Summary of the Session’s Theme and Objectives

Demographic ageing and depopulation – demographic decline – are affecting many cities and regions in, e.g., Europe and North America, implying fewer customers and a diminishing pool of employees for entrepreneurs and enterprises located in demographically shrinking regions as well as lower rates of entrepreneurship (Liang et al., 2018). Not only does shrinkage exerts a strong influence on the aggregate numbers of entrepreneurial activities but it also affects the types of enterprises and business models found in such regional contexts (Mayer & Leick, 2019). Demographic decline is, moreover, linked to lower productivity levels and innovativeness of firms and industries (cf., Mahlberg et al., 2006; Poot, 2006) although the concrete mechanisms are far from clear (Verworn & Hipp, 2009). It also lowers the place attachment and, vice versa, increases the likelihood of out-migration of entrepreneurs (Wilkerson et al., 2022). While the positive connections between regional (population) growth and business performance (e.g. in terms of business formation and retail sales) are well-documented, demographic decline is by far less understood as a complex and path-dependent phenomenon impacting entrepreneurs and enterprises. This is because demographic decline is often coupled with economic decline, weakening the economic base and even leading to a vicious circle of path-dependent downward processes (cf., Matuschewski et al., 2016). Studies on demographic and economic change have shown that particularly rural areas and small towns are witnessing both demographic and economic decline (Makkonen et al., 2022) but the phenomenon also describes many cities (Velthuis et al., 2024; Wolf & Wiechmann, 2018). The concept of “shrinking” or “decline” evidently carries a negative connotation, instigating planners and politicians to seek growth-focused remedies (Kempenaar et al., 2016). However, what also characterises shrinking cities and regions is that there is usually no quick-fix solution to restore a viable economic-demographic balance, e.g., through financial stimuli or major external investments (Leick & Lang, 2018; Matuschewski et al., 2016). To some extent, policy approaches have begun accepting the decline of many regions and cities and adjusting planning approaches accordingly for, e.g., smaller populations in terms of space, services and infrastructure required under conditions of decline – in order not to waste resources, as growth-focused remedies often end up doing (cf., Makkonen & Inkinen, 2023). These development-policy approaches, however, do not put the viewpoint of enterprises and entrepreneurs nor their innovativeness in the spotlight.
By focusing on shrinking cities and regions in this special session, we address regions of various types (such as rural, peripheral, remote islands, small town, urban-metropolitan regions, etc.) experiencing, facing, or suffering from long-standing economic-demographic conditions that imply economic change and decline. This is coupled with a negative trend regarding population development, which is commonly spurred by continued out-migration, lack of sufficient in-migration to replace out-migrants from the region, and/or demographic ageing due to low fertility rates and rising cohorts of elderly residents. 

Key themes that the special session addresses are: 

1. how may enterprises and entrepreneurs located in shrinking cities and regions thrive in such locations?
2. can (and if so, how can) enterprise and entrepreneurship support policies be aligned to match such planning and policy paradigms targeting managed decline in cities and regions?
3. which factors impact the enterprise development and entrepreneurship in shrinking cities and regions?
4. which conceptual frameworks based on, or informed by, paradigms, theories and concepts from the realms of economic geography, regional planning studies, entrepreneurship, business as well as management and innovation studies, and related ones, support a better, and perhaps more realistic, theoretical understanding of enterprise development and entrepreneurship in shrinking cities and regions?

List of Topics to Be Presented in the Special Session

• New business formation in shrinking cities and regions
• The effects of shrinking in cities and regions on business performance, firm innovativeness and firm survival
• Types of businesses and business models in shrinking cities and regions
• Necessity vs. opportunity driven entrepreneurship in shrinking cities and regions
• Lifestyle entrepreneurship in shrinking cities and regions
• Generational and ownerships change, including turn-around situations of enterprises, in shrinking cities and regions
• The role of new types of (digital) entrepreneurship in shrinking cities and regions
• The role of (re-turn) migrant and immigrant entrepreneurs in shrinking cities and regions
• Entrepreneurship and enterprises built on a local consumption base in shrinking cities and regions
• Drivers and barriers of entrepreneurial activities in shrinking cities and regions
• Theoretical frameworks, concepts and paradigms to understand and explain enterprises in shrinking cities and regions
• Policies and planning approaches to support enterprises and entrepreneurship in shrinking cities and regions

Key References

Kempenaar, A., van Lierop, M., Westerink, J., van der Valk, A., & van den Brink, A. (2016). Change of thought: Findings on planning for shrinkage from a regional design competition. Planning Practice & Research, 31(1), 23-40. https://doi.org/10.1080/02697459.2015.1088242
Leick, B., & Lang, T. (2018). Re-thinking non-core regions: Planning strategies and practices beyond growth. European Planning Studies, 26(2), 213-228. https://doi.org/10.1080/09654313.2017.1363398
Liang, J., Wang, H., & Lazear, E. (2018). Demographics and entrepreneurship. Journal of Political Economy, 126(S1), S140-S196. https://doi.org/10.1086/698750
Mahlberg, B., et al. (2006). The impact of population ageing on innovation and productivity growth in Europe. A. Prskawetz, & T. Lindh (Eds.). Vienna: Vienna Institute of Demography.
Makkonen, T., & Inkinen, T. (2023). Benchmarking the vitality of shrinking rural regions in Finland. Journal of Rural Studies, 97, 334-344. https://doi.org/10.1016/j.jrurstud.2022.12.023
Makkonen, T., Inkinen, T., & Rautiainen, S. (2022). Mapping spatio-temporal variations of shrinkage in Finland. Fennia – International Journal of Geography, 200(2), 137-156. https://doi.org/10.11143/fennia.119495
Matuschewski, A., Leick, B., & Demuth, M. (2016). Growth-based theories for declining regions? A note on conceptualisations of demographic change for regional economic development. Comparative Population Studies, 41(3-4), 225-254. https://doi.org/10.12765/CPoS-2017-04en
Mayer, H., & Leick, B. (2019). Entrepreneurship and ageing: Exploring an economic geography perspective. In M. Backman, C. Karlsson & O. Kekezi (Eds.), Handbook of Research on Entrepreneurship and Aging (pp. 88-108). Edward Elgar Publishing: Cheltenham. https://doi.org/10.4337/9781788116213.00009
Poot, J. (2008). Demographic change and regional competitiveness: the eƯects of immigration and ageing. International Journal of Foresight and Innovation Policy, 4(1-2), 129-145. https://doi.org/10.1504/IJFIP.2008.01691
Velthuis, S., Royer, J., Le Petit-Guerin, M., Cauchi-Duval, N., et al. (2024). Regional varieties of ‘left-behindness’ in the EU15. Regional Studies. https://doi.org/10.1080/00343404.2024.2417704
Verworn, B., & Hipp, C. (2009). Does the ageing workforce hamper the innovativeness of firms?(No) evidence from Germany. International Journal of Human Resources Development and Management, 9(2-3), 180-197. https://doi.org/10.1504/IJHRDM.2009.023452
Wilkerson, J., Sorokach, F., & Wafa, M. (2022). Does entrepreneur perception of the city’s decline matter to place attachment? Journal of Place Management and Development, 15(4), 396-422. https://doi.org/10.1108/JPMD-06-2021-0064
Wolf, M., & Wiechmann, T. (2018). Urban growth and decline: Europe’s shrinking cities in a comparative perspective 1990–2010. European Urban and Regional Studies, 25(2), 122-139. https://doi.org/10.1177/0969776417694680