Keywords

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1 Introduction

The implementation of innovative ideas or the development of possible solutions in a programme, product, or service, and individual engagement in new practices to ensure benefits to a community, are perhaps some of the most important activities to ensure sustainable undertakings in society. Therefore, community-based entrepreneurship should be considered a key factor in enabling individual entrepreneurs to pursue opportunities that create social benefits for a community, thus meeting many of the needs so many societies struggle with because of structural change, lack of innovative culture, lack of resources, or limited organization (OECD 2011). Community-based or social entrepreneurship involves cooperative and collaborative relationships and activities in which resources are combined into the co-creation of beneficial value for stakeholders. Peredo and Chrisman define the concept as ‘a community acting corporately as both entrepreneur and enterprise in pursuit of the common good’ (2006, p. 310) and say that it involves processes by which new enterprises are created and can operate within a community’s existing social structure. As such, community-based entrepreneurship is recognized by governments for its ability to transform society (Ratten and Welpe 2011). Where successfully implemented, it can reinvigorate a society, but failure can lead to such shortcomings as a failure to address the dignity, creativity, and potential of inhabitants (see, for example, Smith 2011).

Politicians and policymakers seem to agree about the significance of community-based entrepreneurship. For example, many large public programmes in the European Union, such as the Europe 2020 strategy (2011) for ‘smart, sustainable, and inclusive growth’, support joint efforts between social partners and civil society to achieve growth and prosperity in the member states. Another example is the OECD (2011), which for several decades has advised governments and communities on how to adapt to global trends and tackle complex problems in a rapidly changing world. They show that more local- and community-based entrepreneurship and collaborations between public and private bodies have helped local economies transform into entrepreneurial, innovative communities that create more and better jobs. For this reason, societal forces have put their faith in entrepreneurship at the community level as a way of deflecting economic and social crisis and of achieving sustainable positive development.

Although it would seem an obvious topic, there has been little research on community-based entrepreneurship, and such as there is tends to be very limited (Gawell et al. 2009). Different forms of community-based entrepreneurship, such as NPOs, local community development organizations, and traditional small firms linked to rural development programmes, are highlighted in the literature. These forms of entrepreneurship set out to strengthen communities and the economic attractiveness of peripheral areas, which ultimately contributes to regional competitiveness and slows rural population drain. The things characteristic of rural areas—small schools, homogeneous populations, traditional values, politically conservative climates, and limited recreational, educational, and mental health services—pose particular challenges to the implementation of rural development programmes, as well as offering particular benefits (Bierman et al. 1997). Academics studying the potential of community-based entrepreneurship have an interest in understanding how to mitigate such socioeconomic and institutional problems. The key is to develop knowledge of how smaller communities can survive and thrive in sparsely populated areas by using and learning from larger networks, both nationally and globally. Even though research on community-based entrepreneurship considers how social and environmental needs can be addressed by creative entrepreneurs, it evidently focuses on issues that are not of primary interest in related research. The established topic of social entrepreneurship—capturing processes involving the innovative use and combination of resources to catalyse social change and/or address social needs (Mair and Martí 2009)—tends to obscure what is unique about community-based entrepreneurship and its relationship with similar concepts in the entrepreneurship literature, we would argue that community-based entrepreneurship per se nevertheless deserves attention.

The purpose of this chapter is to review the literature on community-based entrepreneurship in order to provide a useful definition of the concept for future use. That this is a subject of particular concern is shown by the recent special issues of Entrepreneurship & Regional Development (January 2011) and the International Journal of Innovation & Regional Development (2010). In the past, prior studies have merely signaled the problem. However, with the rapidly growing body of literature on social entrepreneurship, it is important to reduce the ambiguity about community-based entrepreneurship, highlighting its status and where it differs from social entrepreneurship research. In this chapter, we will concentrate on the impact of the literature on today’s community-based entrepreneurship research and its key contributions, the breakdown of the research in terms of conceptual and empirical articles, and the data-collection methods used. Lastly, we will look at what makes community-based entrepreneurship unique in both definition and execution.

2 Research Method

We have conducted a bibliographical analysis that specifically focuses upon peer-review academic periodicals, using the Scopus database for the literature search. Key words included social entrepreneurship, social entrepreneur(s), community-based entrepreneurship, and community-based entrepreneur(s) in various combinations. Scopus is one of the largest abstract and citation databases of academic literature and quality web sources, with 41 million records covering nearly 18,000 titles, including all the standard specialist journals, from more than 5,000 publishers, plus quality indices; it includes publications listed in the ISI, ABI/INFORM, and EBSCO databases and the like. Our search was completed in April 2011 and identified 58 articles for detailed review.

3 The Literature

The field started as far back as 1975, with an article by Nottingham (1975), which focused on implementation issues in community-based entrepreneurship when initiating a rural development programme. From that point, the number of journal publications and citations grew very slowly until 1998 (Fig. 11.1). Then, in mid- to late 1990s, came a number of milestones in the development of community-based research, such as Baron (1998) who discusses how certain human cognitive processes can increase entrepreneurs’ susceptibility; Nechyba and Strauss (1998), talking about how to estimate the impact of local fiscal and other variables on individual community choices; Bierman et al. (1997), who focus on how local characteristics can affect rural programmes; and Tareen and Abu Omar (1997), discussing community entry and how it is a prelude to any action in a true partnership with the community. In 2001–2005 there was a much steeper increase in the number of citations and publications, with articles such as those published by Stræte (2004), who covers how local entrepreneurial capabilities are important factors for innovation and production in local communities; Gold (2004), outlining how to improve sociological work; Johnstone and Lionais (2004), discussing how conditions in depleted communities can limit possibilities for traditional development, while entrepreneurial responses are not similarly constrained; Morrison et al. (2005), focusing on the community entry process, action cycle of problem identification, community planning, and the implementation and evaluation of strategies to tackle identified problems; and Heilbrunn (2005), on how market criteria such as profitability and competition at the organizational level promote individualistic motivations and economic behaviour on the part of entrepreneurs within a community setting.

Fig. 11.1
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Periodical publications and citations

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Today, both research and publications continue to increase, with work by April (2010) on the stories of 20 entrepreneurs practicing witchcraft in the southern region of Namibia and what their initial motivation was to combine witchcraft with entrepreneurial activities; Cardow and Wiltshier (2010), discussing the role that domestic tourism plays in an island’s economic recovery; Bent et al. (2010), talking about the needs for businesses to provide communities with business support and advice, and different approaches to doing so; Spilling (2011), who focuses on Bengt Johannison’s early studies aiming at developing an adequate understanding of the role of small firms in local communities; and Torri (2009), who discusses how traditional concepts of entrepreneurship and economic development do not appear to capture the essential features of investing in depressed areas such as local communities in developing countries.

We have analysed the extent to which the output of the researchers in this field has contributed to the co-creation of knowledge by using the h-index (used to quantify an individual’s scientific research output and impact by looking at how many times a certain article has been cited), which reveals that a number of contributions to the field have been well-received: of the 58 documents considered for the h-index, 12 have been cited at least 12 times.

Several disciplines are involved in the creation of community-based entrepreneurship research: the social sciences; business and management; economics, econometrics, and finance; medicine; environmental science; psychology; the agricultural and biological sciences; earth and planetary science; and computer science and engineering. Figure 11.2 shows how much published research is associated with each discipline in this particular literature review. The main disciplines represented are the social sciences and business and management; the least represented are computer science and engineering.

Fig. 11.2
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Main disciplines involved in the field of research

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Having analysed all 58 articles and established a publication chronology, we can see that there is a wide spread in date of publication, and little logical order across the disciplines. For example, articles in the social sciences were published in Johannisson (1990), Bierman (1997), Baron (1998), and later Morrison et al. (2005), Beeton (2008), and April (2010). The same is true of business and management, with Ryan (2002), and Ivanova (2004). Take the less represented disciplines and the results are much like those of, say, psychology, with Nottingham (1975), Díaz and Rodríguez (2003), and Mandiberg (2010). However, when we look at the disciplines that were least represented—computer science, earth and planetary science, engineering, and the agricultural and biological sciences—it is noticeable that they have all been published in the last decade or so, ranging from Anand and Orlóci (2000) and Kåberger and Månsson (2001) to Gordon (2006) and Hexmoor (2009).

Community-based entrepreneurship research is thus not only firmly multidisciplinary, but is also a growing field, impinging on a growing number of disciplines, and using a great variety of perspectives. The range of questions addressed in the disciplines concerned can be seen by connecting examples of research questions to each individual discipline. Thus in business and management we see issues such as private–collective innovation, entrepreneurial activities, community business entrepreneurship, and entrepreneurship capital; in the social sciences, community entry processes, decentralization and empowerment, social capital utilization, and strategies against poverty. Further, in less researched areas such as engineering and computer science, we can see areas of discussion such as entropy and economic processes. Evidently, each discipline takes community-based entrepreneurship and explores areas relevant to its own research topics. This is what makes community-based entrepreneurship so dynamic and multidisciplinary.

Research on community-based entrepreneurship is mostly published in a set of well-known academic periodicals. Figure 11.3 shows the most-cited journals: topping the list is the Journal of Business Venturing followed by the Journal of Business Ethics. At the bottom, we can find the Journal of Political Economy proceeded by the Harvard Business Review. Table 11.1, meanwhile, shows no clear list of active universities that frequently publish on community-based entrepreneurship, meaning that there is no clear ‘knowledge centre’ in this highly multidisciplinary field. The university that leads in the number of publications is the University of Wisconsin Madison; however, it is noticeable that even those the universities on the list that publish frequently in fact publish very few articles, and little divides the top and bottom universities in terms of quantity. Comparing university output to individual research output, our analysis reveals that it is individual researchers who drive the development of the field at each university, rather than research groups.

Fig. 11.3
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The top ten cited journals in the development of societal entrepreneurship research

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Table 11.1 Universities that frequently publish on social entrepreneurship (with number of published articles)
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4 Research Breakdown

Table 11.2 gives a breakdown of the research orientation of the 58 articles on community-based Universities that frequently publish on social according to whether they are conceptual or empirical, and how their data was gathered. We will address both the conceptual and empirical research in more detail, and the areas of discussion that appear in the various studies. We will also discuss the different data-collection methods that have been used.

Table 11.2 Research orientation, conceptual and empirical papers (with number of published articles)
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4.1 Conceptual Research

The conceptual research articles, which, in common with most such research, map out the topic to give coherence to empirical inquiries, fall into three groups: descriptive (3 articles), explanatory (11 articles), and theory development (8 articles). Thus the descriptive articles describe the characteristics of the different core phenomena in community-based entrepreneurship; the explanatory research gives a set of statements to describe certain facts in order to clarify context, causes, and consequences; while the theory development takes existing theories (such as institutional theory) and works them up in ways that contribute to the original theory as well as the subject in hand.

There are several examples of descriptive research that discusses key concepts without drawing on the explanatory or theory development literature: Bent et al. (2010) discusses the needs of businesses in supporting communities and how to give advice; Harris et al. (2009) talks about how the significant and growing scholarly interest in entrepreneurs and new venture creation has resulted in the shaping of entrepreneurship as a rigorous academic field of study, including the creation of several dedicated scholarly journals, the modification of business school curricula, and the rise of entrepreneurship-specific research conferences; and Lotz (1989) discusses how some ventures (such as community development corporations, worker-owned businesses, and regional development councils) arose because of a crisis, some were brought into being by the government to aid in the delivery of services, and others began when people found that the existing structures for creating employment had failed them, and decided to solve their problems collectively.

Much of the conceptual research effort is expended on how and why questions. Examples of important contributions in defining the field when it comes to such explanatory research are Uddin et al. (2010), who discuss how community institutions, such as the private sector, international agencies, foundations, and local communities have gradually shifted from dependence on external funding to a social enterprise model; Rankin (2008), who emphasizes spatio-temporal contingencies in the articulation of market-led development institutions with specific national regulatory frameworks and political cultures; Gold (2004), who talks about how images help to establish a rapport with respondents by contextualizing and lending specificity to the subject matter, and also humanize the portrayal of respondents in sociological work; Gibb (2002), who explores the challenge of a wider community in a broader context by reference to a number of issues central to the globalization debate, including culture, market liberalization, forms of governance, and democracy; Ryan (2002), who studies how host communities are far from homogenous, arguing that there will be some who see entrepreneurial opportunities in any tourism development, some who tend to inertia and/or indifference, and some who will resist change and seek to sustain the status quo; Yongming (2001), who discusses how entrepreneurs use social capital to influence state policy-making, and how forging a relationship between entrepreneurial organizations and the state involves a dynamic process of power negotiation; and Kalantaridis (1997), who investigates how small towns and rural areas are integrated into international production networks, and the implications of external influences for the unity of productive and social structures in localized production systems.

When it comes to theory development, with its uncovering of theoretical relationships and connections, the articles outline issues such as the level of citizen trust needed to assure the risk when more commitment and action take place in community development programmes (Summers et al. 2009); or the fact that a community that links participants in a shared desire to create new knowledge for international competition will better succeed in providing a basis for learning and innovation (Lee and Williams 2007). Dew and Sarasvathy (2007) suggest that in modern societies, entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases; and Kåberger and Månsson (2001) that human industrial activities could be transformed into a sustainable system where the more abundant elements are industrially used and recycled, using solar energy as the driving resource. Balcazar et al. (2001) describe a capacity-building approach to community empowerment grounded in a contextual/behavioural model of empowerment for people with disabilities; Cremer et al. (2001), look at the countervailing trend of a growing emphasis on globalization, which has brought the analysis of global cities into sharp focus, giving new significance to ‘the local; Nechyba and Strauss (1998) analyse how individual community choices vary depending on local community characteristics, including local crime rates; and Baron (1998) considers how social entrepreneurs often work in situations and under conditions that would be expected to maximize the impact of bias and error depending on the levels of uncertainty, novelty, emotion, and time pressure. All these studies land in community development and locality from various angles, and describe the research field, including several crucial topics, in a multidisciplinary manner. It is encouraging to see a significant effort in theory development, since this is often said to be important for the legitimacy and future development of the field. A variety of theoretical perspectives have been drawn upon, something that facilitates the development of this multi-disciplinary field of research.

4.2 Empirical Research

As can also be seen in Table 11.2, the majority of the research (23 articles) focused on qualitative methods, and thus obtained an in-depth understanding of qualities and characteristics as a means of data collection. There were few quantitative studies that relied upon statistical or mathematical techniques in their findings (9 articles), all of which used a survey design.

We found that the empirical discussion is mostly of a qualitative character. Authors have studied community-based entrepreneurship by looking at it from different angles, including entrepreneurship in indigenous communities (April 2010); domestic tourism operators and economic recovery in island tourism destinations (Cardow and Wiltshier 2010); community-based entrepreneurship as a mechanism for renewal and experimentation (Lundqvist and Middleton 2010); the collective power of ethnic entrepreneurship (Kraybill et al. 2010); how a different entrepreneurial approach such as community-based entrepreneurship could be significant for policymakers and practitioners, given the growing interest in entrepreneurship and sustainability as tools for local development (Torri 2009); the question of whether, instead of increasing local participation, decentralization may further marginalization (Lortanavanit 2009); how formative research informed the development of a home-based neonatal care intervention in rural Ghana (Hill et al. 2008); transnationalism and the (re)creation of home among African women in the New Diaspora (Osirim 2008); stakeholder approaches to sustainable relationships between city and university (Russo et al. 2007); the social aftermath of Hurricane Katrina and how the community has come together with the assistance of government and local authorities (Boettke et al. 2007); the effective utilization of human resources in Kenya in pinpointing entrepreneurial tourism opportunities and encouraging an entrepreneurial culture by recognizing the factors that influence individuals’ intentions to start a business (Okech 2007); and entrepreneurial activities in an unfriendly environment with focus on Belarus (Ivanova 2004). Overall, it should be noted that the traditional case-study approach that has been widely adopted, although obviously of limited generalizability, has generated important insights, and generally speaking points to the fact that community-based entrepreneurship is largely about contextual influences and many conclusions may only be true for certain contexts. As such, this seems to be the future route for empirical inquiries to take.

It is noticeable that there are fewer quantitative studies than qualitative ones, yet despite their small number they still cover important avenues for community-based entrepreneurship research. For example, Heilbrunn (2005) discusses a theoretical model that identifies how cultural orientations of individuals versus collectivism affect the entrepreneurial process, and whether (and if so, how) the move from organizational collectivism to organizational individualism influences the volume and type of entrepreneurship in community settings; Díaz and Rodríguez (2003) examine the prevalence of a range of psychological attributes in a sample of entrepreneurs and how this relates to the creation of social enterprise companies; Doucette and Jambulingam (1999) talk about pharmacy entrepreneurial orientation and the development of entrepreneurial factors by looking at proactiveness, innovation, risk-taking, autonomy, and competitive aggression; and Hexmoor (2009) discusses a methodology for comparing service policies using a trust model.

4.3 Distribution of Data-Collection Methods

We also charted the orientation of data-collection methods, again shown in Table 11.2. Of the 58 articles considered here, nine used surveys (for example, Ryzin et al. 2009; Stuermer et al. 2009; Robles 2007), 13 used interviews (for example, April 2010; Lundqvist and Middleton 2010; Torri 2009), 23 used secondary data (for example, Hexmoor 2009; Harris et al. 2009; Rankin 2008), and 13 used observations (for example, Morrison et al. 2005; Peredo 2003; Nottingham 1975). The spread of collection methods is fairly normal, although secondary data has been used more often than the others, possibly indicating that a clear definition of community-based entrepreneurship is still being sought, with a greater reliance on citations of existing literature as a result. It should also be pointed out that in most cases the use of secondary data is combined with another data-collection methods, such as observations or interviews. The fact that interviews and observations are used to much the same extent points towards a slightly higher use of qualitative methods.

It is positive that secondary data has been used a great deal, since this indicates that an attempt is being made to understand community-based entrepreneurship by looking at what has already been produced in the field. Interestingly, what is lacking is fieldwork and close-to-the-community research where actual cases are studied, which would do much to identify the factors in a community that make it function, or not function, and thereby create knowledge that could be used to help communities pursue sustainability and economic development.

4.4 Influential Research Contributions

By analysing the critical apparatus of all 58 articles, we identified the authors who have been most influential in the development of the research on community-based entrepreneurship. The key developments the field turn on some 20 articles, all of which have contributed to the conceptual and empirical discussion of the concept itself and the research framework. Table 11.3 illustrates the key research contributions by specific authors. Here, the work of authors such as Johannisson, Gibb, and Sarasvathy is cited in discussing the potential of local economic development as a holistic endeavour and the subsequent importance of the community entrepreneur (Johannisson 1990), and how the pervasive ideology of the ‘heroic’ entrepreneur connects with the wider notion of ‘enterprise’, and how this relates to the development of the individualism and the design of enterprising organizations (Gibb 2002). In their article, Dew and Sarasvathy (2007) discuss how entrepreneurship and innovation are widely seen as key sources of economic growth and increasing welfare, yet entrepreneurial innovation has also brought losses and hardship to some members of society. Furthermore, researchers such as Beeton (2008) cite articles covering issues such as film corporations’ social responsibilities towards communities and a capacity-building approach to community empowerment. These articles all contribute to an understanding that community-based entrepreneurship is about the need for local economic and social development through various activities such as targeted projects and organizations in order to strengthen and sustain the community—and by highlighting these particular authors we want to show how they have influenced the course taken by subsequent research in the field.

Table 11.3 Key research contributions, by author (with number of published articles)
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5 The Distinctiveness of Community-based Entrepreneurship

In a closer analysis the influential articles on community-based entrepreneurship, we established their crucial properties by looking more closely at the key words as well as the general content. Although a general understanding seems to exist when it comes to potential definitional properties, no research has defined exactly what community-based entrepreneurship is, or how it is related to or distinct from traditional entrepreneurship.

As indicated, community-based entrepreneurship research is a field that has developed incrementally over some years of rather limited activity; however, the understanding is that it can be characterized by its involvement of a great many disciplines, methods, and angles of approach in a single line of research. In a complete review and analysis of the key words used by authors for their articles (the most frequently used are given in Table 11.4) we noted that concepts that capture aspects such as locality, innovation, the creation of new ventures and enterprises, collectivism, social capital, regional and economic development, and problem identification in small towns and rural areas stand out. The studies have researched these areas by studying rural programmes; community entry processes and how to best develop trust and understanding among local people; project-planning at a local level and how this differs from standard projects in other settings; the role of small firms in local communities; local characteristics and their effect on rural programmes; and how dependence on external funding has given way to a social enterprise model. Furthermore, we can also see in the results of community-based entrepreneurship research that certain crises have driven the creation of regional development councils, worker-owned businesses, and community development corporations; how entrepreneurs can use social capital to influence state policy-making; and how this type of research can provide a basis for innovation and learning, which can aid in the creation of trust needed to enter a community with a new rural programme and develop it successfully.

Table 11.4 Key words used (with number of times used)
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Against the background of the previous research in the field, we define community-based entrepreneurship as a locally grounded phenomenon that encompasses for-profit organizations and NPOs, local businesses, individuals, and local community-oriented projects and networks that together or separately seek to create a sustainable and flourishing community by working with the community in solving problems and improving socio-economic value. Thus we stress locality, sustainability, socio-economic value, community development, networking, collectivism, and enthusiastic individual entrepreneurs as important properties of community-based entrepreneurship.

Although related, it is important to mention that the field of community-based entrepreneurship research is distinct from social entrepreneurship research, yet remains related to it. Social entrepreneurship research is defined as a process of creating value by combining resources in new ways intended primarily to explore and exploit opportunities to create social value by stimulating social change or meeting social needs (Mair and Martí 2009), and stresses key properties such as social problems, social value, and existing solutions in order to be financially, organizationally, socially, and environmentally sustainable. As the analysis of key words and general content shows, these are not necessarily the same issues that are of interest to community-based entrepreneurship researchers. While social entrepreneurship could be understood as a broader general concept, community-based entrepreneurship captures a smaller, more focused area. This implies that community-based entrepreneurship and social entrepreneurship have similar, yet varying, research interests. Although more empirical and targeted research in the field could make it easier to differentiate between the two, creating a more dynamic legitimacy for community-based entrepreneurship research, we also see the value of tying into the issues discussed in social entrepreneurship research.

6 Conclusions and Implications

The review we have presented regarding community-based entrepreneurship indicates not only the potential, but also the need for further focused research. In our overview, we note an increased interest in the concept over the last few years, but that the research has historically developed very slowly. We outlined a definition and its relationship with social entrepreneurship. As such, we suggested social entrepreneurship is a more general concept than community-based entrepreneurship, which has a more specific focus directed on alternative processes. We believe that a closer definition and an understanding of the historical origins of community-based entrepreneurship will assist in the development of an academic identity and inspire further research—the suggestion that community-based entrepreneurship has its own influential factors and its own consequences means that such a clarification is needed.

Having traced a bibliographic record of almost forty years and the various academic outlets and disciplines concerned, it appears that the field has been inspired by a fragmented group of researchers from a range of different universities and disciplines. Although this foundation is ideal for answering important questions without being tied to a certain paradigm or body of knowledge, we believe this may be one reason for the lack of cumulative knowledge-building.

Most of the research in community-based entrepreneurship has pursued various types of theme. This indicates that it is a broad research field, which has the potential to grow and develop further. In order to assist researchers to draw on one another’s dialogues, we have taken the opportunity to group the somewhat sprawling field of research into themes:

  • The implementation of innovative ideas, the focus being entrepreneurialism, innovation of products and services, and sustainability.

  • The creation of social benefits for communities, the focus being community and individuals, civil society, health planning, employment and education.

  • The creation of enduring cooperative and collaborative relationships at the community level, the focus being organization and management (especially efficiency), the rural population, societies and institutions, and partnership.

  • The development of the processes by which new enterprises are created within existing social structures, the focus being social capital, social enterprise, policy, networking, and sustainable development.

  • The ability to create more and better jobs, the focus being small-business development, microbusiness, community tourism, community structure, and self-employment.

  • The implementation of development programmes in rural areas, the focus being poverty alleviation, empowerment, cultural factors, economic activity, and capitalism.

  • The collaboration of the public and private sectors, the focus being community–institutional relations, the political economy, political systems, policy formation, and consumer participation.

  • The attempt to use networks, and also larger networks, in order to sustain strong communities, the focus being community enterprise, the rural population, sustainable development, policy formation, community entry processes, and leadership.

We believe that an awareness of these themes can help increase the dialogue between researchers interested in community-based entrepreneurship. We can see potential for several contributions from the separate disciplines involved, and hope these themes will assist further in the academic exchange on the subject.