ABSTRACT
This chapter adds to the debate on the relationship between embeddedness and regional social capital on the one hand and regional innovation on the other hand by focusing on the socio-cultural contexts of small innovative and enterprising regions. The chapter presents a case study of the Swedish Gnosjö region as a typical example of an innovative small industrial district. Gnosjö is known for a strong entrepreneurial spirit, specialization in traditional manufacturing sectors, a high density of small and medium-sized enterprises (SMEs) and persistently high employment rates. The region’s innovativeness is not reflected in traditional innovation indicators; in fact, the region is specialized in low-tech manufacturing sectors and scores low on several characteristics traditionally associated with innovation, such as industry structure, education level of its inhabitants, level of R&D investments and local presence of advanced services. Instead, its innovativeness is reflected in a generally strong capacity of the local businesses to be flexible and to quickly adapt to new business conditions. This form of innovativeness connects to Schumpeter’s (1934) notion of innovation by ‘novel combination of production factors’, which has a clear bearing on flexibility, adaption of production and business renewal. The Gnosjö region has been compared with other innovative and entrepreneurial regions, such as ‘the Third Italy’, Rône-Alps and Baden-Württemburg (Karlsson and Wiklund 1994; Karlsson and Larsson 1993; Karlsson and Klaesson 2001).
