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Rural Matters: CRRF Rural University

Miramichi City, New Brunswick


October 27-29, 2002

Entrepreneurship
Development Strategies

Monica Diochon
St. Francis Xavier University
We’re told that
entrepreneurship is needed in
dealing with economic change
How do we encourage it?
What are the outcomes expected?
Workshop Objectives
to build capacity in assessing a
community’s entrepreneurship ‘vitality’
to explore how a community’s capacity for
entrepreneurship can be developed
to understand the link between context,
process and outcomes in responding to
economic change
How do we define:
Community?
Economic Development?
Entrepreneurship?
IMPLICATIONS OF MEANING ADOPTED
Community
a geographic area in which residents
perceive themselves to be stakeholders
and share behavioural expectations as a
result of social relationships developed
while participating in formal, informal, and
interdependent economic, social, and
political institutions and activities, and
while sharing a variety of public and
private services
Why Define Community in This Way?
people’s ‘life-world’ defines the geographic
boundaries for strategies based on local solidarity
shared economic, social and cultural experiences
build a sense of identity
a sense of identity provides a vehicle for
mobilizing collective action in response to
opportunities or problems
collective action provides means of achieving what
can’t be accomplished alone (common purpose)
Economic Development
how does community define it?
goals based on perceived need(s) and
aspirations
likely focus if defined in economic terms:
formation of new firms
expansion of existing ones
conventional economic indicators of structural change,
growth in income and employment can be useful
measures of effectiveness
Entrepreneurship: The Classic
Definition

Identifying an opportunity in the


marketplace and accessing resources
to exploit it for personal gain
In a Community Context...
identifying an opportunity to improve
the community’s economy and
accessing the resources required to
capitalize on it
In relation to innovation:
entrepreneurship is the means by which
innovation (the end) is achieved
it’s action-oriented (involving a set of
behaviours)
Enterprising Behaviours
Making things
Taking actions happen
in uncertain
environments Seeking opportunity

Coping with
and
enjoying Solving problems/
uncertainty conflicts creatively
INNOVATION

Flexibly
responding
to
Persuading others
challenges
Acting
Actively seeking to
independently
achieve goals
on own initiative
Dealing with Economic Change
Requires Attributes Associated
with Entrepreneurs:
the ability to identify opportunities
operate with uncertainty
take risks
innovate...
The Facts about Entrepreneurship
entrepreneurship is widely distributed in
the population
every community has entrepreneurial
potential
situational factors often have more
influence on behaviour than personality
traits or other personal attributes
entrepreneurship can be developed
through learning, practice
Understanding How a
Community’s Context Affects
Entrepreneurship
What socio-economic factors affect
entrepreneurship?
How?
Economic Factors
Industrial structure
most new firm founders set up their
business in the industry in which they
previously worked
industries differ in their ease of entry
Plant-size structure*
most new firm founders previously worked
in small firms or small divisions of large
companies
Economic Factors
Occupational structure
most new firm founders have either
managerial or skilled trades backgrounds
areas with a perceived high residential
amenity and environmental quality attract
qualified and skilled people for job-related
reasons, some of whom subsequently set
up new businesses
Economic Factors
Availability of information locally
re: new developments in technologies,
techniques, equipment, materials and
markets
Availability of factors of production
access to sources of personal and
institutional finance, premises, labour
Local/regional market demand
Social Factors
Culture
Nature of behaviour the social context encourages
in dealing with problems or opportunities
entrepreneurship dependency
The Challenge
How to encourage entrepreneurship
Achieving a ‘Fit’ Between
Context and Strategy

ENVIRONMENT

RESOURCES STRATEGY
- goals (ends)
HISTORY - how they’ll be
achieved (means)
Strategy involves decisions
about...
Vision for future
where does the community want to be
Goals
based on community’s understanding of
problems/opportunities and how they can
be positively addressed
specific, measurable, time-bounded
criteria for monitoring and evaluation
Ways to achieve them
Strategic Considerations
Coordination and control are achieved
informally
Communication is through networks
Participation is voluntary
Cooperation is achieved through trust,
expectation of mutual exchange, and the
belief that by acting together the
community can accomplish what is not
individually possible
The Development Process
Involves
Activities/Initiatives
People
Formal organizing
Informal organizing
Activities...

The nature of initiatives a community


engages in to stimulate economic
development
The ‘ends’ of individual development
initiatives become the means by which
the community’s overall goal is
accomplished
Evaluating Attractiveness of
Activities/Initiatives
‘fit’ with community’s capabilities
low capital requirements
high margin for error
significant payoffs
low ‘exit’ costs
Fostering Entrepreneurship:
Task/Activity Requirements
 Task uncertainty
 Short-term focus on getting outcomes from action
responding to need**
 Broad task definition**
 Flexibility*
 Freedom to experiment*
 Tolerance for failure
 Diverse skill, knowledge and ability requirements*
 Interdependent control/ ownership
 Holistic set of tasks
 Intrinsic rewards
 Opportunities for learning by doing
Broad Task Definition
activities represent the range of supply
and demand initiatives
the more diversified the activities, the
greater the likelihood of stimulating
broad-based entrepreneurial action
Supply Side Activities Demand Side
 aimed at improving Activities
development capacity  aimed at responding to
by enhancing or market opportunities
expanding local  three categories:
resources, particularly  informational (providing
human resources information to mobilize the
 employing idle human community to act/giving
and physical resources existing businesses or
potential investors
 expanding the information about market
community resource opportunities)
base  promotional (encouraging
investment in the
 increasing the
community)
productivity of local
 influential (generating
resources economic activity)
Formal Organizing
Structures, systems, procedures
defining how people work together/
indicating the kind of behaviour
considered appropriate
Formal Organizing
 Organic structure
 Local decision-making authority and
responsibility**
 Local democratic accountability**
 Formal linking mechanisms
Individuals
Differences among individuals relevant
to entrepreneurial behaviour in terms of:
skill levels, interests, need strength,
learning styles, values and assumptions,
preferences for variety, for definition and
structure, and for individual challenge
Individuals
 Positive attitudes toward learning by doing
 High levels of collective community identity*
 Synergistic strategic vision for economies of
action
 High level of transferable skills and abilities**
 High level of formal/ informal connections
 High level of trust and respected competence
 Preference for informal/free-ranging work style
 Ability to manage interdependencies and deal
with multiple tasks
Informal Organizing

non-prescribed social structures and


process that define how things get done
shared assumptions and behavioural
expectations that emerge from the
interaction of the other three process
components
Informal Organizing
 Supportiveness, trust, cooperation and
community are highly valued principles
 Strong collective identity
 High levels of involvement and participation
 High degree of agreement on goals, objectives,
time scales and outcomes**
 Shared behavioural expectations (ie - operate
informally, flexibility in decision-making and
problem solving, tolerance of risk, failure and
mistakes without fear of punishment, challenging
the status quo…)
Outcome Effectiveness
Goal achievement (improved economic
well-being)
Resource utilization (greater self-
sufficiency, sustainability)
Adaptabilty (more enterprising culture)
COMMUNITY ENTERPRISE DEVELOPMENT MODEL

FORMAL
ORGANIZING

ENVIRONMENT
GOAL ACHIEVEMENT
RESOURCES INFORMAL RESOURCE
STRATEGY
ACTIVITIES UTILIZATION
HISTORY ORGANIZING ADAPTABILITY

INDIVIDUALS

Feedback

DEVELOPMENT PROCESS

CONTEXT (Inputs) OUTCOMES


Conclusion
opportunities to learn/practice
entrepreneurship are needed when
addressing economic change
important for strategy to:
be opportunity not resource driven
fit environmental conditions as it shapes
tasks undertaken, and ultimately,
effectiveness
Conclusion
creating an enterprising culture
diversify tasks
small successes build momentum
aim for broadbased involvement
capitalize on identity (social capital)