Bringing innovation back in–strategies and driving forces behind entrepreneurial responses in small-scale rural industries in Sweden

Abstract

PurposeThe paper contributes to the debate about local food and conceptualization of rural entrepreneurship by analysing the performance of small-scale dairies departing from their relation to innovations, innovative activities and risk.Design/methodology/approachThe authors use phenomenography to identify representative categories, and to draw conclusions about how these are consistent or different from dominant definitions of rural entrepreneurship and self-employment. The authors conducted semi-structured interviews, participatory workshops and compiled a database of all small-scale dairies established between 1968 and 2020.FindingsA focus on innovations contributes to differentiate between rural entrepreneurship and self-employment and how these interact in the process of economic growth. Innovations are seldom disruptive. Instead, innovative behaviour is strongly related to business models and to imitation. Social capital and collective action play a key role for the innovative capacity of small businesses, especially to realize disruptive innovations, such as the establishment of a new market.Research limitations/implicationsThe innovative capacity of rural businesses can be understood through their ability to break patterns, alter institutions and turn embededdness into assets. Rural entrepreneurship and self-employment are intertwined in the economic growth process.Practical implicationsInnovative behaviour is a significant aspect for firm survival over time, and it is also strongly related to new business models. Most rural firms can be characterized as self-employment, the latter are essential because they provide rural livelihoods and help bring maturity to newly established markets.Social implicationsThe right type of support, e.g. adopting enabling industrial regulations and granting access to constructive experiences of others, contributes to the innovative behaviour of small-scale rural firms.Originality/valueThis study differentiates rural entrepreneurship from rural self-employment by analysing the role of innovation. The authors show how innovations and innovative behaviour work their way through the process of economic growth and how innovation can break patterns by turning rural embeddedness into assets; and how innovative behaviour related to self-employments contributes to the creation of value and interacts with entrepreneurship in the process of economic growth.

Exploring the dynamics of innovation: patterns of growth and contraction in the local food industry

“…At first, it was common for health authorities to place unreasonable investment demands on small dairies – for example, building large locker rooms, even in dairies that lack employees, and much more (Informants 1–20, 2016). To overcome this institutional bottleneck, small-scale dairy owners joined forces with Eldrimner in the fight for legislative change (Rytkönen and Oghazi, 2021). In 2009, the first guidelines for small-scale dairy production were adopted (Eldrimner, 2009).…”

Food entrepreneurship and self-employment in an island context

“…The project implemented practices to promote valorisation and capitalisation using the values embedded in artisan food quality, i.e. local and localised resources embedded in local, territorial, historical and cultural aspects, and how these are reflected in the quality of food (Rytkönen and Oghazi, 2021).…”

“…Self-employment is also related to professions where employment is rare, such as lawyers and artisans (Bögenhold and Klingmair, 2015). Self-employment is the dominant type of business among food artisans (Rytkönen and Oghazi, 2021). On islands, start-ups are primarily driven by limited labour markets (Burnett and Danson, 2017).…”

“…Start-ups on islands are often prompted by limited employment opportunities (Yu and Artz, 2019). They can also be opportunity driven when the primary goal of the business is to seize opportunities previously realised by innovators, when there is unsatisfied demand (Rytkönen and Oghazi, 2021), through developing new business models (Bogers and Jensen, 2017; Dressler and Paunović, 2020), and when businesses manage to balance the exploitation of available resources against the exploration of new ones (Vrontis et al ., 2019). Motivational factors behind self-employment include the business owner's search for freedom or lifestyle choices.…”

“…New governance models emerged, through which farmers and food producers aimed to regain their bargaining power and improve firm survival by acting in local markets, short food chains and community-supported agriculture (Lever et al ., 2019). Moreover, this trend has stressed the central role of innovation, innovative behaviour and entrepreneurship among local food producers (Rytkönen and Oghazi, 2021).…”