Assets and Challenges for Rural Entrepreneurship

A new European initiative is working to identify the vital ingredients for developing rural entrepreneurship and successful business models in high-potential sectors such as food and agriculture, bio-based value chains and services. We spoke with Karen Hamann, CEO and Head of Research Dept. IFAU Institute for Food Studies & Agri Industrial Development, Denmark, to get a flavour.

*What are the key assets and challenges for entrepreneurship in rural areas today?*

A major challenge for rural entrepreneurship today is that the divide between rural and urban is widening. In terms of cognitive distance, diversified development policies, and different opportunities for building a business. It is a well-known fact that generally, entrepreneurship is related to ICT, biotech or other technologies and, that such innovative businesses are rare in rural areas. This does not need to be true as the rural areas hold much potential for establishing innovative business models.Opportunities linked to developing and running a business in rural areas is especially related to the interconnectedness provided by ICT and by the development of new business models that build on local conditions. Such conditions may be related to, for example, scenic environment, production of specific types of biomasses, or the infrastructure allowing for local food production and tourism.

*Can rural business models and entrepreneurs be an example of sustainability and circular economy thinking for us all moving forward?*

Basically, farmers have practised rural entrepreneurship for many years and this kind of business has sustainability and circularity as core elements. Recent development of business models in non-farm sectors are learning from the farmers’ approach to thinking about sustainability and circularity, as for example new business models that link agriculture with the production and processing of biomass for non-food products. This kind of business model originated in the bioenergy sector, but has now spread into bio-based materials for building, packaging or otherwise.

*In your opinion, is there a recipe for business success in rural areas… and if so, what is your favourite ingredient?*

Core ingredients for a successful business are adaptability and creativity, and the core restraining factors are linked to funding, technologies, access to markets, and availability of resources (skilled workers, raw materials and more). The recipe for success is therefore closely linked to making the most with the given resources; an approach that also speaks for developing business models centred on recirculation of resources. But, moving towards 2025, it is evident that successful business are more in line with tomorrow than today, and, for example, use the ICT to optimise market access or invent new business ideas.