Recognising and nurturing the contribution and potential of rural economies is a ‘vital ingredient’ to a successful Industrial Strategy, according to the National Innovation Centre for Rural Enterprise (NICRE).

NICRE submitted a response to the Government’s Green Paper consultation which set out that the strategy’s ambitions for growth will only be achieved if it harnesses the diversity, spatial reach and sectoral strengths of the nation’s rural economies.

NICRE’s submission states:

“Rural economies bring a range of distinctive contributions and comparative advantages to wider regions and the nation as a whole, as well as a basket of solutions for economic renewal. There are 600,000 registered business units in rural areas in England alone, employing 4.2million people. They make up a quarter of businesses and contribute over £315billion to the economy, with their supply chains, workforces and innovations reaching well beyond rural areas.

“They contain considerable diversity in enterprise scale, sector and performance, with many creating high-value, advanced or internationally-traded products or services, and with the expansion and productivity of many firms boosted from operating from a rural location.

“It follows that visibly recognising and nurturing the contribution and potential of the nation’s rural economies and their extensive interrelationships with wider regions and urban areas is a vital ingredient to a successful Industrial Strategy. If suitably supported, they can contribute to wider regional and national growth and prosperity, and responses to environmental or place-based challenges. The Industrial Strategy therefore needs to develop a more inclusive and positive vision of the contribution that all types of places and sectors can make.”

NICRE’s response, based on evidence and insight, together with inputs from its Rural Business Beacon network, also highlights:

• All of the priority sectors identified have a substantial rural footprint.
• Emerging sub-sectors and technological priorities should be reflective of devolved, locally and regionally-driven opportunities and specialisms and should particularly recognise the vital role that micro and small businesses play in their development, and which in rural areas account for higher share of employment in registered businesses.
• Land-based and agri-food enterprises should be strongly recognised as quintessential foundational sectors which underpin extensive supply chains of firms and jobs across cities and towns, as well as rural communities.
• Significant proportions of businesses in rural areas perceive local opportunities for business development, which is the critical starting point for entrepreneurial activities that can lead to growth and productivity improvements. However, these investment plans are held back by key barriers which include, in order of significance: difficulties in recruiting and retaining staff; lack of financial resources; lack of availability of affordable housing, lack of transport services and infrastructure; planning restrictions; inadequate broadband capacity; and lack of availability of business premises.
• Recruitment and retention of staff is a chief constraint for rural and urban firms, with slightly more rural than urban businesses facing this challenge. There is a need to develop support and advice provision to help small and micro-businesses to tackle their recruitment challenges, including to develop different recruitment approaches, in-house training provision, and access to apprenticeships, as well as support for collaborative approaches and solutions between groups of firms.
• Rural electrification is a key agenda for the Industrial Strategy to tackle. Rural areas are key sites of electricity generation, however ongoing research funded by Rural England and NICRE is highlighting challenges in rural areas in transitioning to new electric-based technologies, such as heat pumps and vehicle-charging points.
• Many examples of cutting-edge science and technology clusters in rural settings across the country that are globally respected.
• Embedding rural enterprise across local growth and investment plans, which are the cornerstone of a place-based approach, will be key to delivering the economic development goals of the many local and combined authorities that have a rural footprint. Lessons, for example, should be drawn from the experience of the North East Combined Authority and its development of an Environmental Stewardship, Coast and Rural Growth Investment Plan, and the establishment with Government of a ‘North East Coastal and Rural Taskforce’ focused on the natural environment and coastal and rural regeneration and growth.

Read NICRE’s full response.