A Theory of Local Entrepreneurship in the Knowledge Economy
Article Type: Bookshelf From: Journal of Small Business and Enterprise Development, Volume 15, Issue 3
Pierre-Andre Julien,Edward Elgar Publishing,2007,ix+322 pp.,ISBN: 978 1 84720 388 5,
Keywords: Knowledge economy, Economic theory, Information exchange, Regional development, Entrepreneurship
The author of this interesting book, Pierre-Andre Julien is a much respected Professor Emeritus in the Economics of SMEs at the Institute of Research on Small Business, Universite du Quebec a Trois-Rivieres, Canada. This volume makes a significant contribution to the economic theory of entrepreneurship, with a specific focus on local and regional development. Its topic is firmly grounded in the ongoing debate on the impact of entrepreneurship on the knowledge economy. It opens with a forward by Anders Lundstrom, President of the Swedish Foundation for Small business research in Stockholm. The main and very pertinent theme that the author considers is that of regional growth and decline in contemporary knowledge economies. He sets out not only to provide relevant explanations and answers to this economic phenomenon but also to construct a general theory to elucidate the reasons why some regions grow while other,previously successful areas stagnate or decline. In the course of theory building and practical illustration of empirical solutions, the author delivers a relevant, holistic and generalisable cross-disciplinary theory of local and regional development. The volume is divided into four distinct parts,incorporating 11 interlinked chapters.
The introduction provides a summary of the author’s views and demonstrates his considerable knowledge of the economic growth area of entrepreneurship research. He also offers an innovative typology of entrepreneurship, based largely on the society and specific conditions in which these are rooted. We are offered North American liberal entrepreneurship,French-style corporate entrepreneurship, middle class or Belgian and German style, Japanese-style networking and Asian and African or community entrepreneurship. Interestingly, there is no mention of a British version of entrepreneurship, one that I would call the post-Industrial Revolution or colonial style. The author acknowledges the heterogeneity and complexity of entrepreneurship and argues for the need of a complex approach to the debate. Thus, in Julien’s view, the model of a complex or systemic approach would include not only entrepreneurs but also their actions, impact and outcomes– in other words, an ontology of the entrepreneurial phenomenon. He uses the model of an Entrepreneurial Pyramid which incorporates time, environment,milieu and organisations at the four corners of its base, supporting entrepreneurs and their activities at the top. The model as well as the metaphor, which is used to visualise entrepreneurial activity, are both succinct and effective in conveying the complexity and multidimensionality of the entrepreneurship process.
Part one of the volume is dedicated to the contextual aspects of the knowledge economy and related dynamics. In the first chapter, the author compares and contrasts the contemporary knowledge economy with its previous(1970s-1990s) manifestation, often referred to as the “golden age” of small businesses. In his view, the knowledge economy has increased entrepreneurial ambiguity and uncertainty, aspects which simultaneously promote and hinder entrepreneurial activities. A number of solutions and strategies are presented and a case is made for the need of new and validated knowledge. In chapter two, different types of local development are reviewed and classic economic theories are examined in order to explain the rise and fall of several examples of contemporary regional development.
In Part two, Julien employs three chapters that focus in turn on the components of the proposed Entrepreneurial Pyramid model. Thus, entrepreneurship is perceived as individual actions and activities in the context of small firm operational processes, involving entrepreneurs, their organisations and their entrepreneurial strategies. Importantly, he makes the point that a focus on entrepreneurs and their strategies in relation to their firms can only provide partial answers because entrepreneurship in a region or locality is also influenced by, and is largely dependent on, national as well as international economic dynamics and conditions. As such, entrepreneurs aim to increase organisational knowledge and expertise in order to ensure their firms’competitive capacity and profitability. In chapter five the entrepreneurial milieu is summarised as the way in which localities and regions create distinct identities and opportunities for entrepreneurial growth. An important suggestion offered to policy makers and support agencies is incorporated in this chapter:clearly, a dynamic entrepreneurial milieu can provide the “sufficient condition” for active and proactive individuals to become engaged in profitable local and regional development. Such localities are more likely to remain dynamic and provide fertile grounds for entrepreneurial activities, in contrast to some areas which will develop more slowly or decline.
The third part of this volume also contains three chapters, and these focus on the main differentiation factors that can be found in entrepreneurial firms and their environments, such as information, networks and innovation. Information is singled out as the main factor that allows small firms and localities to deal with increased uncertainties and ambiguities that are inherent in knowledge economies. Entrepreneurial networks are depicted as the main mechanism which allows knowledge entrepreneurs to seek, sort, validate and circulate the relevant information that ensures and maintains their firms’competitive edge. Similarly, innovation is identified as the entrepreneurial objective which allows smaller firms to maintain or increase their competitive advantage in both domestic and international markets. In the context of local and regional development, the author suggests that research and information sharing can stimulate innovation and cooperation amongst small firms.
The final part of this volume comprises two chapters. Chapter Nine engages with network efficiencies and their functional ability to convey accurate and relevant information that fosters and/or stimulate local and regional innovation. The next chapter extends the information exchange argument and grounds it into regional development, as an efficient means of fostering localities as fertile sources of innovation production and sharing. These localities can become a locus of sustainable entrepreneurship and entrepreneurial culture that supports and stimulates competitive dynamism.
The final chapter represents an enriched return to the conceptual basis of the entrepreneurial metaphor. The author re-examines major economic and management theories in a quest to identify solid conceptual foundations to the solutions proposed in his book. The advent of the knowledge economy has provided Julien with an opportunity to test classic theories in the context of entrepreneurship and regional development. I would strongly recommend this volume to all those who are interested in or work with entrepreneurs, including policy makers, economist and business observers as well as small business advisors and consultants. Academics, researchers and students at both undergraduate and postgraduate levels would also benefit from the knowledge and expertise embodied in this book.
Harry MatlayBirmingham City University, Birmingham, UK
