Local government strategies and entrepreneurship

Abstract

Our aim is to examine preconditions for local government intervention to promote entrepreneurial behaviour in rural areas with population decline. In the Nordic countries, the legal framework allows local government to take an active part in community development, e.g., to stimulate business as well as cultural activities. In Norway, even small rural municipalities are in command of, or are given access to financial and organisational resources that can be mobilised for community development. When acting outside their public welfare commitments, the municipal leaders deploy strategies of network governance, in which boundaries between and within public and private sectors are downplayed, to promote flexibility and inclusion of the interests in the broader community. In the present study, we compare four rural municipalities in Northern Norway with respect to their leadership strategies and entrepreneurial projects, and we examine the outcome of their developmental activities. A striking finding is that municipalities with rather similar structural characteristics differ with respect to strategies deployed and developmental success. What makes some municipalities better than others in creating an environment for entrepreneurial and innovative behaviour? Our findings suggest that leadership characteristics and the strength of the municipal economy are important factors.