The Rural Enterprise Economy

Abstract

The book is motivated by considerations concerning the lack of social and economic progress in rural areas across Europe, particularly in Northern Europe. The foreword refers to the influential research by Andres RodríguezPose and his colleagues as an important source of inspiration. The book certainly contributes a rich collection of empirical findings and theoretical reflections on a topic that, arguably, is still under-researched. Part I introduces the book and places it briefly within a larger context of rural development. A distinction between rural enterprise development and rural entrepreneurship is used to organize the book in Parts II and III. Most of the contributors are institutional economists, and some of them who can be characterized as ‘neo-Porterian’ are located in Portugal, Germany, and the Nordic countries. Some of the authors refer to work within economic geography, but debates on, for example, related variety are not included in the discussions. The book is dedicated to providing answers to some unresolved questions concerning rural enterprises in the business and economics literature. The editors ask whether the rural enterprise is a specific firm or company in a rural location. If so, how can it be described, characterized, and understood? The question is raised as to whether rurality is a specific and unavoidable condition that enterprises must deal with, or an intentional lifestyle choice by the entrepreneur who settles because of the amenities in the rural location. The editors clarify the question by asking whether there are enterprises in rural contexts, meaning specifically rural enterprises. These are timely and important questions, which are investigated through a businessand economics-centred approach in 14 chapters, covering a broad range of topics from hidden champions in Germany to firms operating across the Norwegian–Russian border. While a couple of chapters have little to bring to the empirical or theoretical table, other chapters shed light on the major questions of the book. Thus, the edited book is well structured and positioned to contribute substantially to the literature in the field. However, it would have been an even better book if two or three of the chapters had been omitted. The first chapters in Part II are rich theoretically and empirically. The chapter on the hidden strengths of rural enterprises in Germany represents the major theoretical contribution of the book. The author argues that rural locations are viewed as lagging, secondary locations compared with urban locations in much of the research within economics. To compensate for this, the chapter sets out to combine the theory of comparative advantage in mainstream economics with ideas on competitive advantage from evolutionary economics. The author has identified vibrant economic development in locations with sparse labour markets and knowledge infrastructure in Germany. She is specially interested in the valuable, rare, and non-substitutable (VRIN) resources that create competitive advantage. Such resources are conceptualized in a matrix combining basic/advanced and general/ specialized resources. The author concludes that VRIN resources are created in rural areas, including firms’ investments in long-term employment relationships and skills development. The third chapter, on qualitative and quantitative research on German champions in rural areas, is another highlight of the book. These firms are global players within their industries and often located in dynamic clusters outside major cities. However, even if located in buzzing clusters, they do not engage in local knowledge networks because they do not see any real benefits from doing so. Moreover, the authors do not identify differences between hidden champions located in urban and rural contexts concerning knowledge creation and innovation. All chapters in the book investigate different dimensions of rural enterprise development and entrepreneurship. In most chapters, theoretical discussions are backed by qualitative studies of a limited number of cases. For example, readers can learn about the role of the project leader in rural, cross-border development projects, the implementation of the rural development programme of the EU’s Common Agricultural Policy, and the competitive strategies of small regional banks in Germany.