Land Tenure Regimes and Diffused Entrepreneurship in DPSs

Abstract

Diffused entrepreneurship in a DPS means that there is a large number of individuals willing and able to start new businesses, explore new markets and innovate technologically and managerially. The main evidence of the existence of this characteristic in a DPS is little concentration of ownership of capital or land. A pattern of diffused entrepreneurship contributes to the dynamism of a production system by incorporating the creative energy of a larger pool of its members. Through the mechanisms that encourage the creation and sustained growth of numerous SMEs, including supportive public policies and interfirm co-operation schemes, a DPS achieves a high level of ‘Schumpeterian’ creative activity. Free from the bureaucratic constraints that come with the vertical organization of large firms, the networks of SMEs in dynamic production systems have proved to be enormously innovative and agile in adapting to market changes.