Networks, Governance and Economic Development

Networks, Governance and Economic Development

Bridging Disciplinary Frontiers

Edited by Mari Jose Aranguren Querejeta, Cristina Iturrioz Landart and James R. Wilson

This compact and authoritative book brings together the topical themes of networks and governance to advance understanding of the determinants of local economic development in the context of increasingly global relationships.

Chapter 5: Regional Development as Entrepreneurial Networking: From Rational Choice to Self-Organizing

Bengt Johannisson

Subjects: economics and finance, regional economics, geography, economic geography, urban and regional studies, clusters, regional economics


Bengt Johannisson 1 OVERVIEW With networking as an all-embracing metaphor for their form of operation, localized structures of (small owner-managed) firms are on one hand ascribed considerable economic strengths and on the other hand attributed significant weaknesses. The critical issue addressed in this chapter is to what extent these strengths can be created and maintained and the weaknesses reduced or even turned into advantages. In order to find out about the feasibility and possibilities to monitor such developments, concepts have to be presented that pay due respect to spatial networking as a socioeconomic construct. Proposed concepts include the notion of ‘organizing context’ and the ‘incorporated’ vs. the ‘entrepreneurial rationale’ as contrasting views with respect to physical space as a potential frame for economic development. The localized network as a generic organizing device is operationalized and applied to three Swedish settings. The empirical lessons suggest that traditional images of governance, as associated with market and hierarchy, and control, as associated with regulating the premises, actions and/or outcomes of organized activity, have to be replaced with a notion of ‘relational control’, that aims at encouraging self-organizing based on an ongoing interaction involving firms and other local stakeholders. 2 SETTING THE STAGE Over the last decades ‘network(ing)’ has become a popular metaphor, not just in the academic community but among practitioners as well. Individualfirm performance is no longer mainly associated with the firm’s own unique resources but also with its position in strategic networks which are functionally, territorially or...

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