In Chapter 5, the author goes further to propose a more concrete development of some new notions that may be suitable to contemporary economic developments acknowledging the significance of dissemination and particularly quantification of financial innovation in fostering rural growth and development. If a reader realizes that it doesn't all boil down to finance, then an entirely different sort of basic connection of management elements is possible, from which our ordinary concepts of social-economic development are approached in a much deeper system. In Chapter 5, the concept of financial innovation is introduced in a general way but also with specific examples discussed mathematically and qualitatively. In addition to the measurement of growth of rural population and entrepreneurship, the chapter has also presented the author's developed indices for quantification of performance coupled with measurement of financial innovation.
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In previous chapters we have identified some qualitative ways in which our theory of rural development can be brought into relationship with entrepreneurship, and what their common elements are. Consequently our main objective was necessarily the determination of the nature of these characteristic functions, and of their relationship to each other. However, a study of all these questions in qualitative terms in chapters 1-4 has not exhausted them, because they indeed imply, as must be evident by now, important quantitative relationships as well. To this end, it is useful to recall that Von Neumann essentially defined mathematics as the relationship of relationships (Von Neumann & Morgenstern, 1944) and that will permeate the present quantitative approach that is being suggested here. It is also evident that, abstractly expressed, quality and quantity are in measure united (Hegel, 2010, p.282). Now, using a Yin Yang symbol this actualized regional agency qualitative-quantitative potential, in relationship, is illustrated below in Figure 1.
Figure 1. Quantification of regional agency performance is a measure of relation of quality and quantity to each other
If we observe the symbol in Figure 1 then it becomes clear that qualitative and quantitative analogies of measuring the performance of rural development agencies can hardly be called disordered for they are composed of a quite simple united order to which the philosopher Hegel refers. Indeed, the author’s approach calls for this sort of way of looking at a potential preceding transformation of SME agencies into regional and/or rural development agencies.
At this stage, as pointed out earlier, the author’s principal purpose had not been to propose a definitive new rural measurement theory, but was rather dominantly to demonstrate, with the aid of a concrete institutional example, that alternative relations in quantification were actually possible. Indeed, the author’s approach in its original form, although completely consistent in a logical way, had many aspects which may have seemed quite artificial and perhaps impractical. Nevertheless, as complex or impractical as some of these aspects were1, it did seem that the new rural agency proposals could serve as a useful starting-point for further rural measurements, which it was hoped could modify and enrich our approach sufficiently to remove these unsatisfactory features. Each of the below proposed quantifiers introduces new ideas that are well worth further study in rural development. And while there is similarity with author’s previous work which introduces The Four Member Family of Monitoring and Assessment Instruments (Vemić, 2019), the differences in market position between rural development agencies and public management systems should be noted as the former can be public private cooperation partnerships or even privately owned organizations. Similarly, to fully measure determinants of economic growth separated into increases in inputs (labor and capital) and technical progress the reader might not only revert to Solow’s earlier mentioned model of economic growth (Solow, 1956) but can also compare it with, Arrow’s endogenous growth theory (Arrow, 1962) and Krugman’s more recent core - periphery model which identifies centrifugal and centripetal forces in spatial economic structure (Krugman, 1991) producing uneven geographical development (Harvey, 2005). In addition, it should be noted that the quantifiers proposed by the author are not aimed at turning out readers with a high level of manipulative skill in mathematics, but at exploring the conceptual relations and practical ideas that potentially lay behind our rural-entrepreneurial theories and their contemporary potential.
We have already seen, notably in Figures 1 and 2 of Chapter 1, for example, that our approach is based on the central importance of human capital, social capital and social equity (Lloyd, 1999, pp. 701-713). By reverting to this criterion, we then go on in the manner described above to generalize these factors so that together with proposed quantifications of performance of rural development agencies they can be analyzed in an invariant way.