OECD Rural Conference 2007: Innovative Rural Regions: The Role of Human Capital and Technology
Speech by Angel Gurría, Secretary-General of the OECD
Centro Cultural San Francisco, Cáceres, Spain
22 March, 2007
Dear Minister Espinosa, Ambassador Ballestero, Dear Speakers, Ladies and Gentlemen:
It is a pleasure for me to participate in the fifth OECD International Conference on Rural Development. This event has become one of the main catalysts for the improvement of rural policy, one of the central challenges of today’s democratic governments.
Let me share with you how the impressive transformations of rural regions demand and benefit from innovative policies, and the lessons from the OECD experience.
1. The rural metamorphosis
One of the most interesting and important changes of the era of globalisation is the recent transformation of rural areas given the technological advances and intensified competition in agricultural markets, ageing rural populations and expansion of urban areas.
This transformation is crucial for national and regional policymakers. Not only because rural areas account for three quarters of the land and are home to a quarter of the population of OECD countries, but because they represent a strategic instrument for economic growth, human development and environmental equilibrium.
There are at least 3 key dimensions to understand the changes affecting rural regions:
These, and other changes, like the growing pressure to cut agricultural subsidies, the end of the conception of rural life as different from urban life, the new urban vision of rural areas as a space for consumption (instead of only production) and the consideration of rural areas as providers of environmental goods and services, have reshaped the concept and nature of rural regions. In this context, rural areas are re-inventing their role in the global economy. Policies must adapt and lead this process. Innovation will be fundamental.
2. Innovation: A must for rural regions
The title of this first session puts forward a challenging question: Is innovation in rural areas an exception or a must? Let me take a stand on this: in the context of globalisation, innovation is a must for all regions, whether rural or not. The capacity of regions to support learning and innovation processes is a key source of competitive advantages, a multiplier of economic activity, employment and development.
This is particularly relevant for rural areas, where the combination of geographical isolation, structural unemployment, lack of services and rural exodus, generate a vicious cycle that leads to economic decline. There are many examples of rural regions across the OECD that lag behind in all indicators.
Our study, The New Rural Paradigm: Policies and Governance reports that between 1995 and 2000 GDP per capita in rural regions as a percentage of national averages declined in more than half of OECD studied countries (in 13 out of 23 countries with data). In these regions, GDP per capita represented about 83% of the national average (in 2000).
However, “rural” is not synonymous with decline. By no means. In fact, at the beginning of the 21st Century, in more than one out of three OECD countries, the region with the highest rate of employment creation was a rural region. In most cases, innovative policies made the difference. There are a growing number of rural regions that have built on their competitive advantages and now thrive in the global economy.
The experience of Extremadura in connecting its 383 municipalities to broad-band internet, linking all public institutions to the Net, to introduce a wide range of programmes on education, technological literacy, productive start or eHealth tools, is a great example.
The experience of Australia with its Rural Transaction Centres (RTC) Programme to help establish locally run units that introduce new services or bring back services into rural towns is another interesting case study. In Finland, telemedicine services allow a specialist doctor in Helsinki to provide diagnosis on X-rays taken in the sparsely populated regions thousands of kilometres away. Canada’s “rural lens” aims to ensure that rural priorities are taken into account in government policy across ministries.
3. Lessons from the OECD’s experience
These few examples, but also a myriad of other regional innovative policies and programmes throughout the OECD countries, share three essential qualities: 1) they all acknowledge that there are multiple objectives in rural policy which require different approaches; 2) they are place-based approaches which help to foster public-private mobilisation at the local level, integrating new stakeholders; and 3) they are developing a culture of cross-sectoral co-operation at all levels of government and diffusing awareness on the diversity of rural needs and opportunities.
We strongly recommend that any attempt to renovate or innovate in rural policy includes these three elements. But there are also other crucial ingredients for the formulation of innovative rural policy. I want to leave 4 of them in your minds:
Ladies and gentlemen,
In the era of globalisation, traditional sectoral approaches to rural development are increasingly ineffective. The challenge for policymakers is to adopt multifaceted policies for rural regions that go well beyond the use of agricultural subsidies, which still amount to about 1.2% of the OECD’s GPD. Rural policy should be less defensive and more innovative. It should also be more focused on places instead of sectors and on investments instead of subsidies.
I have no doubt that globalisation can be a positive-sum game. This is true for the relationship between developed and developing countries, but also for the relationship between rural and urban regions. Innovative policies can make a huge difference. I look forward to a fruitful exchange of views over the next two days. I can assure you that the OECD will continue to develop its role as provider of advice for rural development policies and to promote fruitful policy dialogue for the benefit of a more balanced world.
Thank you very much.