The rural inter-enterprise collaboration problems: the case of Läänemaa

Abstract

Läänemaa as well as Europe are facing the marginalization of rural areas, including socioeconomic and cultural decline. It has been argued that cooperation between rural enterprises can have a positive impact not only for the individual business development, but also for socio-economic problems. The aim of this thesis is to understand how rural entrepreneurs make decisions about cooperation as the research problem is lack of cooperation in rural Läänemaa, despite possibilities for EU funding. This leads to the first research question: what are the primary factors, which encourage or discourage rural entrepreneurs to cooperate with other rural businesses? In order to complement the purpose of this research, a policy dimension has been added on how does the EU rural development policy impact rural business cooperation, which leads to the second research question: what is the role of the EU in fostering inter-enterprise collaboration? Qualitative content analysis of responses was conducted manually through a coding process identifying, categories, themes and the concept. Quantitative Likert scale method was to complement the qualitative method for measuring entrepreneurs` attitudes, beliefs, or opinions on given statements, and was analysed with Microsoft Excel. Based on the analysis, the proposed theory was social capital to explain rural inter-enterprise collaboration problems. As a result of analysis, the primary factors, which encourage rural entrepreneurs to cooperate were identified as business development, competitiveness, social networks and new market access. The primary factors, which discourage were identified as social relations and investment risk such as no labour force/variable business environment or market price. The role of the EU in fostering inter-enterprise collaboration with providing opportunities and connecting stakeholders though supply chain action, clusters, incentives, platforms, information days and joint marketing possibilities. Based on the analysis, the reason for the lack of cooperation in rural Läänemaa is because of the negative impact of social capital and little awareness of the benefits through social capital.