a b s t r a c tThe economic importance of the private sector, such as the contribution of businesses to Gross Domestic Product or to employment creation, is well recognised in research and policy. In the context of significant economic, social and environmental changes such as the economic downturn, public spending cuts, an ageing population and climate change, the broader social and environmental contributions of the private sector to local resilience have begun to be recognised by researchers and policy-makers. However, we lack a detailed understanding of the nature of, and motivations for, these different contributions.This paper discusses the findings of a case study in South Australia which aimed to enhance our understanding of the role of private sector enterprises in local development and resilience. In particular, this article explores What, How and Why questions: What are the economic and social contributions of rural businesses to local resilience?, How are these contributions made? and Why do business owners make these contributions?The findings reveal that rural businesses contribute to local resilience in both direct and indirect ways. Direct contributions include, for example, the creation of local employment and local product and service delivery. Indirect contributions can be understood as the knock-on effect or added value of primary business activities. For example, the provision of employment opportunities helps to reduce the risk of out-migration and depopulation. With reference to the concept of embeddedness, the study demonstrates the importance of the rural context in shaping the behaviour of rural business owners and encouraging them to operate in economically, socially and environmentally responsible ways. However, this is not a passive relationship; rural business owners have the motivation and resources to respond to specific local challenges, opportunities and characteristics, and to proactively and skilfully turn them into entrepreneurial opportunities. As such, they become part of the adaptation process, acting as agents of change in supporting rural resilience. This adaptation process contributes to enhanced community resilience which enables the modification of existing structures and the seeking of solutions to economic, social and environmental challenges.

Drawing on recent studies of the importance of social networks and embeddedness in affecting the operation of businesses, this article reports the results of an empirical study of the social networks maintained by business owners located in three small towns in the highly peripheral Highlands and Islands of Scotland. Through a combination of a large-scale postal questionnaires and qualitative semi-structured interviews, the study found that, although business owners in all three towns place importance on maintaining embedded ties, there are differences between the towns in terms of the characteristics of the social networks maintained by owners. The respondents suggest several explanations for these differing patterns, including the number of in-migrants in the local area and the cultural characteristics of local people. The article discusses the implications of these patterns for the future development of the businesses and the towns in which they are located. In particular, it is argued that the strength of local social networks maintained by owners in very remote Wick may serve to hamper both their future business development and that of the wider local economy.

The social, cultural, and economic transitions in rural areas across the globe lead us to critique the traditional “top‐down” or “bottom‐up” distinction as being outdated for contemporary rural policy. In Europe and the United States in particular, high rates of counterurbanization heighten the need for new ways of thinking about rural development. To address this, we describe the emergence of neoendogenous development theories in the United Kingdom and elucidate further on the economic implications of this approach for rural development. In particular, we examine the role of local and extralocal networks and population flows as facilitators of neoendogenous development based on our independent studies in northeast England and northern Scotland. This approach highlights the importance of diverse forms of capital in rural economies and examines the role of social networks in the utilization of these resources. In‐migrant business owners are a valuable research focus as they provide a link between the “local” and the “extralocal,” allowing greater insight into the creation and evolution of network ties in relation to economic activity in rural areas.

This paper explores the role of private sector enterprises in building the resilience of rural Scotland. In addition, the paper seeks to identify changes in rural enterprise activities and their impact on rural life. The paper is based on quantitative secondary data analysis and two qualitative case studies. These demonstrate how rural enterprises contribute to economic and social development in rural communities and the wider resilience of rural locations. Analysis of the secondary data highlights an increasing contribution by private sector enterprises to overall employment in rural Scotland. The data verifies the importance of SMEs and, in particular, micro-businesses in rural job creation. It also shows the role of rural businesses in increasing the diversification of the local economy and therefore in building wider rural community resilience. The results identify changing employment patterns in rural areas (such as an increasing level of self-employment, part-time and home-working and multiple job holding) which might be associated with the capacity to adapt to dynamic changes in the socioeconomic environment. Finally, qualitative findings help to further understand how private sector enterprises contribute to the social and environmental resilience of rural Scotland by identifying the role they play in enhancing the quality of life of those living in rural locations. Consequently, the paper makes a substantial and original contribution to existing knowledge and debate on resilience. It uses current data on the characteristics of rural private sector enterprises to identify their economic, social and environmental importance in building the resilience of rural places and their communities.

Research into business associations indicates that many associations suffer from very high levels of inactive members and fail to deliver significant benefits to members. In order to improve provision, the objective of this paper is to understand the determinants that drive or limit performance of rural business associations. Previous research has focused on the ratio of perceived costs to benefits as informing the decision to remain a member. However, in small associations, membership may be more influenced by social norms than the logic of rational choice. Using measures of satisfaction and willingness to pay for association survival as in-group measures of performance this paper finds that (1) for small associations, group size is critical, (2) associations are valued higher in communities where trust is lower, (3) funding by public bodies may be counterproductive to long-term development aims, and (4) the degree of rurality is insignificant in explaining association performance.