Food entrepreneurship and self-employment in an island context

Abstract

Purpose

The aim is to advance the conceptualisation of island entrepreneurship by investigating how the island context, for example, industry characteristics, social context and formal and informal institutions, influences the development of artisan food businesses in that context.

Design/methodology/approach

An applied, qualitative and participatory research approach was implemented. Data were collected during a business development process focusing on food artisans in the Åland Islands. In total, 19 business owners participated in the process. Key informants and public officers were interviewed, and the literature was reviewed. Interviews were analysed using phenomenography to identify representative categories, and the literature was analysed using content analysis.

Findings

Island characteristics and context, local institutions, the quality of social capital and gendered institutions influence business activities positively and negatively. Island entrepreneurship entails mobilising agencies to find innovative solutions that enable businesses to overcome obstacles. Most previous research treats business activities as entrepreneurship; however, as self-employment is essential in the island context, it should be highlighted in future studies.

Research limitations/implications

This study illustrates how the island context influences the business development of small firms. Results indicate that local policies (1) benefitting female entrepreneurs, (2) supporting local businesses and (3) promoting locally produced artisan food could generate benefits for the entire artisan food businesses.

Practical implications

Local policies that (1) benefit female entrepreneurs, (2) support local businesses and (3) promote locally produced artisan food have the potential to generate benefits for the entire trade. Policies can benefit from an understanding of the role played by different ecosystem actors. Promoting self-employment can generate benefits for the local entrepreneurial ecosystem by providing agglomeration and helping to solve some challenges caused by the characteristics of islands.

Originality/value

Empirically, this research enhances the knowledge of post-productive responses in the island context. Theoretically, the study advances the conceptualisation of research on the island entrepreneurship context and the local food debate.

Citation

Rytkönen, P.I., Oghazi, P. and Mostaghel, R. (2023), "Food entrepreneurship and self-employment in an island context", British Food Journal, Vol. 125 No. 13, pp. 237-252. https://doi.org/10.1108/BFJ-06-2022-0537

1. Introduction

This study advances the conceptualisation of island entrepreneurship in the artisan food business by emphasising various dimensions of the entrepreneurship context, examining how they influence the development of new businesses and the challenges and opportunities entrepreneurs face in creating economic value on islands. A call for the study of a “variety of contexts” is answered (Welter and Baker, 2021) to deepen our understanding of the varieties of entrepreneurship (Audretsch et al., 2021). Island entrepreneurship has been defined as the creation of value or generation of income through innovative activities occurring in peripheral spaces characterised by a lack of economic agglomeration, limited labour markets and scarce resources (Baldacchino, 2015; Rytkönen et al., 2019). New research argues that islanders could potentially mobilise agency and influence their reality by centring their perspectives on strategic decisions (Booth et al., 2020; Gaini and Priested Nielsen, 2021). Businesses on islands are always considered entrepreneurship, although this label often contradicts dominant definitions of entrepreneurship as seizing economic opportunities through exploiting path-breaking, new combinations of available resources (Sarasvathy et al., 2010). Here, we differentiate between entrepreneurship and self-employment (e.g. conducting an economic activity to generate income) (Bögenhold and Klingmair, 2015).

The purpose of this study is to conceptualise island entrepreneurship by investigating how the island context, for example, industry characteristics, social context and institutional context (i.e. formal and informal institutions, including gender) (Welter and Baker, 2021), influences economic activities in the artisan food trade on the Åland Islands. Furthermore, the study delineates what island entrepreneurship is and is not by differentiating between entrepreneurship and self-employment.

Following this introduction, section two highlights the debates on entrepreneurship in the island context and local food; it outlines theories of institutions, social capital and gender. Section three describes the research design and methods. Section four presents the sample and a thematic account of the results, linked to concepts highlighted in section two. The section is summarised, problematising island entrepreneurship and self-employment. Section 5 comprises a discussion and conclusions.

2. Literature review

Some twenty years ago, local food became a major trend in Europe, partly in response to far-reaching productivism in agriculture and the globalisation of the food industry. Some of the main driving forces behind the local food trend are responses to the environmental impact of global food chains; consumer alienation from the places where food is produced; and negative market pressure that challenges the possibility of small-scale agriculture and small-scale food processors surviving in their local markets (Enthoven and Van den Broeck, 2021). This trend also included the emergence of new food preferences in the wake of food scares, increasing demand for more sustainable food production (Forssell and Lankoski, 2015), food nostalgia and consumer desire to come closer to where food is produced (Lever et al., 2019). Food quality was redefined by consumers, who started demanding “food with a farmer's face” (Papaoikonomou and Ginieis, 2017, p. 53) and food with a history and traceable origin (Kneafsey et al., 2017; Sanz Cañada and Muchnik, 2016). This trend was reinforced by policymakers who developed new policies to support rural development based on local and localised food (Feldmann and Hamm, 2015; Şahin and Yılmaz, 2022). New governance models emerged, through which farmers and food producers aimed to regain their bargaining power and improve firm survival by acting in local markets, short food chains and community-supported agriculture (Lever et al., 2019). Moreover, this trend has stressed the central role of innovation, innovative behaviour and entrepreneurship among local food producers (Rytkönen and Oghazi, 2021).

The local food trend emerged and spread later in the Nordic countries than in the rest of Europe. It was only after the EU decoupling reform in 2003 that the potential of local food to support local development slowly became noticed by Nordic policymakers. Initiatives such as “New Nordic Food” became forerunners in that development. Since then, exploiting local food in new ways has become important for Finnish farmers' livelihoods and diversification strategies and to cope with market challenges faced by farmers and local food producers (Ljunggren et al., 2010). In Finland, most early post-productivist initiatives focused on public catering, and local food was often understood as “Finnish food” (Lehtinen, 2011). Expressions of the local food trend have become more varied in the last decade, although islands have been overlooked in this debate (Feldmann and Hamm, 2015; Şahin and Yılmaz, 2022).

The Åland Islands (hereafter, Åland) are a self-governing Finnish archipelago with its representation in the Nordic Council and governance over its EU programmes (ESPON, 2013). Åland comprises a large main island, Fasta Åland, where the capital Mariehamn is located, and 6,756 surrounding minor islands. In 2020 the number of Åland residents totalled 30,129, of whom 40% resided in Mariehamn, with the rest being spread over the outlying islands (ÅSUB, 2021). Åland has 12 municipalities, seven located on the central island and five composed of small islands. The local economy is characterised as a service economy, in which the shipping industry has historically played a key role (Fellman et al., 2015). A tax-financed public sector implements the principles of the Finnish welfare state (Teräs et al., 2019; ÅSUB, 2021).

2.1 Island entrepreneurship and island contexts

The academic debate on entrepreneurship has several streams. One influential debate argues that entrepreneurship is linked to innovation and the development of unique combinations of resources whose market introduction involves business decisions and risk-taking under genuine uncertainty (Davidsson, 2015; Sarasvathy et al., 2010). In contrast, island entrepreneurship is often defined as doing business under the influence of “limited land, finite resources, narrow client bases, small local markets, high transport costs, and physical isolation” (Baldacchino and Fairbairn, 2006, p. 331; see also Fellman et al., 2015). Island entrepreneurship is driven by communal values, social obligations and a collectivist culture rather than economic profits (Wennecke et al., 2019).

Start-ups on islands are often prompted by limited employment opportunities (Yu and Artz, 2019). They can also be opportunity driven when the primary goal of the business is to seize opportunities previously realised by innovators, when there is unsatisfied demand (Rytkönen and Oghazi, 2021), through developing new business models (Bogers and Jensen, 2017; Dressler and Paunović, 2020), and when businesses manage to balance the exploitation of available resources against the exploration of new ones (Vrontis et al., 2019). Motivational factors behind self-employment include the business owner's search for freedom or lifestyle choices. Self-employment is also related to professions where employment is rare, such as lawyers and artisans (Bögenhold and Klingmair, 2015). Self-employment is the dominant type of business among food artisans (Rytkönen and Oghazi, 2021). On islands, start-ups are primarily driven by limited labour markets (Burnett and Danson, 2017).

2.2 Islands as a business context

The study of entrepreneurship context starts from the situational and temporal boundaries and opportunities for entrepreneurship – theoretically and methodologically (Rytkönen et al., 2019). Entrepreneurship context is conceptualised by considering: (1) the competitive and structural characteristics and nature of the studied industry; (2) the spatial–geographical context and its consequences for entrepreneurship; (3) the social context, including the structure of business networks, quality of social capital and power relations; and (4) formal institutions, legislative systems and regulations and informal institutional values and societal norms (Welter, 2011).

Islands constitute a specific type of business context, frequently described in terms of their remote location and often peripheral status, the characteristics of island culture and geography. This context influences, limits and conditions life on islands. Islands are characterised by small markets and limited access to human, financial and physical capital (Baldacchino, 2015). The socio–economic, cultural and political distance from where decisions are made about everyday island life can be great, so previous research has emphasised the peripheral nature of island contexts. Authorities, social services and key businesses at the national, regional, or local, island levels make decisions affecting island societies and businesses. Sometimes these decisions are made with a focus on the mainland, thereby treating islands as peripheral entities. However, other decisions are made at the island level, with the island perspective in focus. Islanders can and often exercise power over their reality through local actions and decisions. Thus, island societies and businesses act within a polycentric reality (Gaini and Priested Nielsen, 2021).

2.3 Institutions, social capital and businesses in island contexts

Island entrepreneurs can develop a strong local identity and culture, promote social capital through networks that bring businesses together and enable entrepreneurs to overcome obstacles created by the island context (Burnett and Danson, 2017). In comparisons of islands where available resources, location and infrastructure are similar, the quality of social capital, cultural values, norms and institutions are crucial for the success or failure of island businesses (Booth et al., 2020; Rytkönen et al., 2019).

The essential role played by formal and informal institutions, as factors that enable or constrain entrepreneurship and economic development, has been well studied in previous research. In particular, the role played by formal institutions has been at the centre of entrepreneurship research for decades. However, it is important to understand how formal and informal institutions influence the local economy in the island context. Informal institutions are the values, norms and unwritten rules that govern human behaviour, for example, conventions, ethical rules and traditions, which are characterised by self-enforcement and informal societal sanctioning (Voigt, 2018). A key characteristic of informal institutions is that they are communicated through social and human interaction and therefore tend to be path-dependent and difficult to change (Acemoglu et al., 2020). Informal institutions influence the presence or absence of social capital and the quality of entrepreneurial activities (Lajqi and Krasniqi, 2017). Previous research has stressed that informal institutions and social capital play a key role in influencing island development and entrepreneurship (Baldacchino, 2015; Wennecke et al., 2019).

Social capital in the island context is often defined as the resourcefulness of a community to respond positively and responsibly to an identified challenge, regardless of the challenge (Groome Wynne, 2007). Social capital is conceptualised as the beneficial outcomes of social relations. Social capital encompasses reciprocity, shared norms and values and the existence of trust in society. It is a type of capital generated by the rational actions of individuals and communities that produce public goods and creates value for society (Lajqi and Krasniqi, 2017; Voigt, 2018). Social capital emerges as the result of people's interaction. It can be understood as the “glue” that binds people together and the social “lubricant” that helps communities develop (Rytkönen et al., 2019). Bonding social capital promotes local development and bridging social capital creates linkages between individuals, groups and networks across social, economic and cultural boundaries (Martikke, 2017).

2.4 Gender and businesses in island contexts

Gender issues are governed by formal and informal institutions (Ilie et al., 2021). Gender is a key organisational principle in society, so any study of island entrepreneurship is incomplete without considering it. Focusing on gender when studying island entrepreneurship improves our understanding of how power, culture and other forces shape local development and island entrepreneurship (Gaini and Priested Nielsen, 2021; Karides, 2017).

The study of entrepreneurship and gender emerged at the intersection of gender studies, feminist studies and business studies (Ahl et al., 2016). While gender is central to studying societies, entrepreneurship is central to studying economic development, growth and labour. Research on gender and entrepreneurship illustrates how businesses are influenced by formal and informal institutions that sustain or weaken women's and men's economic spaces, conditioning power relations, resource distribution and the gendered division of labour (Ahl et al., 2016). Key concepts in the study of gender and entrepreneurship are socially constructed orders, representations and practices associated with femininity and masculinity (Birkner, 2019). Women's business activities have historically been rendered invisible by society; women's businesses have often been accused of being in the wrong trades, too small, insufficiently innovative, or simply different from firms owned by men (Ahl, 2006; Ahl et al., 2016).

As men's businesses are considered the norm, women's businesses have been perceived as inferior (Ahl, 2006; Ahl et al., 2016). Gender norms are characterised by complex societal patterns that vary over time and are embedded in spatial aspects. This also applies to the study of island entrepreneurship. Karides (2017) argued that gendered arrangements and institutions characterise social and economic life on islands. Place plays an important role in the design of local gendered institutions on islands. Gendered institutions are constituted by culture and norms created, acknowledged and reproduced by local communities. A focus on gender can shed light on women's and men's economic spaces and entrepreneurship on islands (Gaini and Priested Nielsen, 2021). In agriculture, women's entrepreneurship is seen as an “emancipatory act of empowerment” (De Rosa et al., 2021, p. 319) a perspective also highly relevant to the study of food artisans.

Departing from Welter and Baker (2021), this study centres the entrepreneurial context on islands by considering how institutions (including gender), sectoral features and social aspects influence business development. Furthermore, entrepreneurship is differentiated from self-employment.

3. Methodology

3.1 Research design

A qualitative, participatory research approach was applied. Participatory research implements research schemes and frameworks through which scholars and sampled informants collaborate in generating knowledge (Vaughn and Jacquez, 2020). This study is based on an applied business development project that offered counselling and support to food artisans in Åland. Researchers provided the framework supporting the business development process, while the informants decided what challenges and opportunities the project should address.

Data were collected during a business development programme (BDP) designed to address sensory evaluation and food quality, valorisation based on place-based resources, strategic local alliances, understanding and developing businesses' value propositions and profitability and liquidity. The theoretical foundations of the BDP protocol were based on state-of-the-art methods for addressing business development, departing from service design thinking (Osterwalder and Pigneur, 2013). The project implemented practices to promote valorisation and capitalisation using the values embedded in artisan food quality, i.e. local and localised resources embedded in local, territorial, historical and cultural aspects, and how these are reflected in the quality of food (Rytkönen and Oghazi, 2021).

The BDP started in 2018 and implemented new business models between 2019 and 2021. Participants signed up with a written statement of their business challenges, strengths and goals. The BDP included individual counselling, workshops (focusing on sensory quality, marketing and tourism), participatory observations and practical evaluation exercises. All BDP activities were documented, and a project diary was kept throughout the process, including notes and short reflections on all activities and outcomes. Results were triangulated using expert interviews and public documents.

Data were collected through:

1. A review of literature relevant to general challenges facing the food sector and agriculture in Åland;

2. Registration forms in which the food artisans who signed up for the BDP described their businesses and business goals and gave the scholars informed consent; this was followed by in-depth interviews with all participants and follow-up interviews during the BDP;

3. Workshops addressing issues that required collective solutions and action as well as group activities concerning sensory training and food quality, development of food tourism, and establishing collaboration with strategically essential partners;

4. Individual counselling during the BDP; and

5. Semi-structured interviews with key stakeholders: the chair of the Åland Food Artisan Association (AFAA), with two rural development officers (one in 2018 and one in 2019); the CEO of the Rural Societies Association; the director of two business consultants from the Åland Business Association; marketing managers at Viking Line, Tallink Silja and Eckerölinjen (ferry companies); and the chair of the Åland Tourist Guide Association.

The informants conducted their business activities on the main island, except for one informant who ran part of her business on the small island of Kökar. The data comprise over 50 interviews and 11 follow-up interviews conducted in 2022. During the BDP, counselling activities and workshops were documented.

3.2 Data analysis

Data were analysed and categorised following phenomenography (Feldon and Tofel-Grehl, 2022), a method used to identify and highlight commonality and variation in informants' interpretations and perceptions relative to a dominant view, here, definitions of island entrepreneurship and island self-employment. Phenomenography helped find analytical categories by compressing and contrasting business owners' competing interpretations and perceptions. Documents were analysed using content analysis (Banks et al., 2018).

Results were organised according to the theoretical concepts proposed by entrepreneurship context research, characteristics of the artisan food trade, geospatial context, social and cultural dimensions and formal and informal institutional frames relevant to the study (Welter and Baker, 2021).

4. Results

4.1 The artisan food business and market issues

Food artisans emerged as a business category in recent years, and several driving forces underlie this development. The tourism industry on Åland generates an average of EUR 330 million annually (ÅSUB, 2019). In recent decades, the role of food has shifted from being part of the tourism experience to being an important driver of it (Ellis et al., 2018), creating an opportunity to promote artisan food businesses on Åland (Kinnunen, 2018).

Another driving force concerns a rapid decline in local farms amid increasing market challenges. One response of farmers has been to diversify farm produce to increase income (ÅSUB and Nordregio, 2018). Some informants were negatively affected by the economic decline of the dairy market following the Russian blockade of European Union(EU) products in response to EU sanctions following the 2014 annexation of Crimea (I2–I11). Others had been affected by deteriorating market conditions and falling prices for potatoes, onions and fruit (SLC, 2016; I10) and a long-term fall in the export prices of apples, berries and vegetables (I5–6, I10–11, I15).

The local food trend had its breakthrough later in Åland than in mainland Finland. “Put Åland on the Plate” was the first large and coordinated local food initiative taken by Åland's authorities and NGOs in 2015. It aimed to help farmers cope with the dairy sector crisis triggered by the Russian boycott of European food. One spin-off of this initiative was the establishment of the Åland Food Artisan Association (AFAA) in 2017 (I3). AFAA founders participated in an artisan food course offered by Coastal Food, a project promoting artisan food production (Kustens Mat, 2018). Artisan food is produced on a small scale, and its quality results from local produce processed without preservatives or industrial additives using gentle non-industrial methods (Bell, 2013).

As Table 1 shows, business owners have various motivations. Some seized the opportunity created by the growing demand for locally produced artisan food to improve their current (agricultural) income or earn a living. Five informants have taken over a farm, and an eighth run a business for lifestyle reasons. A few followed the footsteps of older generations, and six declared that they were responding to deteriorating market conditions.

The growing number of food artisans created an opportunity to become organised, resulting in the establishment of AFAA to speak for the artisan food business and to generate positive effects by organising local food markets and shared marketing activities (Interview, AFAA Chair, 2018). Following the long-term decline in agricultural prices and the imminent risk of losing employment opportunities in mainland Finland, the local government has supported food artisans through training and other measures to facilitate their establishment and development (Interview, Rural Development Officer, 2019; ÅSUB and Nordregio, 2018).

4.1.1 Limited markets

The informants' strategies and the financial stress they described illustrated the effects of limited markets. One informant was the first on the island to sell subscriptions for weekly deliveries of organic grocery packages to customer homes. However, once local grocery stores realised that their business represented a new market opportunity, it was crowded out of the market through a price war (I1).

All informants stated that the local market was limited. Those who exported agricultural products (e.g. apples, potatoes, fruits, vegetables and meat) via wholesalers to mainland Finland felt the pressure of long-term declining accurate prices. Developing a healthy cash flow was a priority. Many informants developed strategies to take advantage of tourists and holiday homeowners in the summer. These strategies included diversification by selling processed food products, organising summer markets and developing tourism services. Some informants complemented artisan food production with paid employment, or by adding new activities to their businesses, for example, courses, consultancy services, making hand-crafted jewellery and selling delicacy boxes.

4.1.2 Unfair competition and lack of knowledge of local food

The most important annual selling event is the harvest festival held in September, visited by over 16,000 people in 2018. Some informants earned half of their total income during the event. The festival is also used in marketing shipping companies (Eckerölinjen, Finnlines, Tallink Silja and Viking Line) to Finnish and Swedish passengers. The ferry lines collaborate with local bus companies and Ålandsguiderna (Åland Tourist Guide Association). The informants saw Ålandsguiderna and the large shipping companies as a significant problem:

They come just to look at us. (I17)

Their tourists crowd out others who come to buy from us. The buses obstruct the parking lot …, but the tourists are never given time to shop. They could be an asset to us but are a problem instead! The guides want people to hurry up … get back to the ferry … and eat there instead. (I14)

Ferry lines and the Åland Tourist Guide Association benefit from activities organised by artisan food producers (AFPs), while earning opportunities for AFPs are obstructed. In May 2019, a workshop was organised to establish a dialogue between AFPs, ferry lines and the Åland Tourist Guide Association. The AFPs presented their views, demanding that shipping companies pre-book their visits and give the tourists time to shop. Nothing has changed since then, so the informants have sought new organising methods to avoid exploitation. The ferry lines lacked knowledge of the existence of AFPs but realised that local food initiatives were attractive to tourists.

The informants said that selling to local restaurants, stores and hotels was difficult because they preferred importing high-quality food. When informant 15 tried to sell apple juice for a hotel's breakfast service, the manager informed her that customers were not interested in local food. The hotel was, however, willing to help them by setting up a local food display cabinet in a corner by the reception. The informant reflected that “they want to take advantage by showing a connection to local food, but they do not want to pay for it” (I15).

Informant 14 sold pig's cheeks to a restaurant in Mariehamn. The chef wanted a discount to test local producers' demand for premium products. The informant decided to accept the price, to seize an opportunity to get a new client. As part of the BDP, the research team and the informant ate at the restaurant to follow up on how the product was cooked and presented. The waiter described the cheeks as “Pata negra pig cheeks of the highest quality imported from Spain”. Several other informants had similar stories. They claimed that the tourism industry, local stores and restaurants did not value locally produced food but had “a narrow-minded and provincial view of local producers” (I3, I15).

4.2 Social capital and collective action

The new business models are linked to a mixture of postmodern environmental ideas, such as animal welfare and climate change, by promoting slow travel and “staycations” (De Bloom et al., 2017; Derrien and Cerveny, 2019; Enthoven and Van den Broeck, 2021) to Finnish and Swedish tourists. The idea of promoting artisan food by linking products to the people and sometimes the animals behind the products were promoted by Åland's Rural Development Officer, who cited Swedish examples.

Some informants promoted health and natural values by developing courses about edible wild plants, their culinary uses and health benefits and fermentation and the health benefits of fermented products. Others developed products based on wild Sea Buckthorn, a symbol of Åland's natural environment with documented health benefits, or created dishes using organic produce. Some promoted ethical meat production by breeding pigs and raising old milk cows retired from dairy farms in ways that promote the animals' natural behaviour (I14). Moreover, single-cow products (e.g. ice cream, cheese and yoghurt) promoting the cow's identity and well-being were used in marketing (I17).

Informants offered various attractions for tourists: short trips around the island visiting several businesses, including a pick-up service from the hotel, lunch and refreshments; pig safaris for families (ride in a horse-drawn carriage into the pasture where the pigs roam), followed by information about pigs and their natural behaviour, and finally organic refreshments; a pop-up café on the market day on Kökar Island, after which the informant established a permanent summer café in the informant's parents' home.

Establishing a link between producers and consumers is promoted through farmer's markets and “Reko circles”, i.e. pop-up sales held by producer–consumer agreements through Facebook in Mariehamn and strategic nodes around Åland. A few informants opened farm sales points, which were sometimes unattended: consumers make electronic payments or leave cash in a basket, making reciprocal trust a key component.

Collaboration was crucial for informants who wanted to transform their businesses into destinations (I2, I6, I11, I14, I16, I18, I19), and informants with similar products collaborated to improve product quality. Collaboration was essential for female solo entrepreneurs. AFPs whose operations were far from the main roads collaborated with local associations and rural firms with different orientations to become more attractive to tourists by increasing and diversifying their product range (I2, I14, I16). One partnership comprised an AFP producing grains and running a mill, a combined café and flea market and an association running a rural historical museum (I11, I16). The partners established Lumparlandsrundan, a joint marketing initiative to attract tourists by featuring diverse destinations with standard opening hours (I11, I16). This is in line with Ellis and Bosworth (2015), who argued that entrepreneurs seldom succeed in isolation. Informants also highlighted the role of trust as the “glue” that strengthens local collaboration and collective action (I11, I15, I16, I18, I19). Previous research emphasises the role of trust as a mediator between producers and consumers (Gianpietri et al., 2018). This study shows that trust is equally important between producers as a facilitator of collective action.

Most new business models were to be concretised between June 2019 and September 2020, so the business development process was followed up during the pandemic. Some long-term effects remain to be seen. All informants' businesses have exceeded their economic expectations. Local inhabitants now value locally produced food more than before, because the pandemic visualised the food system's vulnerability. Furthermore, Finnish tourists vacationed in Finland instead of going abroad, and all informants received an overwhelming number of customers. Åland celebrated its centennial as an independent region in June 2022, for which local authorities invested in an extensive marketing campaign to publicise the celebration.

4.3 Institutions

4.3.1 Formal institutions

Artisan food businesses have become widespread in other European countries, especially since the EU's decoupling reform put rural development at the centre of the Common Agricultural Policy (Morris et al., 2017). It took ten years before Åland's authorities implemented this reform due to the cultural and economic distance between Åland and various levels of government (Interview, Rural Development Officer, 2018).

One crucial institution is hembygdsrätten (local residents' rights), which regulates the right to own land and fixed assets and to run businesses in Åland (Ålands Landskapsregering, 2022). Hembygdsrätten has prevented Åland from becoming just a summer paradise for second-home owners from the mainland, which works in favour of AFPs. However, restrictions imposed by hembygdsrätten mean that while property prices are low, available land is limited—the latter risks hampering new businesses that need access to land (I1, I14). Furthermore, Åland has tax-free status, which has led to the establishment of several shipping companies and a large gaming company. The tax-free status benefits the development of the tourism industry and helps promote exports of agricultural staples to mainland Finland (Fellman et al., 2015; ÅSUB, 2021).

4.3.2 Informal institutions

Informants claimed that a “derogatory view of the value that local ventures and local products can contribute” (I1) is typical of Åland. Some described this as “provincial thinking” and an “old-fashioned way of acting” (I15). Some used the Swedish concept Jante-lag (law of Jante) (I1–2, I5, I10, I14–17), a code of conduct indicating that it is inappropriate to stand out or do things that are out of the ordinary. One informant claimed that she was “socially flattened by Jantelagen” (I2) when describing the health benefits of fermented products. Jantelagen affects women's businesses more than men's or couples' businesses. Gender arrangements are intersectional, because running a local business based on local resources while being a woman entrepreneur represented a double disadvantage for several informants (I1–4, I10, I13–14, I17).

4.3.3 Gender, business teams and solo entrepreneurs

One challenge facing island-based businesses is “securing outside capital for starting or carrying on a business” (Baldacchino and Fairbairn, 2006). Gender aspects are evident in this regard. Seven businesses were run by women and established because of a lack of employment and lifestyle motives. A few of these entrepreneurs were economically dependent on their spouses' farms to conduct their businesses, and two said that their husbands were reluctant to support their businesses, which was problematic since these farms (and production places) were owned by the husbands (I10, I16). Business development consultants working for the Ålandic government argued that “the existence of a farm creates the conditions for artisan food businesses to become real companies”. Nonetheless, lenders demand that a farmer have a wife with permanent employment outside the farm to reduce the lenders' financial risk. Thus, while a female AFP depends on her spouse's farm (and farm finances), the farm owner also depends on his wife's employment to secure access to capital.

Female informants tended to continue working in paid jobs after establishing their businesses. They run their businesses full-time but still work in paid jobs (I1–4, I10, I14), independent of whether they are solo entrepreneurs or members of business teams. A key reason for this is to reduce financial risks, either because they are sole breadwinners or because it is a way to capitalise the business; a third reason is a fear of becoming dependent on or being denied subsidies or loans (I1–6, I10–16).

Business teams comprising two spouses are considered assets when banks or authorities evaluate loan or subsidy applications (I4–6, I11–19). Three informants were solo entrepreneurs who lacked access to farms. They were denied subsidies from local authorities with the following arguments: “a small business like yours cannot generate any profit”; “nobody will take the risk of supporting a small business run by a woman”; and “please come back when you have the collateral of real estate as security”. These arguments were presented without even looking at the business plans or considering the informants' previous history of business success, even though they were entitled to a subsidy.

Gendered institutions make it difficult for women to access capital. They also depend more on farmers' markets and local food festivals to sell their products. Female informants were, therefore, more involved in organising such activities without payment, because a market needs to offer a wide variety of products to attract customers.

Results corroborate theories arguing that institutional and societal business structures are constructed with men as the norm and women's businesses as a deviation (Ahl, 2006; Ahl et al., 2016). Women's businesses opportunities are limited. This hampers local development and discourages new economic activities. Gendered institutions work against business development in Åland. Furthermore, AFPs are a new phenomenon in comparison with agriculture. AFPs challenge path-dependent structures and ideas of what is accepted as “real food production”. AFPs on Åland are affected by traditional value systems typical of islands (Baldacchino and Fairbairn, 2006); in this case, they feel undervalued by the society in which they operate.

4.3.4 Entrepreneurship and self-employment

Table 2 (below) differentiates island entrepreneurship from self-employment. While entrepreneurship is characterised by establishing new economic activities, driven by market opportunities and implementing new business models, many firms are driven by a desire for self-employment. For example, owners may run their artisan food businesses to realise lifestyle choices, respond to limited employment opportunities, or diversify their farm activities.

5. Discussion and conclusions

This study aimed to conceptualise island entrepreneurship by analysing how context influences business development and differentiating island entrepreneurship from self-employment. Previous research often denominates all business activities on islands as entrepreneurship. However, the main reasons for them instead relate to self-employment, so it is essential to include self-employment in the study of island businesses. Results indicate that the limitations of islands identified in previous research impose challenges on entrepreneurs and the self-employed on islands. However, these challenges can be counteracted by entrepreneurial responses. Such responses are fuelled by the existence of social capital created in networks that join forces in promoting development. The institutional setting in each island enables social capital in turn. In this case, the residents' rights protect island properties from being sold to outsiders, preventing Åland from becoming depopulated and keeping property prices reasonable. While such an institution limits the local property market, its benefits outweigh its disadvantages.

Informal institutions also play a key role in enabling or constraining local businesses. Informants mentioned a “derogatory view of local businesses and local products” and “provincial thinking”, which created obstacles to business development by valuing foreign resources over domestic ones.

A gender perspective helped reveal how women's businesses, especially those of solo entrepreneurs, were excluded from obtaining capital and rural development subsidies to which they were entitled. Being a team of spouses proved to be a winning way to get official support and access capital through local loans. All businesses were negatively affected by informal, old-fashioned social structures and informal institutions through which other stakeholders undervalue local firms and food artisan businesses. This circumstance created a “double negative” effect for female solo entrepreneurs, as they were considered inferior for being women producing local food.

While gendered institutions limited women's business opportunities, women entrepreneurs could mobilise forces to bridge business gaps. They organised markets and created agglomerations to increase their sales. If their efforts become recognised financially, their actions can likely create additional knock-on effects for the entire artisan food sector.

5.1 Future research and policy implications

Future research could benefit from differentiating between island entrepreneurship and self-employment. This is in line with the necessity to focus on the nature of innovation, to improve our understanding of the diversity of entrepreneurship (Audretsch et al., 2021). Such an orientation would also help us understand the deeper meaning of various business contexts (Welter and Baker, 2021).

The results present many examples of bonding and bridging social capital manifested in group initiatives initiated mainly by women. Future research on island entrepreneurship needs to highlight the links between gender and social capital, perhaps through the enabling or constraining aspects identified by Davidsson et al. (2017), to deeper our insight into entrepreneurial decision processes among women business owners.

Local policies that (1) benefit female entrepreneurs, (2) support local businesses and (3) promote locally produced artisan food have the potential to benefit the entire business. Policies could benefit from understanding the role played by different ecosystem actors. Promoting self-employment could benefit the local entrepreneurial ecosystem by enabling agglomeration and helping address some challenges caused by the characteristics of islands.

Table 1

BDP participants, their businesses, and motivational factors

N.	Business models	Production orientation	Motivations underlying the business
I1	Diversified local market – no farm	Jams, chutneys, vegetables, courses, consultancy services, festive delicacy boxes, markets, café	A, F
I2		Fermented vegetables, courses, B&B, markets	A, F
I3		Food handicrafts, café, markets, courses, project coordination	A, F
I4	Diversified, local market – own farm	Vegetables, jams, and chutneys, eggs, wool yarn	A
I5		Apple orchard, apple juice, jams, chutneys, and berry-based products	C, D
I6		Apple orchard, apple juice, jams, chutneys, honey, and berry-based products	C, D
I7	Specialisation	Dairy cooperative	B
I8		Brewery	D, E
I9		Bakery	D, E
I10		Sea buckthorn products: herbs, jams, juice, and buckthorn flour	A
I11		Grain, grain mill, flour	G, H
I12		Vegetables, plants, honey	G, E
I13		Honey products	A, E
I14	Food processing and tourism	Farming, pig breeding, meat sales, pulled pork burgers at markets, tourism	A, D, E
I15		Apple orchard, apple juice, jam, honey, apple-based products, farm store, tourism	B, C, D
I16		Sea buckthorn products, wooden crafts, fine carpentry, hand-printed textiles, store, tourism	A, B, D, G
I17		Potatoes and onions, dairy products, store, café, tourism	B, C, G, D
I18		Meat, cheese	B, C, D, E
I19		Lamb, slaughterhouse, charcuterie, handcrafted jewellery, store, café, tourism	B, D, E, H

Note(s): A = lifestyle, B = economies of scale, C = generational shift, D = opportunity, E = growing demand, F = necessity (work), G = tradition, H = market pressure

Table 2

Island entrepreneurship (IE) and island self-employment (ISE)

Theoretical concepts	Main categories	Category content
Island entrepreneurship (IE)	Establishing a new economic activity	Innovative behaviour; risk-taking with the limited resources of islands
		Start-ups are related to ISE and farm diversification
		Interacts with and depends on ISE
		Collaboration and social capital are essential for success
	Responding to market threats	Risk management
		Not path breaking; taking advantage of new opportunities
		Ability to use island resources as assets
		Dependent on ISE to achieve agglomeration
	New business models	New products and services inspired by others
		Enabled or constrained by local institutions and gender norms
Island self-employment (ISE)	- Realise lifestyle choices - Respond to limited employment opportunities - Diversify farm income	Benefits from existing opportunities provided by development projects
		Interacts with and contributes to IE, value creation and agglomeration within the sector
		Constrained or enabled by informal institutions and gender norms