Remote rural areas
Remote Rural Areas: stimulating and managing new firm creation and entrepreneurship through local action
European rural areas present particular challenges for policy-makers. They consist of 80% of the European Union’s territory and are home to around a quarter of the population but show considerable diversity in their geography and landscapes and in the problems they face. The lack of homogeneity of rural areas across and within Member States presents problems in the development and design of European and national rural development policies and programmes which must take into account this diversity.
Key features and problems of remote rural regions
Europe’s rural areas are faced by a number of general challenges including a higher share of employment in declining sectors than the Community average, distance from main centres of business and employment, a less entrepreneurial and risk-taking culture, an inability to participate in the main economic channels and networks and poor education levels. There are also several other major problems affecting these areas:
- Firstly, in rural areas the local population is often in decline numerically and the average age is often increasing. This is particularly so in small communities as the working age population migrates to larger regional settlements or leaves the region entirely to access education and/or employment opportunities.
- Natural environment conservation constraints can have major impact on rural development; environmental protection laws can have an effect on capital development schemes, such as transport infrastructure improvements, housing schemes or new business premises, by increasing building costs.
- The low population density of these areas can lead to major increases in the cost of delivering basic public services such as transport, healthcare and education. In many areas there is a low employment rate among women and this is often linked to a lack of suitable childcare facilities.
- Private enterprise is affected in a similar fashion as public service provision. The low population density places a natural limit on demand for products or services and the large distances make it difficult for businesses to expand their market.
- Inward investment can also be negatively affected. Due to population migration, often of the young and highly educated sectors of the workforce, there is a limited and dispersed pool of labour that may lack the specialised skills required by a new business. A paucity of locally orientated financial instruments may also mitigate against the retention of local savings in the local economy which flow out of the area via national financial institutions.
Essentially, many of the issues considered above are concerned with generating effective scale. Therefore, the key question is: How can the distance factor inherent in areas with a low population density be overcome in order to create the minimum effective scale for public or private activity?
In order to create sustainable communities it has been argued that a critical population mass is needed in order to make economically viable public and private services delivery possible. Creating critical mass does not necessarily involve population relocation into larger settlements, rather, it means overcoming distance through improved transport or communication systems that can support and promote larger social and business networks.
Lessons from Experience
There are a variety of ways how local employment development can help to tackle the problems posed by remoteness. The experience of the IDELE good practice examples highlights that local action can make a major contribution to the successful development of rural areas. The projects display innovative thinking, leadership but above also a deep understanding and sensitive treatment of specific local and regional issues. In this respect, the good practice examples demonstrate the importance of local project ownership and development as a key success factor alongside flexible regional/national support systems, strategies and policy frameworks.
Specific lessons are:
- Embedded local cultures are a key feature of the potential comparative advantage of rural communities as well as the particular properties of the environment. Long histories of cultural richness and diversity have the potential to be mobilised, and the valorisation of these attributes has become in many cases a source of new competitive edge in the global marketplace. It is at the local level that these values can be realised and harnessed where structures have been put in place to achieve it.
- The appropriate level for action is not always the local. In the cases of the SENDA Project in Spain and the Lapland Centre of Expertise for the Experience Industry in Finland, a regional approach was appropriate. In both these cases the activities benefited from greater scale which allowed the creation of a regional strategic approach. However, each example retained enough flexibility to enable local people to participate by developing sub-projects and smaller-scale activities at their local level.
- Intermediary Support Structures (ISSs) can help support rural enterprise. More than elsewhere, remote rural areas demand enabling intermediate support structures to overcome the scale/density problem. ISSs can help communities and businesses connect to achieve a critical ‘network strength’, to increase the scale and scope of products and services and to overcome the problems of distance and accessibility. In the case of the SENDA Project and the Catalan Craft Centre an ISSs has been able to support regional craft businesses by collectively branding and marketing their products. This approach has opened new markets and allowed rural areas to maintain craft industries that are an integral part of their cultural heritage. The Orkney Marketing Scheme has taken the approach further by promoting local products generally.
- Facilitating the creation of business networks can improve quality and business performance. The Catalan Crafts Centre has introduced a quality standard into the craft sector. In Lapland, the Centre for Expertise has facilitated interaction between different industries resulting in several innovations in new products, services and the creation of new businesses and jobs. In Galicia, the network of small hostels established by the SENDA project has enabled the provision of targeted business support and training for the sector.
- Local assets must be maximised – prime examples are St James’ Pilgrimage route in Galicia and the Santa Claus Christmas experience in Lapland. Both of these have taken unique assets and linked them successfully with other related activities and services in a mutually beneficial way. Other rural areas, such as the Island of Eigg have been able to valorise their relative remoteness and highlight it and their natural environment to increase tourism. The Terre del Sosio Leader+ GAL in Sicily is developing the regions archaeological heritage to promote tourism and stimulate feelings of a shared cultural heritage.
- Small scale local action can achieve improvements to community infrastructure. In the case of the 3-C cooperative, the community was able to implement commercial broadband and wireless internet services when the area was overlooked by the large telecommunications companies and service providers.
- Wider land and property ownership can increase entrepreneurial and creative activity. On the Isle of Eigg land reform has enabled the community to operate several community services, to renovate housing stock and generate an independent income for investment in community projects. In Trångsviken in Sweden the community owns its own community centre and community development company. This company has been able to provide guidance, mentoring and financial aid to existing and start-up companies where other public and private bodies have not been able or willing to help.
- Communities can benefit from owning even small scale assets. The Scottish Land Fund has supported several large-scale land purchases but it has also financed many smaller acquisitions, ranging from small plots of land to a butchers shop. These comparatively small scale activities help maintain community services, support sustainable communities, raise the quality of living and provide local employment. The source of independent income for communities also means that further small-scale activities are possible without further intervention from public sources.
- Local action can take advantage of the strong social and trust relationships in rural communities to lever in voluntary donation of labour and skills. Higher levels of social capital and trust can also lead to increased entrepreneurial risk taking in the community. Acting locally has the potential to mobilise the trust embedded in local communities. Being able to predict others’ responses in a partnership transaction can: reduce the costs of contracting and doing business; promote more risk taking where the loading of the risk is shared and induce more creative thinking through releasing non-defensive behaviours. Consensus building can mobilise additional “free or voluntary labour” to a venture and give it a cost-performance bonus. The potential conflicts that pervade the life of these regions (indigenous people/incomers: environmental sustainability/resources exploitation, etc) need vehicles to allow them to be discussed and worked out. New forms of flexibility and adaptability can emerge in local contexts where partnership and trust can give legitimacy to social relationships and can allow both conservationist and developmental positions to be mutually explored and strategies put in place to deal with them.
- Rural communities do not often suffer from the ‘crowded platforms’ and multiple interests present in urban areas. The relative lack of local action and locally engaged government agencies mean that there is significant scope for local partnerships to develop. However, in some countries, such as the New Member States, local partnership working can be underdeveloped and significant resources may be required to build capacity. In other countries there may be cultural norms to overcome concerning the role of the state, community and the individual, i.e. a debate over where responsibility for local development actually lies. In some cases there may be political resistance to the decentralisation of power and decision-making to the local level.
- Local action can often depend on the activity of individual community leaders to generate interest and sustain momentum. Leaders of this type are not common and need support, but local action must be based on community consensus – a balance must be struck between action and consensus even if activity proceeds at a slower rate as a result. Part of the development gain from acting locally is to give a degree of legitimacy to any strategic proposals for development: local people and interests can come to “own” the strategy giving it more chance of being actualised in practice. Acting locally in this way can offer the prospect of a more sensitive reading of local economy and society: strategies built on this base will have more value and legitimacy. Part of the intrinsic value of acting locally is that it enhances the prospects for promoting social inclusion. Significant economic and social benefits can accrue where strategies for employment and development can be set in a context of local knowledge and cultural understanding.
- While in general local relationships in remote rural areas may be well developed from long-standing family and religious/cultural roots, these do not automatically enable communities to “act locally” for economic and employment development. Single issues may mobilise communities but the capacity and adaptability that is needed collectively to anticipate and respond to more abstract development challenges needs to be installed.
- Some areas may not possess existing capacity or culture to work in partnership locally. In these areas substantial time and resources must first be deployed to develop capacity, engaging people in partnerships and activity that generate social capital, trust and contribute to local employment and development. In these areas a partnership structure imposed in a top-down manner will not produce the dynamism evident in the best practice examples.
- Policy makers can support local partnerships and networks by providing Intermediary Support Structures (ISSs) for them to link into. ISSs such as the Networking Innovators and SENDA projects generated sufficient scale for efficient and effective operation of training, advice, finance and marketing services.
- In order to succeed in their development, rural areas need help to remove unnecessary barriers constraining their development. Policy-makers can help by supporting rural partnerships in campaigns for improved transport or communications infrastructure or by supporting community groups to implement improvements themselves, for example, promoting broadband access.
- In areas with average incomes generally lower than the national average part-time employment can have a major positive impact upon household and disposable income. There is significant scope for several part-time jobs to be combined into full-time jobs through job-matching schemes that can increase the ability of SMEs to expand their activity.
