Policy entrepreneurship and entrepreneurial orientation in vulnerable Swedish municipalities

Small- and medium-sized towns (SMSTs) not integrated into expanding metropolitan regions often face industrial decline and depopulation. As a result, many of them lack resilience to change and may be classified as vulnerable. While research holds that a local government's efforts to act in an entrepreneurial way are important for the development of vulnerable SMSTs, entrepreneurship behaviours in the local public sector remain under-investigated. In this paper, we address this gap in the literature by investigating whether and how vulnerable SMSTs differ in their entrepreneurial behaviours. Based on the concepts of policy entrepreneurship and entrepreneurial orientation, we performed a survey of Swedish local communities about their work on strengthening and renewing local business life and improving their own administrations. We analyse factors associated with these activities and examine differences between the policy entrepreneurship of vulnerable and nonvulnerable places, as well as differences within the vulnerable group. Vulnerable places rank low in entrepreneurial orientation, which may contribute to regional lock-in. Cluster analysis reveals that the vulnerable municipalities are a heterogeneous group, which we classify into "entrepreneurs' 'local innovators', and 'disengaged risktakers'. Regression analysis indicates that local social capital may increase entrepreneurial orientation in vulnerable places by strengthening the focus on innovation.