Local Growth (LOCFOOD) project funded through the INTERREG IVC Territorial Co-operation Programme.

REFERENCES Abreu, M., Grinevich, V., Kitson, M., & Savona, M. (2011). The changing face of innovation policy: Implications for the Northern Ireland economy. Report to DETI. University of Cambridge. Agri-Food Strategy Board. (2013). Going for growth. Retrieved from http://www.agrifoodstrategyboard.org.uk/pages/33/going-for-growth. Accessed on May 26, 2013.

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ABOUT THE EDITORS AND CONTRIBUTORS THE EDITORS Colette Henry is Head of Department of Business Studies at Dundalk Institute of Technology, and Adjunct Professor of Entrepreneurship at the Arctic University of Norway. Prior to this, Colette held the Norbrook Chair in Business & Enterprise at the Royal Veterinary College (RVC), University of London, and was President of the Institute for Small Business & Entrepreneurship (ISBE), UK. A Fellow of the Royal Society for the encouragement of Arts, Manufactures & Commerce (RSA), Colette is also Editor of the International Journal of Gender & Entrepreneurship (IJGE) and has published widely on entrepreneurship education & training, programme evaluation, gender, the creative industries and women and veterinary business. Gerard McElwee is Professor of Entrepreneurship at Sheffield Business School. Professor McElwee joined Sheffield Hallam University in 2012, having previously worked for Nottingham Trent University, the University of Lincoln and the University of Teesside. He is the founding editor of the International Journal of Entrepreneurship and Innovation. Gerard’s research interests are in Rural Entrepreneurship, Illegal Enterprise, Farm Enterprise and Village Sustainability, areas in which he has published extensively.

THE CONTRIBUTORS Katherine Adam is a PhD student at the Royal Veterinary College where she is researching the future of farm animal practice in a changing veterinary business landscape. She trained as a veterinary surgeon at the Royal (Dick) School of Veterinary Studies in Edinburgh and, after a year in small animal practice, she completed a master’s degree in aquatic animal 259

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medicine at the Norwegian School of Veterinary Science. She has since worked as a veterinary researcher in health and production in the aquaculture and cattle sectors in the UK. Her current research interests include the social science aspects of production animal disease and how human behaviour, policy and economics are linked to animal health. Ivan Annibal is Managing Director of Rose Regeneration, a consultancy specialising in rural and coastal regeneration. He is a Senior Visiting Fellow at the University of Lincoln Business School, a Visiting Fellow at Nottingham Trent Business School and a Fellow of the Institute of Economic Development. Elaine Aylward is a Postgraduate Scholar of Irish Research Council for the Humanities and Social Sciences (IRCHSS) Government of Ireland. Elaine studied inclusive regional stakeholder networks from a rural perspective as part of her doctoral research studies and completed her PhD in 2012. Subsequently, Elaine has successfully completed a number of post-doctoral research contracts throughout Ireland, and is a Committee member of the inaugural “Rural Tourism Summit” Steering Group, Ireland, established in 2012. Sarah Baillie is Professor of Veterinary Education at the University of Bristol. She is a veterinary surgeon and worked in mixed practice for many years before entering academia. She is currently Programme Director for the 5-year veterinary curriculum. Her teaching and research interests include professionalism, business and leadership skills, transition into practice, outcomes assessment and mental wellbeing. She developed a virtual reality simulator, the Haptic Cow, for training veterinary students, and the simulation work is currently being adapted and extended for applications in human medical training. Jo Bensemann is a Senior Lecturer in the School of Management, Massey University, New Zealand. She teaches small business management and innovation, creativity and entrepreneurship and has research interests in similar areas. Rural areas and agribusiness remain a focus of interest for her and she has published recent material on copreneurship in rural tourism, family business, and entrepreneurial behaviour and regulation: primary sector rural entrepreneurs. Gertrud Buchenrieder received her doctoral degree (1994) at the University of Hohenheim. After her post-doctoral work in development and transition economics, she joined the Leibniz Institute of Agricultural Development in

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Central and Eastern Europe (IAMO, 2006 2010). Since 2010 she has been Adjunct Professor at the Martin-Luther-University Halle-Wittenberg. Kathryn Burnett is Broadcast Subject Leader and Senior Lecturer in Media and Culture at the School of Creative and Cultural Industries, University of the West of Scotland. Her published research includes Scottish identity as situated representation with specific reference to island contexts, rural product as cultural heritage, issues of peripheral space and place mediatisation. Recent work includes studies of island community and identity as cultural archive and creative practice. Kathryn is co-director of the Scottish Centre for Island Studies, a committee member of the Scottish Media and Communication Association, and Scottish representative on the UK Media, Communication and Cultural Studies Association. Sue Cassells is a Senior Lecturer in the School of Economics and Finance, and a Research Associate of the New Zealand Social Innovation and Entrepreneurship Research Centre, at Massey University (Palmerston North, New Zealand). She is an environmental economist, whose work has covered a diverse range of topics, including non-market valuation of environmental attributes. Another focus has been end-of-life vehicles and waste management issues from a policy perspective (e.g. extended producer responsibility). Most recently she has been investigating issues that exist at the interface between business and the environment, particularly in the context of small firms. Mike Danson is Professor of Enterprise Policy at Heriot-Watt University, Scotland. He has researched widely on island, rural and peripheral regional economies with 13 books and over 200 papers published. He has been an economic and policy advisor to the Scottish and UK governments and parliaments, development agencies and bodies, including the OECD and European Commission. He is Treasurer of the Academy of Social Sciences, former chair of the Regional Studies Association and an active member of national and international bodies. He is co-director of the Scottish Centre for Island Studies, joint co-ordinator of PEMABO (peripheral, marginal and border regions) and an active member of the Jimmy Reid Foundation. Adele Dunn is Senior Lecturer in Marketing at the Ulster Business School, University of Ulster. Adele has wide ranging experience in the development of programmes related to entrepreneurship and has also worked extensively with the food industry regionally and internationally for over 20 years. She has participated in a range of European projects on food and has

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published on food related subjects in journals such as the International Small Business Journal. Laura Galloway specialises in research in the small firms sector, entrepreneurial diversity, and entrepreneurship education. She works at HeriotWatt University in Edinburgh and has published in many peer-reviewed journals on entrepreneurship and small business. Her teaching focuses on enterprise and most recently, on leadership. Diane Holt is a Senior Lecturer in Management at Essex Business School, within the University of Essex. She previously held positions at Queen’s University Belfast and Middlesex University Business School. She is the principal investigator and grant holder for the ESRC funded Trickle Out Africa Project that explores the impact of social and environmental enterprises on poverty alleviation and sustainable development across the 19 countries of Southern and Eastern Africa. She has published over 60 journal articles, book chapters and conference papers in the broad areas of sustainability, environmental management and sustainable development in the developing world. Felicity Kelliher is a Senior Lecturer in Management and DBA Programme Director at the School of Business, Waterford Institute of Technology, Ireland. She is also co-chair of the RIKON research group. Her research focuses on organizational learning networks and management capability development in small firms, and her work appears in a number of international publications including the Journals of Tourism Management, Business Ethics and Small Business and Enterprise Development. Kate Lewis is a Senior Lecturer in the School of Management at the Wellington campus of Massey University. Her research is centered on entrepreneurship and small and medium enterprises. She has examined firm practices from a number of perspectives including business growth, environmental management, and business assistance utilisation. A considerable amount of her work occurs at the juncture where person and firm meet in particular that nexus has been the focus of studies in the area of entrepreneurial identity development, gender, age, career theory, and the meaningfulness of work. David Littlewood is a Lecturer (Reputation and Responsibility) at Henley Business School, within the University of Reading. He previously worked with Queen’s University Belfast, Management School on the Trickle Out Africa Project alongside Diane Holt. David carried out his PhD research

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in the Geography Department at the University of Sheffield, and this included a year conducting fieldwork in Namibia. He has published in internationally recognised peer review journals, as well as contributing to books and conference proceedings. Patrick Lynch is the Director of RIKON at Waterford Institute of Technology and obtained his PhD in innovation. Pat has extensive research expertise having published a range of articles in national and international conferences and journals. His book Managerial Challenges in Irish Organisations: A Case Study Collection has just been published by Blackhall. His research specialism is service innovation within interorganisational and network relationships, in particular, close relationships. Current research interests include strategic innovation, knowledge transfer, inter-organisational conflict and regional tourism destination networks. Rodney McAdam is Professor in Innovation Management at the Ulster Business School, University of Ulster. Rodney has extensive experience of working on European projects. His research focuses on innovation implementation within SMEs and he has published a large number of papers in international peer reviewed journals in this area. He is a regular conference speaker at international conferences on SME issues and supervises a number of PhD students in this area. Before joining the university he worked in the aerospace industry. Lynsey McKitterick is a Research Associate in the Ulster Business School, University of Ulster, for the Local Food as an Engine for Local Growth (LOCFOOD) INTERREG IVC project, which explores policy supports for small food businesses across Europe. Lynsey has extensive experience of working with SMEs, including small food producers, on their business support needs and has published her work in journals such as the International Journal of Entrepreneurship and Innovation. She is currently undertaking a PhD part-time into small food producer innovation and the role of Government policy and support. Judith Mo¨llers is a Senior Researcher at the Leibniz Institute of Agricultural Development in Central and Eastern Europe where she works on issues of rural development with a focus on the transition economies of Southeast Europe. Her areas of expertise and professional interest include rural non-farm employment, entrepreneurship, and migration. David Moyes is a Senior Lecturer in Enterprise with the University of the West of Scotland, based at its Dumfries campus in southwest Scotland. His

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research interests include rural enterprise, cluster development, decisionmaking in small firms and rural service quality. David Patterson is an Economic Development Manager within the Cultural and Economic Development Department, Down District Council. Working with neighbouring councils in the South East Economic Development (SEED) region of Northern Ireland, Down District Council delivers business support programmes with micro-businesses/SMEs and artisan producers to further develop their ability to supply local, tourist and export markets. Down District Council is a partner in the LOCFOOD INTER REG IVC project. Liz Price is a Senior Research Fellow at Lincoln Business School, the University of Lincoln. She has degrees from Durham and Sheffield Hallam universities. Liz’s research interests include economic development, rural enterprise, and public policy evaluation. She has led a variety of policy evaluation projects on behalf of the European Commission, regional development agencies, and local authorities. Barry Quinn is Professor of Retail Marketing and Head of the Graduate Research Centre at the Ulster Business School, University of Ulster. His areas of expertise include SME growth and innovation in various sectors, including food and retail. He has published widely in journals such as Journal of International Marketing, Journal of Marketing Management, International Marketing Review, and European Journal of Marketing. He has worked closely with SMEs on several European projects that have looked at policy support and business development needs. Jonathan Rushton is an agricultural economist specialising in the economics of animal health and livestock production and food systems. He is involved in research in the United Kingdom and Europe, and has extensive international experience of livestock production and the control of animal diseases in South America, Africa and Asia. During the global avian influenza response he worked at the Food and Agriculture Organization of the United Nations (FAO). His recent research focus has been on the use of economics in understanding the emergence of pathogens from food systems and the more general impacts of disease at individual level and across society. He is currently Professor of Animal Health Economics at the Royal Veterinary College. John Sanders is a Lecturer in management in the School of Management and Languages at Heriot-Watt University. He teaches strategic management

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courses to both undergraduate and post-graduate students. In addition, he teaches a small business management course to final year undergraduate students. Strategic fit within a University setting was the subject of his PhD. His past research efforts have focused on Internet portals, website quality, social networks and the market reach of rural small firms in Scotland. Diana Traikova is a native Bulgarian and, since 2012, holds a doctoral degree in agricultural economics obtained from the Martin-LutherUniversity Halle-Wittenberg. Her current research interests include rural entrepreneurship, informality, transitional entrepreneurship and rural development. She is a post-doctoral researcher at the Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO). Izzy Warren-Smith, OBE, is a Visiting Research Fellow at MMUBS and Principal Lecturer in Rural Policy and Agricultural Economics at Harper Adams University. She was the founding Director of Women in Rural Enterprise (WiRE). She has researched and published a wide range of papers on rural female entrepreneurship and networking. Geoff Whittam is a Reader in Enterprise in the School for Business and Society at Glasgow Caledonian University. Geoff has played a leading role in the organisation of, and has presented papers at, many of the annual Rural Enterprise Conferences.