The analysis of the cluster trajectory also confirms the strategic and unique role of the executive leadership in ensuring that the other intangi- ble factors emerge and work effectively, and so make the transformation of the region, from a traditional to a more entrepreneurial regime, viable. In fact the executive leadership of the ‘anchor’ entrepreneur is the third intan- gible factor identified in the cluster development process. All the other factors that emerged in the region were decisively influenced by actions and decisions of the ‘anchor’ entrepreneur in his role as the executive leader.
Thus he emerges as a role model to be followed by potential entrepreneurs (Intangible 2), making an important contribution for the industrial district to change into a focal point capable of producing novel ideas (Intangible 1), playing a decisive role in the decision to create the Furniture Makers Association and the Furniture Trade Show (Intangibles 3, 5 and 6).
But the analysis of the Arapongas Furniture Makers cluster also shows that although the figure of the executive leadership is strategic and essen- tial, at least in the initial stages of the regional transforming process, the individual’s role can be gradually institutionalized, that is, assumed by institutions collectively created in order to ensure that the trajectory and the process can be sustained autonomously once the proper cultural, social and institutional environments are created. In the end this would be the final evidence of the positive transformation that took place in the region, that is, the continuity of the modernization process is no longer dependent of one individual, but relies on local models and institutions that support entrepreneurship.
The dynamic depicted and discussed in the previous paragraphs allows us to conjecture that, although the model proposed by Venkataraman (2004) links regional transformation to technical entrepreneurship, trans- formation could also take place as a consequence of traditional entrepre- neurship, that is, entrepreneurship in mature industries. Moreover the case depicted here illustrates that the transformation process can be more effective if the local institutions create the conditions for the emergence of the intangible factors defined by Venkataraman (2004), which in turn strengthen the local institutions, creating a new kind of virtuous circle:
one that enables the region to positively transform itself instead of keeping it trapped in traditional models that perpetuate social and eco- nomic backwardness.
neurship on regional economic growth, but no emphasis, or attention at all, is given to the individual entrepreneur, their firms and strategies. The entre- preneur is a ‘given’ or taken for granted. In the management stream of entre- preneurship literature the central subject is the individual entrepreneur, the process of venture creation, the entrepreneur strategies and firm perfor- mance, but no emphasis, or attention at all, is given to the macro-economic or regional impact of the entrepreneurial action. In this case the economic impact is a ‘given’, a normative assumption or is taken for granted.
The present study aimed to make an exploratory research to bring these two approaches together. We did this by studying the factors that led to the emergence and development of a furniture manufacturing cluster in the city of Arapongas, a medium sized city located in the countryside in the southern region of Brazil. With this purpose we studied simultaneously the trajectory, strategies and outcomes of one particular entrepreneur, and linked this trajectory to the cultural, social and economic transformation that the actions of this entrepreneur, and others that followed him, brought to the region. This particular entrepreneur, defined as the ‘anchor’ entre- preneur, was identified as the executive leadership whose innovative and proactive actions led to a path for other entrepreneurs, enabling the emer- gence and development of the cluster studied.
Through the actions of these entrepreneurs, or more simply through entrepreneurship, the city of Arapongas changed in the time span of three decades, from a stagnant agricultural economic based city, to one of the most industrialized cities in the state of Paraná, with a per capita industrial value added more than 50 per cent higher than in the main cities of the state and comparable to some of the most industrialized cities of the country.
Starting with only a handful of small furniture companies, including the
‘anchor’firm surveyed in this study, the city witnessed the emergence of an internationally competitive cluster of furniture manufacturers with more than 150 local and all family companies, generating annual gross revenues of more than US$ 800 million, from which more than US$ 40 million come from exports. The cluster generates more than 8000 direct jobs and 25 000 indirect jobs, allowing the city of Arapongas to have the lowest unemploy- ment rate in the state of Paraná.
It is important to highlight that this transformation had a spontaneous component reflected by the decision of individual entrepreneurs to start their business by investing their money, accepting risk and so on. But it also had purposive components. This purposive component was expressed,first, by the local governmental policy which aimed at stimulating the industrial activity in the city back in the late 1960s. The second purposive component was the strategies of the entrepreneurs of the cluster that, since the
beginning, resulted in collective and cooperative action by creating an asso- ciation to promote training for workers and coordination of business and political collective actions. In a second phase, the Association of Furniture Manufacturers built a pavilion for furniture and equipment fairs, strength- ening and disseminating the image and the brand of the local manufactur- ers, thus contributing to the consolidation and development of the cluster and, consequently, for the region as a whole.
We hope that beyond making a contribution tofill the gap in the entrepre- neurship literature the present study makes other significant contributions. In the researchfield we illustrated the practical applicability of some novel and recent theories, like the effectuation theory proposed by Sarasvathy (2001), and the model proposed by Venkataraman (2004), who defines a set of intan- gible factors to foster regional transformation through entrepreneurship. We concluded that the analytical framework suggested in these two approaches seemed to be adequate for explaining the dynamics of the ‘anchor’ entrepre- neur and cluster trajectories, and the relationship between them.
Most importantly, our study can bring important implications for policy making aimed at fostering entrepreneurship. We examined a case in which the actions of private entrepreneurs were able to radically transform and develop a region, increasing its income, reducing economic uncertainty, generating jobs and reducing inequality. All these outcomes are a high pri- ority in developing countries that usually face a cruel combination of a drout of economic opportunities with high unemployment and social inequality. The promise of entrepreneurship could be really brilliant, as a tool for facing the severe problems of developing countries. One important lesson of the case studied and presented here is that although the presence of the government was of little importance during the development of the cluster, it was essential in the beginning by the decision of City Hall to donate land to the entrepreneurs and offering tax exemption. The policy makers should unleash local entrepreneurial forces and provide the appro- priate support for the initial steps of the process. The evidence presented here leaves no room for doubt. When the entrepreneur starts to walk with their own feet they will walk all the way, with no additional help necessary.
We also analysed a case with no significant specificities. The industry of the cluster is a mature industrial sector, which utilizes a medium technol- ogy level, with no significant barriers to access. We are sure that in Brazil, or in many other developing countries, it wouldn’t be difficult to identify other industries with similar characteristics, like shoe manufacturing, wearing apparel, food, food processing and many others, in which it is pos- sible to identify a cluster with a similar history or, what is more promising, the existence of conditions that could lead a small and unknown group of entrepreneurs and could replicate the experience of Arapongas in other
makers) could be to find the local entrepreneur. With modest and proper support at the beginning of their ventures they can create new histories of success, like the one described here.
Although Venkataraman (2004) shows some concerns about the risk that non-technological entrepreneurship could inherit and the deficiencies of what he calls ‘weak entrepreneurial force’, and fail to promote a sustainable transformation process in the regions, we suggest that this process could be accomplished in two stages. In the first stage, the one depicted in our case study, the entrepreneurship in mature industrial sectors would be sufficient to move the region from a traditional and inefficient economic base to an industrial and a nationally, and eventually globally, integrated one, and in this process create the conditions for the intangible factors to emerge. In a second stage the industries in the region’s cluster would have their techno- logical content improved and complemented by other more technological based industries. This process is already taking place in the Brazilian fur- niture cluster studied here. Linked with the furniture industries, other industries are being attracted or locally developed, such as equipment, logistics and, more recently, design.
Finally, we are aware of the limitations imposed by the methodology used in this research, especially in terms of generalization. Since we choose to study a case of a traditional industry that can be found in many other regions in Brazil, or in many other countries, it would be necessary to repli- cate similar studies in order to the check the stability, reliability and gener- alization of the conclusions reported here. We challenge our colleagues interested in the field of entrepreneurship to do so.