COMMUNITY ENTREPRENEURSHIP AND

REGIONAL DEVELOPMENT

Professor, Dr. Ekon Odd Jarl Borch

Bodo Graduate School of Business

Bodo, Norway

Focus in this speech• Community entrepreneurship research has gained interest

in the entrepreneurship research field• Community entrepreneurship a very challenging task or

research field– Broad range of motivational factors– Difficult to draw the borders of the organization– Larger set of stakeholders– Action and performance measures at different levels– Government institutions more often play a more vital role

• More need for cross-disciplinary research and emphasis on more in-depth research knowledge within PhD-education

The Northern-Norway research group• Results from a joint research project between Nordland

Research Institute, the University of Tromso and the Bodo Graduate School of Business (2006-2009)

• Community ventures in four regions in Norway• In-depth studies

– Story-telling– Participant observation techniques

• Comparative, quantitative study from Norway and Scotland (Global Entrepreneurship Monitor)

• Emphasis on community entrepreneurship as a tool in regional development

• Both small village projects and large regional ventures

Entrepreneurship research• Within entrepreneurship research a new venture has been

very much synonym with a business venture• Entrepreneurship present within a broad set of arenas other

than business• We are in need of a theoretical platform incorporating all

categories of entrepreneurship research in the society • Entrepreneurship research should emphasize a broader

range of new ventures and actions in society• If we see entrepreneurship as a societal phenomenon we

may take a broader view and see entrepreneurship as the creation of new forms, practices, and concepts at different levels of society

What is community entrepreneurship (CE)?

• CE is the process of developing ventures in terms of new activities, services or institutions established for the common good of the inhabitants in a specific community (Borch et al. 2008).

• A community is an aggregation of people living within a natural geographical area generally accompanied by collective culture, ethnicity or by other shared relational characteristics (Peredo and Chrisman, 2006).

Closely related concepts• Social entrepreneurship

– “innovative, social value creating activity that can occur within or across the non-profit, business, or government sectors (Austin, Stevenson and Wei-Skillern, 2006)

– in particular focusing on social care for poor people • Public entrepreneurship

– the process of creating value for citizens by bringing together unique combinations of public and/or private resources to exploit social opportunities, in return for material, purposive or solidarity benefits (Morris & Jones, 1999)

– in particular focusing on ventures by governmentofficials and politicians

Other disciplines and studies of entrepreneurship in its social context

• The political science literature has focused on the terms “political” and “policy” entrepreneurs.

• Within the public administration literature the focus changes from politicians to public sector managers, officials, and civil servants who act as entrepreneurs.

• The two disciplines emphasize the importance of the social and political climate for this type of entrepreneurship

• Anthropological research emphasizes social processes towards new practices

The characteristics of community entrepreneurship?

• Community entrepreneurship a broad concept• The main purpose of CE is to identify and meet social,

community, and public needs • Non-profit or profit venture as a tool for reaching broader

objectives at community level (Hayton, 1995) • Objectives are far-reaching beyond the project or organization

towards social, economic, environmental, and cultural goals (Peredo and Chrisman, 2006).

• We find common good, social needs, peoples’ welfare as main part of the objective

• The geographical arena may differ from a smallcommunity to a to a larger region

What is the characteristics of community entrepreneurship (cont.)?

• The activities within the community venture may cut across the intersections between the voluntary, business, and governmental sector (Austin et al, 2006).

• Access to resources very much depend on the community entrepreneur’s capabilities in multi-arena action

• The actors work together inside social structures creating support for the community venture (Johannisson, 1990; Lotz, 1989)

• Community ventures are closely embedded in the social networks where they manage to make changes in the action patterns and reorganize the network (Borch et al, 2008)

What is the CE research challenges?

1. The characteristics of community entrepreneur-beyond personal gain

2. The entrepreneurial support team - the voluntary management

3. The different stakeholders - at different levels4. The entrepreneurial process more about social

change 5. The social context and the government more

important6. The indicators of performance at different

levels

1. The characteristics of the entrepreneur

• the community business entrepreneur is as the centre of the social network who perceives opportunities and activates the network to achieve objectives.

• Strong voluntary effort as to time and money towards the community

• Creation of enthusiasm and feeling of involvement

• Living on the social inventive edge –continuous cultural creativity

• human and network capital -cultural skillsand experiences

2. The entrepreneurial team

• The venture team may play a more important role in the community venture

• The community acts entrepreneurially to create and operate a new enterprise in its existing social structure in pursue of a common goal (Peredo and Chrisman, 2006).

• Important to focus on how the network of individuals and the organization is working to obtain resources to the venture

• There is a broad set of roles within a community venture team (Borch et al, 2009)– “translators” between groups and cultures– The group coordinator taking care of running operations– Motivators in the grey zone between the venture and the society– cultural bridge builders towards other arenas– Field workers

3. The different stakeholders• A community entrepreneur deals with a complex

and diverse range of issues and stakeholders (Selsky and Smith, 1994).

• While the traditional entrepreneur is limited to for-profit organizations, the community entrepreneur engages both for-profit and not-for-profit stakeholders that create a greater complexity in managing those relationships (Johnstone, 2004)

• Dependency on sponsors create a broader set of stakeholders

4. The social context and government• A community venture in particular is embedded in the social

context. Social capital is described as resources embedded in social networks of relationships (Nahapiet and Ghoshal, 1998)

• The social capital of the community is connected to networks social relations and norms and values in the society

• Due to large positive external effects the government may play an important role

• The government organizational structure and risk taking norms of the government very important (Borch et al, 2009)

• The mayor and chief administrative officials may represent a dynamic force in developing community ventures

• Public money and moral support give increasedlegitimacy

5. The process• The CE process differs significantly from the business venture• One perspective is to see the entrepreneurial process as social

creativity and cultural reproduction• The existing mental frames of action, or embodied routines that

reflect the society’s norms and values (habitus) may inhibit creative action

• community entrepreneur interacts with, and changes, the social context through the process of creative practice

• Through challenging existing conventions and fronting a creative practice the dominant thought and experience of the entrepreneur is internalized and adapted by potential supporters

• Special challenges: – Increased dependency and complexity may demand more

formalized systems in addition to the ”social contracts”– Challenge of loosing up and uncoupling strong ties – Evaluation and correction as foundation for new mobilization

6. Performance at several levels

• Personal satisfaction from volunteers

• Reach objectives and economic survival at venture level

• Positive effects for the community

• Increased political legitimacy

• Spill over to other activities

Implications for entrepreneurship PhD-education

• More knowledge of the methodological challenges of multi-level research

• Stimulate cross-disciplinary reading and understanding (sociology, anthropology, political science)

• More emphasis on in depth participant observation research and grounded theory techniques towards more precise concept building and measures

Conclusion• Community entrepreneurship different from

business entrepreneurship • There is a need for a broader theoretical

perspective within community entrepreneurship research

• Should give entrepreneurship research students a more in-depth understanding of social processes and community issues

• Methodological challenges are present that means more advance research tools have to be implemented

Thank you for your attention!