Entrepreneurship and local economic development: a comparative perspective on entrepreneurs, universities and governments
This book focuses on the nature and role of entrepreneurship in modern developed and emerging economies and societies, its relation to governments and universities, and its role in the often-forgotten informal economy. The aim is to position entrepreneurship in the post-crisis context and explore how its relation to universities and governments contributes to explain the countries’ and territories’ growth performance and resilience or vulnerability to the crisis. The accent is particularly on processes and patterns at local level and in small and medium-sized enterprises in local economic systems and districts, local systems of innovation, and the types and configurations of innovation these give origin to.
With globalization, entrepreneurship has become fundamental for the competitiveness of territories and countries, for policy management and for development. The local dimension is fundamental because of agglomeration economies and effects, the advantages of proximity and the nature of knowledge and information. Furthermore, territories carry to the centre-stage tacit knowledge, localized social capital, embeddedness and interpersonal relations as fundamental components of their endogenous socio-economic development and competitiveness. When local systems are connected in a horizontal network, they contribute to the strength of national and international systems. To play a constructive role from this perspective, entrepreneurship must avoid local entrenchment and support the local economy to upgrade and be competitive. To do this, the entrepreneurs’ interaction and alliance with universities and governments is a must for those countries and localities wanting to emerge. This requires that enterprises, universities and governments create synergies and spill-overs to their mutual advantage.
The paper deals with the specifics of informal entrepreneurial activity in fragile postsocialist environment of Russia. Based on related literature it develops an original typology of entrepreneurs combining the level of informal entrepreneurial activity and motivation. The paper offers an in-depth look into the strategies of local entrepreneurs doing business merely formally vs. informally, and into the performance of their firms before and during the economic crisis in Russia. Empirical enquiry is based on three cases in a longitudinal panel survey conducted by the authors in 2013-2015 in Moscow, on one ‘marginal’, one ‘simpleton’ and one prospective ‘star’ entrepreneurs. The more informally and less growth oriented is a business established at the grassroots level, without using any connection with authorities, the more sustainable and secure is its development. Conversely, those bottom-up entrepreneurs who try to establish a transparent business are facing substantial administrative and fiscal problems. Finally, some evidence and political recommendations are formulated.