Regional SME and Development Agencies: Factors of Entrepreneurial Support, Development and Competitiveness

Regional SME and Development Agencies: Factors of Entrepreneurial Support, Development and Competitiveness

DOI: 10.4018/978-1-7998-2641-5.ch002

Abstract

In Chapter 2, the author shared research evidence on the role of regional SME and development agencies, which are profiled as factors of SME support, regional development, and improvement of competitiveness. The author inquires whether it is possible to experiment with new institutional concepts with a basic role given to the agencies as facilitators of social-economic development reaching out locally, regionally, globally, and in particular, rurally. Such institutions have as their substance a series of development interventions that flow and merge into each other without sharp divisions that might inhibit entrepreneurship and, as will be seen later, rural development. What is proposed here is not a new institution as such but, rather, a new fashion of using the existing development infrastructure. The author develops this approach as experimentation with institutions, which is meant mainly to provide an insight into the fragmentary function of the common social-economic development rather than to propose a totally new method of developing an economy at the local and rural level.
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Introduction

As mentioned earlier and emphasized in key studies of leading international organizations, there is no single model of economic development, nor is there a definitive type of optimal development agency. The last decades of the twentieth century have shown that globalization and regionalization are constituent parts of contemporary economic development while systems, structures and agencies dynamically evolve and transform. Within this contextual uncertainty it can even be argued that regionalization is a prerequisite for globalization, and that globalization returns to regionalization, both flowing in and out of rural and local development thus benefiting from entrepreneurship (as is indeed the overarching idea that represents the key aspect of our view). We shall also see that local economic development agencies, as the likely predecessor of regional and rural development agencies, are a conditionally, yet universally, applicable model for facilitating economic development, particularly through the SME sector.

Advantages of these organizations have been broadly recognized and supported in many different parts of the world. It should be noted that International Liaison Services for Local Economic Development Agencies (ILS, 2019) has been operating since 1998 and since then 61 LEDAs have been supported and operate in many Latin American, African, East European, and Asian countries (Catenacci, 2000). In a similar yet much broader fashion The U.S. Small Business Administration (SBA) provides grants to support counseling partners, including approximately 900 Small Business Development Centers (SBDC) and 110 Women's Business Centers (WBC)1. In the EU the European Association of Development Agencies (EURADA), founded in 1992, gathers people working on economic development through a large network of 73 members throughout 22 EU countries and beyond2. It connects its members with other regional development agencies, business partners and European authorities. It supports innovation in SMEs, smart specialization, finance of innovation, social innovation and development of dual use industry. All three institutions and associations have demonstrated in practice that the SBDC’s, WBC’s, LEDA’s and RDA’s represent a potential solution for improving the performance of economy in the local, rural, regional and global economy mainly because of the following unique characteristics of these corps intermédiaire institutions:

  • They are an organized structure that can become sustainable3, also in rural development;

  • As a partner in decentralized cooperation they are useful in an administrative division of tasks at local, rural and regional level;

  • Agencies have developed relationships with different national and foreign networks;

  • As territorial structures they can coordinate local development and territorial planning;

  • Agencies are a tool for combating rural poverty and a forum for social dialogue;

  • Agencies help in developing business plans and securing loans for SMEs;

  • Agencies can ensure sustainable development of entrepreneurship and SMEs. In relation to this aspect Horlings and Marsden (2012) pointed out the necessity of agencies to address potential failures in the SMEs which were unable to survive by the competitiveness.

  • Development plans prepared by agencies also take into consideration the environment. In this context the work of Danson and Lloyd (2012, pp. 78-94) has been used by many professors to show how the ecological footprint has been integrated as a strategy in rural communities and regional agencies in West Scotland.

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