Catalysing Rural Innovation 

How can the UK’s innovation support landscape better meet the needs of rural businesses? To answer this question, we need to understand: 

• Current thinking around how innovation and entrepreneurial ecosystems affect business innovation in rural areas 
• What innovation stakeholders and decision-makers think leads to effective rural innovation support 
• The data on what rural innovation looks like, and what the opportunities and barriers to innovating are in rural places 
• What rural businesses feel enables them to innovate currently, and what would help them to innovate in future.   

The four reports linked below address each of these aspects in turn. Together, they provide a comprehensive perspective on how business innovation can be encouraged in rural areas and the implications for innovation support capabilities.   

Rural businesses, which represent over a fifth of businesses, are an important source of entrepreneurialism and innovation. Many of the sectors that are major rural employers are also key potential areas of innovation and growth relevant to sectors of global significance, including the IS-8 (eight growth-driving sectors) identified in the UK’s most recent industrial strategy. Rural businesses are adaptable and resourceful innovators. Their innovation patterns tend to be collaborative, responsive to emerging needs, and embedded in networks and communities. Rural innovators, therefore, are often best placed to help tackle societal and environmental challenges. 

Rural firms are as likely to innovate as urban firms, with comparable rates of product, process and organisational innovation and similar levels of innovation investment. They are more likely than urban firms to be motivated to innovate in order to reduce their costs or environmental impacts. However, rural firms face greater difficulty converting innovation into commercial success, with notably lower rates of new-to-market innovation, weaker conversion of innovation into sales, and more limited use of formal innovation protection mechanisms. 

Overcoming ecosystem and structural constraints, rather than firm-level deficits, is critical for improved outcomes from rural innovation. Rural innovators face challenges with accessing information and collaborating with partners. Notably, weaknesses in access to market information, finance, the cost of finance, lack of qualified personnel, and less well-developed external networks and institutional intermediaries appear to hinder innovation. 

The research identifies overarching strategic issues for consideration by innovation support providers and wider stakeholders, relating to the framing of innovation and innovation support, gaps in data and knowledge, structural weaknesses within the innovation ecosystem, and the need for adaptation in innovation support service design and delivery. It highlights the ways in which support providers could adopt more tailored, flexible, accessible approaches to help rural firms get the support they need at any stage of their business. Tailored funding programmes for rural places could be co-designed and clearly communicated with the help of local trusted partners, to maximise uptake and value for money. Expanding university engagement, partnerships, and knowledge exchange in rural places is another key opportunity area, as well as building capacity for rurally based intermediaries and innovation animators to spark local connections. 

Overall, strengthening rural innovation requires a combined effort, addressing systemic constraints, while also improving access to networks, finance, skills, and markets. Addressing these constraints will be essential if rural areas are to fulfil all their potential to contribute to the UK’s economic growth objectives. 

Related Reports:

IRC Report 057 Catalysing Rural Innovation. Part 1: State of the Art Review
IRC Report 058 Catalysing Rural Innovation.. Part 2: Perspectives on the Innovation
IRC Report 059 Unpacking Innovation Activities In Rural Firms. Evidence from National Data Sets
IRC Report 060 Rural Businesses’ Understanding Of Innovation. Drivers, Barriers and Collaboration

Download the four reports using the buttons on the right-hand side of this webpage. Visit nicre.co.uk, to find out more.