ABSTRACT

Introduction Rural regions in advanced capitalist nations are in the midst of a long restructuring (Parkins and Reed 2013). Traditional agricultural, resource, and manufacturing industries no longer employ the numbers they once did, due in large part to consolidation, rationalization, and international competition. In turn, this means that rural residents no longer have access to traditionally high-paying jobs, and many communities find themselves starved for revenue. In response, governments across the developed world are promoting ‘rural entrepreneurship’ as the long-term solution to these problems (Marsden 1998, 1999; Ray 1999; Terluin 2003). According to this view, rural economies need to be reinvented ‘from the ground up’ by creative local entrepreneurs who are both committed to their communities and willing to reach into broader markets (Young 2013). While this narrative is compelling, the economic realities facing rural entrepreneurs and small and medium-sized businesses (SMEs) are stark. National and global economies are increasingly dominated by large conglomerates orchestrating enormous transnational commodity chains (Gereffi and Christian 2009). While this system was pioneered in manufacturing, it has now colonized key rural industries such as forestry and agriculture, leaving little room for small producers to access global markets (Dauvergne and Lister 2011; Young 2010). Additionally, distant retailers and service-providers are more capable of ‘descending down’ to compete in local economies than ever before. Internet and other communications infrastructure allows rural residents to shop on Amazon, download software and entertainment directly, and access personal and professional services at a distance, bypassing local businesses in the process. Rural entrepreneurs and SMEs are therefore caught in a double bind, squeezed at both the local and extra-local scale by economic forces they cannot control. This chapter looks at how local businesses in one isolated Canadian community – Port Hardy, British Columbia – are responding to these challenges and attempting to enhance competitiveness in local and extra-local markets. It builds on existing research suggesting that rural businesses with access to rich social resources are better able to adapt and compete under difficult economic

conditions than those that do not (e.g. Atterton 2007; Floysand and Sjoholt 2007; Phillipson et al. 2006; Ring et al. 2009). Specifically, prior studies indicate that firms with higher levels of ‘embeddedness’ in the local community and business networks are better able to access help, coordinate activities, and collectively pursue opportunities than lesser-embedded firms. These studies are not without their weaknesses, however. Much of this research has fallen back into what Lagendijk and Oinas (2005) call ‘the regional cage’, where attention to local embeddedness and networks overshadows equally important connections and practices at extra-local scales. At present, few studies have examined the coexistence and interactions among local and extra-local business networks, in rural regions or otherwise (Yeung 2009; see also Copus and Skuras 2006; Floysand and Sjoholt 2007). This chapter seeks to address this gap by presenting empirical findings from an in-person survey of 181 businesses operating in the isolated coastal community of Port Hardy, British Columbia, Canada. Among the key findings is that locally oriented and extra-locally oriented firms have markedly different structures of help and partnership that rarely overlap. These differences can be (at least partially) explained using qualitative data from the survey, which suggests that SMEs operating in local versus extra-local markets face strikingly different competitive realities.