Rural Development, Equine Businesses in Vaggeryd’s Municipality : Empirical Analysis and Outlook

Abstract: Vaggeryd is a rural municipality and wants to develop its rural areas. Therefore Vaggeryd’s municipality wants to become a cluster region within the equus industries and hence become an equine municipality where equestrians can live and run their businesses as well as providing for equine activities and competitions. The reason why it is interesting to create a cluster region is because it comes with benefits for the companies and it helps developing the regional economy (Enright, 1998; Porter, 2000). “Clusters lower barriers to new business formation that improve the environment for productivity.” (Porter, 1998a). One investment made in 2005 in the direction of becoming an equine municipality was the start up of an Advanced Vocational Education [KY] in the region, named Horse Entrepreneur. All 23 students in this programme, year 2005 and 2006, were interviewed and it turned out that all of them wanted to start up own businesses within 10 years, but only three planned to establish their companies in Vaggeryd. Most of the students planned to move back to their home municipality. Eight students in total could, however imagine themselves establishing in Vaggeryd. The students thought that this kind of education is very important for equestrians who want to start up businesses. The students believed that Vaggeryd’s municipality will become a good and functional equine municipality and referred to the highway E4 (which runs through the municipality), the race track and the veterinary clinic. More farms with large lands are what the students think the municipality council should invest in to attract equine companies as well as to become an equine friendly municipality. From the cluster analysis a similar result was found. It showed that there is no agglomeration in the four investigated industries over Sweden, namely horse breeding, horse competitions, managing race tracks and gallops courses and riding educational services and horse rents. This means that the places where the entrepreneurs choose to set up their businesses are less important; hence they can likewise set up in Vaggeryd. However a trend was expected. The districts where most of the equine businesses in Sweden take place are rural areas close to populated regions, so called semi-urban areas. There are no cities in Vaggeryd’s municipality only two towns, Vaggeryd and Skillingaryd. The conclusion drawn is that if Vaggeryd wants to become an equine municipality it must invest (Enright, 1998; Malmberg, 2002). For example creating job opportunities, and building farms on areas with large lands. These investments are needed to attract inhabitants and business people to their municipality before the equine companies can flourish. Investments make this type of clusters attractive (Enright, 1998; Malmberg, 2002). The cluster data revealed that there are no equine activities in Vaggeryd’s municipality today; however it has the possibility to become an equine municipality due to suitable condition, for example land plots with lakes and the closeness to highway E4. Vaggeryd should focus on facilitating business activities and providing with updated networks in order for companies to gain from being clustered, according to the cluster theory advocated by von Hippel (1988) and Hakansson (1987). Vaggeryd suits for equine businesses which are trading goods and services with other businesses, hence which are not dependent on a location close to cities, according to Karlsson (2008) in the field of clustering in smaller regions.