mexico and spain’s regional microenterprises: their

ISSN 2309-0081 Ana, Julio, Maria, Grissel & Arwell (2016)

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www.irss.academyirmbr.com May 2016

International Review of Social Sciences Vol. 4 Issue.5

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Mexico and Spain’s Regional Microenterprises: Their

Trajectory, Values, and Knowledge Construction through

Networks

ANA MARÍA DE GUADALUPE ARRAS-VOTA Faculty of Agri-technological Sciences, Autonomous University of Chihuahua

E-mail: [email protected]

Tel: 52-614-439-1844

JULIO CÉSAR LÓPEZ-DÍAZ Faculty of Agri-technological Sciences, Autonomous University of Chihuahua


(Corresponding author)

Tel: 52-614-439-1844

MARÍA LORETO FENOLLOSA-RIBERA Faculty of Agronomy Poly-technical University of Valencia


Tel: 34-65-199-8997

GRISSEL ALEJANDRA RUIZ-SALAZAR Faculty of Agri-technological Sciences, Autonomous University of Chihuahua


Tel: 52-614-439-1844

ARWELL NATHÁN LEYVA-CHÁVEZ Faculty of Agri-technological Sciences, Autonomous University of Chihuahua


Abstract

The purpose of this research was to describe the causes that led entrepreneurs to start their ventures and

the values supporting them, as well as their participation in networks and benefits they get from this

involvement in the communities of Valencia, Spain and Chihuahua, Mexico. To attain the objective,

managers of 16 microenterprises were interviewed. Results showed that entrepreneurs’ values were

honesty, quality, responsibility and teamwork. Benefits obtained through collaboration and networking

included having contacts with financing entities and other peers. Also, entrepreneurs stressed the

importance of sharing knowledge on new markets, management, technological and communication skills.

Key Words: Micro Enterprise, Network, Knowledge, Values, Entrepreneurs, Social Capital.

mailto:[email protected]






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Introduction

In this global era in which distances among human beings and countries have been reduced by means of

Information and Communications Technologies (ICT), communications are established in new ways and

one can find similarities among people and the activities they carry out; such is the case of microenterprises

where common actions can be found and, when in touch with each other, experiences can be shared. This

type of enterprise has demonstrated the ability people have to promote development and respond to the

needs of vulnerable groups located in the rural sector, particularly in developing countries, where an option

to give added value to the goods they produce in the primary sector is a way in which they can face adverse

situations and take advantage of the crops they produce.

It is important to stress that microenterprises carry out large and diverse activities and functions, in which

the most characteristic feature is their socio-economic heterogeneity, in terms of the variety of products and

services, and the diversity of combinations of capital and labor use (Pérez & Jofre, 2000). It can also be

said that if this type of activity improves the productive development of rural enterprises, it will have an

impact on the economy of the State. That is why it can be said that processes of rural and local development

involve the participation of producers organized around associative forms that allow them to be inserted

into the markets and, therefore, to increase their income, improve their quality of life as well as preserve

their cultural identity (Muñoz, 2008).

At present, applied research in regard to microenterprises has found that the structure formed by the

interactions of the owners and their families are networks through which entrepreneurs have had more

opportunities to gain resources from government institutions and access to diverse channels of commerce

and economic development (Arras Vota, Hernández Rodríguez, & López Díaz, 2012). This fact is

recognized by institutions that are discovering ways in which they can support the efforts of those persons

making attempts to overcome obstacles and keep their firms in the marketplace.

With this in mind, this assignment was established to discuss the importance of entrepreneurial networks in

the survival of rural microenterprises. Its origin was founded on the project ‘The role of social networks in

the development of rural microenterprises in Mexico’. Furthermore, the community of Valencia, Spain was

added in order to compare the situation of these types of enterprises in both countries. This study had as a

framework the Program of Research Support in Technological Innovation (PAPIIT) of the National

Autonomous University of Mexico (UNAM). It was also sponsored by the Autonomous University of

Chihuahua (UACH), the Universitat Politècnica de València, and the National Council for Science and

Technology (CONACYT-Mexico).

For this purpose, and in order to compare the situation of microenterprises in the two provinces, the study

was carried out in the following entities of Valencia, Spain: Castellón, Catadau, Alginet, Alboraia,

Rafelbunyol, Puzol and Cocentaina, and the town of Alicante. In Mexico, diverse microenterprises from

municipalities in the state of Chihuahua were included, namely: Allende, Conchos, Chihuahua, Bocoyna

and Saucillo. In order to present the outcome of the research, this article is made up of several parts: a

review of literature, followed by research questions and objectives, methodology used to gather

information, results, discussion and conclusions.

Literature Review

In order to achieve the proposed objective, a theoretical framework is presented with the intent of sharing

the meaning of the concepts used in this research. A definition of enterprise is presented, followed by the

concepts of knowledge and networks, including the benefits that interaction derived from these kinds of

structures provide for microenterprises, which are characterized by small-scale economic activities having a

single owner (De Gortari & Santos, 2010), and based on the values of entrepreneurs.


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Enterprises as collectivities of knowledge processes

People who are part of the creation of enterprises have certain goals and objectives they seek to achieve

through a form of organization; this means seeking results when performing certain productive actions,

which can be seen as a process of knowledge whose infrastructure is based on culture, technology and

business processes (Sivan, 2000). In this sense, enterprises can be considered to be a collectivity of

coordinated capabilities that are somehow integrated by its history and limited by the effectiveness of its

social and cognitive skills (Prusak, 2001).

Capabilities refer to the knowledge, the know-how of the transformation process, which in many cases is

tacit, meaning that it is rooted in the action and personal responsibility--values and beliefs--within a given

context. The key to the creation of knowledge lies in the mobilization and conversion of tacit knowledge

into the explicit, which is expressed in a formal and systematic way: this means that it is coded (Marwick,

2001).

Another very important aspect to consider when referring to these communities of coordinated-capabilities

is the systemic perspective which conceives organizations as political systems and cultural complexes,

whose interpretative dimensions vary depending on the interests, conflicts and power games inherent in

interactions in the inter and intra organizational contexts (Arras-Vota, 2010). It is important to stress that its

inclusion in an environment is needed in order to prevail, so enterprises are connected and form networks

with suppliers, consumers and political and social actors that give meaning to their existence, allowing

them to optimize resources, as well as to take advantage of spaces and experiences of other members of the

network.

Networks as relationship structures supported by trust, values and social capital

Network Theory allows for describing the relationships between actors involved in the development of new

technologies, through sectional and longitudinal interventions, to model the structural development and

conduct of a community of actors. This also serves as support for developing a theoretical system for

understanding the transition from the change of status of knowledge that goes from the scientific paradigm

to the technological paradigm (de Gortari Rabiela, 2001).

This leads one to consider the concept of network, which refers to a set of individuals or groups

interconnected via communication patterns (Arras-Vota, 2010). Social networks are composed of: a)

personal relationships between individuals, b) the structure relative to the composition of networks (nodes

and links) and c) trust, which means that a person relies on certain aspects of the behavior of the other,

under certain circumstances. In this sense, trust is an attitude based on the behavior that is expected from

the persons involved in the established relationship. Trust has cultural and emotional support. The first is

based on the principle of reciprocity, and the latter on the affection a person feels towards those people

considered to be reliable (Arras-Vota, 2015), and trust acts as the oil that smoothes the relationships within

the network (Andrés & Salvaj, 2011). It also builds social capital, which is conceived as the aggregate of

real and potential resources which are linked to the possession of a network of more or less institutionalized

permanent relationships of mutual acceptance and recognition (Bourdieu, 1980).

So networks allow enterprises to face major constraints arising from the lack of development of markets

and public services in rural areas (Santos & de Gortari, 2010). In fact, it is considered that this type of

structure and cooperation between the actors can become a tool for local development through which

knowledge and information is exchanged and transferred to the population making up the rural community

(Marmanillo, 2011). Every culture and human process is supported by a set of beliefs and values, the latter

‘...are all that should be in general object of preference or choice’ (Abbagnano, 2004, 1071). It is the

importance that is given to a way of acting or a final state that is considered ‘what ought to be’ (Schein,

1985, 15). In these definitions one can perceive how the value that one gives to a fact, event location or

object lies in the meaning that the action or situation has for individuals or groups. Moreover, it is


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important to note that the value refers to an abstraction of reality that is in the human mind and not in the

object. In that sense it only has meaning for those who give significance to it (Arras, 2009). This way, the

axiological system varies from person to person, from company to company and from society to society in

harmony with the culture the actors have (Loli Pineda, López Vega, & Atalaya Pisco, 1999).

Value Chain

Value Chain is defined as the set of actors and activities that add value to products through processes, links,

information, knowledge, resources, logistics and marketing from the stage of production to consumption

(Arras-Vota, López-Díaz, Fenollosa-Rivera, & Bustillos-Núñez, 2015). Most small businesses have their

roots in rural microenterprises, which are units of production of goods and services, where the

businessperson and his/her family participate directly to give added value to their products through agro-

industrial processes of transformation of primary production, with the goal of bringing them to the modern

market (Parra, 2000). This involves the processing and marketing of these products, which represent an

alternative for development of the sector. Therefore they need to commercialize the products in order to be

able to survive and subsequently grow. This means that rural microenterprises require generating strategies

through which people seek to achieve their goals (Arras et al., 2012) and find opportunities to

commercialize their goods.

This action involves, at first, the insertion in a value chain, which conjugates suppliers of commodities, raw

materials and consumers. Subsequently, they would seek to enter into a network of wider relationships in

order to acquire strength and share expertise and knowledge and, in some cases, government support for

growth. Some authors think that the Government of each country has the obligation to teach entrepreneurs,

if there is to be a reduction in the mortality rates of small-to-medium-sized enterprises. Also, the

Government and private sector in conjunction need to inject doses of entrepreneurial spirit (Venegas,

2008); this should apply as well to educational institutions that need to introduce applied programs that

would develop and reinforce the entrepreneurial spirit in their students, and promote the incubation of new

microenterprises.

Small and medium-sized enterprises in Mexico and Spain

Economic censuses reveal that 98% of the enterprises in Mexico are small and medium-sized enterprises

(CNNExpansión, 2013), which generate more than 50% of the employment on a national basis and produce

52% of the Gross Domestic Product (GDP). According to INEGI (2014), 42.7% of them have a lifespan of

no more than 5 years. This exposes the fact that in Mexico a large percentage of microenterprises that are

constituted every year tend to disappear (Baez Reyes, Cordero Lara, Hernández Flores, Sánchez Sánchez,

& Carrillo Rendón, 2009). Therefore it is important to analyze the strategies they follow in order to prevail.

In Spain, small and medium-sized enterprises represent 95.8% of the enterprises in general, generating

more than 75% of private employment (Dirección General de Industria y de la Pequeña y Mediana

Empresa, 2015) and contributing with over 65% of the Spanish GDP (Álvarez et al., 2011). A comparison

of data between Spain and Mexico is presented in Table 1.

Table 1. Comparison of enterprises, employment and GDP between Spain and Mexico

Indicator Spain Mexico

Small and Medium Enterprises 95.8% 98%

Employment 75% 50%

Gross Domestic Product 65% 52%

(Source: INEGI, 2014; Dirección General de Industria y de la Pequeña y

Mediana Empresa , 2015; Álvarez et al., 2011).

This data leads one to consider that small enterprises remain critical for the economy of both Spain and

Mexico. The vitality and potential of many rural areas are closely linked to the existence of a dynamic and


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competitive agri-food sector which appeals to young farmers, consumers and the public in general (Strano

et al., 2011).

Characteristics of microenterprises in both provinces

Microenterprises in both scenarios exhibit similar characteristics (Table 2): they are made up of family

members and give added value to the primary sector, although productivity in Mexico is lower. In regard to

environment opportunities, both regions have potential markets in the domestic and international arenas.

European enterprises have an easier time trading, due to the proximity with countries that are part of the

European Union. Mexico has free trade agreements that sometimes do not allow the smooth flow of

merchandise; there are many obstacles, as stated by Love & Lattimore (2009, 54), ‘Goods and services do

not flow completely freely among countries, even among those with excellent relations. Countries put up

barriers to trade for a number of reasons, among others: to protect their own companies from foreign

competition, to protect consumers from dangerous or undesirable products or reasons even unintended, as

can happen with complicated customs procedures. Tariff barriers have been reduced considerably over the

past decades but other obstacles remain’, such as restrictions in relation to certification processes that

enterprises in Mexico need to introduce into their production systems (Arras-Vota, López-Díaz, Fenollosa-

Rivera, & Bustillos-Núñez, 2015).

Table 2. Comparative analysis between rural microenterprises in Mexico and the European Union.

Mexico European Union (EU)

Characteristics Characteristics

Family-owned enterprises.

They give added value to primary sector.

Generational learning.

Process improving especially when interchanging

information with other producers.

Traditional products.

They form part of a network.

Family-owned enterprises.

They give added value to primary sector.

Generational learning.

Process improving especially when interchanging

information with other producers.

Traditional products.

They form part of a network.

Productivity Productivity

Productivity of micro-enterprises form Latin

American countries have an average of 26% (OECD

& ECLAC, 2013).

European micro businesses are more productive

than the ones of Mexico, with an average of 69%

(OECD & ECLAC, 2013).

Opportunities Opportunities

Local, national and international markets are a

potential for traditional and artisanal products.

Mexico has free trade agreements with several

blocks of countries, including the EU.

The agri-food policy places emphasis on: a) rural

development territorial vision; b) integration of

food chains, c) sustainability and d) productive

reconversion to adapt the production system to

the new realities of markets and regional

productive vocations.

Local, national and international markets are a

potential for traditional and artisanal products.

Belonging to the EU facilitates flow and

marketing of products.

In Salzburg, the Second European Conference

of Rural Development defines new policies to

achieve sustainable development in rural

areas: competitiveness, sustainability,

diversification, community initiative and

simplification.

Sources: Tolón Becerra & Lastra Bravo, 2008; Grupo Interagencial de Desarrollo Rural - México, 2007;

(Organisation for Economic Co-operation and Development (OECD) and Economic Comission for Latina

America and the Caribbean (ECLAC), 2013)


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Research Questions

The purpose of this study was to analyze how microenterprises arise and stay in business in the State of

Chihuahua, Mexico, and in Valencia, Spain, based on their trajectories and networks to which they belong

and form social capital based on the incorporation of actors, actions and trust into the framework of the

value chain that is generated. This leads us to the questions: what are the causes, from the perspective of

those who have created microenterprises, for starting them and what values or axiological system supports

them? How do they participate in networks and what benefits have been obtained from the relationships

with other entrepreneurs that form part of such social structures?

Methodology

This research considered the perspective of case study, which contributes to broaden and deepen knowledge

with respect to individual and groups, as well as organizations and related phenomena (Yin, 2003).

Analytical-synthetic and theoretical-deductive methods were used. This research was applied and

descriptive, of field and bibliographic mode. Data was gathered through qualitative techniques namely

interviews and direct observation. Sixteen owners of rural micro-enterprises were interviewed: 8 from

Valencia, Spain and 8 from Chihuahua, Mexico. Interviews were recorded and transcribed afterwards. All

of the businesses studied were small-sized firms (less than 15 employees) and belonged to a network.

It is important to stress that a Protocol for interviewing owners or key players from micro companies was

carried out in order that the producer could talk in an open way. The design of the interview has paragraphs

where they can speak about the trajectory of their company, its profile, relationships established for the

formation and development of the business, production, markets and marketing, knowledge share, technical

assistance and training, as well as their participation in networks and benefits attain from this involvement.

Data Analysis

Data analysis is key in all research, and the way that is addressed in this research was through

hermeneutics, so researchers can interpret the voice of the owners of rural micro-enterprises and generate

knowledge about the reality of these businesses that respond to the needs of a sector that needs to make

itself visible in the world context.

Analysis

Results obtained from the interviews with rural entrepreneurs of both regions, Valencia and Chihuahua, are

presented in three sections. Firstly, cases from Valencia are described; secondly, cases from Chihuahua are

presented; and thirdly, a comparison between microenterprises of the two regions is shown.

Description of rural microenterprises and their participation in networks in Valencia, Spain

In order to compare the microenterprises of the two communities, these enterprises had to be part of an

institutional network. In the case of Valencia the enterprises did not belong to the same network;

furthermore, a network exactly like RENDRUS could not be found. Nevertheless the results reveal that, in

both communities, networks are valued by the groups of people who are part of them.

Productes Hortofrutícoles Esteve Reyes

Located in the town of Puzol (Valencia), this microenterprise was set up in 1990. It is a family-owned

enterprise, since the husband and wife of the Reyes family work on a full-time basis. They own some acres

of orange trees and a greenhouse where they produce tomatoes, persimmons and pumpkins. These products

are sold as a brand called ‘Pumpkins, cultivation and innovation’. Mr. Reyes looks for quality in what they


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produce and is always searching for information in order to improve and innovate their products. Currently

they sell their crops in Spain, in places like Valencia and Ibiza.

Esteve Reyes is a member of the Agrarian Transformation Society (SAT), a network that according to Mr.

Reyes ‘… promotes the development of the microenterprises that are part of SAT, exchanging information

and emphasizing innovation and the improvement of rural areas’. So through SAT this enterprise exchanges

information and knowledge about innovation processes that allow them to develop and improve processes

in the primary sector.

Senent Oranges

Senent is made up of a family of farmers with a practice of more than four generations in the cultivation of

oranges. This rural microenterprise is always making process innovation such as harvest, selection and

packaging and also on the way it sells its products by different means, one of them is Internet. They export

to Italy and France. This company forms part of the network called Farmers Association of Valencia

(AVA). According to Mr. José Daroqui Lluch, owner of the company, this association ‘helps us, as

producers, to obtain information, participate in trade markets, interact positively with farmers, manage

resources and gain more customers’. Senent Oranges exchanges information, resources and participation in

trade markets through the net AVA in order to upgrade their market.

Tecniagro Levante S.L.

Tecniagro began operations in 1998; its social objective is the provision of agricultural services,

construction, installation and maintenance of irrigation networks, as well as the operation of rustic farms.

Vicent Iborra (Manager) commented on the importance of being integrated into a network denominated by

the Spanish Association of Manufacturers of Tubes and Plastic Accessories (AseTUB). The main

objectives of this association are oriented at: a) promoting the use of plastic pipes, b) developing new

products, c) obtaining pipe certification, d) representing the industry before the Government and other

institutions, e) collaborating with other associations, and (f) participating in technical forums. Mr. Iborra

added, ‘we also work together on the standardization, certification and promotion of companies and their

products’. Through the AseTUB net, Tecniagro exchanges knowledge about new products, certification

processes, and also acts as a common front for negotiating as a group before diverse institutions.

La Mieleria

La Mieleria (The honey home) began in 1926, with Javi and Nacho’s great grandfather who was a

beekeeper. At present, Javi and Nacho are brothers and partners in a family business dedicated to the caring

of hives and bees to extract, completely by hand, the honey produced. They commercialize their products

directly to consumers without intermediaries. The owners are associates of lamieleria.com, a website

launched with the help of several families with ties to the world of beekeeping and artisanal honey.

This company is internally related to a network called Agrarian Association of Young Farmers (ASAJA),

which helps them to obtain information and participate in trade markets. The brothers stressed the

importance of participating in programs organized by this network because, they say: ‘… it opens doors

with contacts, not only with customers but also with financial institutions from whom we can obtain

resources’. Therefore it can be said that La Mieleria exchanges resources and customers through the net.

La Sucrera Pastisseria

This venture began on July 27, 2012; it is a small family business that envisions a new version of bakeries.

This business innovates and produces its own baked goods, sold in a restaurant/shop where customers can

eat freshly-made bread, and cakes, among other products. Benjamín Vicent (owner) pointed out that they

have 5 employees. He and his wife bake all kinds of cakes and desserts.


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La Sucrera Pastisseria forms part of the network of bakers and confectioners. Benjamin states that: ‘… this

network helps and guides them so they can take courses in patisserie, in which they discuss and report their

experiences’. In his own word, ‘the training and the information obtained is very helpful for

microbusinesses that are starting up’. In synthesis, La Sucrera Pastisseria exchanges information and

knowledge through training programs organized by the network they participate in.

Patisserie Garcia

Patisserie Garcia was founded in 1940 by Angel Garcia. Since then and up to now, three generations of

master confectioners of cakes and sweets have been part of this enterprise. It is important to stress that the

production process remains the same, made from the recipes of their ancestors, meaning that the work is

done in an artisanal way. This enterprise has the satisfaction of having participated in several trade fairs

where they have won prizes on several occasions.

Mr. Garcia (owner) said that they ‘…form part of the network called Valencian Craftsmen Association

(ARTEVAL), and that this association is responsible for enhancing the handicrafts of the region of

Valencia, as well as promoting the consolidation and competitiveness of companies of artisanal sectors that

compose it, through the development of training programs in marketing and policy analysis. Also they

share information and jointly co-ordinate actions that allow them to improve their processes’.

Then, it can be said, that the enterprises that are part of ARTEVAL, one of them Patisserie, share

knowledge on marketing and information that allows them to improve their productive processes.

Climent Bono

Climent Bono started in 2007 as a microenterprise. The land they own was inherited from the father, so

they decided to create a totally family-owned enterprise. Different citrus fruits such as oranges and

mandarins, among others, are grown on this land. Their crops are sold in Spain and also exported to France

and Germany. This microenterprise forms part of the network called the Valencian Association of Farmers

(AVA-ASAJA).

The organization, as stated by Climent Bono (owner),

‘… opened the doors for the establishment of the first independent professional organizations. Thus, on

May 24, 1977, thirteen farmers signed the founding act of AVA. In the European Union ASAJA, AVA is

part of the Committee of Professional Agricultural Organizations (COPA-COGECA) and also takes part in

numerous committees related to the European Commission. In Spain it participates in negotiating with the

various ministries related to the agricultural sector and collaborates with various institutions nationwide’.

The enterprises that are part of ASJA, AVA collaborate and negotiate together for better conditions for the

agricultural sector in Spain.

Nurseries Escriba Pérez

Nurseries Escriba Pérez is located in Alginet (Valencia). They are experts in the care and treatment of trees

and indoor and outdoor plants. They also advise clients, having more than 10 years of experience in this

area. Mr. Escriba states: ‘We are affiliated with a social network called the Professional Association of

Flowers and Plants of the Valencian Community (ASFPLANT), established on November 19, 1977 in

Valencia. It is relevant to say that this organization forms part of the Spanish Confederation of Horticulture

(CEHOR), which is made up of owners of nurseries, growers and florists’. This enterprise exchanges

knowledge with their customers, and with the members of ASFPLANT.


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Description of microenterprises and their association in networks in Chihuahua, Mexico

All of the enterprises of Chihuahua were part of the National Network of Sustainable Rural Development

(RENDRUS, acronym in Spanish). In order to select the ventures for this research, a list of these businesses

was obtained from The Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food

(SAGARPA, initials in Spanish), a unit of the Federal Executive Branch of the Government of Mexico.

Productos Nanines Del Norte

The company Nanines Products was started on January 13, 2009. This microenterprise is dedicated to the

dehydration of fruits, specifically apples. The enterprise is family-owned and employs 5 people.

Mr. Manuel Sanchez said, ‘I thought of this fruit because Chihuahua is the first producer of apples at the

national level and also because it is the most complete, enriching, highly nutritious fruit’. Mr. Sanchez

became part of RENDRUS in order to position his business as a leader in providing products of high added

value for the food industry and with the intention of selling in supermarkets and distribution chains. He

seeks to create partnerships and long-term relationships with customers. Also he said that, ‘the owners of

the company Conchos Dairy had told me to participate in RENDRUS because they had had that experience.

And SAGARPA invited me so I joined the network, making the most advantage of it’ (Mr. Sánchez), such

as the relations and the sharing of knowledge with other enterprises.

Procesadora Pecanera

Procesadora Pecanera is located in the municipality of Valle de Allende, Chihuahua. This venture began

selling and purchasing in-shell pecan nuts. After a strong economic crisis in 2004, the Baylón Gutiérrez

family decided to join forces and create their own business by giving added value to the product they had in

their orchards, native pecan nuts. Currently, this business employs 5 people.

‘In RENDRUS, people gather and share experiences. When a company is considered to be the best of the

network because it shares extensively, they win a prize so they can go to a national contest to show their

projects and products’ (Mrs. Baylón). Through this experience they gained more places to commercialize

their product in other parts of the State and in Tijuana. For that reason Mrs. Baylón said ‘…that

participating in RENDRUS was something positive’.

The owners decided not to use machinery to shell pecan nuts, so they hired elderly women who were heads

of households. Women could do the job in their homes and thus this strategy opened up new sources of

employment. Thirty families were benefited by these new jobs. Through RENDRUS, they were able to

expand their market and share knowledge with other members of the network. Also they share resources

with their community.

Conchos Dairy

Conchos Dairy is located in the municipality of Saucillo, Chihuahua. This enterprise was born with the

resources of the Lopez Guerrero family (parents and children). ‘We started due to the fact that we had

surplus milk from our farm called ‘Claudia’ which is a supplier to a large company called ‘Alpura’. With

those surpluses we began to sell milk to local dairies which never paid us back’ (Mr. López).

Therefore, brothers and sisters began their own business with training on milk processing and cheese

making and each one was able to use his/her knowledge. One of them manages the farm, another one of

them, a lady, is in charge of the financial area, and one of the brothers is in charge of the production

processes and another of marketing and of the sales point in Chihuahua City.


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After 6 years of work they obtained their first help to buy equipment from governmental resources. Also

they carried out marketing research and, based on the results, they changed their image. It is important to

stress that the owner said : ‘…we can not satisfy the demand for our products, but we can not buy milk

from other producers due to the quality we have to maintain’. Commercial activities are developed in three

markets: local, state and out-of-state, with self-employed people. ‘Through RENDRUS we were able to

contact experts on the transformation of milk and cheese making’ (Mr. López). This enterprise exchanges

knowledge with members of RENDRUS, with experts and with their market.

Agroindustrias Valle Viejo

Agroindustrias Valle Viejo was started 18 years ago by the head of the family Mr. Chavira, with the

purpose of achieving technological improvement and increasing profitability from the beekeeping activity.

‘Our original objective states Mr. Chavira, was only honey production. At present it has come to include

the total utilization of the hive. Products obtained, besides honey, are bee venom, propolis, and pollen. In

the short term we have plans to include the production of royal jelly’. The Government support that this

project received was invested in machinery and equipment, as well as training.

Direct jobs generated in the community are oriented at the production of packaging boxes. The destination

of the entire production is the city of Monterrey, where it is marketed by various distributors. The family

acknowledges the diversity of its products and the quality they have as factors for commercial success. ‘Our

enterprise is also a member of the Beekeepers Association, which includes the municipalities of Allende,

Santa Barbara and Parral, and through RENDRUS we were able to access financial resources; we also share

knowledge with the network of the Beekeepers’ Association’ (Mr. Chavira).

Don Felix Vinata

This enterprise is owned by the family and has diversified its products, one of them is white sotol, and the

others are a cream of sotol and aged sotol. Says Mr. Romo, ‘…the Autonomous University of Chihuahua

has been of great help, and we have also formed a group of producers to support each other and in order to

belong to the Association of Sotol Producers the product needs to be one of quality’.

‘I started the business in 1987 working on the standardization of the production of sotol. My grandfather

manufactured sotol many years ago, so the company was named after him. When I had vacations and he

was producing sotol I would go with him, so I got to know the process and that was it. So I learned the

recipe from my grandfather, and afterwards I got some equipment like stainless steel stills and fermentation

tanks’. In the process he has changed some of the equipment in order to get better results’.

This enterprise exchanged knowledge first with Mr. Romo ´s grandfather, and then he learned about quality

processes by experts at the university, and through RENDRUS knowledge was transferred with producers.

They also share knowledge with the enterprises that are part of the Sotol Association, and support some

businesses in their productive processes, such as Pinesque.

Pico Largo

Pico Largo is dedicated to the production of dried apples and other fruits, in the municipality of Guerrero.

The company arose from the idea of my father who wanted to give added value to the fruit. He started his

business mainly with loans from relatives. With that money, he acquired machinery and set up the

company. Initially the fruit was sun-dried, and later my uncle got him in touch with an engineer who knew

a technique for drying fruit with tunnels. With his help they implemented that innovation as a way of

processing their fruit.

This firm formed part of RENDRUS and, at present, it is part of associations such as UNIFRUT and

COPARMEX. The company has approximately 100 employees during harvest season. They have a Sales


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Department located in the Mexico City. At present, Mr. Gonzalez’ son runs the business. This case

demonstrates the transference of knowledge of the process of drying with a different technology which

became an innovation in the enterprise, from a friend of a family member to the owner of the company, and

then from him to his son. Also they shared their experiences and knowledge with other members of

RENDRUS in Chiapas and Oaxaca.

Juvelin Products

This family-owned enterprise in which six women participate was started in 1991. They produce beauty

products, but started with a shampoo designed to prevent the loss of hair. Doña Nachita learned how to

make some soap and different products with her grandmother. So she innovated and transformed the soap

into a shampoo using a plant called ‘sangre grada’ that grows in the desert.

‘When I started making the soap, states Doña Nachita, I made many discoveries while transforming it into

shampoo, and decided to take courses at CONADE and at the University of Chapingo, because I wanted to

know the exact consistency of the shampoo and learn other processes’. This enterprise obtained support

from the Government because they were a co-operative, made up of Doña Nachita, her daughters and her

daughter-in-law. The values claimed by Juvelin products are: ‘…honesty, discipline, responsibility, quality

and trust’. It is important to stress that this enterprise is also part of a network along with other producers

which give support to each other in terms of negotiating resources with governmental agencies.

So knowledge has been transferred first from generation to generation, then through some members of

RENDRUS and universities. Financial resources were obtained from the government to improve their

production plant.

Pinesque

Pinesque started operations in 2010 with the processing of wine. They set up a rural association named

Bodegas Pinesque. Currently, Pinesque is positioned as the leader in the vine-growing cluster of

Chihuahua, made up of grape producers. Its wine is now sold in supermarket chains and restaurants in the

region. Mr Pinoncelly stated:

‘We started making home-made wine in the family, maybe due to inheritance; for various reasons we like

wine. Around eighteen years ago we learned from an Italian how to make wine and for many years we did

it within the family, also involving other families, until a friend came and told us that another person who

had a plantation of vineyards wanted us to make his wine. We said well if he wants, we can teach him the

little that we know. And so we did for the first year. The second year, the man had already bought fifty

thousand dollars’ worth of equipment and that was when we learned how to make wine commercially’

(Pinesque).

This company has a connection with Don Felix Vinata and the latter distills the remains of the grape to

make another type of alcoholic beverage. Also Mr. Pinoncelly states that ‘…through my participation in

RENDRUS I learned a lot in regard to other economic support’.

There are different moments in this venture; the first one when they learned how to make wine with their

friend. Next, when they transferred their knowledge to the producer who pushed them to make commercial

wine. The third moment was when they were supported financially and started their business. Afterwards

they participated in RENDRUS and got to know people all over the Mexican Republic and promote their

wine. Then Pinesque made an alliance with Don Felix Vinata and innovated by making another product. At

present their wine is sold in different supermarkets in the City of Chihuahua.


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Comparison of rural microenterprises in Valencia, Spain and Chihuahua, Mexico

Comparative results between Chihuahua’s and Valencia’s entrepreneurs are presented in order to broaden

the vision of the enterprises under study and their status, reasons for starting their venture, values and

knowledge gained through their participation, as well as the contacts that continued after their incorporation

into the network.

In general terms, 100% of the enterprises in both regions are formally constituted. Therefore, it can be said

that the dependability and competitiveness of micro and small businessmen can reduce problems of under-

employment and tax evasion (Santander, 2013).

Also all of the owners think that participating in networks is positive, and all of them would recommend

other producers become part of a network, because through networks they were able to come into contact

with institutions, the government and people that can give them professional advice, among other benefits

(figure 1).

Figure 1. Status of enterprises and perception of being part of a network

The aspects where differences were seen are first, the reasons for which they initiated their enterprises, their

values and what the enterprises learned by participating in networks, as well as the contacts that continued

after they participated in networks, as can be observed in figures 2, 3, 4 and 5.

As can be observed in Figure 2, in relation to the trajectories of the enterprises under study it can be said

that all of the entrepreneurs started their businesses because they wanted to have their own enterprise. For 7

enterprises in each community their business were initiated because their family has always had

businesses.

Also all of the entrepreneurs in Valencia and in Chihuahua started their enterprise because they like to

make decisions and to be challenged. Another aspect is that they had in mind the creation of employment

and they get excited about creating something new. The causes where differences were found are: as a

product of my profession, (5 in Chihuahua and 7 in Valencia) and to be their own boss (6 in Chihuahua and

8 in Valencia).


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Figure 2. Causes for which the entrepreneurs began their businesses

Figure 3. Values that prevail in enterprises in Chihuahua and Valencia

In regard to values, most of the entrepreneurs in Valencia and Chihuahua share the following:

responsability, quality, honesty, teamwork and trust. There is little difference in the evaluations made by

people who own an entreprise in Chihuahua; nevertheless, in a lower percentage their values are the same

(Figure 3). Of course this result cannot be generalized, due to the small number of groups of persons who

were interviewed, but it needs to be considered for further studies. Also, it is important to stress that when

people interact in networks, they usually act out of trust and help each other. For instance Don Felix Vinata

processes the by-product of the wine-making process and after distilling it, tranforms it into grappa liquor,

for Pinesque. Juvelin´s products form part of another network where they interact as family members and

support the actions of the five enterprises involved (Arras-Vota, Hernández-Rodríguez, López-Díaz, 2012).


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Figure 4. Entrepreneurs learnings through participation in networks

The knowledge they adduce they received by participating in networks is related to the increase in abilities

and a better understanding of management, marketing and the use of resources (Figure 4). 8/8 of the

businessmen from Valencia expressed having gained knowledge in the areas of marketing and technology,

as well as an improvement in their communication capabilities and taking advantage of resources. 7/8 said

they have gained abilities for participaing in associations and negotiating resources. While in Chihuahua

8/8 of the entrepreneurs adduced to having gained abilities for participaing in associations, 6/8 adduced to

having gained communication capabilities, and 5/8 said they had acquired marketing and technological

knowledge, as well as learning about taking care of resources. And only 3/8 thought they had attained

administrative knowledge and abilities to negotiate resources. Especially in the last two areas there is a gap

of 50% or more, between the results in Valencia and Chihuahua.

Figure 5. Contacts preserved by enterprises after their incorporation into a network

Figure 5 shows that 8/8 of the Valencia’s enterprises preserve contacts with the enterprises that are part of

the network, while in Chihuahua only 7/8 do so; nevertheless 6/6 in both countries remain in contact with

networks or government support, which in some cases turn into projects that can be financed by the

government. Another difference that can be stressed is the contact with financial institutions. These can


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reflect the culture of each country, because in Spain producers seem to be more independent from

government support and they look for support in other institutions, while in Mexico, entrepreneurs rely

heavily on government support, because few people have significant personal savings. They also

concentrate on low-risk, low-value-added enterprise that require a minimum investment of capital (Fabre &

Smith, 2003). Also, Spanish entrepreneurs are more willling to pay for professional services such as

consulting, which is supported by the results in which 6/8 of them adduce to preserving that contact.

Discussion

First, it is important to stress the significance of small and medium enterprises in creating employment and

their contribution to the Gross Domestic Product in both Mexico and Spain. The characteristics of the small

ventures are: they are owned by families, give added value to primary sector, most of all have learned to

make their products through generations or friends, and interchange information with other producers.

Also, they are part of a network. Some differences between Mexico and Spain are in relation to their

productivity and quality control, which are lower in the former.

Also, entrepreneurs engage in networks to gain knowledge, to find support and professional services, so

social networks become a tool (Nieto & Santa Maria, 2007), that contributes to rural enterprises and the

role they play in their growth, development and knowledge. Correspondingly, when enterprises interact in

social networks, they can attain knowledge related to technological, marketing, financing and

administrative matters (Arras-Vota, 2015), as well as communication capabilities.

An important finding is related to enterprises from Valencia, 7 of the enterprises are run and were started by

men and only 1 of them (Esteve Reyes) by a couple. In comparison, from Chihuahua one of the enterprises

was initiated by a woman (Juvelin), another by a couple (Procesadora Pecanera) and Conchos Diary by all

of the siblings who participate in different ways in acordance with their skills and knowledge. Nevertheless,

a prevalence of men in the entrepreneur role was found in this study. This aspect is also reflected in an

empirical study, where it was found that men are more apt to create enterprises while women are dispossed

to agree with authority (López apud Ortega Luzardo et al, 2015). This is considered as a cultural barrier,

due to the fact that it is learned and transmitted in all the social arenas that both genders exposed throughout

their lives. Of course, in the light of 16 enterprises this statement cannot be generalized. Further studies in

this field are recommended in order to promote women to start enterprises.

Conclusion

All of the microenterprises under study both in Valencia and Chihuahua are made up of family members

and some of them give employment opportunities to people in their communities. Also, they are established

in a formal way. For most of them the knowledge of the productive process was transferred from a relative

or a friend. In some cases it can be said that it was a generationally-transmitted knowledge. The way in

which the questions that guided the study were answered is mentioned in the following paragraph:

1) What are the reasons, from the perspective of those who have created microenterprises, for setting

them up and what values or axiological system supports them?

The answers to this question will be addressed in two parts, first the one about values and second the reason

for setting up an enterprise.

a) Most of the enterprises in both communities point out that their values are: responsibility, honesty,

trust, quality and team work, all of which are necessary in order to participate in a network and gain all

the benefits from it.

b) All of them, in Valencia and in Chihuahua say that they set up their enterprises because they: 1) like

challenges, 2) for the excitement of creating something new and job opportunities, 3) to make


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decisions and 4) because they wanted to have their own enterprise. The aspects in which they differ

are: 1) because they wanted to be their own boss (in Valencia this was the answer of 100% of the

entrepreneurs, while in Chihuahua it was for 60%), 2) as a product of my profession (80% of

Valencia´s businessmen and 40% in Chihuahua gave this as a reason), and 3) they wanted to generate

alternatives for development was answered positively (80% of entrepreneurs in Chihuahua and 55% in

Valencia).

2) How do they participate in networks and what benefits have been obtained from the relationships with

other entrepreneurs that form part of such social structure?

All of the entrepreneurs in Valencia and in Chihuahua think that their participation in networks was

positive and they recommend participating in networks to other businessmen. Through them they obtained

knowledge and abilities in different areas such as marketing, management, technological and

communication skills, among others.

Social networks contribute to the development of microenterprises and the aquisition of knowldge which

support their growth. Due to the fact that microenterprises generate a high percentage of the employment

indicator, as well as make an important contribution to the Gross Domestic Product both in Mexico and in

Spain, social networks can be seen as a key element for enterprises and economies.

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