Reduced opportunities for regional renewal: The role of rigid threat responses among a region's established firms

Abstract

This article illustrates how opportunities for regional renewal in a peripheral region may be reduced by rigid threat responses undertaken by established firms operating within traditional regional industry. In an inductive case study of new biorefinery industry initiatives in a region where traditional pulp-and-paper and forestry industry was in decline, we used primary and secondary data to outline how a set of new industry players who created innovative ways of using existing regional infrastructures and resources sparked rigid threat responses among established firms from the struggling traditional industry. Established industry firms framed new industry initiatives as threats, and responded by (1) reducing new industry actors’ possibilities for new business development, (2) engaging in entrenched resistance, (3) creating collaborative illusions and (4) undermining the fundamentals of the new industry. Consequently, this study contributes to existing literature by proposing the potential of applying the threat-rigidity thesis on a regional level. This is achieved by illustrating that conflicting behaviours between new and established regional industry actors constrain opportunities for regional renewal in a peripheral region. As such, relevant directions for future research and policy implications are outlined.

Keywords:

• biorefinery
• industry emergence
• legitimacy
• localized resources
• peripheral region
• regional renewal
• Sweden
• threat rigidity

Acknowledgements

The authors would like to thank the Associate Editor of this journal, Edward J. Malecki, and two anonymous reviewers for providing constructive critique to all previous versions of this paper. We also acknowledge the cooperation from all interview participants in Örnsköldsvik for their valuable input and empirical insights as well as feedback from the ‘Restructuring and Revitalization’ track participants at the 54th ICSB World Conference in Seoul, Korea. Finally we thank the Nordea Norrland Foundation, Kempestiftelserna, Handelsbanken Research Foundation, Länsförsäkringar Västerbotten and Umeå School of Business Research Institute whose generous funding made this research possible.

Notes

Notes

1. Quote excerpts stem from our primary interview data with personnel from three mainstay groups: (1) new industry; (2) policy and (3) established industry actors that held in-depth insights into the region's new industry emergence processes (further details can be found in Section 3).

2. Objective 1 regions are main priority for the EU's cohesion policy. As such, more than €135 billion are allocated to helping regions lagging behind in their development (‘Objective 1’) where the gross domestic product (GDP) is more often than not below 75% of the EU community average (European Commission 2008).

3. For example, high performance textiles, fuels, food additives, energy and heat, pharmaceutical aids, soil enhancers, paint additives and solvents.

4. The regional municipality in Örnsköldsvik set up the ‘Världsklass 2015’ development scheme as a long-term project encompassing five strategic ‘regional excellence’ areas that aimed to be ‘world class’ by the year 2015. The initial biorefinery industry initiatives fell into the ‘Beyond oil – industry development in a sustainable society’ area. Other strategic excellence areas were ‘Worth seeing’ – aiming to develop local tourism; ‘Finally at home’ – aiming to develop the quality of life and attractive accommodations; ‘Skills for the new world’ – aiming to develop skill provision and higher education; and ‘More City’ – aiming to develop local attractions, establishments and venues.

5. Complete secondary data collected encompassed more than 150 newspaper articles, biochemical industry newsletters, press releases, biorefinery planning documents and forestry company annual reports; EU project pre-studies, meeting minutes from regional development project meetings and Örnsköldsvik municipality planning documents.