Rural business support policy and rural enterprise economy : The neo-endogenous approach to entrepreneurship promotion of common agricultural policy

Abstract

This chapter introduces the neoendogenous rural development approach to serve as a lens on the rural enterprise economy and rural business support policy. The interpretation of the rural enterprise economy via the neoendogenous approach comprises three elements. First, the local embeddedness of rural enterprises consisting of the realization of the indigenous potential, like natural and human assets. The second element is the exchange of knowledge within local and extra-local networks. The third element is the politico-administrative level comprising the institutions of rural business support policy. We study how rural business support policy appears to rural entrepreneurs. The main focus is on the relationship between entrepreneur and rural authority, which is the closest policy implementer to the entrepreneurin the multi-level European Union policy governance system of the rural development programme (RDP) in the second pillar of the common agricultural policy (CAP). We illustrate the interpretation of rural enterprise economy with an analysis of empirical data consisting of 12 semi-structured interviews of Finnish entrepreneurs who had received financial support for their business activities from the RDP. We underline the tensions between administrative bureaucracy and broad support of entrepreneurial discovery of enterprises as a function of rural authorities. The findings show that the success of the policy actions depends on using the full potential of neoendogenous approach, including local amenities and emerging local and extra-local networking. Accordingly, entrepreneurs should be treated as equal participants with rural authorities.