Affiliations: Chaire Bombardier, Small Business Research Institute, Université du Québec à Trois-Rivières, 3351, boulevard des Forges, C.P. 500, Trois-Rivières, Québec, Canada G9A 5H7, Tel.: + 819 376 5235; Fax: + 819 376 5138; E-mail: [email protected]; [email protected]
Abstract: The common elements of dynamic regional development can be summarized under three headings: the existence of absolute advantages such as plentiful mineral resources, large forest or significant tax benefits, etc.. Obviously derived from the absolute advantages: a significant reduction in economic uncertainty for investors. Together, these two elements explain the third, the massive inflow of foreign investments to the region. Many other dynamic regions do not have the same absolute advantages and their development is generated by hundreds of small local businesses and investments. We have therefore formulated a hypothesis to explain their dynamism in spite of their economic uncertainty and lack of absolute advantages. First, investors take advantage of different levels of complicity through networks that allow them to share and hence reduce uncertainty; and second, they increase their ability to innovate through the networks, which help them at least partially exceed their current innovative capacities. The networks – some of which are strong signal networks (usually regional) and others weak signal networks (regional or extra-regional) – promote the multiplication of fast growth SMEs which, in turn, stimulate the regional economy. We review the results of a case study (52 fast growth SMEs), highlighting the importance of potential information and weak signal networks in generating fast growth for SMEs.
Keywords: Regional economy, fast growth SMEs, networks, endogenous development
