New business model and local governance in supporting social and environmental solutions: A social network analysis to evaluate the Italian local action group's “Terra è Vita” role

Abstract

Current issues, such as climate change and social and economic disparities, are complex and context-dependent, influencing several economic and social actors. Micro-small and medium enterprises that populate rural areas often have lower risks than other companies but less innovation and fewer financial resources and capabilities. Here, a local convenor could help support these enterprises to drive their social, environmental, and economic behaviours to safeguard natural resources, respond to social community needs, and fulfil their economic goals. The European Union's Community-Led Local Development programme defines local action groups as actors who help develop and grow local areas in social and economic fields. We analyse this role, highlighting that by focusing on social and environmental issues, the convenor can stimulate changes in the traditional business model and the social business model characterised by the business ambidexterity involved in producing economic value that is also relevant to addressing the community's needs. We study the effectiveness of a local action group in its convenor role for local actors' behaviours on economic, social, and environmental themes. The study uses social network analysis to extract the network backbone that links 150 local area entrepreneurs according to their perceptions of the local area's main weaknesses. The results are twofold: they indicate that the local action group is perceived as an effective convenor and that its activities are instrumental in improving local area stakeholders' performance.