Abstract

Business-to-business cooperation is commonly regarded as vital to knowledge transfer, the discovery and exploitation of ideas, and higher levels of innovation. The literature on industrial networks and business clusters is replete with evidence of how differential access to physical, human and social resources provides greater local, regional, and/or national productivity. Business networks may be informally or formally constituted, with loose friendships through to tightly regulated Chambers of Commerce. Regardless of the hierarchy of the literal association, the lubricant for all these networks are the social ties between businesses. Rural areas may offer some natural barriers and boosts to business association, which may in turn effect the motivations of businesses to cooperate and the eventual outcomes they receive. The lower population densities of rural area, and the often greater distances between individuals and businesses, should constrain the ability of firms to form, maintain and develop social ties. From this perspective they are disadvantaged. On the other hand, the stronger social mechanism associated with rural communities – classically articulated by Tonnies - should act as a foundation or template for building and consolidating social ties. These barriers and boosts to rural social tie formation may cancel each other out to some extent, but they also give a distinct rural character to business association. This chapter aims to describe this ‘rural character’ of association.