Supporting rural businesses

Hill, Inge and Mole, Kevin (2022). Supporting rural businesses. NICRE State of the Art Reviews No. 4; In NICRE State of the Art Reviews No. 4 NICRE State of the Art Reviews No. 4, National Innovation Centre for Rural Enterprise, Newcastle University..



This review offers a concise overview of rural business support research from an academic viewpoint. As the concept of 'rural business’ is ill-defined, this review differentiates ’rural business’ - the business that is integrated into the rural socio- economic context via suppliers, staff and networks, from a business that is simply located in the rural without those links. ’Rural business support‘ denotes services provided to all rural businesses, that serve rural communities and beyond, from land-based to service businesses, although the rural economy is becoming less reliant on land-based businesses. Existing business support research findings implicitly claim general applicability, yet, are conducted nearly always in urban contexts. Hence, little research exists that identifies what is distinctive about rural business support and what is similar to services provided in urban contexts. Specific challenges business located in the rural face include the effect of fewer business and lower population densities, which reduce the abilities for rural businesses to access skilled workers and customers, and more limited infrastructure in terms of public transport and broadband.

Market failure applies both to rural and urban areas. Market failure denotes the condition when markets do not allocate resources efficiently, for example, due to lack of information, and many rural businesses struggle to access quality business support. Market failure in business support is most obvious in those rural areas where many bank branches have closed, only few business services remain and public business support services have difficulties in accessing remote locations, due to the higher cost of visiting. Integrated policies for rural economic development need to recognise the inter- dependencies between rural (embedded) businesses and communities. The review addresses research findings on business support excluding specialist advice to farms and large rural estates.

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