.

Sabine Müller & Steffen KorsgaardDepartment of Business AdministrationAarhus University, Denmark

(Re)Sources of Opportunities - The Role of Spatial Context for

EntrepreneurshipAoM Conference 2014

Session: Spatial Issues, Location, and Agglomeration in Entrepreneurship

What we KNOW

OutcomesActivities Drivers /Structural Conditions

Regional Development

EntrepreneurshipRegional/Spatial

Context

•Population density,

•Access to social, h

uman &

financial capital

•Employment stru

ctures

•Proportio

n of small firm

s

What we DON’T KNOW

OutcomesActivities Drivers /Structural Conditions

Regional Development

EntrepreneurshipRegional/Spatial

Context

History, Herita

ge, Cultu

re,

Local resource endowments?

Spatial context influences entrepreneurial processes but it is less clear HOW it influences

these on a local level

Rural regions typically suffer from resource scarcity, inadequate infrastructure, small markets and limited access to human and financial capital (Morgan, 1997; OECD, 2006)

In adverse & uncertain conditions entrepreneurs may create opportunities from resources that are readily available (Baker

& Nelson, 2005); “otherness” of the periphery may become an advantage (Anderson, 2000)

THEORETICAL Background

I) Resource affordances

The rural is a particular spatial context that offers good opportunities to observe entrepreneurial activities and processes because of its severe resource constraints (Kodithuwakku & Rosa, 2002).

Entrepreneurial activity influenced by how well resources are connected to other spatial contexts or markets. Access to relevant markets is challenging for entrepreneurs in rural areas (Kalantaridis & Bika, 2011).

Entrepreneurs who connect to other spatial, non-local contexts are ‘bridging to space’ (economic geography, Hudson, 2005).

THEORETICAL Background

Leveraging existing connections between spatial contexts or building new connections may thus be an important source of opportunities.

II) Bridging to contexts

Research QUESTIONS

What types of resources do rural entrepreneurs extract from their spatial context?RQ 1

How do rural entrepreneurs recombine resources to create opportunities?RQ 2

How do entrepreneurs connect localized opportunities with non-local market flows?RQ 3

How does the spatial context influence entrepreneurial opportunity creation?

Study Design

Multiple embedded CASE STUDY

3 regions

Regional observations Site visits, Observations, PhotographsExperiencing

28 Ventures

Expert interviewsSemi-structured interviews (90-120

min)Enquiring

Archival documents Org. documents, News clips, WebsitesExamining

North-djursland

Wadden Sea

Island of Samsø

Findings

RQ1 | What types of resources do rural entrepreneurs extract from their spatial context?

Entrepreneurs utilize a multitude of local and SPATIALLY BOUND resourcesFindings I

Type of resource

Specified Examples local Examples non-local Local Non-local

Baseline physical

- Buildings, also Discarded, abandoned materials or buildings

- Natural amenities (landscape, nature, natural phenomena, wildlife)

- Natural resources (raw materials, agricultural produce)

- Empty, derelict buildings of a former castle, neglected farmhouses, abandoned dairy or slaughterhouse, closed-down hostel

- Abandoned airport – runway and terminal buildings (S07) - Natural bird migration phenomenon used as tourist attraction (V04) - Agricultural raw materials such as berries to make jam, berry juice - Wood from the forest to build musical instruments (N04)

- Non-locally sourced agricultural products such as saffron, sugar, malt, barley

- Non-locally sourced packaging material and chemicals

- Production facilities elsewhere/abroad

84 20

Human resources & capital

- Labour (Workers, Employees) - Volunteers - Businesses, products and

service - Know-how and expertise

- Internet provider uses volunteers to run daily functions (N04) - Localized know-how/expertise in building low-energy houses (S01) - Integrating local products, businesses or services; and using other

businesses in the area as sub-contractors, e.g. tree labyrinth uses wooden statues carved from local trees by a local artists (S11)

- Foreign volunteers and trainees, e.g. berry-pickers from abroad (S08)

- Foreign workers, e.g. V01 employs workers from Poland to build parts of the conference centre

65 11

Social & community

- Social networks - Business networks - Partnerships - Cooperatives

Local professional and private partnerships with community and other entrepreneurs, for - cooperating, e.g. loaning and sharing equipment, or simply

“helping out”: locals install wireless antennae on their roofs (N04) - partnering to sell products together under one umbrella, e.g.

foodstuffs “Wadden Sea Delights”, “Samsø’s Back Yard” - financing, e.g. community financed restored buildings (S06)

- External professional networks for marketing & PR (S03, S09)

- counselling, e.g. start-up support - cooperating, e.g. shared

production equipment such as juice producers process their raw materials at shared mill (S08, V05)

36 16

Immaterial - Culture, Ethos - History and Heritage - Stories, Image, Place brand

- V01 uses history as a setting for storytelling and for performing historic games

- Place brand used as resource to sell jam or honey

- Non place-specific stories (e.g. stories about birds of prey for S12 are general knowledge)

48 3

Financial - Grants, loans or other funding - Financial support from local banks - Financial support from local community (S06 and N04 got

activities partially financed by locals) - Municipality grants

- National and EU funding (e.g. EU structural funding)

7 7

RQ2 | How do rural entrepreneurs recombine resources to create opportunities?

Entrepreneurs (re)combine resources through LOCALIZED ACTIVITIESFindings II

Type of resource activity and action Specified Examples # of

casesLocal material* & human** sourcing

Local and place-bound tangible or intangible affordances

Integrating local products, businesses or services in own venture, for example using other businesses in the area as suppliers, or supplement a product line with other products from the area

25* 23**

Reusing place-specific resources

Existing, unused tangible or intangible affordances

“Upcycling” neglected landscapes, run-down buildings, discarded materials for new purposes

11

Commodification through storytelling

Creating a narrative which supports place branding

Utilizing the typical features of place, e.g. landscapes, nature and natural phenomena (such as wildlife) and include in storytelling

18

Collaborating & partnering with local actors

Collaborating and partnering with other local entrepreneurs and the community (creating synergies)

Forming networks and partnerships with other local entrepreneurs, local stakeholders, or community actors, “sharing the cake” and distributing wealth among each other by teaming up and guiding customers to other local actors, or using each other’s products and services in activities

24

Involving & empowering community

Creating activities and value through the involvement and participation of the community

Involving and empowering the local community, local stakeholders and/or informal leaders in venture activities Engaging, priming and convincing community, informal leaders and local stakeholders in activities

18

RQ3 | How do entrepreneurs connect localized opportunities with non-local market flows?

The extent and mode of BRIDGING activities to other spatial contexts variesFindings III

Bridging Specified: Market (outlet & customer base) Examples # of

casesYes Local and non-local

customers, local and non-local outlet

V01 produces local place-specific products that are directly sold to local and non-local customers at their premises and indirectly through supermarkets. The packaging includes the story of the venture and advertising to attract visitors, who want to “visit the story”. This pattern of bridging is especially prevalent for businesses that are pluriactive across sectors.

9

Local and non-local customers, local outlet

Event agency S03 organizes various tours of the locality for national and international customers. Thus the actual physical marketplace is local, but the customers are non-local. This pattern of bridging is especially prevalent for tourism and experience economy businesses.

6

Limited, or no

Local customers, local and/or niche outlets

S10 produces hand-made speciality foods and beverages that are priced to fit certain smaller customer segments or niche markets. These goods are sold locally and in a few speciality shops around the country.

8

Non-local customers, non-local outlet

The optical loupes manufacturer S04 produces locally, but exclusively for a non-local customer segment of medical professionals. The product is not a place-specific product; also the resources to assemble these loupes sources non-locally. This venture operates on space as the product is largely detached from any place-specific features.

5

Theory building

R: Local by chance, convenience or choice

A: Moderately localized

M: Local market + non-local customer base

R: Mostly non-localA: Limited localized

practicesM: Non-local Market

R: Place-specific resources

A: Highly localizedM: Local / Niche

market

R: Place-specific resources

A: Highly localizedM: Local + non-local

market; Local + non-local customer base

Extent of local resource use and practices

Extent of bridging to other spatial contexts

lowLocality as “location”

highLocality as “place”

Typology

bridging

no bridging

Legend:R: ResourcesA: ActivitiesM: Markets

ATTRACTORS

ENTREPRENEURSHIP IN THE RURAL

ARTISANS

VALORIZERS

Extent of local resource use and practices

Extent of bridging to other spatial contexts

Typology

lowLocality as “location”

highLocality as “place”

bridging

no bridging

Contributions

Rural entrepreneurs are not just farmers or artsy craftsmen: Typology provides insight into the diversity of entrepreneurship

“Valorisers” exploit local potential fully

Summing up

Rural entrepreneurs utilize a multitude of spatially-bound resources Natural and Cultural amenities Community History & Heritage Stories, Image and Place brand

Majority of rural entrepreneurs engage in highly localized activities & practices

Contextualizing research Spatial context influences

entrepreneurial opportunity creation

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