Innovation in rural Europe

02 December 2014

The nature of the European Union’s Common Agricultural Policy is changing - the CAP is changing. 


With the latest CAP reform concluded last December we are now moving towards a CAP of greater and wider responsibility: at the same time the CAP needs to work with less money while also responding to growing expectations – as the CAP has become relevant to more people.


We all no doubt agree that European rural development should deliver for the people of rural Europe. 


20 - 23% of EU citizens live in rural regions and a further 35% occupy intermediate rural-urban regions. 


While Europe may have the largest share of its population living in cities we are agreed in pursuing the desire for those who live in rural areas to share the same quality of life, economic prospects and welfare as those who live in cities.


Hence the support for rural development in the European Union for the period 2015-2020 was drafted in such a way as to tackle multiple challenges to rural areas, such as: 


poor state of basic services in rural areas 
insufficient small infrastructure eg sewage, gas
inefficient energy supply 
limited access to high-speed internet. 

For only a comprehensive approach to rural development allows for the successful pursuit of the main topic of our discussions today: innovation.



Europe´s countryside today badly needs innovation: not only for its agriculture, but also for all those who dwell in the countryside but are not actively engaged in farming. 


The inclusion of rural areas is fundamental for the attainment of the Europe 2020 employment target of 75% of the population aged 20-64; indeed, rural regions in the EU-15 generate 17% of employment, whereas in EU-13 that value reaches 37%. 

What's important, 35% of all EU farmers engage in gainful activities other than their farm work whereas farmers themselves do not constitute the bulk of rural workforce; on the contrary, the share of employment in secondary and tertiary sectors in the rural EU reaches almost 87%, with an important difference between old and new Member States: almost 92% and 77% respectively. 


Hence we can note: Europe’s countryside population does not live from farming anymore.


This is why in the United Kingdom we attach particular attention to the development of innovation and entrepreneurship in rural areas, describing innovation as one of the key drivers of our productivity growth in agriculture and countryside. 

Innovation is treated as a priority across all investments under Rural Development Programmes comprising of generally available CAP measures.


First, knowledge transfer and information actions - this measure facilitates the much needed links between the research and innovation sector and agriculture and rural start-ups.


Second, farm and business development - a measure that provides start-up capital for young farmers and new entrants but also encompasses business start-up aid for non-agricultural activities. 


Third, basic services in rural areas and village renewal - this measure is supposed to address inequalities in the standard of life between the cities and the countryside. Its particular value from the point of view of innovation is that it can finance development of broadband infrastructure for ultra-fast internet and thus help bridge the digital divide that often cuts off rural areas from the internal and global markets.


Fourth, cooperation - a broad measure of increasing importance which can support pilot projects aimed at development of new products, practices, processes and technologies that can be utilised by different actors in the food chain.



The second core source of funding is the European Regional Development Fund. On the basis of its 2007-2013 contribution the UK Government established a special programme in my own constituency: the North East of England Rural Growth Network.


Rural Growth Networks are funded from a 165 million British pounds package designed to stimulate economic growth in rural businesses and communities. The purpose of the Network is to address the fundamental barriers to growth in rural areas: poor infrastructure, scarcity of business premises or lack of business networks. My region was selected as one of five in England to tap into this unique opportunity to break down barriers to economic growth.



The key actors in setting our Network were the North East Local Enterprise Partnership and the North East Farming and Rural Advisory Network. They started with identifying key challenges to rural business growth: 

lack of small and flexible office premises for start-ups and micro-enterprises 
exclusion of women from entrepreneurship, especially in more remote areas
insufficient access to broadband services 
as well as inefficiencies in engagement of micro-businesses with enterprise support services. 


By end of March 2015 a resulting programme of pilot initiatives is expected to:

deliver 300 jobs (created or safeguarded)
support 200 different businesses
create 40 new start-ups 
develop over 50 new workspaces 
open six new enterprise hubs. These hubs, consisting of flexible workspaces, shared services and opportunities for networking are a 3.2million British pound - worth flagship project of the Rural Growth Network.



Support to rural enterprise is delivered by a team of 10 rural enterprise development officers, appointed by the regional enterprise agency and local councils, thus securing a link with the local authorities. Newcastle University plays an important role, too, with its Centre for Rural Economy which provides expertise and facilitates business networking.


Funding for micro-enterprises comes from a pilot grant scheme fuelled by the Rural Development Programme for England which links to the rural development policy and taps into relevant CAP budget line.


Typical enterprise hubs set up by the Network, like those in Alnwick, Wooler or Middleton offer small businesses office and industrial workshop units, space for co-working, food units or training rooms, all with flexible licence agreements. They also share their space with local community centres, public libraries and tourist information offices.


Examples of businesses accommodated thanks to the hubs include:

a web development and digital marketing companies 
a manufacturing company specialising in subsea buoyancy for the oil and gas industry (which benefits from strong ties with an engineering department of the local Newcastle University) 
an arts training company
a Public Relations firm 
a complementary therapy company 
a Human Resources company 
& micro-butcheries. 


At the same time, the grant scheme funded under the CAP’s second pillar includes such micro-enterprises as a small brewery, a local printing facility, an artisan coffee roasting business and others.


One lesson that can be drawn from the North East England example is that rural entrepreneurship should be treated as as broad a category as possible.  



Primarily, development of start-ups requires a multi-programme approach when it comes to funding, and this has recently been fully enshrined in the Common Provisions Regulation for European Funds. 

In England, we have already demonstrated how European and national funds can be successfully combined in a package deal addressed not to all, but to those who are able to demonstrate commitment, ideas and leadership.


Secondly, close cooperation between all actors involved is indispensable. Although enterprise hubs are independently managed and competition-driven, they are overseen by the local councils as well as national authorities responsible for the management of European funds. At the same time, close cooperation with the local university delivers tangible benefits both in form of expertise and transfer of knowledge as well as local jobs for highly trained graduates.


Finally, effectively managed and successful enterprise hubs deliver for the entire rural community of the region by harnessing human potential, connecting it to global economy and cashing in on returns from taxed economic activity. 


I hope our example from the North East of England can be successfully copied elsewhere in Europe, the more so because it is based on the common European policy of rural and regional development. 


If it is successful then it will help deliver a brighter future for our rural areas

- rural areas where entrepreneurship and innovation can thrive on the basis of locally available resources satisfying local, national, or even international demand and where the rural population can pursue their  lives including their careers, safely, happily and productively. 

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