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.



Unlocking rural innovation in the North East of England

The role of innovation connectors

Recent academic studies and UK policy documents have recognised the increasing role of innovation as a key driver of economic growth, both regionally and nationally. However, there is an assumption in policy making that successful innovation requires concentration of scientific and technological expertise and proximity to knowledge resources, particularly universities, hence the designation of six science cities in England in 2005. Moreover, innovation is generally regarded as a one-directional linear process, involving the translation of knowledge and information generated by high-tech science to end users.

“Rural” per se has largely been missing from national and regional innovation debates. This is not to say that policy makers actively exclude the rural, rather that the characteristics that make rural areas and rural actors (such as businesses) different, and the extent to which they engage with urban-based actors, are largely unrecognised. This raises important questions regarding the role of rural areas and actors in generating and implementing innovation.

This chapter investigates the extent to which rural businesses in the North East of England (United Kingdom) are engaged with key regional innovation actors, including seven “innovation connectors”. These are sites highlighted as having the greatest potential for using innovation to stimulate economic regeneration across the North East region. Based on a review of relevant literature and policy, an analysis of findings from a large-scale rural business survey and a series of interviews and focus groups with key actors in the innovation system, the chapter discusses the innovative potential of rural businesses and the likely benefits of engaging with knowledge institutions, including the designated innovation connectors, in the region. However, the chapter also highlights several challenges faced by rural firms in seeking support to develop their innovative potential. The chapter concludes by drawing some implications for future strategies and policies to promote rural innovation.


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