Press Office


Rural economy more than farming and tourism


Newcastle academic warns rural economies at risk without radical policy rethink.

Newcastle University rural issues expert Professor Mark Shucksmith OBE is today calling on EU and UK governments to recognise that the countryside can contribute to economic growth beyond agriculture and tourism.

Speaking in Brussels alongside the European Commissioner for Agriculture and Rural Development at a Notre Europe seminar on European policies for rural areas, Professor Shucksmith, Director of the Newcastle Institute for Social Renewal, will highlight the contribution different types of rural business make to the economy. He will also discuss the constraints these firms face as they try to grow, and call for a shift in thinking about rural development.

He will say: “Too many policymakers fall into the trap of thinking that rural economies are all about farming and tourism. This is not true, although of course we must support Europe’s family farmers. For instance, we know that in the North East of England 75% of rural Gross Value Added (GVA) is actually generated by the public sector, business services, distribution, hotels and retail, and manufacturing.

These are not business sectors that most people associate with rural areas, but they are hugely important as a potential source of future economic growth. And Newcastle University’s surveys of rural businesses show that many of these businesses have potential for growth, even in these challenging times.

“However, rural firms face a number of barriers to growth. Businesses encounter difficulties recruiting skilled staff, and many have trouble finding premises where they can expand. This is particularly true for the manufacturing sector, which has the highest growth ambitions but is constrained by inadequate sites in rural areas and inappropriate planning policies. Other obstacles faced by rural businesses across all sectors are regulation, lack of finance and slow broadband speeds. Governments urgently need to address these barriers and help businesses overcome them. Without a radical rethink, there is a real risk that rural economies across Europe will be unable to contribute fully to the EU growth agenda, and some rural areas will even decline.

“We’ve had ‘top-down’ views of rural development, where infrastructure projects such as power stations or aluminium smelters have been imposed on rural communities from outside. These policies are dictative, destructive and distort rural economies. We’ve also had ‘bottom-up’ philosophies, where rural economies are encouraged to develop from within by responding to local priorities and using local assets, but are rarely given the support they need to do this. Neither of these approaches is sufficient or effective and radical action is required, otherwise the potential of rural economies will be squandered.

“Governments should take a ‘networked’ view of rural development; one which builds local capacity and supports the assets and networks that already exist within and around each region, but does not ignore the vital role of the state in providing the necessary facilitating conditions to allow rural businesses to grow. Philosophies such as localism and place-shaping, while important, are not enough. Governments must seriously consider their regional policies and rural-proof national initiatives to protect non-urban economies. They should prioritise provision of high speed broadband to rural areas, simplify the tax regime to encourage entrepreneurship and growth, and provide networking and incubation spaces for rural businesses.

“It is vital that governments recognise the potential contribution rural areas can make to national economic growth and invest in rural development. In this age of austerity it has never been more important that businesses that can create jobs and generate growth are equipped and supported so they can thrive. Supporting rural businesses is not an unaffordable luxury, it is a necessary investment in our future.”

The Notre Europe - Jacques Delors Institute seminar on European policies for rural areas is being held in conjunction with Sol & Civilisation and will take place on Friday 13 December at the Committee of the Regions – Jacques Delors Building in Brussels. Also speaking at the event are Dacian Ciolos, European Commissioner for Agriculture and Rural Development, and Mercedes Bresso, First Vice-President of the Committee of the Regions.

published on: 16 December 2013