Local Embeddedness and Global Links in Rural Areas: Euclidean and Relational Space in Business Networks

Rural regions and small businesses are often assumed to be marginalised in relation to globalisation, which is perceived to be an urban phenomenon. However, emerging rural business network configurations contradict this commonly held view. This chapter presents an investigation of spatial and ‘relational’ structures in business networks of small and medium-sized enterprises (SMEs) in rural areas of five European countries. It argues that successful and dynamic firms derive ‘networking economies’ from frequent and effective interaction, both within the local business environment and with a more extensive set of linkages stretching out across Europe. New communication technologies allow entrepreneurs to communicate with contacts and institutional sources without the geographic limitations that would have hampered them just a decade ago. Actors such as local and county authorities, professional associations and European-funded business advisors increasingly act as ‘network brokers’ for local SMEs. In this way, ‘organised proximity’ is increasingly independent of geographic space, providing rural business with an alternative to agglomeration as a competition strategy.