Entrepreneurial ecosystems in disadvantaged places: spatial context, 'place' and policy

Topic: Through a qualitative, semi-case study design, this paper explores the role of place and place-based funding in enterprise support for entrepreneurs. The paper responds to Welter and Baker’s (2021) call to give prominence to context (business, social, institutional, and spatial) in the theorising of entrepreneurship. It focusses on spatial context, theorising the spatial concept of ‘place’ in entrepreneurship. It examines the cases of Devon and Cornwall in Southwest England. This is perhaps an unexpected spatial context for successful entrepreneurial ecosystem (EE) practice, as the region is peripheral to the large urban economic powerhouses of the UK. Much of it suffers from the economic disadvantages commonly listed in accounts of remote enterprise landscapes (e.g. Aguilar, 2021). Devon, and especially Cornwall - which is the most remote, have higher than UK average levels of social and economic deprivation, few large industries, and limited opportunities for employment (Pennon Group, 2021). As such, they are small-and micro-business economies with business ownership frequently adopted as a necessity.

The paper examines the specificity of this region and the unique business-support ecosystems that have developed in places within the counties. It examines the drivers of these ecosystems, considering their foundations and sustainability, paying attention to the role of the short-term project-funding landscape. It further explores the elements of the ecosystem that are sensitive to women and underrepresented-group entrepreneurs and asks the extent to which these are a function of locational specificity and funding landscapes.

The paper argues that the uniqueness and locational disadvantage of the region, qualifying it for European funding through the European Regional Development Fund (ERDF) enabled the development of a close-knit ecosystem that functioned and served its local population well. This case provides a lens into successful practice, EE precarity and the locally sensitive project funding necessary to build such an ecosystem. It also highlights the roles of place narratives, location-specific culture and pride in place. It ultimately serves as a cautionary tale of business support fragility in the face of political change (Brexit).

Applicability to ISBE conference theme - Sustainable growth in unexpected places:
The paper is centrally concerned with the development and support of the business community in two peripheral regions. As such, these are arguably unexpected places to find best practice and advantage, given their social, economic, and geographical marginality (Muñoz and Kimmett, 2019). The paper will consider the specificity of place and its relationship to the entrepreneurial ecosystem. It will also examine the ways in which this specificity feeds into good practice in terms of supporting groups of entrepreneurs whom the ecosystem often overlooks. It reveals that the sustainability of good practice is dependent upon assured and continued funding as well as locally sensitive policy.

Aim: The paper’s aims are twofold. First to respond to Welter and Baker’s call to theorise the entrepreneurship-place relationship. Second, to focus on the successes and failures of policy and funding aimed at disadvantaged places and people. The paper investigates the conditions under which effective support ecosystems can thrive, and the difficulties of achieving this. It explores the role of geographic scale in place-based policy including the scale at which solutions to problems are decided.

Methodology: The paper draws upon 22 in-depth interviews that were undertaken between 2020-2021 with individuals from support ecosystem agencies in Devon and Cornwall (n=14) and entrepreneurs who had participated in their programmes (n=8). These data are extracted from a larger dataset gathered for an EU-Interreg-funded project entitled ‘Accelerating Women’s Enterprise’ (AWE) which comprised 159 interviews with such individuals in the wider channel region, both in England and France. As such, although a small number, the 22 interviews have been considered in the context of the larger database to understand the exception or similarity - of Southwest English counties.
Semi-structured interviews were undertaken face-to-face until the pandemic hit, and thereafter online, by members of the AWE research team. The interview transcripts for the 22 respondents located in the SW England region have been re-analysed by the author inductively for this paper and thematically coded.

Contribution: The paper contributes to current debates in three ways. First, through the focus on the role of ‘place’, it addresses the call from Welter and Baker (2021) to enrich entrepreneurship scholars’ understanding of spatial context – the paper examines the spatial processes at work, illuminating the relationship between networks and place (Malecki, 2018; Muller and Koorsgard, 2018; Welter et. al., 2019). Second, through its focus on women and in Devon, social enterprises, it speaks to a growing theme in the EE literature about the need to focus on EE sub-cultures and include businesses that are not only high growth (Brush et. al., 2019; O’Brien et. al., 2019). Third the paper explores an entrepreneurial support ecosystem sustained by temporary project-based funding, which was vulnerable to external shock, in this case, a change in political regime (Brexit).

Implications for policy: The paper demonstrates the importance of a well-functioning, connected and place-specific EE for both a) groups underrepresented in entrepreneurship and b) remote regions whose economic sustainability rests on a small-business economy. Insights from the paper will assist policymakers in including sustainable and inclusive entrepreneurial ecosystem proposals within regional development plans.

Implications for practice: The paper demonstrates that networked, effective and sustainable enterprise support within local contexts arises when the individuals delivering these services are themselves supported, securely employed, valued, and invested in. This requires continuity of funding and flexible funding conditions so that support providers can respond to local need.