**5. Conclusion**

With these cases I do not claim to have exemplified entirely what is actually a far richer and complex reality. Yet, what can we learn through the ethnographic analysis? By taking a close and ethnographic look at the intricacies on the ground in a limited geographic area I have illustrated a kind of entrepreneurship that in general does not tally with popular representations of entrepreneurs' life histories: rich 'self-made men', talented innovators and market leaders. Only a minor fraction of firm owners have the capability to be so stereotypical. The reality of industrial districts is less glossy than what appears at first glance. The subcontractors make up the majority of the entrepreneurs. They seek clientfirms because these provide constant work orders, nonetheless, they fear them because they might become exploitative, and exert control over their work process, generating conflicting interests. Subcontracting networks are three-dimensional systems: they constitute a stratified, hierarchical group of companies and production units in which competition and interdependence mask strong tensions and contradictions, that can only be reduced through the oft said adagio: "working hard". The process of building this kind of reputation (which encompasses the notion of competence, and capability of providing quality products) begins even before the small entrepreneur starts up his/her own business and engages himself/herself in a relationship with a client firm. It begins when he/she is still a worker and acquires the skill that will be used as "symbolic" capital in exchange for economic capital.

In presenting these case studies I have tried to single out and describe further aspects implicated in the passage from wage labour to petty entrepreneurship. Throughout the chapter, the general focus has been on the differences in social, economic, and institutional resources available to former workers now entrepreneurs for dealing with their new social condition. I have shown the importance of interpersonal relationships in setting up their own business, and in creating, reproducing, and sometimes, limiting subcontracting relationships. Where do workers get the initial capital to get started? How do they come to possess their own means of production? With these questions in mind I have described the multifarious forms of financial help and credit that are available in the social system. Public national programs of loans and the credit from local banks constitute the two opposite levels (the central and the local, respectively) of what I have termed the 'institutional credit system'. However important they are, their capacity to grant credit is obviously limited by the inherent risks involved in this operation. To make up for their limitations, other forms of credit and financial assistance emerge out of the agency of artisans and entrepreneurs who are capable of acting upon the constraints of the system. Similar to what I have shown above, these resources are visibly mobilized within a context of unequal power, and may contribute to increase the level of exploitation and of external control on the workshop. Finally, I have turned my attention to the local bank, and I have argued that although it appears to formally guarantee equality of access to credit, in reality, it cannot escape elusive forms of favouritism because of its embeddedness in the complexities of the on-the-ground social and economic relations. There must be a tension in the decision making process within the board of the bank to reconcile calculation and commitment toward local applicants, some of which seem more "deserving" than others. My limited access as an ethnographer to the workings of the local bank system did not allow me to document the manifestations of such tensions, nor the discrepancies within each decisional process. Yet, most informants have confirmed the benefits of building close ties with institutional creditors, because the availability of financing increases.

With these cases I do not claim to have exemplified entirely what is actually a far richer and complex reality. Yet, what can we learn through the ethnographic analysis? By taking a close and ethnographic look at the intricacies on the ground in a limited geographic area I have illustrated a kind of entrepreneurship that in general does not tally with popular representations of entrepreneurs' life histories: rich 'self-made men', talented innovators and market leaders. Only a minor fraction of firm owners have the capability to be so stereotypical. The reality of industrial districts is less glossy than what appears at first glance. The subcontractors make up the majority of the entrepreneurs. They seek clientfirms because these provide constant work orders, nonetheless, they fear them because they might become exploitative, and exert control over their work process, generating conflicting interests. Subcontracting networks are three-dimensional systems: they constitute a stratified, hierarchical group of companies and production units in which competition and interdependence mask strong tensions and contradictions, that can only be reduced through the oft said adagio: "working hard". The process of building this kind of reputation (which encompasses the notion of competence, and capability of providing quality products) begins even before the small entrepreneur starts up his/her own business and engages himself/herself in a relationship with a client firm. It begins when he/she is still a worker and acquires the skill that will be used as "symbolic" capital in exchange for economic capital.

In presenting these case studies I have tried to single out and describe further aspects implicated in the passage from wage labour to petty entrepreneurship. Throughout the chapter, the general focus has been on the differences in social, economic, and institutional resources available to former workers now entrepreneurs for dealing with their new social condition. I have shown the importance of interpersonal relationships in setting up their own business, and in creating, reproducing, and sometimes, limiting subcontracting relationships. Where do workers get the initial capital to get started? How do they come to possess their own means of production? With these questions in mind I have described the multifarious forms of financial help and credit that are available in the social system. Public national programs of loans and the credit from local banks constitute the two opposite levels (the central and the local, respectively) of what I have termed the 'institutional credit system'. However important they are, their capacity to grant credit is obviously limited by the inherent risks involved in this operation. To make up for their limitations, other forms of credit and financial assistance emerge out of the agency of artisans and entrepreneurs who are capable of acting upon the constraints of the system. Similar to what I have shown above, these resources are visibly mobilized within a context of unequal power, and may contribute to increase the level of exploitation and of external control on the workshop. Finally, I have turned my attention to the local bank, and I have argued that although it appears to formally guarantee equality of access to credit, in reality, it cannot escape elusive forms of favouritism because of its embeddedness in the complexities of the on-the-ground social and economic relations. There must be a tension in the decision making process within the board of the bank to reconcile calculation and commitment toward local applicants, some of which seem more "deserving" than others. My limited access as an ethnographer to the workings of the local bank system did not allow me to document the manifestations of such tensions, nor the discrepancies within each decisional process. Yet, most informants have confirmed the benefits of building close ties with institutional

creditors, because the availability of financing increases.

**5. Conclusion** 

As I have described there is a wide range of types of financing that, incidentally, recent literature on business studies has termed "financial bootstrapping" or "bootstrapping methods" (Winborg and Landström, 2000). Alongside the well known government assisted financing, bank credit, and leasing, there are other less studied and more informal practices of credit, that cannot be merely reduced to money lending and that seem to work properly only in contests of embeddedness, within forms of exchange that are culturally engendered and facilitated by the social networks built by workers, entrepreneurs and local brokers (see Table 1). For example, barter as a form of exchange between two parties was an effective way to provide machines in exchange for labour because of a shortage of liquidity on behalf of one party; in addition it allowed the work relation to continue in the long run. Informally deferred payments were also adopted to meet the initial difficulties of new entrepreneurs, as well as the setting of lower than average prices for machines and rental space. Others shunned indebtedness of any kind for fear of external control over their activities, and therefore relied on their own (or family) capital and labour, keeping a low profile of risk taking. In their view capital market and other sources of financing were seen suspiciously. In accordance to this principle entrepreneurs with low risk profiles rely more on skilled and unskilled labour than capital (i.e. expensive machines).


### Table 1. The embeddedness of credit

Thus the anthropological approach towards the role that culture and social networks play in the credit transactions I have observed sheds light on fundamental issues not only on the character of entrepreneurship, but also on the various forms that economic development may take at the local level. Moreover the ethnographic analysis of the embeddedness of the economy calls into question neoclassical economic models which appear to be ideological and unable to represent the local context. And so we are brought back to Polanyi's original

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idea, that economic life is 'embedded and enmeshed in institutions, economic and noneconomic' (1957, p.250). Polanyi's notion of embeddedness allows us to conceptualize a comprehensive view of the market economy, to observe the connections between economic and social/cultural phenomena, and to regard the latter as by no means residual. By the same token, the use of embeddedness as a conceptual frame enables us to gaze at entrepreneurship by eschewing the limits of economic models that explain entrepreneurial behavior detached from the cultural context. We could also turn our attention to entrepreneurship as a point of departure, in the sense that it is through the study of entrepreneurship as a social and cultural phenomenon that we can easily see the extent of the embeddedness of the market economy. This is what has been accomplished here, by analyzing how entrepreneurial opportunities are enhanced (or at times hindered) by financing "as instituted process" - to paraphrase one of Polanyi's fundamental articles (1957). Entrepreneurship is essentially a social and a cultural phenomenon as much as an economic one. Just look at the importance of the symbolic personal assets, such as reputation, esteem, family, working skills, political and religious beliefs. They represent the cultural sphere and play an economically relevant role as symbolic collateral to lower the barrier to credit access and to initiate social relations that eventually turns into valuable economic capital.

What stands to be seen is how and if the forms of embeddedness examined in this paper will alter and/or persist in light of the global economic crisis and to observe if there will be new forms of credit and if they will be embedded or rather dis-embedded practices.
