Sustainable Cities and Society 73 (2021) 103115

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Sustainable Cities and Society

journal homepage: www.elsevier.com/locate/scs

Digital entrepreneurship in local government: Case study in Municipality of

Fundão, Portugal
Margarida Rodrigues a, Mário Franco b, *
a
PhD in Management at the University of Beira Interior, CEFAGE-UBI Research Center, Estrada do Sineiro, 6200-209 Covilhã, Portugal
b
University of Beira Interior, Department of Management and Economics, CEFAGE-UBI Research Center, Estrada do Sineiro, 6200-209 Covilhã, Portugal

A R T I C L E I N F O A B S T R A C T

Keywords: Digital entrepreneurship is an inseparable axis of technological evolution and digitalization experienced in the
Digital entrepreneurship twenty-first century, so the role played by the technological and related sectors requires the relevant investment
Technology of all economic and non-economic actors in places with administrative and political powers. Like any kind of
Innovation
entrepreneurship, digital entrepreneurship stimulates the formation of bonds and local networks, attracting
Local authorities
Smartness
investment and people. In addition, it stimulates the fight against depopulation in rural areas, such as the case
Sustainability studied here. The objective is to study local authorities’ level of digitalization and their capacity to improve their
Cities technological and digital information systems, through a qualitative methodology, specifically the case study
method. The results show the relevance of local actors becoming digital entrepreneurs, as this impacts on eco­
nomic development and is a means to counter the negative aspects of geographical isolation verified in recent
years.

1. Introduction inviting entrepreneurs to follow differentiated paths in society (Cohen &

A sustainable city encompasses physical, environmental, social and
economic dimensions (Camagni, Capello, & Nijkamp, 1998; Ratten,
2017; Tranos & Gertner, 2012), simultaneously driving these cities to­
wards innovation (Ballas, 2013) and towards a tripartite balance be­
tween environmental protection and integration, between economic
development and urban regeneration and between social equity and
justice (Bibri & Krogstie, 2017a), where good governance practices are
fundamental (Pozdniakova, 2017). It should also be noted that
improvement of urban sustainability in cities (Ferraris, Santoro, & Papa,
2018) involves understanding them as a collaborative network
(Brorström et al., 2018) with various actors that compete and collabo­
rate with each other (Camagni & Capello, 2004), forming collaborative
partnerships (e.g., public-private partnerships) (Ferrari et al., 2018). Of
these collaborative partnerships, we highlight living labs, seen as an
entrepreneurial partnership between companies, governments, citizens
and institutions (Ratten, 2017), supported by an open business network,
profitable and non-profit, based on entrepreneurship and innovation, as
stimulating drivers of cities’ economic growth (Nyström et al., 2014).
It appears, then, that entrepreneurship covers a number of fields,
Muñoz, 2015), where local government policies have a preponderant
role regarding their typology (Flor & Teixeira, 2016) and the consequent
creation of added value for the local authority (Hsieh & Wu, 2019).
Technology has become a means to help entrepreneurs, and when
associated with innovation the digital language emerges (Carniello, dos
Santos & Oliveira, 2011). This means it is fundamental to create an
environment directed to the intelligent axis, which includes the public
sector as well as the private one. However, intelligence is a complex
structure for towns and cities. So territorial strategies have recently been
redirected towards so-called integrating, resilient governance guided by
the axis of intelligence (Rodrigues & Franco, 2019). This stimulates
economic growth through changes in all economic and non-economic
sectors (Dilmegani, Korkmaz & Lundqvist, 2014; Walport & Craig,
2014). The European Strategy 2020 includes the pillar of the Digital
Agenda, which aims“…precisely to restart the European economy and help
European firms and citizens to take maximum benefit from digital technol­
ogy.”, namely continuing to “improve competences, employment and
entrepreneurship in the digital domain” (Digital Agenda). For Manville
et al. (2014), this type of strategy implemented by local authorities aims
to bring cities, towns1 and citizens closer together, through

* Corresponding author.
E-mail addresses: mmmrodrigues@sapo.pt (M. Rodrigues), mfranco@ubi.pt (M. Franco).
1
This term was adopted according to functional rather than demographic criteria. The adopted criterion postulates that the existence of an institutional and
administrative power allows the inclusion of villages, in addition to cities, as municipalities.

https://doi.org/10.1016/j.scs.2021.103115
Received 1 December 2020; Received in revised form 4 May 2021; Accepted 17 June 2021
Available online 19 June 2021
2210-6707/© 2021 Elsevier Ltd. All rights reserved.
M. Rodrigues and M. Franco
implementing integrated, sustainable solutions. Additionally, Bibri and
Krogstie (2017b) defended the importance of linking the technological
process to the sustainability agenda.
From the above, digitalization of the economy is a new challenge for
new models of socio-economic growth, in which entrepreneurship is
essential l(Holford, 2019), and where intangibility and networks assume
a new role (Rodrigues & Franco, 2019b). An example of reference is
Amsterdam, which has developed projects around digital entrepre­
neurship, amongst others (Meijer & Bolívar, 2016).
It is clear that local authorities can only participate in the digital
economy if they define and implement a digital strategy sustained by
their information systems (Niehaves, Röding & Oschinsky, 2019).
Consequently, they must initiate the adoption process, realizing this
transformation will improve their operations (Berman,2012). This
means that existing organisational systems will be improved, which
represents a challenge for all actors involved in the process (Henriette &
Boughzala, 2016).
The era of digitalization and digital entrepreneurship has been un­
derstood as the application of technological resources and information
systems to serve citizens and local authorities’ daily management
(Rezende, 2012). However, the interest aroused in the academic sphere
does not suppress the need for further research linking digital con­
struction to digital entrepreneurship in local authorities (Hsieh & Wu,
2019; Niehaves et al., 2019; Ylinen & Pekkola, 2019). The aim of this
research is therefore to study local authorities’ level of digitalization and
their capacity to act towards improvement of their technological and
digital information systems, where research has been scarce regarding
digital innovation (Glor & Ewart, 2016). The main contribution of this
study lies in identifying the digital processes adopted by local authorities
associated with their governance. Thus, qualitative methodology was
adopted regarding the importance of technology and governance as
pillars of their digital transformation.
The paper is structured as follows: The next section reviews the
literature on the topic under analysis. The method used and data
collection are described in section three. In section four, the results
obtained and their content analysis in the light of the literature reviewed
in section two will be presented, together with a framework for digital
entrepreneurship. Finally, section five shows the challenges, implica­
tions and contributions of this study regarding full implementation of a
digital entrepreneurship strategy and a proposed research agenda.
2. Literature review
ICT-enabled cities have auxiliary means to achieve the desired
(Bifulco et al., 2016; Funk, 2015; Wang, Chen, & Benitez-Amado, 2015;
Wu & Raghupathi, 2015) environmental (Gouvea, Kapelianis, & Kassi­
cieh, 2017; Jain, 2011), social and economic sustainability (Jain, 2011).
A recent study (Bibri & Krogstie, 2017) considered that the benefits of
technology associated with sustainability include density (e.g., energy
savings, greater accessibility to services) and compactness (e.g., quality
of life, social interaction), mixed use of soil (e.g., safety, pollution
reduction), sustainable transport (e.g., waste reduction) and a green
image (e.g., improved urban image, attractiveness). Also, governance is
seen as an inclusive pillar of city intelligence (Batty, Axhausen, Gian­
notti, Pozdnoukhov, & Bazzani, 2012), which means the adoption of
innovative, participatory and open governance models to allow the
implementation of policies responding to this challenge (Bolívar &
Meijer, 2016). However, efficient governance requires articulation with
ICT (Neirotti et al., 2014; Vilajosana et al., 2013). In other words, ICT
improve cities’ governance and functioning, which implies trans­
formations (Paskaleva, 2009a) driven by long-term strategies in terms of
competitiveness and sustainability (European Commission, 2008) sup­
ported by networks, strategic plans, integration and adequate exploita­
tion of the advantages provided by technology (Curwell, Deakin, &
Symes, 2006). Therefore, governments/municipalities should adopt
e-governance, with the aim of leveraging greater public participation by
2
Sustainable Cities and Society 73 (2021) 103115
citizens (Bouzguenda, Alalouch, & Fava, 2019; Odendaal, 2003; Pas­
kaleva, 2009), the creation of public urban partnerships -private and
transparent processes (Odendaal, 2003; Paskaleva, 2009).
Since cities are dynamic and complex sociotechnical systems, social
places where people live and work, urban infrastructure plays the role of
collective facilitators that can be improved by implementing ICT (Finger
& Razaghi, 2016). This argument suggests participatory governance
based on technology to foster multiple networks and collaboration
processes between all public and private actors (López-Quiles & Rodrí­
guez Bolívar, 2018). Against this backdrop, infrastructures, institutions
and the surrounding ecosystem are determinants of what is called digital
entrepreneurship (Satalkina & Steiner, 2020). This means that gov­
ernment/municipal initiatives for digitization promote this entrepre­
neurship, as a way of invigorating local institutions, and improving
economic growth based on a sustainable business fabric (Jawad, Naz, &
Maroof, 2020), in which city planners are in the process of transforming
their cities into smart, sustainable ones (Ibrahim, El-Zaart, & Adams,
2018). In addition, these cities are “… electively integrating the goals of
digitalization and environmental protection through established, entrepre­
neurial forms of urban governance” (Martin et al., 2019, p. 647).
In this context, the current scenario is one of digital transformation,
which means local authorities must adapt quickly, using the synergies
provided by their resources, and thereby become differentiated (Nie­
haves et al., 2019) through changing their operational environment
(Ylinen & Pekkola, 2019). In other words, by improving the supply of
solutions for citizens through implementing an effective digital envi­
ronment, they become digital entrepreneurs, in accordance with the
explanations of Streltsov, Yakovlev, Nikulina, Nikitina and Ermolina
(2019), where digital entrepreneurship creates diversified and unique
opportunities, improving competitiveness overall.
In this context, Davidson and Vaast (2010) defined digital entre­
preneurship as an act of identifying and utilizing new business oppor­
tunities which are offered by new media and internet technologies.
However, digital entrepreneurship presents differences from traditional
or general entrepreneurship (Vineela, 2005). In the current scenario
supporting digital entrepreneurship, Eleftheriadou (2014) summarised
the five pillars of this typology of entrepreneurship recognised by the
European Union, these being:
1) Digital knowledge base and ICT market - is a type of technology
which is used to store complex unstructured and structured data or
information which is used by computer systems. A digital
knowledge-based system comprises a knowledge-base that charac­
terizes the facts and an interface engine that justifies these facts and
also uses many rules and logical forms in order to produce other facts
from existing information. Information and communication tech­
nology is also one of the technologies responsible for transmitting all
kinds of information from industries or companies electronically. ICT
is the major tool or technology used for the process of digital
entrepreneurship.
2) Digital business environment - as a virtual place in which one or
more computer systems are used to record or save business infor­
mation and details of individuals’ interaction. This can be done
through digital social environments, also called social networking
sites which consist of a single central server to share information or
data to each and every client.
3) Access to finance - as the capability of an individual or an enterprise
to attain financial services along with credit, deposit, payment, in­
surance and other risk managing services. The extent of finance de­
pends on the type of business, its products and services. The
management of available finance is very important for every entre­
preneur to reduce financial risks. There are many formal and
informal financial services which provide financial support.
4) Digital skills and e-leadership - as the skills of an individual which
are associated with the use of digital technologies. Attention to the
process of using digital technologies should be more to eliminate
M. Rodrigues and M. Franco
disturbances in the digital business environment. Leadership, in
other words, electronic leadership, is a process to influence people to
change their attitudes, intentions, behaviour and performance so
that they can achieve their goals perfectly. E – Learning can be used
not only for digital entrepreneurship, but also for other aspects in
order to attract people towards specific fields.
5) Entrepreneurial culture - as an environment where people are
influenced and motivated to obtain innovative thinking power to
bear risks. In the case of business, an entrepreneurial culture is a
programme or a place where employees are encouraged to express
their innovative thoughts or products. Whenever the time during
work is involved in this, it is called intrapreneurship. Leadership can
be said to be a part of entrepreneurial culture as it can be used to
create an effective entrepreneurial culture.
These pillars should be included in local government strategies
related to digitalization. Potnis (2010) explained that digital governance
is comparable with innovation, as its attributes can be mapped by
innovation in the services, processes and organisational structures
adopted by users.
Digital evolution is therefore seen to be associated with innovation,
and so local government should include in its form of governance actions
and measures aiming for digitalization, transformation, commitment
and integration in a global context (Bertot, Estevez & Janowski, 2016;
Janowski, 2015). Innovation in the public sector has been defined as the
fulfilment of new ideas that generate value and this has to be managed as
a process at the time of its implementation/execution (Stewart-Weeks &
Kastelle, 2015). Clearly, most of the results obtained from those ideas
and inherent processes are intangible, as is the case of implementing
new services (e.g., on-line) and improving existing processes
(Arias-Pérez, Perdomo-Charry & Castaño-Ríos, 2017).
However, results are only achieved through local leaders, local
managers and local employees having digital competences and capac­
ities, and through the active involvement of all citizens (Sørensen &
Torfing, 2012). This means it is necessary to create a collaborative
context, to allow the creation of relations with local governments’
external environment at all levels (public-private-people), as argued by
the same authors. These tripartite relations have recently been referred
to in the literature as crucial (e.g., Cohen & Munoz, 2015; Muñoz &
Cohen, 2016, 2017). Lewis et al. (2015) consider that leadership is no
less important in the public sector, and should be characterised by
having dynamic and interpersonal capacities, a transformational style of
leadership, an entrepreneurial spirit and network governance, so that
digital transformation projects effectively come to fruition. Finally, the
involvement of all stakeholders is crucial, since this provides synergistic
benefits, improved efficiency and effectiveness, and fewer risks in
adopting digitalization policies (Al-Balushi, Bahari, Rahman & Hashim,
2016).
In this context, traditional organisations in the public sector have to
be re-invented, which implies reformulation of their strategies and
operational processes, and to do so, it is necessary to define a new
strategic focus, form digital competences holistically (products, services,
processes), adopt new ways of working and thereby retain and develop
the right talents to create and sustain a digital organisation (Berman,
Korsten & Marshall, 2016).
Digital transformation of processes in organisations, whether public
or private, affects products, services, forms of management and people
(Matt, Hess & Benlian, 2015). In this situation, digital transformation
requires an integrated approach to technology, processes and people, to
allow management of its availability to third parties and its sustain­
ability (Alhaqbani, Reed, Savage & Ries, 2016). Moreover, in the
organisational structure that presents an associated organisational cul­
ture, all elements are interdependent, both within organisational levels
and between them (there being a cause-effect relationship from inside to
outside and from outside to inside), as argued by Nograšek and Vintar
(2015).
3
Sustainable Cities and Society 73 (2021) 103115
Clearly, the digitalization process is extremely complex in the public
sector, as this revolves around citizens (Hoetker & Mahony, 2002), and
so the application of new leadership competences is required to meet the
demands of quality, flexibility, adaptability and time for experimenta­
tion arising from the changes implied by this process/transformation
(Walterova & Tveit, 2012). These demands are the driver for existing
barriers to be overcome in a positive, dynamic way (Arias-Pérez et al.,
2017; Janssen & van der Voort, 2016).
For Carter and Bélanger (2005), application of this process to local
authorities implies implementing new ways of providing services to
citizens, through new digital technology and its increasing involvement
in governance practices. Certainly, local authorities face obstacles
(Hackney & McBride, 1995), which are overcome through agility,
flexibility and the best governance practices (Nazir & Pinsonneault,
2012; Salmela, Tapanainen, Baiyere, Hallanoro & Galliers, 2015).
The obstacles are related to local authorities’ contextualization and
their interaction with public and private actors and citizens (Hackney,
Mcbride, Hackney & Mcbride, 1995). The external, organisational and
individual context (Hackney et al., 1995), in which technology and
digitalization promote social relations with citizens, improving their
quality of life (Partridge, 2004), as well as organisations’ competences,
and hard and soft infrastructure, as local authorities are a public orga­
nisation, acquire synergies by adopting a technological environment and
the networks this creates (Alkandari & Alshekhly, 2012; López-Quiles &
Rodríguez Bolívar, 2018; Schaffers, Komninos, Pallot & Trousse, 2011).
For Rodrigues and Franco (2019), public governance has to be articu­
lated with technological evolution, and so there must be alignment be­
tween digital strategies and inherent information systems in the public
sector, in this case local authorities (Leonhardt, Haffke, Kranz & Benlian,
2017)
In addition, a digitalized public sector is comparable to a collabo­
rative community of public authorities, firms, citizens and civil society,
which is seen as contributing to improved public performance and
provision to citizens (Davies, 2015). This does not mean that informa­
tion and communication technology (ICT) transforms the public sector,
but it can be used to redesign forms of interaction between internal and
external information through collaboration (Millard, Iversen, Kubicek &
W., 2004).
In this line of thought, Rodrigues and Franco (2018) explained that
public-private-people partnerships (e.g., living labs) are a platform
creating added value for local government (councils), with synergies in
all the aspects and axes the locality covers, for example, creativity/en­
trepreneurship, intelligence and sustainability (Rodrigues & Franco,
2018a). This type of partnership is a response to the challenge of rapid
change required of local authorities concerning digitalization, to reverse
the demographic decline and depopulation many of them face (Nie­
haves et al., 2019). These authors also consider that adaptation to
change should be directed towards citizens’ needs and to creating
endogenous conditions to attract qualified and talented human
resources.
In this context, talented, qualified human resources in line with in­
formation systems allow definition of an organisational strategy to
benefit from digital resources, and in this way create differentiating
value (Bharadwaj et al., 2013). It is also necessary to align and raise
these strategies with local authorities’ perspectives/premises/objectives
so that they can acquire and hold on to their competitive advantage, the
same authors argue. Corroborating this, Hanna (2018) proposes that
local governments should adopt a holistic vision of digital trans­
formation to be able to cope with this, as it takes place in a highly
interactive environment requiring a shared vision, agile strategies, sus­
tained commitment and institutionalized collaboration. In addition,
digital technology, infrastructure, platforms, applications and big data
are extremely interdependent and should be treated as a dynamic
ecosystem, and so local governments cannot ignore all these complex
and growing demands to remain competitive, as this author argues. The
ecosystem of digital transformation can be conceived as formed of
M. Rodrigues and M. Franco
interdependent elements, as follows:
1) Enabling policies and institutions “include the necessary tools of the
state to coordinate and synergize the whole digital transformation
ecosystem. They constitute the environment that will enhance
interaction amongst all elements of the transformation process. They
promote the effective supply and use of ICT in all sectors of economy
and society. Enabling policies and institutions are essential to
fostering trust in the digital economy. They are shaped by shared
vision and leadership” (Hanna, 2018, p. 7);
2) Human capital is important because “skilled human resources are at
the heart of the digital revolution, as both users and producers; they
include policy, technical, and change management skills as well as
broad information and digital literacy, and techno and data entre­
preneurship” (Hanna, 2018, p. 7);
3) ICT and the data industry is relevant since a “dynamic digital in­
dustry ecosystem is necessary to adapt globally available technology
solutions to local needs, manage and maintain technological infra­
structure, develop digital local content and solutions, and effectively
partner with global suppliers of ICT. In particular, local software
development and data analytics capabilities represent a core com­
petency that enables wide and effective domestic use of digital
technologies.”(Hanna, 2018, p.7);
4) Digital infrastructure refers “to affordable and competitive commu­
nication infrastructure, including affordable access to the Internet
and ICT tools, broadband, key platforms such as cloud computing
and digital payment systems.” (Hanna, 2018, p. 8);
5) Digital transformation applications include “digital technology ap­
plications and complementary investments in institutional capabil­
ities to transform key ICT-user sectors of the economy, including
digital government, digital commerce and finance, and digital
transformation of other priority economic sectors” (Hanna, 2018, p.
8).
The interdependence of these elements suggests that institutions and
economic policies are crucial for digital transformation, for firms, for
infrastructure and for the digital entrepreneur (human capital), and so it
is fundamental to have an integrated vision in local government
(Hanna, 2018).
We have, therefore, a digital economy that allows countless promises
and opportunities for regions’ social and economic development
(Sanjuán, Cárdenas Garciá & De Cañizares Arévalo, 2018). Nevertheless,
according to these authors, it also represents threats, if business and
firms are not equipped with the tangible and intangible resources
required by digital transformation to promote innovation and inclusive
growth in regions. For Spicer, Goodman and Olmstead (2019), however,
this digital economy is interlinked with the rapid adoption of technology
inherent to the concept of a smart city, but in a system of “haves and have
nots”, where places are classified according to their degree of intelli­
gence (Söderström, Paasche & Klauser, 2014), without considering their
endogenous and exogenous characteristics and the adjective intelligent
itself (Rodrigues & Franco, 2019). In other words, for digital firms and
their entrepreneurs to be successful, it is necessary to attract talented
individuals and investment rather than simply stating that a place is
intelligent (Geissinger, Laurell, Sandström, Eriksson & Nykvist, 2018;
Rodrigues & Franco, 2019). It is important for that intelligence to be
transformed into synergies and scale economies and that an attractive
environment is provided for its development, according to the same
authors.
In these circumstances, it is important to study digital entrepre­
neurship in towns and cities, particularly concerning the role of in­
stitutions and the changes arising in these that affect the business
environment (Geissinger et al., 2018). These authors conclude that
towns are a fertile environment for the implementation of digital and
technological firms, although their diversity and population density are
aspects affecting this (Geissinger et al., 2018). Nevertheless, these
4
Sustainable Cities and Society 73 (2021) 103115
obstacles can be got round by the networks created in towns, the crea­
tivity they provide and by the supply of social and cultural amenities
(Rodrigues & Franco, 2019).
In summary, the literature reviewed enables a response to the
objective defined, through the case study concerning the local authority
of Fundão, Portugal, as an example of reference in the country, due to its
concentration on technology and digital transformation. It is intended to
demonstrate how cities and towns, through the local institutional and
administrative powers, can be disseminators of digital entrepreneurship
in all its vectors of action, through the preponderant role of its leaders
(Hanna, 2018). This argument is consistent with the fact that “digital
transformation impacts all types of cities from a village in a poor region to an
established and wealthy capital. The digitalisation process is a winning game
for all kinds of territories being able to leverage on their strengths and offset
their structural or geographical weaknesses thanks to digital technologies.
These opportunities open up new directions for city-based policymaking”
(European Commission, 2016, p. 3).
3. Methodology
3.1. Methodological procedures
To fulfil the aim of this study, the research methodology followed
was the case study. The case study method respects the premises of
qualitative research, in that it follows a particular method by allowing
various procedures to be used in data collection (Ryan, Scapens &
Theobold, 2002; Yin, 2015). Patton (2002) also argued that qualitative
research is a particular data analysis process. Case studies are useful in
studying complex phenomena and those that are little explored (Yin,
2015). Niehaves et al. (2019) explained that case studies’ strength lies in
their internal validity, since external validity is weak. However, the fact
of studying the phenomenon in the physical context in which it occurs is
enriching and revealing (Bonoma, 1985).
The case study reflects not only a data collection style, but a research
method (Berg & Lune, 2004) and the preparatory actions, including the
case study protocol, are important aspects in preparing the collection of
evidence (Yin, 2015). The preparatory actions were mainly the personal
training to conduct the interviews according to Yin (2015)), as well as
the choice of people to interview (individual interviews), in order to
allow access to better and richer information, as well as to facilitate and
direct the research (Gillham, 2005). Semi-structured interviews were
also chosen, since a script makes it easier to achieve the intended ob­
jectives (Gillham, 2005).
In accordance with Yin (2015)), the stages of a case study are:
I Case study design - for this author a monographic case study
becomes more vulnerable than a multiple case study, since these,
due to their diversity, can make the study more robust and
convincing. In the selected case study, this situation will be
enriched with the inclusion of information obtained from certi­
fied webpages. In the end, the intention is to confront the results
obtained with the literature review. Finally, the research design
was based on the points reviewed in the literature, which support
the defined objective and the framework presented (Fig. 1) to
ensure the reliability of the information.
II Preparation for information collection - this phase reflects the
researcher’s capacity, preparatory measures (e.g., contacts, dates
for interviews, collection of written information) and preparation
of interview scripts. This phase is also considered crucial.
III Evidence collection - this should include multiple sources of ev­
idence, the creation of a database and should ensure linked evi­
dence. In the case presented here, triangulation was carried out
with public information about the municipality.
IV Evidence analysis - should be based on the reliability of the evi­
dence collected and its validity in the context, and establishing
standards of analysis.
M. Rodrigues and M. Franco Sustainable Cities and Society 73 (2021) 103115

based service centres. Today, Fundão has a creative ecosystem of open

innovation with a set of capacities and services that include areas for
business hosting; co-working and incubation spaces; a Fab Lab inte­
grated and certified by the world network; a Business and Services
Centre that meets the best technical and security standards required by
the sector; an Advanced Training Centre that acts on the skills required
by companies, highlighting the initiative to convert the unemployed into
computer programmers; the Agrotech IoT Centre; the Temporary Work
Reception Centre; and a Software Verification, Validation and Certifi­
cation Centre.
The connectivity of this municipality is presented in Table 1.
Analysis of Table 1 reveals, for example, the existence in 2016 of 15
technological companies and a relevant rate of employment with higher
skilled individuals (12.2%) in the municipality, as a result of the strategy
implemented. In this way, it has been possible to attract to Fundão some
investments that today are real signs of a new situation: the critical
added value of working from this region to anywhere in the world,
integrating the value chain of productive processes that run on a global
scale and that find added value here. Since the announcement of the
Innovation Plan, more and more jobs have been created in the tech­
nology sector, with companies exporting a large part of the knowledge
produced. Over the last years, Fundão has positioned itself as a
favourable destination for investment and innovation.
Fig. 1. Dimensions of digital entrepreneurship.

4. Results and discussion

V Writing up the case study - the empirical part follows the research
questions/propositions.
"About six years ago we began to position the municipality in the ICT area,
after quite an interesting work that sometimes these inland issues depend on
Data were collected from documents provided by Fundão local au­
scales. If we go to a more global scale, the question of interior or coast is
thority, and complemented by in-depth interviews (Patton, 1991), with
relative, in which in the technological sector, we have no problems with the
the deputy mayor of Fundão Local Authority (AMF), Operational Man­
fact that we are a region of the interior", was this way that the MC referred
ager of Cova da Beira Living Lab (GO), another member of the municipal
when questioned about the transformation and digitalisation of Fundão
council (MC), a computer engineer (EI) and the supreme authority of the
around information technologies. So, Interviewee AMF explained that
municipality (SM). In addition, the answers obtained were compared
the local authority has attracted technological firms (15 in 2016),
with secondary data gathered from INE2 and PORDATA.3
including multinationals such as Altran, which has led to the creation of
The results obtained were discussed in the light of the premises
more than 500 highly-qualified jobs and transformed 240 unemployed
recommended by Yin (2015)), to determine “how” and ”why” Fundão is
a digitally entrepreneurial municipality. To do so, content and inter­
Table 1
pretative analysis is carried out supported by the literature review
Data on connectivity.
presented.
Indicator Value Database/year/Unit of
measurement1
3.2. Profile of the municipality of Fundão Use of e-commerce 100 INE; 2016;%
Public consultation processes made 100
Geographically, Fundão is situated in the Central Region of Portugal, available on the website
in the area known as Cova da Beira, on the north-facing slopes of the Completion and submission of online forms 100
National network members SIM WEBPAGES, 2018
Gardunha mountain range, covering an area of 700 Km2 and divided
International network members SIM
into 23 parishes with approximately 30,000 inhabitants. The Munici­ FabLabs/ SIM
pality of Fundão has been investing, over the last few years, in a strategy LivingLabs 11.485 PORDATA; 2017; N◦
to attract investment, create jobs and foster innovation with the objec­ Analogue phone booths 100 INE; 2016;%
tive of promoting diversification of the local economy and socioeco­ Electricity consumption in public street 6873.376 PORDATA, 2016, KWH
lighting
nomic development adapted to the dynamics of the current economy
Hierarchy index of urban waste 38,6 PORDATA; 2017;%
marked by globalisation and digitalisation. Fundão has focused its management
strategy on creation of an ecosystem that would facilitate the attraction Access to broadband internet service at 6963 INE; 2016; N◦
of investment, attract and retain people, create jobs and provide new fixed location
Electricity consumers 23.378 PORDATA; 2017; N◦
markets for companies, products and services. This plan became known
Natural gas consumption 1.021 PORDATA, 2017, KWH
as the “Fundão Innovation Plan” with the essential purpose of acting Computers with Internet connection in 686 PORDATA; 2017; N◦
decisively on all the factors that contribute to the competitiveness and primary and secondary schools: total
attractiveness of a territory. It was directed to the most traditional sec­ Companies providing technology services 15 INE; 2016; N◦
tors of the local and regional economy, but also, and very specifically, to Employment rate 40,8 PORDATA; 2011;%
Unemployment rate 7,7 PORDATA; 2017;%
sectors and activities that until recently seemed alien to this territory,
Youth unemployment rate (15–64 years) 28,2 PORDATA; 2017;%
such as software development, robotics or the installation of technology- New companies with activity after 2 years 52,0 PORDATA; 2016;%
Employment with higher skilled 12,2 PORDATA; 2013;%
individuals
2 Self-employment (non-employer) 9,6
National Institute of Statistics.
3 Self-employment (employer) 11,5
Database on contemporary Portugal with official and certified statistics
1
about the country. Latest available data.

5
M. Rodrigues and M. Franco
people in computer programmers. The multinational company in engi­
neering and R&D services, Altran, also bet in the municipality of Fundão
and is currently the largest technological hub of the region: 700 engi­
neers of numerous nationalities work in the city and, in its great ma­
jority, in this company, which was mentioned by all the interviewed as "
the cherry on top of the cake".
In this sense, the MC revealed that for this type of highly specialized
labour force there is a regulation of supported rents, that is, "It is a rental
program that started in the historical centre of Fundão and then started to
expand, because we are having a lot of success, with which foreign and na­
tional workers have, during the first year, access to housing in the city. For
example, access to a property equivalent to a T2, for the value of 150 euros",
referred MC, in which the EI enjoys this benefit. Particularity, EI decided
to leave Nepal in 2017 after getting the opportunity to work at a startup
through an international exchange programme in Lisbon. "At the time of
heading to Portugal, I knew nothing about the country, really nothing, with
the only thing I knew being Cristiano Ronaldo" notes EI. Even so, the
computer engineer did some brief research about the country: he found
that Portugal had just emerged from a financial crisis and that large
multinationals like Google were positioning themselves. When he
arrived in Lisbon, the Nepalese admits he didn’t have any major diffi­
culties. Only the language was an obstacle. "After almost a year, at a time
when my exchange was about to end, I started to look for work in the country
and I found a job offer at Altran, in the Fundão area", explains EI.
AMF also mentioned that all primary school children in the local
authority have learned to handle computers (686 computers with access
to the internet in primary and secondary education). Interviewee GO
highlighted that “around 50 incubator projects are being studied and there
is a pre-agreement for the installation of two Microsoft start-ups with an
investment of around two million euros.”
These practices resulted in the European Union awarding the Region
Star 2018. For AMF, this is recognition of the local authority’s focus on
innovative projects and good practices of regional development,
particularly technological and digital. The importance of these projects
and governance practices was mentioned by Rodrigues and Franco
(2019a), and the alignment found in the strategies adopted by this local
authority was highlighted by Leonhardt et al. (2017). Furthermore, this
award reveals that Fundão includes in its digital governance the five
pillars of digital entrepreneurship shown by Eleftheriadou (2014). This
digital governance was underlined by interviewee GO, who considers
that Fundão “banks on a technological future visible in various vectors, such
as the Experimentation Centre, the IoT and the future creation of Design
Factoring.” Those comments by interviewee GO reveal the importance of
institutions/local authorities creating a business environment that pro­
motes digitalization and technology, supported by a business network
(Geissinger et al., 2018; Rodrigues & Franco, 2019). Recently, "the
American multinational IBM decided to bet on the rural "Silicon Valley",
through the installation of a Technological Innovation Centre in Fundão. The
activity of this project will be focused on the development and management of
energy solutions." pointed out the MC.
This local authority clearly concentrates on the technological and
digital area to respond to the challenge of the digital era (Holford,2019;
Streltsov et al., 2019). In addition, “the relevance given by the council to
the formation of start-ups (around 70) and research and development proj­
ects…”and “to training young unemployed people in the area of digital
skills.” was stated by AMF. In other words, for the interviewee, there is
clear evidence that the local authority studied here is equipped with the
necessary competences (Holford,2019; Streltsov et al., 2019)“…to
transform intangible assets (e.g. human resources, information systems) in
bonuses, in the form of creating a Centre for Business and Shared Services in
the Cova da Beira Living Lab (start-up incubator and accelerator), in the
FabLab certified by the worldwide network; in the existence of an Advanced
Training Centre for new digital skills and others, an IoT Centre supported by
open source technology, a Plant Biotechnology Centre and a Software Vali­
dation and Certification Centre.” These multiple technology-based pro­
jects mean this local authority and its inhabitants have the capacity and
6
Sustainable Cities and Society 73 (2021) 103115
motivation to overcome inherent barriers (Tabassum, Kaleem & Nazir,
2013) to digital entrepreneurship (S. Nazir & Pinsonneault,2012; Sal­
mela et al., 2015) and create a favourable context for this (Hackney &
McBride, 1995).
It is important to underline that all these actions to promote a
technological environment favourable to digital entrepreneurs in
Fundão are supported by the LivingLab installed there. In the words of
interviewee GO, the living lab functions “As a consortium, from the
methodological and strategic point of view, of all stakeholders, as an
ecosystem supported by a network. Its services are varied and are ultimately a
link between the whole and its parts. These services include the Praça Incu­
bator (business world, social development, artists’ workshops), the FabLab
(providing resources to support projects), the Business and Service Centre
(concentrating particularly on technological firms) and the agri-food area on
Fundão industrial estate.” Also foreseen is an interaction project involving
technology and agricultural activity, interviewee AMF revealed. This
description means there is an integrated vision of local governance
(Hanna, 2018), which takes advantage of the opportunities created by
banking on technology and the digital economy (Sanjuán et al., 2018).
Reinforcing the framework of how this local authority transformed
itself to be a digital entrepreneur, this is seen in the words of AMF, who
states that “Fundão is one of only five places in Portugal where there are
centres of software development competences in a nearshore regime and is
widely known as a hotspot in Portugal for start-up acceleration, in a study
carried out by the European Commission and Microsoft.” This local au­
thority is found to have carried out actions to create an ecosystem of
interdependence between all elements and an environment for digita­
lization to be effectively implanted (Hanna, 2018).
Summarising, this local authority followed an entrepreneurial path,
and in this way differentiates itself (Manville et al., 2014). It also formed
local partnerships with the University of Beira Interior and Castelo
Branco Polytechnic Institute, and is a full member of Parkurbis (tech­
nological centre), and these“..have strengthened the local economy, by
adopting technology, intelligence…” as a crucial axis for diversification of
economic activities, generating “critical mass” in research and devel­
opment…”, with the consequence of people moving from other regions
to “Fundão and neighbouring local authorities”, AMF reveals, besides
attracting major firms. These partnerships are a fundamental require­
ment for the local economy to grow sustainably and attract the talent
necessary to create a digital economy, which agrees with the conclusions
of Geissinger et al. (2018) and Rodrigues and Franco (2019).
In addition, the constructs of “Open governance, understood as a
bottom-up approach destined to satisfy the population’s wishes, interest and
specific, real needs; the culture of learning to grow through new experiences
and ideas; resorting to open data to stimulate transparency and the pop­
ulation’s trust, open arms for the surroundings, openness to all and open
minds to promote a constructive, positive and innovative spirit…” are an
integral part of this local authority’s public policies, “…producing global
added value..”, concludes AMF. The importance of directing the vision of
local authority management has been mentioned in the academic sphere
(Flor & Teixeira, 2016; Hsieh & Wu, 2019;Santinha et al., 2018) as
determinant for value creation “local co-value” (AMF). Consequently,
the constructs mentioned above mean that “…innovation and creativity
lead to creating an environment favouring the installation of new firms linked
to entrepreneurial concepts. Investment is being made in Fundão such as the
recent Robotics project of YDREAMS…” (https://www.cm-fundao.pt/4). In these
circumstances, intelligent, digital entrepreneurship is visible in the unit
of analysis, meaning that strategic options were redirected to the Digital
Agenda, for this typology of entrepreneurship to be effective (Digital
Agenda), and this is visible in job creation and retraining of the unem­
ployed, as mentioned above.
Moreover, the IoT (Internet of Things) formed represents the digital
transformation essential for an improved external and internal
4
Webpage of the Municipal Council of Fundão.
M. Rodrigues and M. Franco
environment necessary for the favourable context to produce the ex­
pected results, in terms of the real effects on digital entrepreneurship,
“…particularly concerning the impact on attracting people and firms through
creating the socio-economic conditions required for people to move inland”
(https://www.cm-fundao.pt/4). These specificities have been mentioned in the
literature on this topic as a challenge to overcome (Holford, 2019;
Streltsov et al., 2019), but without neglecting the importance of net­
works and intangible factors (Rodrigues & Franco, 2019). In the case
studied, intangibility and network formation are operationalized by the
existence of a living lab, as an open innnovation network (https://www.
cm-fundao.pt/4
).
Also in this line of thought, Fundão local authority belongs to the
consortium of “IoTXchange” formed of a network of European towns
committed to conceiving digitalization plans based on IoT solutions,
aiming to raise the quality of life in small and medium-sized towns in the
European Union (https://www.cm-fundao.pt/). This project was
approved in the scope of the URBACT III programme, whose method­
ology, based on transnational cooperation between towns and the
involvement of local action groups, provides the network with the
conditions to develop integrated action plans serving as a script in a new
era of digital transformation (https://www.cm-fundao.pt/). This means
that digitalization and digital entrepreneurship are part of local gov­
ernment’s daily management (Rezende, 2012). Interviewees AMF and
GO stated that the council once again participated in Web Summit/2019
in Lisbon. They consider that “This participation is part of the council’s
strategy to attract investment, create employment and encourage innovation
and entrepreneurship, and aims to promote a local ecosystem with integrated
solutions to receive technological firms, incubation and the acceleration of
new business ideas, research, development and prototyping of products,
banking on human capital and quality of life as differentiating elements.”
Fundão local authority is therefore seen to include in its governance the
five pillars of digital entrepreneurship described by Eleftheriadou
(2014).
Various authors (e.g., Berman, 2012; Meijer & Bolívar, 2016; Nie­
haves et al., 2019; Parviainen, Tihinen, Kääriäinen & Teppola, 2017)
mention that this process of transformation and transition to a digital
environment includes the adaptation and improvement of existing in­
formation systems, particularly regarding e-government. Here, Fundão
has improved its hard (e.g., water, waste, energy) and soft (e.g.,
participative budget, online digital platforms to provide residents with
services) infrastructure. An example is implementation of the“…clean
energy system supported by one of the country’s largest wind-power parks.”
says AMF. This interviewee also stated that almost all public buildings
are equipped with“…solar panels…” so that the energy produced does
not pollute the environment. As for the water network, the whole
council area benefits from appropriate treatment and a modern supply
network, as well as waste management, accessibility and street lighting
(https://www.cm-fundao.pt/). This positive supply by the local au­
thority implied the adoption of measures and policies involving all
economic and non-economic actors, characterised by agility and flexi­
bility (S. Nazir & Pinsonneault, 2012; Salmela et al., 2015). Here, the
formation of networks allowed by those projects originated the creation
of social bonds and relations with an impact on the local authority’s
everyday management and as a response to residents’ needs (AMF),
which agrees with the conclusions of researchers studying digital
entrepreneurship (Alkandari & Alshekhly, 2012; Hackney & McBride,
1995; López-Quiles & Rodríguez Bolívar, 2018; Partridge, 2004) and
governance (Leonhardt et al., 2017; Rodrigues & Franco, 2019).
Corroborating all the answers of these interviewees, the SM, never in
informal conversation with the researcher, pointed out and praised the
evolution of the investment of this municipality in technologies, which
is explained in the following points:
✓ The Municipality of Fundão has been investing, over the last few
years, in a strategy to attract investment, create jobs and foster
innovation with the objective of promoting the diversification of the
7
Sustainable Cities and Society 73 (2021) 103115
local economy and a socioeconomic development adapted to the
dynamics of the current economy marked by globalisation and
digitalisation.
✓ In this sense, Fundão focused its strategy on the creation of an
ecosystem that would facilitate the attraction of investment, the
settlement of people, the creation of jobs and the conquest of new
markets for companies, products and services.
✓ This plan became known as the Fundão Innovation Plan and pre­
sented as its essential purpose to act decisively on all the factors that
contribute to the competitiveness and attractiveness of a territory.
✓ It was aimed at the most traditional sectors of the local and regional
economy, such as the agro-food industry, the textile and precision
metalworking industry or tourism, but also and very specifically at
sectors and activities that until recently seemed alien to this territory,
such as the cases of software development, robotics or the installa­
tion of technology-based service centres.
✓ Today, Fundão has a creative ecosystem of open innovation with a
set of valences and services that include areas for business hosting;
coworking and incubation spaces; a Fab Lab integrated and certified
by the world network; a Business and Services Centre that meets the
best technical and security standards required by the sector an
Advanced Training Centre that acts on the skills required by com­
panies, highlighting the initiative to convert the unemployed into
computer programmers; the Agrotech IoT Centre; the Temporary
Work Reception Centre; and a Software Verification, Validation and
Certification Centre.
✓ As a result of this strategy, it was possible to attract to Fundão some
investments that today are concrete signs of a new reality: the added
value of working from this region to anywhere in the world, inte­
grating the value chain of productive processes that run on a global
scale and that find added value here.
✓ Since the announcement of the Innovation Plan, more than 700 jobs
have been created in Fundão in the technology sector, whose com­
panies export a large part of the knowledge produced.
✓ Over the last years, Fundão has been able to assert itself as a
favourable destination for investment and innovation, and this has
been evidenced on several occasions: 1st place in the European
Business Development Awards 2015, promoted in Portugal by IAP­
MEI; classification as Municipality of the Year as a result of the in­
tegrated ecosystem of investment attraction and support to investors,
in 2016; and more recently as winner of Registers 2018 promoted by
the European Commission.
These findings highlight the constructs previously extolled by the
literature reviewed, such as the importance of an integrated view of
governance local (Hanna, 2018), which included a willingness expressed
and implemented on the ground to overcome digitisation barriers (Nazir
& Pinsonneault, 2012; Salmela et al., 2015). On the other hand, this
holistic vision has directed this municipality towards the creation of a
business-friendly environment (Hackney et al., 1995), in order to attract
new investment and talent (Rodrigues & Franco, 2018).
In an interview on 19 March 2021, in the framework of the Recovery
and Resilience Plan (RRP) defined for Portugal, the municipality of
Fundão, as a reference in terms of innovation and technology, reported
on this experience and the role of Fundão in the recovery of the econ­
omy, sustained by the certainty that "Fundão is recognised as a digital
cluster that, as referred in the Strategic Vision for the Economic Recovery
Plan of Portugal 2020–2030 (document that served as basis for the RRP)can
serve as an anchor for a large digital project, reinforcing the installed
capacity", therefore, the Municipality of Fundão proposed that the “RRP
include, in the range of structural measures to ensure a resilient future,
concrete investments in several domains” (https://www.gazetarural.
com/). These issues and investments are aimed at the following axes
(https://www.gazetarural.com/):
M. Rodrigues and M. Franco
✓ Investment and Innovation - The local authority defends the
consolidation of Fundão’s digital cluster, through the establishment
of the first technological free zone in Portugal; the creation of an
integrated incubation, acceleration and knowledge transfer
ecosystem in the blockchain area; the installation of a Technological
Interface Centre in this domain and mapping of Fundão for the
purposes of extending the Collaborative Laboratories network and
the installation of the Portugal Digital Mission Structure;
✓ Qualifications and Skills - Convergence between the companies’
needs and the available training offer and designed in an integrated
and contextualised manner by territorial specialisation, proposing
the revision of the National Qualifications Catalogue and the rein­
forcement of the Cova da Beira Advanced Training Centre in the
digital field and the conversion of professionals and the unemployed
into areas of employability;
✓ Infrastructures - Ensure universal and uninterrupted 5 G coverage
throughout the country and create the new generation Technological
Hub in Fundão. At a time when 5 G technology is being introduced,
the Municipality proposed that the RRP should be clear in the fight
against the creation of digital deserts in a vast area of the national
territory, especially in the interior, a situation that was witnessed in
the implementation of 3 G and 4 G. The universal introduction of 5 G
would be a real revolution in terms of territorial enhancement and
the promotion of cohesion, contributing decisively to the regions’
ability to attract investment, innovation and people. On the other
hand, programs for natural risk management, agricultural and
forestry innovation, management and monitoring of the water cycle,
telehealth or mobility in low density areas, amongst others, are
directly dependant on this infrastructure, so Fundão has volunteered
to be a pilot territory in the process of introducing the network in
Portugal;
✓ Water Management and Value Creation with Agri-Food Prod­
ucts - The investments foreseen in the RRP for new irrigation systems
are not aligned with the National Irrigation Programme, which
provides for the creation of the Gardunha South Hydroagricultural
Facility and the modernisation of the Cova da Beira Irrigation
Scheme. Considering that water management is a central issue to
ensure the resilience of the territories in a context of climate change,
the investment in irrigated areas foreseen in the National Irrigated
Areas Programme should deserve another attention in the RRP,
having the Municipality of Fundão proposed the reinforcement of the
foreseen investments, in harmony with the National Irrigated Areas
Plan, the National Strategy of Adaptation to Climate Change and the
Action Programme for Climate Change. The Municipality defends,
also, the creation of integrated programmes in the scope of circular
economies, which increase the value of agro-food products and that
this valorisation stays in the primary production and first trans­
formation, so relevant in the municipality of Fundão. This valor­
isation is carried out at the same time that the distances between
producers and consumers are reduced;
✓ Housing - No measures or investments are identified in the RRP to
answer the specific needs of the Inland territories, having the Mu­
nicipality of Fundão proposed that the RRP foresees a specific pro­
gramme for the access to housing at controlled prices by the
professionals moving to the Inland, combining public investment
with incentives to private operators for the dynamization of a new
housing offer, adequate to the present comfort standards and pref­
erably associated to the urban rehabilitation. In this area, the Mu­
nicipality also proposed a reinforcement of the importance of the
Local Housing Strategies and the financial resources to support their
implementation, managed on a regional level, but also a principle of
recourse to multifunds since this is a subject that brings together
urban regeneration, energy transition, dynamisation of the economy
and social inclusion;
8
Sustainable Cities and Society 73 (2021) 103115
✓ Regional Contractualisation of Support - The local authority de­
fends the reinforcement of the territorialisation of support and pro­
grammes, namely in low density territories and in the Centre Region;
✓ Enterprise Capitalisation - There is an imperative need to reinforce
support and the capitalisation of inland enterprises, since there is the
risk that these enterprises may not be able to obtain support due to
lack of financial capacity, even more so in a pandemic situation that
has decapitalised so much the enterprises and entrepreneurs.
All these explanations were corroborated by the interviewees in loco,
as well as, the line of thought that these proposals are aligned with the
Strategic Vision, but also with the Plan for Valorisation of the Interior,
the Action Plan for Digital Transition and the EXPANDIR Programme.
Along with the proposals presented, the Municipality of Fundão
participated in the discussions of the RRP in the Intermunicipal Com­
munity of Beiras da Serra da Estrela (CBSE) and the Regional Council of
the Centre Regional Coordination and Development Commission. It also
participated in the initiative "RPP in debate", in the online debate on
Digital Transition, specifically in the panel on "Digital Commerce, new
logistics and value chains" (https://www.gazetarural.com/). This
commitment by the municipality under review shows, once again, that
opportunities will always be important for local decision-makers
(Sanjuán et al., 2018), as a strategy is in place and aligned with the
economic recovery in the country. This strategic alignment was
mentioned by Leonhardt et al. (2017), whose fundamental axis is based
on reinventing the position of local governments to embark on digital­
isation and, in this way, create the pillars of this (Eleftheriadou, 2014).
Finally, it is worth mentioning the strengths of existing partnerships in
this municipality, highlighted in the Geissinger et al. (2018) and
Rodrigues and Franco (2018), and also the co-creation of added value
and the adoption of e-government. (e.g., Flor & Teixeira, 2016; Hsieh &
Wu, 2019; Niehaves et al., 2019).
In conclusion, Fundão local authority has shown its entrepreneurial
spirit in various axes related to digitalization and technology, meaning
that the council itself and its residents and private entities move towards
today’s digital entrepreneurship, in order to fulfil the objectives defined
in the Digital Agenda. Consequently, there has been job creation, in­
vestment and the retention of population. This conclusion can be seen in
the comment of the municipality of Fundão when defending that the
RPP does not foresee a plan of measures and investments for the Interior,
dedicated to the consolidation and valorisation of the existing clusters of
competitiveness and that can be transformers of the country, of the
Interior and contribute to the construction of a fairer, more balanced and
inclusive economy, so it made this set of proposals that can make all the
difference in the defence of this territory (https://www.gazetarural.
com/).
Finally, it is crucial to underline the importance of regional policies
implemented in cities to improve their economic growth, to solve their
daily problems and to satisfy citizens’ needs, provided that they are
properly evaluated and monitored in a systematic way in order to
identify and correct their weaknesses. Moreover, bridges should
continue to be built so that all the axes of cities and towns are a
consequence of each other and not of individual policies per se. In this
context, the case study presented here is an illustrative example of the
successful intervention of municipal leaders in the development of
partnership strategies, attracting human capital and technological in­
vestment, as well as fostering digital entrepreneurship amongst all city
actors.
These arguments corroborate previous studies. For example, through
a single case study (qualitative approach), Rodrigues and Franco (2018)
studied a living lab. That living lab is a platform grouping a number of
economic, social and territorial services, with the aim of stimulating
creativity/innovation and entrepreneurship at the regional level, while
simultaneously forming various networks and promoting sustainable
and green urban development through the regeneration of existing
premises, which was seen to be possible in practical terms (Rodrigues &
M. Rodrigues and M. Franco
Franco, 2018). Although Fundão presents a taxonomic profile of weak
holistic performance, it is widely regarded as a reference in terms of
creativity, intelligence and urban sustainability, shown by the various
awards received, by belonging to various national and international
networks and by having the Cova da Beira Living Lab (Rodrigues &
Franco, 2020). From a management perspective, this open network has
the potential to promote processes involving creativity, technology,
advanced training and pilot projects in various areas. In other words,
Fundão presents a taxonomical profile of weak performance due to the
financial situation of its structural debt and not managing to prevent the
new residents attracted to work in the firms set up there from leaving the
town at the weekend due to the lack of amenities they consider impor­
tant. This means that the holistic performance shown by Fundão does
not reflect its attempts to become creative, intelligent and sustainable,
and so its political decision-makers should review its weaknesses and
reconsider how to transform those factors to improve its holistic per­
formance (Rodrigues & Franco, 2020). In sum, it is important that cities
and towns use their hard and soft infrastructure to make the transition to
digital entrepreneurship a reality and a driver of holistic local perfor­
mance in all its vectors. Despite being a single case study, Fig. 1, with the
main dimensions of digital entrepreneurship in cities and towns
enabling improved economic growth, is presented as an innovative
contribution of this study.
Reading of Fig. 1 leads to proposing that these dimensions are crucial
for local authorities to embark on digital transformation and means they
are sustained by the five pillars of digital entrepreneurship (Digital
knowledge base and ICT market; Digital business environment; Access to
finance; Digital skills and e-leadership and Entrepreneurial culture).
Consequently, if local strategies include the digitalization vector asso­
ciated with provision of an extended business network, they are making
their environment more attractive for new investment and more people
with digital skills. As a result, the positive effects will be visible in
economic growth. Moreover, the digital economy implies the involve­
ment of all stakeholders, including residents.
5. Conclusions and implications
The falling economic growth and population density found in recent
years in local authorities in inland Portugal– depopulation– led to local
authorities in this situation adhering greatly to European Union strate­
gies for areas of low population density. In this context, it became urgent
for political decision-makers in articulation with local government to
implement specific new actions to combat this decline, without harming
their economic growth and concomitantly without neglecting socio-
economic, technological and digital aspects. Here, Portugal followed
the same path as other countries, and so the bases were created for local
authorities to make unavoidable changes to create an external, internal
and individual/citizen context to attract people and technological in­
vestment in the economic, social and environmental domains. In addi­
tion, local authorities want to become attractive places for people to live
and work in with quality of life.
One of the axes to fulfil these requirements and at the same time
revitalize public areas was confirmed to be increasing concentration on
digital entrepreneurship, both at the public and individual/citizen level,
so that ideas and opportunities identified are transformed into stable,
economically viable activities and above all contribute unequivocally to
regional development, for fulfilment of the Digital Agenda objectives in
Portugal, perceived in the participation in the debate on the axes to be
included in the RPP for the recovery of Portugal’s economy.
In the Portuguese context, this type of entrepreneurship has been
associated with urban regeneration (new firms moving into existing
premises, following renovation), technological and other related activ­
ities, the formation of local networks, with the common aim of making
local authorities (principally those in isolated, inland areas) a place for
synergistic, multidimensional collaboration, and in this way stimulate
their growth and improved quality of life and well-being for their
9
Sustainable Cities and Society 73 (2021) 103115
residents. The empirical evidence presented shows that Fundão local
authority has combated depopulation by focusing on various typologies
of entrepreneurship, with digital entrepreneurship being highlighted
amongst them. Having implemented measures to encourage this type of
entrepreneurship and its interaction with all economic, cultural, social
and environmental sectors, both through open innovation networks (e.
g., living labs) and recognition of opportunities to create business
directed towards solving its social and environmental problems, the case
presented here is considered a success in European terms, as shown by
the various awards attributed over the years (e.g., Region star 2018).
Summarising, the case study presented served to respond to the objec­
tive defined, as there was internal validation of a high level of digitali­
zation in its processes, infrastructure, information systems and a
relevant focus on the technological domain.
Therefore, the main contribution of this study lies in identifying the
digital processes adopted by local authorities associated with their
governance, by using indicators of technology and governance as pillars
of their digital transformation. This means there was identification of
the measures and actions allowing assessment of the level of digital
entrepreneurship in a Portuguese local authority through application of
qualitative methodology, highlighting the importance of technological
activities, good public governance practices, the competences of actors
in digital entrepreneurship and networks as predictors of that entre­
preneurship. Another contribution lies in filling the gaps identified by
carrying out an empirical study in a successful local authority. This
study also contributes to filling the identified gaps, by carrying out an
empirical study in a successful municipality. Another contribution refers
to the emergence of cities moving towards being intelligent and sus­
tainable simultaneously, given that technology increasingly plays a
crucial role in cities’ economic growth and in people’s quality of life.
Citizens’ values are undergoing changes in the face of the health crisis
experienced around the world, which involves changes in the way we
work, live and communicate. Strategic planning of cities supported by
the axes of intelligence and sustainability will make them attractive for
new investments in the area of ICT, which will create more jobs for
sustainable urban models, facilitating future adoption of the re­
quirements of the circular economy. However, this challenge of change
imposed on cities means that good governance practices must be the
starting point, which includes digital transformation, the active partic­
ipation of all city actors and actions that encourage the formation of
open innovation networks.
Naturally, this study is not without limitations, the main one being
the fact that results are specific to the case here analysed, which does not
seem to be sufficient to draw generalized conclusions. However, the
inclusion of multiple interviews, with stakeholders from various areas of
activity, was the most appropriate way to respond to the objectives set
for the research. In addition, it is recommended that further research is
conducted in several municipalities and also in different contexts to be
able to generalize findings. Second, it is therefore suggested that in
future research, studies adopt the mixed investigation method. Ac­
cording to Jack and Raturi (2006), a combination of quantitative and
qualitative methods provides depth and/or details that are not obtained
when using just one method. The third limitation relates to the inclusion
of only one citizen, but this did not affect the results described, partic­
ularly with regard to the benefits their new residents derived, which
suggests another line of research for the future. Another possibility is a
case study, with semi-structured interviews with citizens from some
municipalities, to assess how this digitalisation has affected their quality
of life, as human capital and citizens.
We hope that this study sparks further research interest to explore
the phenomenon of digital entrepreneurship in a local government, and
the combination of the present and future works will surely allow
valuable comparisons.
M. Rodrigues and M. Franco
Funding
This research received no external funding.
Conflict of interest
We confirm that there is no conflict of interest between the authors.
Declaration of Competing Interest
The authors declare no conflict of interests.
Acknowledgments
The authors are grateful to the anonymous referees of the journal for
their extremely useful suggestions to improve the quality of the paper.
The authors gratefully acknowledge financial support from National
Funds of the FCT – Portuguese Foundation for Science and Technology
within the project «UIDB/04007/2020».
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Margarida Rodrigues holds a degree in business organization and management from
Instituto Superior de Economia e Gestão (1989); postgraduation in advanced financial
accounting (ISCTE) in 1999; master’s in management from the University of Beira Interior
(2016); PhD in management from the University of Beira Interior (2019). She is a member
of the CEFAG-UBI Research centre since 2020. Her research interests include networks,
smart cities, creative cities, entrepreneurship, CSR, Sustainability and many others.
Mário Franco is an Associate Professor of Entrepreneurship and SME Administration at
the Department of Management and Economics, Beira Interior University, Portugal. He
received his PhD in Management from Beira Interior University in 2002. In 1997, he was a
doctoral candidate and participated in the European Doctoral Programme in Entrepre­
neurship and Small Business Management in Spain and Sweden. His-research focuses on
strategic alliances, business networks, innovation and business creation. He is also a
member of a Research centre (CEFAGE-UBI) and currently involved in several research
projects on SMEs.