The “additional costs” of being peripheral: developing a contextual understanding of micro-business growth constraints

Purpose Despite their economic significance, empirical evidence on the growth constraints facing micro-businesses as an important subset of small and medium enterprises remains scarce. At the same time, little consideration has hitherto been given to the context in which entrepreneurial activity occurs. The purpose of this paper is to develop an empirically informed contextual understanding of micro-business growth, beyond firm-level constraints. Design/methodology/approach The paper draws on 50 in-depth interviews with stakeholders and micro-business owner–manager entrepreneurs (OMEs henceforth) in a peripheral post-industrial place (PPIP henceforth). Findings The paper shows that, beyond firm-level constraints generated by their OME-centric nature, there are “additional costs” for micro-businesses operating in PPIPs, specifically limited access to higher-skilled labour, a more challenging, “closed” business environment and negative outward perceptions stemming from place stigmatisation. All of these “additional costs” can serve to stymie OMEs' growth ambition. Research limitations/implications The paper is based on a limited number of interviews conducted in one region in England. However, the contextualisation of the findings through a focus on PPIPs provides valuable insights and enables analytical generalisation. Originality/value The article develops a context-sensitive model of micro-business growth constraints, one that goes beyond the constraints inherent in the nature of micro-businesses and is sensitive to their local (socio-institutional) operating context. The implications serve to advance both how enterprise in the periphery is theorised and how it is addressed by policymakers and business intermediaries to support the growth of micro-businesses

Artificial intelligence in the legal sector: pressures and challenges of transformation

Recent technological developments in automation and Artificial Intelligence (AI) promise to disrupt the very foundations of how legal work is practised and delivered. Yet how they challenge current business models, where they encounter resistance, and how the benefits of AI can be realised remain unexplored. Drawing on interviews with professionals in the UK legal services sector, the paper highlights how technological and market pressures combine to challenge the business models of legal services firms. However, the findings reveal important cultural and structural challenges that hamper transformation. The paper extends the debate on technological disruption in legal services through a focus on business model innovation as a tool that can support firms in the sector to reimagine legal service provision

Entrepreneurship and local economic resilience: the impact of institutional hysteresis in peripheral places

This article examines how the legacies of the past in peripheral post-industrial places serve to shape current and future entrepreneurial activity, and with it local economic resilience. Drawing on in-depth qualitative interviews with key regional stakeholders, the article reveals how peripheral post-industrial places are constrained by their histories. This is found to be manifest in different ways, such as low aspirations, generational unemployment and a loss of identity which are in turn compounded by negative perceptions of place and opportunity. These issues culminate in institutional hysteresis at the local level and constrain entrepreneurial ambition. The article argues that the rigidity and reproduction of informal institutions continues to stymie economic resilience and growth. We conclude by reflecting on the implications for entrepreneurship in peripheral post-industrial places as well as with recommendations for policy

Localism is an illusion (of power) : the multi-scalar challenge of UK enterprise policy-making

This paper explores to what extent the new localism has effectively empowered local enterprise partnerships (LEPs) and local communities to deliver localized, place-based enterprise policy at the subnational level. It identifies externally imposed constraints on local enterprise policy-making that have seen this reoriented towards the support of high-growth potential businesses. However, the scope and focus of enterprise policy at the LEP level contrast with heterogeneous local realities and needs, highlighting a pronounced rhetoric–reality gap. With little evidence of local knowledge transcending policy boundaries, the paper reveals that the current arrangements constrain local agency and reduce the effectiveness of enterprise policy-making at the local level. It concludes that the power to develop localized, place-based enterprise policy exists only in rhetoric

Entrepreneurial ecosystems in Poland: Panacea, paper tiger or Pandora’s box

The purpose of this paper is to critically examine the role of public policy in the formation of entrepreneurial ecosystems in Poland. The paper assumes a qualitative approach to researching and analysing how public policy enables and constrains the formation of entrepreneurial ecosystems. The authors conducted a series of focus groups with regional and national policy makers, enterprises and intermediaries in three Polish voivodeships (regions) - Małopolska, Mazowieckie, Pomorskie. The paper finds that applying the entrepreneurial ecosystems approach is a challenging prospect for public policy characterised by a theory-practice gap. Despite the attraction of entrepreneurial ecosystems as a heuristic to foster entrepreneurial activity, the cases highlight the complexity of implementing the framework conditions in practice. As the Polish case demonstrates, there are aspects of entrepreneurial ecosystems that are beyond the immediate scope of public policy. The results challenge the view that the entrepreneurial ecosystems framework represents a readily implementable public policy solution to stimulate entrepreneurship and entrepreneurial growth. Insights are drawn from three regions, although by their nature these are predominantly city-centric, highlighting the bounded geography of entrepreneurial ecosystems. This paper poses new questions regarding the capacity of public policy to establish and extend entrepreneurial ecosystems. While public policy can shape the framework and system conditions, the paper argues that these interventions are often based on superficial or incomplete interpretations of the entrepreneurial ecosystems literature and tend to ignore or underestimate informal institutions that can undermine these efforts. As such, by viewing the ecosystems approach as a panacea for growth policy makers risk opening Pandora’s box

The nature of publicly funded innovation and implications for regional growth: Reflections from the Sheffield City Region

Purpose: The aim of this paper is to unpack the nature of business innovation and understand the impact on regional innovation and competitiveness. Design/methodology/approach: The paper is based on a qualitative study of Advanced Manufacturing and Advanced Materials businesses in the Sheffield City Region (UK). Interviews were conducted with 23 firms in exploring how innovation in the firm translates to innovation-led regional economic growth. Findings: The paper demonstrates that there is a tendency of owner managers to focus on innovation in terms of the development of new products, processes and/or services. Many of the businesses interviewed were technologically innovative, yet there was little evidence of wider business model innovation. This, the authors conclude, stymies regional innovation and with it regional economic growth. Research limitations/implications: This study is based on a case study of the Sheffield City Region and is not generalizable, but offers insights into the nature of business model innovation which are valuable in generating questions for further research. Practical implication: The paper highlights the need to think of innovation in broader terms and the scope of business model innovation to not only improve the performance of firms but also regional economic growth. Originality/value: Business model innovation is a growing domain of the literature, and this paper highlights how narrow interpretations of innovation may serve to limit growth business growth, and with it regional economic growth

The nature of corruption affecting entrepreneurship in transition economies: some lessons from Montenegro

The aim of this paper is to examine how the institutional environment impacts the nature of corruption affecting entrepreneurship in transition economies. Drawing on a survey and in-depth interviews with entrepreneurs in Montenegro, the paper finds that corruption is a pervasive presence which has not been ameliorated despite economic reforms. Montenegro is a transition economy which has made significant strides in terms of creating a more open market economy. However, reforms have often overlooked corruption which remains prevalent, and the institutional environment has left space for officials and entrepreneurs to engage in corrupt practices. The paper shows that although it takes different forms, corruption can be viewed as a cultural impediment even if the majority of entrepreneurs are not exposed to it

Mapping SME productivity research : a systematic review of empirical evidence and future research agenda

SMEs are the lifeblood of economies around the world. They play an important role in productivity growth, which is crucial for developed economies as they adjust to major trends such as the industrial revolution, an aging population, and changes in the nature of work. This study maps the SME productivity research landscape by way of a systematic literature review focusing on the direct, indirect, as well as mediating/moderating factors that enable or constrain productivity in SMEs. We review 109 empirical studies and highlight the fragmented nature of the extant research in this field. Our thematic analysis identifies six key themes, namely organizational environment, organizational capabilities, investments, types of innovation, external knowledgebase and commercialization. By taking stock of existing knowledge, we highlight critical gaps and methodological issues that limit our understanding of SME productivity. We propose a future research agenda to address current shortcomings and advance knowledge on this topic. Implications for policy are also discussed

The role of system-building agency in regional path creation: insights from the emergence of artificial intelligence in Montreal

The emergence of new industries that are not closely related to existing regional paths remains an underexplained process in evolutionary economic geography. This paper responds to this gap through a case study of a maturing ecosystem of activity related to artificial intelligence in Montreal, Canada. Conceptually it brings together recent thinking in economic geography about agency in path development with complementary concepts from the literature on technological innovation systems. The empirical findings demonstrate the role of multiple agents in system-building and legitimation activities that have varied across pre-formative and formative phases of new path development in this analytical knowledge field