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Recent Research: Best Practices in Rural Economic Development

December 03, 2015

Across the globe, the proliferation of innovation-led economic development is typically viewed in an urban context. Despite cities receiving the bulk of the attention, researchers have begun to focus on how to leverage best practices in rural economic development. Just as is the case in nearly all economic development scenarios, practitioners and policymakers working in rural areas benefit from a better understanding of local strengths and opportunities, according to new research from the United States, Canada, and the European Union.

As part of its 10-year growth strategy Europe2020, the European Union added the concept of smart, sustainable, and inclusive growth to its innovation policy agenda. In What is Smart Rural Development?, four Swedish researchers analyze how the European policy on “smart growth,” which refers to innovation policy rather than urban planning attempts to mitigate sprawl, can best be applied to rural areas. The researchers distinguish between rural areas located close to cities and integrated within metropolitan systems and peripheral rural areas with much weaker demand from cities.

Overall, they find three key determinants of smart rural growth:

  • Agglomeration: The authors suggest that smart growth in rural regions is still driven by agglomeration economies and that smart rural development is greater in rural regions that are more similar to urbanized regions.
  • Amenities and creative economies: Rural areas that are endowed with amenities (e.g., natural amenities, built amenities, social amenities) as well as creative and vibrant local communities have better growth potential compared to other areas.
  • Networks and collaborations: Because urban areas have innate advantages in firm networking and collaboration, those rural areas located on the peripheral are faced with unique challenges. Improvements in information and communication technologies infrastructure are critical in helping rural areas access external knowledge. The authors suggest that smart the connectivity of firms and organizations within a region boosts technological specialization and supports entrepreneurship.

In Is There A Best Practice? A Better Understanding of Local Economic Development in Rural Ontario, Andrew Redden from the University of Waterloo provides formal advice for rural municipalities, especially those in Canada, interested in pursuing a local economic development strategy. Informed by a series of surveys and interviews, Redden finds four essential starting points for delivering economic development services in rural areas. First, Redden suggests the importance of acquiring a solid understanding of the local community’s market and assets and the development of an economic development strategy that clearly reflects the local assets and advantages. Second, Redden emphasizes the importance of hiring a full-time economic development officer. For improved economic development efficiency, Redden suggests communities should recognize existing organizations in the community and avoid the duplication of effort. Finally, Redden suggests that rural areas should partner with neighboring municipalities to participate in regional consortiums. Given the limited resources of municipalities, regional efforts allow groups to pool money, staffing, and expertise to attract investors they would be unable to individually.

Writing in Governing, Maury Forman, a senior manager for the Washington state Department of Commerce discusses key elements from Startup Washington, the department’s rural strategy. Startup Washington focuses on organic job growth in communities across the state and serves as a clearinghouse of information and resources for entrepreneurs, including funding sources, training and technical assistance, mentorship, education and information. According to Forman, the program is rooted in five services considered by small businesses to be essential to their success: access to capital; networking; mentorship; technical assistance; and education and training. Similar to the lessons learned in Canadian and EU rural economic development, Startup Washington’s programs have proven to work the best when they serve as a complement to other local economic development activities.  



Internationalrecent research, rural