Local Small Business Development in two Swedish Northern Rural Areas – A Matter of Synergy, Social Capital and Trust?

Anne Teresa Pierre


This exploratory paper examines the synergy between small businesses and the municipality in rural areas in northern Sweden, by exploring whether the degree of social capital and trust influences local small business development. Previous research shows that municipal policy tools, initiatives, and state-society synergy are crucial for local small business development in rural areas. This study challenge popular assumptions about how state-society synergy is imperative for local small business development by saying that a lack of vertical trust has in fact encouraged the entrepreneurial force and increased small business development in the rural areas studied. A qualitative case-study method was used including interviews, observations and studying of documents. Results show, by using the indicator ‘extent of trust in the municipality’ as measurement, that when there is strong horizontal social capital, it may in fact inhibit the possibility of creating strong vertical social capital, and the extent of trust towards the municipality is insignificant in promoting small business development in a rural area if the horizontal social capital is strong.

Keywords: small business development; rural; synergy; social capital; trust

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The Journal of Rural and Community Development is supported by SSHRC.