New evidence shows that around 64% of rural firms are innovative, compared with 70% in urban areas – a much smaller gap than often assumed. The analysis finds that rural firms are not inherently less innovative – they innovate differently, according to the findings.
Rural vs urban areas and the lack of data
Rural areas are home to nearly 25% of Europe’s population and 75% of its territory. Yet innovation and entrepreneurship in these places have long remained a story without numbers. This is because most innovation indicators are produced only at aggregated territorial levels and rarely distinguish between rural and urban contexts. Such data gap made it more difficult to design targeted interventions that address the specific needs of rural economies, risking widening territorial divides.
First-time analysis at firm level
JRC scientists’ analysis addresses the data gap and presents the first systematic firm-level evidence on rural innovation drawn from a dedicated Eurobarometer survey of over 12,000 firms across the EU.
Beyond the first estimation of EU-wide innovation statistics for rural areas, the survey also found that rural firms are innovating at high levels and with less of a gap with urban areas than observed in proxy technology related statistics such as patents and R&D expenditure. Furthermore, when firms in rural areas innovate, they use a mixture of product and process innovation more often than their urban counterparts.
The report also highlights additional differences between the way enterpreneurs in rural areas and urban areas innovate in the EU. For example, rather than competing, rural firms collaborate with local competitors to compensate for missing external inputs and fill innovation gaps.
There are several real examples of how rural places innovate through collaboration. For example, Sweden’s Rural Innovation Centre serves four municipalities in the south-eastof the Skåne county as a knowledge and networking hub, offering advisory meetings and linking rural entrepreneurs with urban-based networks. Rural-Urban Hub Cluj in Romania also connects the city of Cluj-Napoca’s thriving digital ecosystem with the surrounding rural municipalities, to share development opportunities and reduce regional inequalities.
Like in urban areas, partnerships with local universities are also a key driver of innovation intensity among rural firms, but the proximity to universities – now measured for the first time through this survey – is an important determinant for innovation in rural areas. In Ireland, the South East Technological University launched several rural innovation hubs across the region, also in partnership with the Dungarvan Enterprise Centre, and provides flexible office solutions and fostering innovation and digital advancement in the area.
Finally, while firms with a more gender-balanced and skilled workforce are more likely to be innovative across all territories, the link between tertiary education and inclusive labour practices is stronger in rural than urban areas.
Rural firms still face specific barriers, such as access to funding which is connected for example to lagging intellectual property outcomes. Fewer rural firms receive public funding for innovation (15% vs 18%), and only 5% of rural firms report receiving EU funds, compared to 6.5% of urban firms. By contrast, a slightly higher share of rural firms is funded by local or regional authorities. Commercial bank loans and informal financing channels such as family and friends are the most frequent private sources of funding reported in both rural and urban firms.
The study underscores that measurement choices matter when assessing territorial gaps and designing place-sensitive policies that help unlock rural innovation potential.
Background
As part of the long-term vision for the EU’s rural areas, the European Startup Village Forum initiative, coordinated by the European Commission’s Joint Research Centre (JRC), brings together European, national, regional and local policymakers, entrepreneurs, and communities to shape actions that support locally driven, innovative entrepreneurship in rural areas. The work of the Forum is supported by the European Parliament through a Preparatory Action on ‘Startup Village Forum and Rural Innovation Valleys’.
Previous JRC work provided novel, granular metrics on technological innovation indicators, such as patents and R&D investments. This report relies on the very first Eurobarometer dedicated to rural innovation, including queries on firms’ location, and releasing novel data for a wider definition of innovation – for example introducing new or significantly improved products or processes, regardless of whether technology is involved.
O artigo foi publicado originalmente em JRC.
