At the 2025 OECD Ministerial Meeting of the Regional Development Policy Committee, ministers emphasised the central role of innovation in helping rural regions adapt to the challenges and opportunities of global megatrends. They noted that building rural resilience requires going beyond traditional measures such as patents and R&D to include entrepreneurship, social innovation, and co-operation between urban and rural areas, while promoting access to opportunities and resources for all. Ministers recognised that innovation can unlock rural potential in manufacturing, ecosystem services, renewable energy, the bioeconomy, and sustainable tourism, as well as within global value chains. Supporting these forms of innovation can help diversify rural economies, strengthen local capacities, and build resilience.
Demographic change is one of the megatrends shaping the conditions under which rural innovation can develop. Changes in age structure, migration flows and the distribution of people across territories affect local labour markets, the availability of skills and the demand for services. These factors influence how rural communities can engage in and benefit from innovation, making demographic trends an important consideration before examining the specific challenges facing rural regions.
Almost half of rural places are already losing population, generating significant challenges including for the labour market and the cost-effective delivery of public services. Innovation can play a fundamental force to address these challenges and indeed many others, including those presented by other megatrends. With ageing populations and old-age dependency population ratios reaching 60% in some OECD rural regions, automation and the tailored uses of artificial intelligence can help boost productivity and overcome fiscal and labour market challenges, not least to address shortages in, and higher costs of, activities and services required by an ageing and, often, spatially fragmented population. Innovations in industry, including through automation, Big Data, and artificial intelligence in agriculture, robotics in manufacturing, and renewable energy generation are already transforming rural industries, driving productivity growth, and enabling output to grow even as populations decline.
The OECD has been taking a deep dive into how innovation unfolds outside urban areas, its relevance to the performance of rural firms, and how policies can enhance it. This workstream has benefited from a series of in-depth thematic studies and five country reviews under the banner Enhancing Rural Innovation. The thematic reports focus on measuring rural innovation, understanding networks and urban-rural linkages and supporting social innovation in rural regions. The five case studies, conducted in Canada, Japan, Scotland (United Kingdom), Switzerland and the United States, examine policy programmes and initiatives that support innovation in rural areas, as well as their conditions for success. This publication synthesises the key lessons from these studies, along with the results of a global survey of 23 OECD countries, to provide a policy toolkit that can assist governments to support innovation in rural regions.
The overall message is clear: rural regions are not waiting for rescue; they are inventing the future. Across the OECD, there is proof that innovation flourishes where community networks, local entrepreneurship and governments work together. This may take the form of world-class freshwater science in remote Ontario, social enterprise on Fogo Island (Canada), tourism sandboxes in Switzerland’s Jura, or the social innovation networks of Scotland’s Highlands and Islands. These stories show that rural innovation is not an afterthought to R&D in metropolitan areas; it is a strategic capability for resilience and productivity.
This report calls for strengthening the rural lens of innovation policy through models that recognise the diversity of rural economies as well as broader notion of innovation beyond science and technology, embracing, in turn, place-based and community-led solutions and local governance reinvention.