Innovation in rural areas

It is necessary to move beyond smart development policies for predominantly rural regions because their effectiveness rests on the utilization of technological innovations, which appears to be ill-suited to the specificities of rural areas.

The literature highlights that rural areas lack the necessary resources and levers to foster growth and innovation; levers and resources found in metropolitan areas and in some medium-sized towns. Among the disadvantages rural areas suffer from, the most often mentioned is a shortage of resources linked to the production of externalities: low concentration of highly skilled workers and individuals whose aspirations, lifestyles and tastes can be likened to those of the creative class; lack of competencies and entrepreneurship necessary for developing a fabric of SMEs; absence of research, development and higher education centers; deficiencies in transport and communication networks as well as in physical and digital infrastructure; insufficient demand both in terms of consumer numbers and consumption characteristics; insufficiencies in terms of networks of expertise and of potential partners; lack of engineering mechanisms for supporting the formation of business clusters and the dissemination of technological innovation. All those deficits place rural areas at a disadvantage in terms of economic development. Finally, actors in rural areas have poor access to innovation funding and to land for economic activity.

Thus, actors in rural areas appear to have less capacity to participate in and develop organizational chains of innovation and production, which form the basis of the smart specialization model, particularly in terms of sectoral integration, related variety and connectedness. One might think that in the face of low population and industrial density and diversity, a strategy based on specialization is an efficient solution, through which can be avoided a vain quest for diversification and an ineffective distribution of scarce resources among various sectors. Focusing more on a few interconnected value chains seems to make sense. However, the benefits of this strategy often depend on levers whose effectiveness varies according to the territories concerned.

Thus, at the regional scale, smart specialization is well suited for intermediate regions combining urban and rural areas, provided they have a large enough population base; However, this course of action has limited effectiveness in very isolated regions, and creates few possibilities due to the lack of scale economies.

At a sub-regional level, rural areas close to cities and more or less integrated into an urban area, can take advantage of this proximity to benefit from the positive effects of urban dynamics (where they exist) in order to develop a potential for value creation by positioning themselves strategically in such a way as to take advantage of the resources provided by the city’s economic network. Similarly, intermediate regions composed of interconnected urban and rural areas often achieve positive development based on the complementarities between these territories. On the other hand, the more peripheral rural regions have less potential for smart specialization. However, local amenities and other resources (tourism) are means through which these territories can initiate and sustain local smart development processes, provided that they are able to develop and exploit these assets.

A geographically differentiated development of the various categories of activities involved in the innovation process could offer opportunities to territories located outside the restricted club of high-tech metropolises. Indeed, two phenomena are observed: the dissemination of technologies from high-tech regions to other territories, including less technologically advanced areas, on the one hand; and the development of new forms of innovation projects in the less advanced territories. Moreover, all the activities that are involved in a given stage of development of an innovative technology, or all the applications resulting from it, are not necessarily carried out in the same territory. Thus, the territorial dimensions of innovation processes represent opportunities for rural areas to refine their strategic positioning, by building on their complementarity with leading innovative regions, and on a mode of action combining interactions with local and extra-local actors, within innovation networks. The digitization process that has taken place in the agricultural sector illustrates how this type of innovation dynamics can be initiated, and embedded in rural areas, thereby generating knowledge externalities within and beyond the agri-value chains.

Alternative paths for the development of rural areas: Implications in terms of regional and territorial development policies

To be smart in terms of policies has specific challenges for rural areas. The usual “smart” approach - which is based primarily on the exploitation of technological innovation - must be modified to take into account the specificities of these types of areas. Based on the considerations and empirical evidence produced in the project, five key factors must be considered to build an efficient smart development strategy.

 
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