A Theory of Local Entrepreneurship in the Knowledge Economy

Citation

Ferri, P.J. (2008), "A Theory of Local Entrepreneurship in the Knowledge Economy", International Journal of Entrepreneurial Behavior & Research, Vol. 14 No. 5, pp. 365-367. https://doi.org/10.1108/13552550810897704

In essence, the central theme of Julien's book is an analysis and discussion of why some regions exhibit signs of economic growth and prosperity whilst others are in terminal decline. This text not only makes a valuable contribution to the current academic debate within the extant literature on issues relating to local entrepreneurship and economic development, but also urges active researchers to adopt a more complex approach to the development of regional entrepreneurship theory. Furthermore, policy makers and those academics undertaking research with a regional focus on new business birth rates are encouraged to consider local context, social capital and networks, as well as the inherent indigenous entrepreneurial culture, as indicators crucial to future economic growth in our “knowledge economy”.

The principal audience for this book seems to be deliberately and most certainly an academic one; that said, those practitioners from a business management or central/local government support‐agency background might also find the text a useful resource. Intrinsically, those employed teaching and researching within the fields of entrepreneurship or regional economic development will find this publication an invaluable and indispensable reference tool.

The layout is a quasi‐conventional, four‐part academic textbook format. After an excellent, cohesive and informative introductory chapter, which places the book firmly in the field of regional entrepreneurship theory development, the reader is effortlessly prepared for the intellectually challenging read ahead. Part 1 essentially puts the theme of the book into context, with specific emphasis on the knowledge economy and the author's ideas on the reasons behind local and regional differences in entrepreneurial activity. Part 2 centres on the entrepreneurs themselves and the local environments within which they operate. Part 3 presents an analysis of the factors that Professor Julien argues must be in sufficient supply, on a regional or local basis, in order to enable entrepreneurial activity to flourish; two of these factors include networks and innovation. The final section, Part 4, skilfully brings the first three parts of the book together and leads the reader significantly closer to the author's suggested new theory of entrepreneurship.

A particularly interesting point in this book relates to the author's innovative approach to research tools and methods within the field of entrepreneurship. By the skilful use of a crime‐mystery novel metaphor – featuring four fictional detectives including Columbo, Maigret, Sherlock Holmes and William of Baskerville – Professor Julien helps us understand the underlying theories behind the tools and methods employed by these characters, before relating them to our current knowledge of the research world (see table on page 17). He wryly contends that Columbo is a positivist, Maigret is an interpretationalist, Sherlock Holmes is a post‐positivist and that William of Baskerville is a constructivist. Each detective has a theoretical leaning which in turn leads them to three basic levels of understanding – i.e. the crimes, the criminals and the various scenes of crimes. In the entrepreneurial context however, we have the entrepreneur, the organization and the socio‐cultural environment where the entrepreneurial activity takes place.

The description of the three‐level understanding is another particularly good point within this text; the way in which the socio‐economic environment that surrounds entrepreneurs is described as an “entrepreneurial milieu” by the author is noteworthy. As a researcher in the field of entrepreneurship myself (I am currently focusing on the role of social capital in the new venture creation process), I found Professor Julien's approach both absorbing and academically interesting, primarily because within this “regional milieu”, he contends that resources, connections and entrepreneurial culture generate social capital, which can in turn promote a climate that supports innovative small businesses. He believes this is a social market construction that facilitates multiple links between resources and the potential consumers of those resources. Furthermore, he argues that one of the key roles of this “milieu” is to provide “social capital”, which forms the basis of an entrepreneurial culture. In this context, Julien suggests that the existence of social capital gives entrepreneurs some of the moral support they need, which in turn helps improve their chances of successful venture start‐up. His views are supported by Tsai and Ghoshal (1998), who believe social capital not only opens doors, but also reduces the cost of information and access to resources. The contention is that intrinsically entrepreneurs are “nourished by their ties, relations and interactions with the industrial fabric that supports them” (p. 130). It is a catalyst that creates synergy and stimulates exchange (Cohen and Fields, 1999). Many of Julien's ideas are sympathetic to those emerging from my own study.

The support role of the state is analysed and briefly discussed within the context of regional economic development. I would have liked to see more time and space devoted to this key stakeholder within this text, as I believe the state has an important role to play in fostering an entrepreneurial ethos, particularly at a local or regional level. A strong argument does come across within the text for a move away from a single‐track, single disciplinary approach to entrepreneurship research, to a more complex, multi‐disciplinary theoretical approach to regional entrepreneurial studies. This thesis may or may not have some academic validity and topical relevance, but that would be for other more experienced researchers to decide. However, the author does follow safe academic convention by calling for further empirical and theoretical research in the field to test and develop his ideas.

Overall, this book is well laid out and it is easy for the reader to pick up the thread of the argument, even after a lay‐off. The endnotes after each chapter are useful and comprehensive, adding richness to the text through the additional information. The bibliography is as comprehensive as it is exhaustive. If there is a degree of criticism that can be levelled at this book it is one firmly for the publishers and not the author, and relates to the cost of £75.00. This figure may be perfectly acceptable to the vast majority of university librarians, but it may be a little too pricey for many “financially challenged” academics! Nevertheless, Professor Julien has given us a book that presents both an interesting and alternative perspective to the field of entrepreneurial cross‐disciplinary research. Indeed, few could argue with the author's holistic logic when he suggests that although entrepreneurs can often work wonders with limited resources, their ability to mobilise these in an effort to turn an opportunity into a viable business requires not only the existence of positive social capital in the “milieu”, but also an efficient local entrepreneurial culture.