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Agricultural and rural entrepreneurship:


concepts for modeling development
Federico Sancho1

Summary


he world of business has become an extremely dynamic environment in which the only constant is
change. In Latin America and the Caribbean, the situation is obliging the actors to enhance their
 

  

 

  
 


  


 

of entrepreneurship, meaning the individual or collective capacity to develop sustainable enterprises, is an


important focus of research that is making it possible to undertake concrete actions in aid of the productive

 
 




 

   


 
  




is playing in the overall development of our hemisphere. It also considers ways of promoting enterprise
development as part of the strategies for agrifood chains and rural territories.

 
  

  

    

      


64 
  
Key words: 
   
 
    -
prises, Latin America, agriculture, rural development.

Introduction to the economy, productivity, innovation,


employment, the development of the





  
social fabric and prosperity in general.
have long been a subject of debate among Nevertheless, the indices for enterprise
experts. creation in Latin America+ are low

 



 


 




  
countries. For example, every year 2.5
growth2
  
 
 
times more enterprises are created in Asia
 
  

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than in this region (Kantis et al
/11%3
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“Enterprise development is arguably
of labor were the principal cause. Other more sustainable, more cost-effective
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(
and more attuned to community
and David Ricardo, believed that natural development than its sister economic
resources placed certain constraints on development strategies of business
the development of opportunities. attraction and business retention”
(Lichtenstein et al. 2004).
In the 20th century, other factors emerged
as drivers of growth: investment in For that reason, people look to entrepre-
human capital (education and training), neurship to provide innovative alterna-
infrastructure, technology and innovation. tives that complement development,4
 '
  
  


mainly to increase the concentration and
for options, while at the same time exploitation of business opportunities
acknowledging that there are no magic that should increase income in rural areas.
solutions (World Economic Forum 2004).
 
 
 

 

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elements of entrepreneurship, the
small and medium-sized enterprises make actors involved and ways of promoting

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   65
entrepreneurship within agriculture an agent manages to conceptualize and
and rural life in regions where more implement an idea, notion, service,
opportunities are needed to allow product or activity. Stevenson et al. 8%<<<3

people to improve their socioeconomic see it as the pursuit of an opportunity,


conditions. regardless of whether enough resources
are available. Other authors relate it to
an individual’s efforts to turn a vision into
reality, regardless of the possibilities of
What does “entrepreneurship” 
 



  

mean? can be an entrepreneur, or at least has the


capacity to develop that vision in order
Enterprise research draws a distinction to create his own enterprise. However,
between the tasks involved in creating an it is clear, as will be seen below, that in
enterprise (entrepreneurship) and those different situations some individuals will
required for its (operational or strategic) have better options or conditions that they
management. can take advantage to create enterprises
or develop innovative products or services
Entrepreneurship is the capacity to through them.
develop ideas and achieve success with
them. Innovation, the acceptance of Besides what could be interpreted as an
change and risk, the mobilization of individualistic interest, entrepreneurship
resources and the tapping of opportunities can be seen as a collective phenomenon
are just some of the factors involved in in which society as a whole can exploit
creating a competitive or sustainable the practice of contributing to general
enterprise. As the Commission of the well-being by means of social investment
6
7  
8/11+3

 '
in new products and services. Sight must
the entrepreneurial spirit5 is the asset not be lost of the fact that the principles
responsible for creating employment, of enterprise promotion include justice
competitiveness and the potential to and equity, with respect for dignity, and
exploit any sector or business. the commitment to life without violence,
to sustainable development and to
9 

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8/11+3
 
business ethics (Iniciativas de Desarrollo
entrepreneurship as a process in which Empresarial'
/11+3

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Besides what could be interpreted as an individualistic interest, entrepreneurship can be seen
as a collective phenomenon in which society as a whole can exploit the practice of contributing
to general well-being by means of social investment in new products and services.

Who and what is an


entrepreneur? #




  

exists but certain psychological traits or


An entrepreneur is someone who is able characteristics are usually associated in
to balance the economically desirable theory with a business-minded person.
with the technologically/operationally Some of the most common traits are
feasible, someone who takes a calculated high levels of motivation and energy,
risk to seize an opportunity or meet an    '
  


 

  




  
skills, and the ability to set goals and take
a sustainable business.  
 
8
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Table 1. Terms commonly used to characterize a potential entrepreneur.

> Has initiative (“founders”) > Hard worker


> Has a sense of > Experienced
opportunity or is intuitive > Expects to succeed (self-effective)
(e.g., focused on niches) > ?

  
> Independent > Problem solver
>
(  > Knowledgeable
> Dynamic > Involved
> A leader > Systemic thinker (visionaries)
> Has a strong character > Responsible
> Simple (does not seek to > Open to partnerships and
teamwork
generate complexity)
> Determined to take risks (tolerates,
> Honest
runs and/or accepts risks)
> Goal and results-driven
> Creative and imaginative
(achievement)
(differentiator)
> Constant, committed and > Innovative and able to turn ideas
persevering (tenacious) into reality
> Gets on well with others > Flexible and adaptable
> Energetic > Agent of change


   67
According to Robbins and Coulter (2005), determined that the most important
entrepreneurial personality traits include indicator was previous work experience.

 



  
 
In other words, only individuals who
goals, to be autonomous and convey have already acquired a certain amount
a message, to act quickly, to distance of experience will succeed in becoming
oneself and be objective, to create simple small and medium-scale entrepreneurs.
and practical solutions, to take risks, to 



 

 

have clear values, to obtain results and to people who related with entrepreneurs,
act positively, exhibiting enthusiasm and have networks of contacts and systems for
optimism. managing relations with their employees,
and exert strong control over the people
Other authors (such as Filion 2000 and around them.
  
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are tenacious, can live with uncertainty,


make good use of resources and are
imaginative, moderate risk takers and Agricultural and rural
results-oriented. entrepreneurship
9



%11
 
An “agricultural entrepreneur” is an
applied to four Latin American and four individual or group with the right to use or
Asian countries, the Inter-American exploit the land or other related elements
Development Bank (IDB) and others required to carry out agricultural, forestry

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Some examples of successful origin and is not used often within the
enterprises in the region  J


  
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asserts that “rural enterprise” is not only


> Honey in Chile (exported to Europe)  





 



> Asparagus in Peru also a term that has been used incorrectly.T
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new organizations that introduce new
(Cafe Britt-Costa Rica) products, create new markets, or use new
> Agrotourism in Argentina technologies from rural areas (Wortman
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Entrepreneurship strategies are regarded
as tools for developing new forms
of society as part of comprehensive
 


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other things, acquiring land, ascertaining



  


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establishing a timeframe, creating


enterprises, generating wealth and
achieving a constant improvement

 
   

   

from traditional agriculture to more


modern, business-oriented operations
undoubtedly includes addressing the 
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factors that hold back rural territories, 


[ 


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such as the low incomes and investment rural entrepreneurs must visualize the
in such areas, the migration and aging opportunities and be aware of the risks
of the population, limited investment in around them, identifying, among other
science and technology, the low levels things, their own potential and the
of education of some of the actors, the    


  
 

levels of linkages/isolation and poor links individuals to their immediate social


infrastructure. surroundings and makes them responsible
for their own development.
Lichtenstein et al.
8/11X3
  

some of the possible obstacles to rural '



  
 


entrepreneurship as: a) the size and superior opportunities for potential


density of rural territories; b) the social entrepreneurs - actors, even farmers, who
and economic makeup of communities; are likely to accept in a better way the need
and, c) the territories’ links or ties with the for entrepreneurship in their production
outside world (Dabson 2002). activities.

Rural territories@ are the natural space Converting traditional or “artisanal”


where many traditional agricultural agriculture to mass production entails
activities take place, but also the place not only increasing volumes, labor and
where the actors develop and carry cultivated areas to achieve economies of
out other, non-agricultural activities scale, but also identifying other types of

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   69
strategy that have more to do with product How can entrepreneurship
innovation.8 For example, agricultural be promoted?
researchers in the United States found
that small-scale systems based on family Individualized work with a small farmers’
farms9 could not be organized as large- organization, and that organization’s work
scale, standard production lines for with sustainable enterprises, calls for a
homogenized products (Lyson 2004). number of activities, including appropriate
technical assistance, access to credit,
With regard to the role that small the formation of self-managed working
enterprises play in the rural world, Lyson committees and social organization geared
(2004) also says that communities whose to raising awareness of local solutions,
economic base is composed of a plethora the provision of basic education, capacity
of small, locally-owned businesses will creation and in situ enterprise training
exhibit higher levels of social, economic (planning, management, marketing,
and political prosperity and well-being control and evaluation).
than communities where a few large
companies dominate the economy and However, before attempting to promote
there is little or no local ownership. entrepreneurship, it is necessary to
identify the reasons why individuals
 


 

 
or groups want to be entrepreneurs.

 

 
 
According to the Global Entrepreneurship
policies, especially those in aid of small ( 
8/11+3'





producers, inherently linked to rural take advantage of opportunities%1 or be


work, family farming and, in particular, opportunity entrepreneurs (a positive
the entrepreneurial approach. All actors vision), while others do so out of
in the productive sector need to have an necessity%% as necessity entrepreneurs (a
entrepreneurial mindset. negative vision).

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idea and consolidating it over time
entrepreneur –his expectations, 8   3
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preferences, assumptions, opinions and


view of business– can lead an enterprising According to the Inter-American
person to maintain the status quo or Development Bank, some of the factors
conserve entropy. Put simply, people that stimulate entrepreneurship in Latin
interested in developing their enterprise America are family traditions, the social
or implementing new ideas within one context, the size of the economy, per
that already exists receive a boost from capita income, the quality of the macro-
macro issues, such as the clear presence economy, the availability of capital
of an environment in which there are good and work, the communications media,
 
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specialized services, sector diversity,
aspects such as family support, pressure the educational system, the abilities
from friends or extreme situations like and competencies of individuals, the
the lack of employment and the need for red tape involved in doing business and
resources and recognition.   
 
 
 



of the complexities and interconnecting


It has been suggested that people who issues involved in a subject like this.
do not become entrepreneurs out of
necessity do so by opening the so-called In general, the three critical agents to be
“black box” of innovation, acquiring a considered in promoting entrepreneur-
brilliant idea in a deliberate manner or ship are:


 

 
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>



 
-
individual considering his real needs and teristics related to the entrepreneur
real interest in becoming an entrepreneur, and his or her interests that motivate
and then proceeding to implement the commitment to a cause or action.


   71
to advisory services and extension are
of key importance.
>

 
   '
 


should ensure macroeconomic stability


and facilitate enterprise creation.


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(RUPRI), on the other hand, suggests four


components for enterprise development
strategies (Dabson 2005):

> Social aspects such as the construction > Community culture of support by
of networks, contacts, teams, family means of tools and resources to
members, follow-up to key leaders identify and build upon the goods
and individuals.   


  



>

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to be connection to the wider region to
the context or world of opportunities,   
  


 

creativity, competition, resources, the role of local communities.


government policies, and consumers >
{

 
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and other actors in the production not merely general programs. In the
chains.%/ territories, entrepreneurs’ levels of
education, skills, motivation and
Other authors suggest factors such as: preparedness vary considerably.
> Systems orientation to guide
>


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entrepreneurs through the formalities,
age, education level and experience. instead of entangling them in a
>

 

   

web of red tape and individualized
related to ownership of machinery, bureaucracy.
animals, land and buildings. > Connection between policy-making
>

  

 
and community success.
institutions responsible for dealing
with imperfections in the market, A working model to strengthen agricultural
contracts, organization and access to entrepreneurship should include four
  
 
  
 

  
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72 
  
Since education promotes culture, the desire to be an entrepreneur may manifest itself not
only in higher education but also at the secondary level and in daily life, with people ready
to acquire core competencies, learn about successful cases and develop new businesses.

producers; b) the organization of support plans with adequate strategies as


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3| 
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regards organization, production and
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marketing.
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In the initial stages of rural enterprise



 


 
- development, the optimal form of
gests that policies need to be based on four enterprise organization for a given group
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3
  

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3| - will depend, among other things, on the
ness networks that link entrepreneurs to market and marketing opportunities
suppliers and sources of capital; c) resourc-    '





 

es; and, d) infrastructure and institutional strategies of the households that



86 

 
/11T3 make up the group. In this context, the
entrepreneurial activities of organized
Some of the optimal conditions for rural small producers must be compatible with
enterprise development are as follows: their life strategies (Junkin et al. /11€UT3

> A competitive territory, which calls An enterprise strategy built around these
for training programs, information factors makes it possible to generate
and assistance for enterprising, or a comprehensive analysis for the
potentially enterprising, entrepreneurs. organization’s future business plan and a


   

 ~
complete understanding of the opportunity
infrastructure are also required, and costs, be they economic or social.
people must embrace the idea that
limited but sustainably exploitable In the IDB’s experience, enterprise
resources are available. projects at the national level should have
> A buoyant market where there are 
 
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options in terms of services and the


acquisition of inputs and the marketing a) Dissemination of the enterprise

 
 
 
  

 





ingredient is access to information transformation of society that affects


about not only prices but also the the entire population, making people
commercial opportunities available. aware of the importance of motivation
> Diversity of business projects: and competencies for creating
serving a market entails designing enterprises.%+

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b) 6  
  
 


multidisciplinary resources and abstract
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concepts. Since education promotes
ascertain the number of enterprises culture, the desire to be an entrepreneur
 





 
may manifest itself not only in higher
is to establish processes for creating education but also at the secondary

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level and in daily life, with people ready
sectors.%X to acquire core competencies, learn
about successful cases and develop new
c) Support for the survival/growth of businesses.
recently created enterprises (Angelelli

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If enterprise promotion programs are to
the mechanisms that should be have a positive impact on the development
implemented to ensure a minimum of new businesses, they should contain at
mortality rate and strengthen the least the following elements:
capabilities of enterprises that are
already in operation.%€ > A practical description of enterprise
competitiveness and its sustainability

  
   

‚   et in a global world, as a function of
al. (2004) to promote enterprises include small enterprises in a global economy.
enterprise incubators, programs for micro >

 

  
 
and small enterprises, manufacturing  '
 


  

networks, enterprise support centers, opportunities, explore ideas and use


seed capital, revolving funds, techno- limited resources effectively in rural
logical strategies and networks of retired areas.
professionals. > A general strategy for the cultural-
ization of self-employment and en-
In the case of the rural milieu, all the terprises in society, as part of rural
literature%T reviewed suggests that development programs with a territo-
enterprise training should be based on rial approach.
less structured (i.e., less classical) courses. >

  

 
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Enterprise training should be based on risk assessment techniques and the


practical solutions that make it possible eventual generation of plans for
to interact with the real business world,  
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learn to learn, acquire experience and use with markets.

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74 
  
> Enhancement of the abilities and
characteristics of enterprising peo-
ple, such as motivation, self-control,
leadership and a mindset geared to
change, by means of practical training
programs.

In short, the strengths required for


successful entrepreneurship depend
to a great extent on the individual, the
opportunity and the individual’s resources.








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8%<<&3

 


Creativity, luck is simply being prepared


to take advantage of the opportunity that
 



 




 
 

 






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a. People value self-employment more


highly and regard the creation of new
agricultural businesses as a good way
to generate wealth.

b.
(


 
 -
prises in rural areas.

c.
(


  

with falling poverty and migration


indicators.

(  

  



not only a country proposal aimed at the In conclusion


modernization of national institutions, but


  


  

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income in the communities, and increased in enterprise development and promotion


productive capabilities and structural 
  






change incorporating the practices of such a priority that governments, academia


modern societies. In the short term, and and the private sector have been obliged
leaving all rhetoric aside, the goal has to to include programs to address it in their
be a new, inclusive model or an improved development agendas.
model that supports the transformations
needed, so that populations with fewer Over the last three decades, the approach
resources can take advantage of market to the study of entrepreneurship has gone
opportunities. from a vision of risk to a productivist


   75
The success of enterprise initiatives
will depend on what producers’
and income support model, followed organizations achieve, hence the




  

'
importance of focusing on entrepreneurs
job creation, the human approach and,
and their self-management, and
 '
   




that entrepreneurship drives change in


competency creation.
economies has been recognized since the
beginning of the century, it is only more
recently that it has become a focus of
attention in rural areas. economic growth and the reduction of
poverty, especially among the most vul-
One of the factors that has to be nerable groups.
considered when focusing on agricultural
entrepreneurs are the local actors in rural A number of adjustments are needed to
territories, which are different from urban create a model that offers all productive
areas. One element often missing from sectors and their territories equal
strategies designed to link agriculture opportunities - be the latter urban or
with markets is the active involvement of rural, agricultural or non-agricultural,
producers and their organizations. Instead, 






 

they are merely the passive recipients 


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of infrastructure, services and training. rules and less red tape for businesses,



  
  
 
the elimination of monopolistic action,
depend on what producers’ organizations more enterprise promotion, increased
achieve, hence the importance of  

   
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focusing on entrepreneurs and their and better infrastructure and the effective
self-management, and competency  

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creation. A strictly economic, market- global economy.


oriented approach, disconnected from the
communities and families of producers, 

 
 



would be of little use. that entail the creation of rural centers,


networks of enterprise facilitators,






 


community training programs, distance
the importance of comprehensive pro- learning technologies and business
posals that include the culture, networks, support systems.
services, education, competencies, re-
sources, markets, technical assistance, In this case, the construct of major
inputs, the characteristics of enterprises, corporations, senior management, capital
the environment, etc., all closely related intensity and sophisticated technological


 
 

  


systems is replaced by another involving
of assets and combinations of assets –be small-scale producers who are often

'
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invisible as far as national accounting is
social, political or institutional– will de- concerned but who need to be linked to
termine the real conditions for adequate the market.

76 
  
Literature cited


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   77
Résumé / Resumo / Resumen

Entrepreneuriat agricole et rural :


concepts pour une modélisation du développement

L
e monde des affaires a démontré qu’il est l’un des secteurs les plus ouverts à la transformation et
au dynamisme. Il exige des acteurs de meilleures stratégies et visions pour combler les lacunes
 
 


  


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‚
 
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capacité individuelle ou collective de créer des entreprises durables, est important pour la recherche et


ƒ 

  
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démontrer son importante fonction dans le développement de notre continent, mais également sous
l’angle des différentes manières de promouvoir l’entrepreneuriat en tant qu’élément des stratégies
 

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A empresariedade agrícola e rural:


conceitos para modelar o desenvolvimento

O
mundo dos negócios tem demonstrado ser um dos ambientes de maior transformação e
 
6J 



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†

 
 ‡  
  

pelos setores produtivos da região. O conceito de empreendedorismo, entendido como a


capacidade individual ou coletiva de desenvolver empresas sustentáveis, é relevante para a pesquisa e
 
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empresarial, não apenas com o interesse de conceituá-lo e compreender sua importante função no
desenvolvimento de nosso Hemisfério, mas, também, quanto às formas de promovê-lo como parte das
estratégias nas cadeias agroalimentares e territórios rurais.

La empresariedad agrícola y rural:


conceptos para modelar el desarrollo

E
l mundo de los negocios ha demostrado ser uno de los ambientes de mayor transformación y
 
6J 



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por los sectores productivos de la región. El concepto de empresariedad, entendido como la


capacidad individual o colectiva de desarrollar empresas sostenibles, es relevante para la investigación

 

  
 
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de la empresariedad, no solo con el interés de conceptualizarlo y comprender su importante función


en el desarrollo de nuestro hemisferio, sino también en las formas de promoverlo como parte de las
estrategias en las cadenas agroalimentarias y en los territorios rurales.

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