Key policy messages & conclusions: Use for other regions, lessons learnt and recommendations for national and European level

Main challenges for rural areas

Among the 204 INTERREG IVC projects, there are nine that focus on rural development. All of these nine projects aim to improve the effectiveness of regional/local rural development policy through exchanging experiences, identifying good practices and, where possible, transferring good practices to other regions. This report aims to capitalise on – that is, draw lessons from - the achievements of these projects by analysing the results that are available at the time of writing in 2013 (three projects were completed in 2012, but results are not yet available for five of the nine projects which started in 2012). 

The nine INTERREG IVC projects:

  • mainly aim to diversify rural areas through tourism (RURALAND and B2N by exchanging a broad range of rural development initiatives; ICER, CESR, DANTE and e-CREATE by stimulating tourism; Robinwood Plus through forest management).
  • focus on using/stimulating ICT to enhance rural connectivity (Micropol by developing Smart Work Centres to facilitate employment, GRISI+ uses ICT to facilitate rural life and work and to attract new inhabitants to villages, DANTE and e-CREATE both use ICT to stimulate rural tourism).
  • all focus on sustainable development and economic development and pursue all the aims of Europe2020.
  • mostly focus on stimulating development rather than tackling economic barriers.
  • deal with all the main economic drivers and barriers of rural development as reported in the latest EU research on growth and employment in rural areas.

Generally, the nine INTERREG IVC rural development projects can be characterised by two basic features with regard to their foundations and aims.

First, across the projects, the general aim of their activities is to boost the rural economy and employment while preserving or even strengthening the specific social and natural/environmental quality of rural areas. The general assertion is that this combination can shape rural sustainable development, which in turn contributes to Europe’s targets for smart, sustainable, and inclusive growth. The projects therefore do indeed contribute to the Europe 2020 objectives.

Second, the reviewed projects make clear, and generally take as their starting point, that the development of rural areas is not only necessary for their local population, but also beneficial to Europe’s economy as a whole. Generally, rural areas are considered to offer essential, endogenous assets that can help meet some of the great European socio-economic challenges (e.g. safe and healthy food, preservation of the natural environment, climate change mitigation / energy).

Effects of the projects

Apart from their individual objectives, the projects consequently aim to contribute, in some way, to the EU objectives laid out in the Europe 2020 strategy.

To what extent are the projects realising these objectives?

Broadly speaking, all the projects appear to operate on the partner-level, and attempt to improve the quality of life and ‘liveability’ of local communities through relatively small-scale interventions (e.g. the eco-lodge Urnatur under B2N). On this level, most of the projects can already report significant achievements in their own partner regions, even if they are still up and running and the full extent of their effects is not yet known.

For instance, GRISI+ has managed to attract 50 new families to the region involved, and the ICER project has resulted in new investments and an increase in tourism in the region. Other projects have generated outputs that directly support their localities, such as the introduction of working groups to supervise 50 forest sites (Robinwood Plus), smart offices and workers to maintain local employment (Micropol), as well as 28 local action plans and five pilot actions on different topics (renewable energy, gender mainstreaming, local gastronomy, GPS guided tours) (RURALAND).

It is recommended to firmly ‘embed’ the projects within the region in order to ensure that the impact of their actions is enduring. Building strategic alliances between the different rural partners will broaden the projects’ scope, help to build capacity within the project and turn the direct short-term effects into a long-lasting, sustainable impact on the regional socio-economic situation. In practical terms, this means participating in or building (ICT) tourism networks or forming links with research and innovation centres in adjacent towns and deploying ICT. Strengthening rural and urban-rural networks and capacity building through interaction is stressed as a policy priority for the coming period.

The projects obviously aim to have sustainable effects, and a number of them include provisions for this built into their foundations. For instance, the good practice Nattitude within the ICER project has a clear networking approach, which aims to benefit the whole Auvergne territory and which can easily be transferred to other regions. Actions undertaken within the Robinwood Plus project are also encouraged to involve, on a continuous basis, the local tourist, business and cultural stakeholders linked to the forestry system, with a view to creating a public/private network to meet the demands of the territory. Furthermore, the projects Micropol and GRISI+ are looking to ensure the sustainability of their efforts by establishing themselves as nodes around which regional networks can be developed.
Clearly, projects and measures with a relatively limited scale can often make a direct difference to the local community (directly involved partners), and work as catalysts for wider community development (throughout the region).


What has proven to be more difficult for the projects so far, however, is to ensure an impact across the whole of Europe, which would entail disseminating and enabling the transfer of these good practices to other regions (including those not involved in the partnership) and to exert a direct impact on EU objectives and policy. Although the rural projects aspire to achieve impacts just like projects in urban environments, they in effect generally remain relatively limited in scale and reach. In spite of the endogenous strengths of rural areas, the projects generally appear to require time, effort and support, in order to grow and develop to attain the same level of impact.

Obviously, projects in rural areas do have to cope with some structural barriers. The essential (economic) aspects that are lacking in rural areas in comparison to urban economies are the clustering effects and accompanying economies of scale that are features of denser urban environments. In rural areas, the socio-economic structure is spatially spread out, and activities and functions are dispersed. This means that, often, there is no critical mass of human resources, investments, services etc. to generate substantial impacts within single projects. In addition, the wide heterogeneity of rural areas is one of the possible reasons.


Policy approach – smart specialisation

Assuming that rural areas have a substantial endogenous potential to contribute to smart, sustainable and inclusive growth in all European regions, they have an equally important role to play, similar to urban regions, in meeting European challenges. Rural areas first need to be considered as such by European, national and local public/private stakeholders. On the other hand, it is recommended that rural stakeholders themselves take on this role, and perhaps more consciously adjust their ambitions and efforts accordingly.
In this case, the approach to unlock the full potential of rural areas is not different from that used in urban areas and follows the general Europe 2020 and smart specialisation philosophy.

The smart specialisation strategy as prescribed for each region by the European Commission requires the stimulation of entrepreneurship and innovation that complement the competences and skills already present in the region, and build on territorial characteristics specific to different areas. In the case of rural areas, these could be  environmental quality, natural resources, quality of life / cultural capital, the human and social capital  (as identified in the table below). The main competence domains/sectors that this should be focused on could be agriculture and food, forestry, tourism, heritage/crafts/culture, energy, rural services etc. Using these sectors and competences present within a region as a starting point, a smart specialisation strategy then requires further sustained entrepreneurial exploration to define and develop niches where the region has competitive strengths.

The smart specialisation logic suggests that each region has its own specific regional economic system and possesses its own set of economic components. In addition, the interaction between the various players within a regional economy, and thus the way the innovation system functions, differs between regions. Not all regions are equally equipped and suited to stimulate or achieve ‘smart specialisation’. Particularly peripheral and/or lagging (often rural) regions often lack certain basic elements in their innovation systems that are ultimately essential to smart specialisation. The overview below provides the main components that form a regional economic system, and determine the way it functions (based on Hinoul, 2007 and McCann & Ortega-Argiles, 2011) .

Table 4.1 Regional innovation ecosystem

The system

Main components

Descriptive inputs

Regional innovation (eco)-system components

Knowledge and R&D structure

Higher education & universities

Research centres

Knowledge/high-tech employment

Education level

R&D investments (public/private)

Entrepreneurship

(Serial) entrepreneurs / SMEs

Enterprise creation and survival ratio

International role model companies

Economic infrastructure - knowledge valorisation

Incubators/Science parks

Business accommodation

Start-up and other business services and incentives

Financing

Venture capital (private)

Regional investment funds (public)

Policy/governance

Regional strategy, thematic/sectoral priorities + resources

Quality of life

Accessibility

Openness / tolerance (reputation)

Environmental quality

Level of social services/capital

Regional innovation (eco)system - behaviour/ functioning)

Relatedness

The specialisation or diversification rate of the regional economy – opportunity for knowledge spill-overs and regional vulnerability to external shocks.

The most promising channels for regional growth is a  diversification using and building on the existing pre dominant technologies and competences

Connectivity

All types of interaction among and between public, private and knowledge players

Regional network organisations/events

External links – intensity, quality, character

Embeddedness

The extent to which industries use local input-output (backward-forward) linkages and local labour supply

Source: Ecorys

Recommendations

The table above indicates which relevant aspects need specific attention within rural regions. Clearly, a rural region will never have the same economic structure as an urban region, but there are issues currently hindering the development of rural areas that can be dealt with through policy designed to overcome the situation.

Before making any general statements, it should be noted that, in view of adapting policy measures to the needs of each area, the different levels of development of the regions need to be analysed precisely and each situation needs to be understood fully. However, there are a number of more general recommendations that can be made with regard to rural policy and the INTERREG IVC rural projects:

First, ICTs are an essential tool for improving the accessibility of rural areas, and for facilitating the development and maintenance of internal and external networks. ICT applications will certainly help to unlock the potential of rural areas and make them more attractive places to live, work and visit. This is widely understood by the rural community and is being achieved by several projects (DANTE, e-CREATE, GRISI+, Micropol). However, it should be understood that this is merely a pre-requisite for regional development. ICT is important for all rural areas, but it must be made clear that it will not make the decisive difference in their economic development (at most a temporarily advantage);

Second, upgrade and upscale the efforts undertaken within rural projects, as they mostly have a relatively small scope. To achieve this, a number of  recommendations can be made:
a. Rural regions should continuously reinforce local partnerships between public and private local stakeholders (including NGOs) involved within the region.
b. At the same time, contemporary rural development will benefit from strategic cooperation and mutual relationships with different types of region/territory and stakeholder. It is recommended for rural regions to open up to external stakeholders, to bring in new flows and resources from other contexts that will help to catalyse local development processes. In the increasingly diverse and complex rural and urban economies, urban-rural flows and interrelations are becoming ever more important. Mutually benefiting from each other’s strengths and efforts, stakeholders and regions would be better placed to actively participate in the increasingly integrated dynamics of smart specialisation at the EU-level.
c. More specifically,  rural stakeholders should  build strategic relationships and networks with relevant knowledge centres in any shape of form, within or outside of the region (e.g. ENRD, ERRIN). These would provide the necessary complementary competences and skills to further develop their activities, and enhance the effectiveness of such activities for the region.
d. Furthermore, external private stakeholders should be invited to participate, both in programming and in the separate projects. Projects should be market-oriented, and develop strong cooperative public-private stakeholder partnerships. Attracting new external resources and risk sharing (between the public and private stakeholders) are ways to achieve more sustainable results from investment.

Business diversification should be strongly advocated as a means for businesses to resist the negative trends affecting agriculture and rural areas, to exploit strong inherent resources in new ways, and to adapt economic capacity. Successful rural SMEs are small scale, but do tend towards multiple business activities, not limited to a single sector. Such SMEs draw upon distinct regional characteristics, and focus on important niche markets (examples:RURALAND, ICER & e-Create).

In addition to this, it is recommended that sufficient attention be paid to the renewal of the existing industrial fabric in the region. As the role of traditional industrial sectors declines, all areas, including rural ones, need to consider how the specific assets and resources present within these sectors can be redeployed to the region’s benefit.

Finally, like all European regions, rural regions should work towards a smart specialisation strategy. At the moment, however, the governance capacity and entrepreneurial mind-set are not sufficient in public sectors to offset the necessary innovation-oriented, entrepreneur-driven renewal processes in European rural settings. Therefore, knowledge-based renewal processes should be promoted and better use should be made of learning models, so that people involved in projects and stakeholders can learn from each other. Capacity building, training, technical assistance and coaching of local stakeholders will help to unlock the development potential of rural areas (examples B2N, Robinwood Plus, & DANTE).

Furthermore, it is recommended to involve private stakeholders as much as possible, and to attract private financial investments in rural projects. At the same time, one needs to be selective in dealing with private investment. As rural projects generally take a relatively long time to produce optimal results, and require long-term efforts to generate a return on investment, the focus should be placed on investors explicitly looking to bring the region forward through sustainable, long-term investments. Certain private investors might not be very familiar with all the features specific to a rural setting. Therefore, they will benefit from intensive interaction and continuous dialogue among all stakeholders, to provide them with advice and guidance on the specific rural characteristics.

Another recommendation in this respect is to adopt multi-measure approaches, whereby projects do not only focus on their own partners but also actively involve other regions and the European level. By having a project focus not only on actions and measures for its own regions but also by  taking into account what is relevant for other regions as much as possible, there can be a bottom-up input into the European policy on what works and what does not work in rural development. This will however demand projects to adopt a clear focus not only on their own regions/partners but also on their potential for other regions and EU policy level, which is currently not an objective of INTERREG IVC projects.

To better facilitate the design of a smart specialisation strategy and to discern the opportunities and needs of these territories, a continuous needs analysis and foresight work is required. As the European Commission is already requesting a clearer monitoring of statistics to know how regions are progressing, the regions and countries will have to actively monitor these core indicators.

A final recommendation  concerns the Europe 2020 strategy for smart, sustainable and inclusive growth, and particularly the link between the notions of smart and sustainable. The European Commission has assigned specific meaning to these terms, and has even published guidelines on how to connect smart and sustainable growth through smart specialisation . Rural areas offer particular opportunities to link smart and sustainable growth within a general growth strategy. As they depend substantially on natural resources for their economic activity (e.g. agriculture), rural areas integrate sustainability into their development much more than urban regions, and could therefore make a strong contribution, providing smart perspectives on how to achieve this link.

 

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