Innovation and Modernising the Rural Economy

image of Innovation and Modernising the Rural Economy

This publication is a result of the discussions from the OECD 8th Rural Development Policy Conference: "Innovation and modernising the rural economy" which took place in Krasnoyarsk, Russia on 3-5 October 2012. It provides an overview of the two themes of modernisation and innovation, focusing on identifying the attributes of the modern rural economy and showing how it differs from the traditional rural economy and from metropolitan economies. It also shows how rural innovation is a key driver of rural economic growth using patents as a measure.

The second part of the book consists of four chapters that offer evidence of rural regions’ potential to contribute to national economic growth. In addition, each provides useful context for Part I by outlining four different perspectives on the process of modernisation and innovation, and specifically, how they can take place in the rural territories of OECD countries. In each paper, the authors explore the opportunities and impediments to these twin processes and how government policy can help or hinder them.



Executive summary

The topics of “innovation” and “modernising the rural economy” are closely related. OECD rural regions are highly connected to global markets and open to trade. Their growth potential depends on their capacity to modernise their economic base and to innovate, in other words to produce goods and services that can be sold at a profit in local and in international markets, and to introduce new sectors and new products. However, this exposure to greater competition from domestic and international markets sometimes comes without complementary policies that can help strengthen the capacity of rural areas to adapt. The focus on innovation and modernisation represents an important next step in the evolution of the OECD rural policy dialogue. The fact that it is widely believed that the future prosperity of rural regions will be driven by enterprise, innovation and new technologies, tailored to specific markets and applied to new and old industries, makes this discussion timely. Furthermore, focusing on the two pillars critical to revitalising rural areas – innovation and modernisation – is one way to identify factors that can trigger or facilitate improved economic performance and identify those that tend to weaken it.


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