Expanding horizons: local embeddedness and local engagement among small firms in the European countryside

The relative importance for small and medium-sized enterprises (SMEs), of local embeddedness and engagement with the wider economic and technical environment has been a subject of debate, in the context of regional development, for some years. There is increasingly general acceptance that both are essential for regional development. This paper considers the role and characteristics of business networks within the structural shift of the rural economy, away from local resource based activities towards a more diversified 'New Rural Economy'. A better understanding of the relative importance of local and wider networking by rural SMEs is crucial for more effective policy, especially that intended to support rural-urban interaction and cooperation. Findings from a case study in Northern Sweden are presented.