Enhancing innovation in rural regions will be paramount to sustain and deliver high standards of well-being moving forward. To create policies relevant for rural areas, the policy toolkit is underpinned by six pillars of action: (i) Establish preconditions for innovation; (ii) Design for rural innovators; (iii) Build networks and linkages; (iv) Experiment for local solutions; (v) Facilitate with simplified and coordinated support and (vi) Measure and learn with wide rural data access.
Rural Innovation Pathways
Connecting People, Places and Ideas
Abstract
This chapter develops a policy toolkit. The policies and programmes to promote rural innovation focused on six main pillars for effective innovation policy. Figure 3.1 presents the pillars along with their main constituting recommended goals. The rest of this chapter is organised following these recommended policy steps, presenting evidence and examples.
Improve access to digital infrastructure
Innovation needs an ecosystem, and digital infrastructure is a key element. Skilled human capital along with sound information and communication technology (ICT) and public infrastructure are cornerstones to developing an ecosystem that sparks innovation at the local level. However, rural regions show important gaps relative to urban areas in digital infrastructure, digital skills and consequently technology take-up.
Access to broadband is still a key limitation. Gaps in provision have fallen by half in almost all OECD countries, with the average share of rural households with broadband connection (82%) coming close to that in urban areas (89%). However, In 2019, only 59%, 67% and 77% of rural households in Europe, Canada and the United States were located in regions where access to fixed broadband with a minimum speed of 30 Mbps was available, in comparison to 86%, 93% and 94.4% of households in all areas overall (OECD, 2020[1]). This gap translates into lower technology adoption: Recent evidence from OECD countries shows that there is still a clear regional divide in the take-up of digital technologies. Despite rapid advancements, people living in rural areas still have lower-quality Internet compared to cities in OECD countries. On average, user-experienced broadband download speeds (a measure of Internet quality) are 13% faster than the national average across cities, while in rural areas, it is 22% slower (OECD, 2024[2])
A key message emerging from rural innovation ecosystems is to treat broadband as the foundational technology that unlocks all other forms of rural innovation. It enables key activities for rural regions, from remote service delivery to digital business models. The United States review recognises that access to reliable, high-capacity broadband, including investment in middle-mile and remote connectivity, is a foundation for local innovation in skills, health, administration, and commerce. Current policy efforts emphasise closing affordability and adoption gaps, alongside expanding coverage through a mix of technology solutions. Scotland follows a similar logic: universal superfast rollout (R100 and related schemes) is combined with digital skills offers so rural firms and communities can actually use that connectivity (Box 3.1).
Reaching 100% (R100) is a GBP 600 million Scottish Government programme that has been bringing faster broadband to thousands of homes and businesses across Scotland. Unique in the United Kingdom, the R100 programme builds upon the success of the Digital Scotland Superfast Broadband (DSSB) programme and will ensure universal superfast broadband access: connecting around 113,000 properties in North, South and Central Scotland. It is made up of 3 strands:
R100 contracts being delivered by Openreach
planned commercial investment by a variety of broadband providers
the R100 Scottish Broadband Voucher Scheme (SBVS) which offers a subsidy of up to £5,000 for premises not covered by R100 contracts or commercial build
Almost all of the R100 contract build will be Fibre to the Premises (FTTP) which is capable of delivering download speeds 30 times faster than the Scottish Government's original commitment of 30 Megabits per second. R100 contract build is expected to be completed in 2028.
Regarding progress so far, sixteen subsea cables were laid in 2022. These will deliver faster broadband to 15 Scottish islands. In July 2025:
Over 88,000 premises have been connected.
Over 30,000 connections established in the North contract area.
Over 25,000 homes and businesses have been connected in the R100 South contract area.
Over 5,000 connections have been delivered through R100 SBVS across Scotland.
Other related initiatives such as the Gigabit Broadband Voucher Scheme are providing help for covering the costs of installation to individuals and firms. In addition to the commitment to bring superfast broadband access, rural areas of Scotland might benefit from initiatives that can reduce the market-based incentives challenge to bringing Internet to rural regions.
Source: https://digitalconnectivity.campaign.gov.scot/about-r100 . A wider analysis is also covered in OECD (2023), Enhancing Rural Innovation in Scotland, United Kingdom, https://doi.org/10.1787/33b8c803-en.
Digital divides must be closed through targeted policies and support. Achieving wide fast broadband coverage requires collaboration with private providers and across levels of government. While policies to promote competition and private investment, as well as independent and evidence-based regulation, have been very effective in extending broadband coverage across OECD and G20 countries, including in rural and remote areas, some gaps may remain. In areas where market forces have not proven to be able to fulfil policy objectives (i.e. in terms of broadband coverage or service quality), additional interventions by governments may be necessary:
Demand aggregation models and public private partnership (PPP) initiatives can ensure the financial viability of projects.
Public funding should be allocated to expand connectivity in rural/remote areas, including using market mechanisms, such as reverse auctions, to provide funding to market players to deploy their networks in rural and remote areas.
As in other areas of rural policy, digitalisation policy should prioritise bottom-up approaches to encourage community buy-in, adapt to local realities, and ensure long-term viability.
Open access and municipal and community-led networks can address the “last mile” challenges in rural and remote areas and coverage obligations in spectrum auctions (for wireless networks).
To support rural services, the policy priority should be on delivering high-quality broadband services at symmetric speeds across the entire territory. While specific policies for broadband deployment are being targeted by various national-level programmes such as Scotland’s R100, increasing quality access to rural and remote areas is a challenge in most countries and often requires multiple efforts that overcome the barrier for delivering speed at the last mile. Older infrastructure may not be able to accommodate higher speeds and, in some rural areas, deployment is being held up by challenges associated with planning by local authorities. Overall, it is important to ensure that wide national and regional initiatives (such as the R100 programme and the Gigabit Broadband Voucher Scheme in Scotland) are not hindered by local regulations such as municipal planning. Futureproofing not only requires the capacity for high connection (such as installing fibre instead of copper) but could also benefit from speed targets in both levels and maximum disparities between rural and urban areas. This is necessary to enable the delivery of essential services (such as online learning), to support the local business environment in rural and remote areas and to support a level playing field for these businesses with regard to those in urban areas.
Improve access to skills
Digital skills can be as important an issue as digital connectivity. Digital skills are significantly lower in rural places representing an important bottleneck for technology take up and innovation. For instance, across European countries, individuals living in rural regions strongly lag behind their peers in cities with regard to their level of digital skills. While on average 66% of individuals in cities had basic or above digital skills, only 30% did in rural areas (Figure 3.2).
Pervasive skills gaps more generally hinder entrepreneurship and innovation. Rural areas underperform in education and competence outcomes. Students in city schools obtained higher scores in reading than their peers in schools located elsewhere in all but two G20 countries with available data before controlling for socio-economic factors. Results from PISA1 also show that in some countries, this gap was above 40 percentage points (more than the equivalent of a year of schooling). The lack of skills amongst adult workers is partially fuelled by challenges to youth education. Declining youth numbers in rural areas has implications for quality education. Many rural schools are facing or will soon face declining student numbers, bringing consequentially smaller schools, class sizes and student-teacher ratios.2 This has important implications for employment outcomes.3
Note: Not all OECD countries covered by data source. For further information on the Eurostat classification of areas by degree of urbanisation, see https://ec.europa.eu/eurostat/web/degree-of-urbanisation/background
Source: OECD Rural Well-being 2020; graph elaborated from data by Eurostat (2020) EU European Social Survey
Improving education outcomes in rural areas is a necessary to fully unlock rural areas’ innovation potential. Rather than relocating students to larger, more distant schools in the face of declining youth in rural regions, governments should consider a more flexible approach to class and school size regulation. Rural schools can maximise the resources available to them while prioritising investments in the attraction, retention, development and empowerment of teachers in rural communities. School clusters involving formal collaboration between rural schools can also help mitigate size-based challenges, for example through economies of scale in specialised facilities and a better use of scarce educational professionals. Distance learning is a valuable resource for small schools to offer more training opportunities for teachers and support school communities, while service co-location can expand the traditional scope of schools. Finally, and most notably for rural innovation, offering special teaching and leadership to young rural populations by improving synergies among education institutions and demands from local industry and creating focalised funding for young business.
Local initiatives for digital and entrepreneurship skills can be paired with talent attraction. Several countries across the OECD (including in the five case studies) are taking action to pair investments in digital infrastructure with digital skills. For example, to help improve Scotland’s digital productivity, the Scottish Government introduced a Digital Development Loan scheme which provides loans to SMEs (trading for at least six months) wishing to improve their digital skills and capabilities. The OECD rural innovation review of Scotland explains how Scotland is seeking to become a digitally inclusive nation, in which the benefits of technology are available to all with digital skills as key component. Initiatives such as the Scottish Rural Leadership Programme aim to reinforce the entrepreneurial skills of rural business leaders. Digital infrastructure can also help attract talent from cities and other regions amid virtual work trends. In Ireland, as part of the overarching policy for rural development (five-year plan for rural areas entitled Our Rural Future: Rural Development Policy 2021-2025), 0ne pillar of the policy identifies key deliverables on how to optimise digital connectivity for attracting the skills of remote workers. They include accelerating the rollout of the National Broadband Plan, investing in remote working infrastructure, providing local authorities with financial support to use vacant properties as remote working hubs and using remote working facilities to retain and attract skilled people and mobile talent to rural areas, among other initiatives. The policy document estimates up to 400 remote working hubs to be formed as part of a national network and simultaneously used to build the entrepreneurial ecosystem that encourages start-ups and collaboration between entrepreneurs.
This section covers Pillar 2 of the policy toolkit. Labelled Design for rural innovators, it covers actions to design policies fit for rural demographics and firms, tailoring instruments to develop the local ecosystem.
Target policies for rural firms
The type of instrument depends on the different phases of business needs, from starting a business to technical assistance and access to finance. Services can help a business develop a plan, access labour, meet regulatory requirements, and reach markets to export, scale up and expand operations. They provide information, advice, coaching and mentoring services. There are emerging examples of their use in rural areas, but access is still a challenge, which is compounded by more limited access to finance: entrepreneurs and firms commonly need to demonstrate robust business plans to access funds and scale up their investments. As such, in many countries these services are provided in tandem through a network of national and local regional providers. Recognising this, the United States Small Business Association (SBA) provides technical centers, financial opportunities, export and trade assistance, and targeted outreach programmes for small businesses through a network of partners. In many countries there are underserved areas and populations. For example, minority populations may be less likely to access formal business supports (Scott and Irwin, 2009[3]). To address these inequalities, the SBA includes outreach to businesses in underserved communities through Community Navigators. This is a USD 100 million pilot programme designed to fund 51 organizations to work with hundreds of local community groups to improve access to government resources for entrepreneurs (U.S. Small Business Association, 2021[4]). This local approach is designed to work well in rural areas and draw on existing networks of local actors.
Direct support instruments can be tailored to the needs of rural businesses and often involve collaborative partnerships. OECD governments employ a mix of financial (e.g. tax incentives, R&D grants, vouchers, government procurement of R&D services) and non-financial measures to directly support business innovation (OECD, 2021[5]).4 While R&D grants and tax incentives are commonly targeted by firm size (large firms, SMEs5 or start-ups) others are structured to benefit rural industries. For example, Australia’s Rural R&D for Profit programme provides funding to rural research and development corporations (RDCs) in support of primary industry competitiveness (Government of Australia, 2021[6]). In EU countries, the European Innovation Partnership for Agricultural productivity and Sustainability (EIP-AGRI) pools funding streams to boost interactive innovation among many stakeholders (farmers, advisers, researchers, businesses and NGOs) to tackle a specific or practical problem or opportunity which may lead to an innovation. Both programmes are structured in a way that encourages interactions between key rural stakeholders and knowledge holders and to scale up initiatives beyond that of a single firm, and thus help overcome some of the challenges inherent to rural innovation.
Direct innovation support goes well beyond tax incentives, though rural businesses may not always be prepared to use all the options available. Innovation vouchers have been used to promote the use of academic expertise for business development. More systemic initiatives such as clusters, networks or competency centres are effective to support specific types of firms (start-ups or existing SMEs), while innovation vouchers or brokerage systems help firms access consulting services and knowledge, especially in rural places. These are common instruments, but Kalmar County in Sweden is an interesting example. The region has developed a system with innovation vouchers not limited to finding support in universities but can also be used for acquiring innovation support from commercial actors or, preferably, one of the national industrial research institutes.6 The terms are quite generous, and the process time is normally around a week; despite this, the utilisation of these instruments is surprisingly low. This could be due to a lack of time on behalf of firms to undertake this work or perhaps a lack of knowledge (OECD, 2020[7]).
Target policies for rural entrepreneurs
Facilitating entrepreneurship for wider demographic groups, particularly women and youth, can boost innovation. OECD surveys report that skills is the number one challenge for rural innovation and can be exacerbated by ageing workforces and population decline. Diversifying the talent pool can mitigate the problem; this can come from the attraction of entrepreneurs from cities or other regions or by helping more local people create businesses. Incentivising more diversity for entrepreneurship is a well-documented lever of opportunity (Audretsch, Dohse and Niebuhr, 2009[8]; Lee, Florida and Acs, 2004[9]; Rodríguez-Pose and Hardy, 2015[10]; Nathan and Lee, 2013[11]). Yet, young people tend to have a lower propensity to start a firm in rural areas (OECD, 2022[12]), and women may start firms in rural areas but have challenges in innovating (OECD, 2024[13]). Therefore, initiatives for women and youth are particularly helpful.
Youth entrepreneurship supports enduring innovation in rural communities and helps young entrepreneurs stay. Many governments have established specific business supports programmes or centres of hubs for young entrepreneurs. These young people are more likely to start their business out of “necessity” due to a lack of employment opportunities, which characterises the labour market in many rural areas (OECD/European Commission, 2020[14]). To address this, initiatives such as the Northern Ireland Rural Development Council’s Rural Youth Entrepreneurship programme focuses on helping young people develop the skills, knowledge, confidence and capacity to initiate viable business (European Committee of the Regions, Soldi and Cavallini, 2017[15]). Many initiatives focus on building an environment and social structures to improve youth inclusion and engagement from an early age, which strengthens their links to their communities (Box 3.2). For example, in Norland, a largely rural region of Norway, the government developed a strategy for youth inclusion. In Japan the prefectural government and university jointly developed a youth entrepreneurship programme in Yamagata that built on local demands for entrepreneurs that have either moved from Tokyo or were already in this largely rural region.
Female entrepreneurial support significantly deepens the talent pool. Targeted support such as France’s Plan Entrepreneuriat des femmes aim to increase the proportion of women in new business start-ups. Likewise, in Canada, there are targeted initiatives, departments and agencies that invest in projects led by underrepresented groups. Some of these initiatives prioritise projects that support women, Black and Indigenous entrepreneurs as well as language minority communities (OECD, 2024[13]). These examples are elaborated in Box 3.3.
Indigenous entrepreneurship can address local challenges and opportunities more effectively if well supported. Publicly-backed loan facilities can support access to finance for marginalised communities or populations, particularly since Indigenous entrepreneurs face more barriers due to lower levels/lack of collateral (e.g., land) and limited access to personal wealth, systemic discrimination and a lack of understanding of Indigenous business interests and intellectual property (OECD, 2019b). Recognising these challenges, some OECD countries have adopted specific initiatives to support Indigenous entrepreneurs. For example, in Canada there is a national network of autonomous, Indigenous‑controlled, community-based financial organisations. These Aboriginal Financial Institutions (AFIs) provide lending and business financing and support services to First Nations, Métis, and Inuit businesses and communities in all provinces and territories.7 NACCA estimates the total direct economic impact of AFI activity at CAD 300 million while creating or maintaining 4 000 full-time employment jobs; each dollar invested by the Government of Canada has been recycled in new loans 8.4 times (NACCA, 2020[16]). Similar institutions exist in Australia such as the Indigenous Entrepreneurs Capital Scheme (IECS) has been co-designed with Indigenous businesses, banks, and investors to target Indigenous businesses who are established and ready to grow but are under-capitalised and unable to access mainstream bank financing outright.
Youth inclusion in Nordland, Norway
The skills strategy for Nordland County Municipality focuses on bringing skills to develop and use natural resources in the county, provide welfare services, give back to the Indigenous Sámi community and create good local communities. The parliament in Nordland County has adopted a strategy to counter young exclusion in Nordland (where rates of young people not in employment or education is high),8 where young people feel a sense of belonging and participate in society. Notably, Sami young people should be able to participate in society on their own cultural and linguistic terms and have access to public services.
Activating youth through early engagement, Yamagata University, Japan
Yamagata University (YU), which services rural communities in the prefecture of Yamagata, established the Development Centre for Entrepreneurship (YU-DES) by integrating YU’s entrepreneurship programme and broad academic assets. YU-DES offers a human resource development programme called Development of Innovative Human Resource toward Outcome the Programme for Entrepreneurship (i-HOPE) to encourage personnel to develop innovation through leadership. By introducing Columbia Business School’s Venture for All, i-HOPE created an original programme to foster entrepreneurship, offering business mindset training, basic business skillsets and practical exercises. i-HOPE is not exclusively open to university students and working adults: it also provides a special programme for high school students to cultivate an entrepreneurship mindset at an early stage.
Each prefecture has at least one national university in the Japanese university system. Unlike leading universities like the University of Tokyo or Kyoto University, the principal role of local universities like YU is to work for the local prefecture. The focus of the i-HOPE programme is to engage with youth already in the local Yamagata region, regardless of whether they are native or have migrated to Yamagata. i-HOPE is intended to support entrepreneurs, many of whom are young, to set up new businesses in the region and is supported through the Local Vitalization Cooperator programme (hosted by the Ministry of Internal Affairs and Communication) and hosted at YU.
Source: Adapted from OECD (2024), Enhancing Rural Innovation in Canada, https://doi.org/10.1787/a9919c66-en OECD (2025), Enhancing Rural Innovation in Japan, https://doi.org/10.1787/8d3b682a-en.
The Government of Canada has established various initiatives to support entrepreneurs from underrepresented and marginalised groups, delivered in collaboration with federal agencies, provincial and regional governments, financial institutions and NGOs.
Only 17% of SMEs in Canada are owned by women. The Canadian Department for Innovation, Science and Economic Development (ISED) estimates that the full participation of women in the economy could add up to CAD 150 billion to the national gross domestic product (GDP). In this light, the Government of Canada’s Women Entrepreneurship Strategy (WES), which received CAD 6 billion in investments, seeks to increase the number of businesses owned and managed by women by supporting access to finance, talent, networks and expertise. Provinces and regional development agencies (RDAs) provide specific consulting and advisory services to women and help deliver two aspects of the WES: the Women’s Entrepreneurship Loan Fund and the WES Ecosystem Fund. The WES also includes an Inclusive Women Venture Capital Initiative and a Women Entrepreneurship Knowledge Hub. The Women’s Enterprise Initiative is an example of a regional programme that provides a variety of unique resources for women entrepreneurs, including business advisory services, training, networking opportunities, loans and referrals to complementary services. The initiative, in partnership with PrairiesCan and PacifiCan, is present in each of the four Canadian western provinces (Alberta, British Columbia, Manitoba, Saskatchewan). These non-profit organisations
The Black Entrepreneurship Program (BEP), a partnership between ISED, Black-led business organisations, and financial institutions, has an investment of up to CAD 265 million over four years, to help Black Canadian business owners and entrepreneurs build and grow their businesses. Its three main components are a Black entrepreneurship loan fund, a National Ecosystem Fund, and a Knowledge Sharing Hub that conducts research on the challenges for Black entrepreneurship in Canada, led by Carleton University’s School of Business and Dream Legacy Foundation. The Government of Canada is also partnering with financial institutions, including RBC, BMO Financial Group, Scotiabank, CIBC, National Bank, TD, Vancity, and Alterna Savings, to make up to CAD 128 million available in additional lending support.
The Economic Development Initiative (EDI), conducted in partnership with multiple federal agencies, provides financial support to projects that support official language minority communities (OLMCs) through economic diversification, business development, innovation, partnerships and increased support for SMEs. Through the EDI, agencies can invest in projects focused on economic development of businesses and communities with diversified linguistic heritages that help develop capacity, expertise and partnerships. In addition, Indigenous Services Canada administers support for indigenous entrepreneurs and communities. In part, this is done through the Indigenous Loan Fund (BDC) and the Indigenous Community Business Fund (EDC), which provides funding for First Nations, Inuit and Métis communities.
Sources: OECD (2024), Enhancing Rural Innovation in Canada, https://doi.org/10.1787/a9919c66-en.
This section covers Pillar 3 of the policy toolkit. Labelled Build networks and linkages, it covers actions to connect local entrepreneurs and businesses to knowledge and markets. Such connections can involve private and innovation partnerships, functional regional alliances, urban-rural links and linkages to global markets and supply chains. All seek to open new opportunities for rural places and build scale.
Create public-private and innovation partnerships
Rural innovation policies need to consider the different types of rural geographies and their respective linkages. The mechanics of innovation in agglomeration economies have received most of the attention, with significant benefits and knowledge spillovers from proximity to key markets and stakeholders.9 By contrast, innovation in a rural context has received much less attention and has tended to focus instead on specific sectors, such as agriculture or mining, irrespective of how these relate to people and places. But rural areas are not monolithic. Rural areas close to cities benefit from more diversified economic linkages while those that are more remote face penalties of distance, higher transportation costs and a smaller and less diversified labour market. Making the right connections will make the difference.
Networks for joint innovation take several forms and can be adapted to rural settings. Building networks for innovation partnerships often take one of several forms that include: direct matching services as part of the policies and programmes for entrepreneurial support; a one-stop-shop that allows entrepreneurs to easily access pre-existing services for linking innovation partners; and public-private initiatives that facilitate access to innovation resources for entrepreneurs. In Switzerland, the public servants at the regional innovation systems have services to link rural entrepreneurs and potential research partners. This can then be subsidised or not by the public sector depending on the project (OECD, 2022[17]). Scotland’s Interface is one example of a network that uses an online one-stop, with support by the three regional enterprise agencies in the nation, for linking entrepreneurs with innovation partners (Box 3.4). There are also examples of public-private partnerships that facilitate the usage of research and development equipment for innovation by rural firms. For example, the Nuclear Innovation Institute, in Bruce County, Ontario, Canada,10 provides through its plants opportunities for local entrepreneurs to use its equipment for experimentation (during the time when nuclear equipment is powered down). A similar public-private partnership, IISD-ELA (previously described) similarly is opening up its resources for partnership with companies looking to collaborate for research and innovation based in natural sciences (OECD, 2024[13]).
Public sector innovation can further boost solutions for rural challenges, particularly with public-private partnerships. There are several examples of public-private partnerships that brought solutions to rural challenges. For instance, through the Kyle of Sutherland Development Trust, a social enterprise worked with the private and public sectors to bring superfast broadband to a previously unserved region. The trust acted as a demand aggregator, bringing 100 properties in the local community together to request digital services, while at the same time procuring an investment in telecommunications equipment reduced the costs for a private firm (Highland wireless) to roll out of superfast broadband in the area (OECD, 2023[18]).11
Public investments can attract local (and wider) collaborations. For example, the International Institute for Sustainable Development - Experimental Lakes Area (IISD-ELA) in Kenora, Ontario is a laboratory established in a remote rural area, initially through public funding and eventually through collaborations with the private sector and international research initiatives. Since 1968, IISD-ELA’s scientists have collected the most comprehensive datasets on freshwater lakes in the world, used for regional and global climate modelling. A natural laboratory with 58 small lakes and watersheds set aside for scientific resources, its work focuses on understanding the impacts of climate change, agricultural runoff, water management and contaminants.12 The centre serves jointly as a research laboratory and a policy platform to provide evidence for policy in Ontario, Canada, and internationally (OECD, 2024[13]).
Public investment in impact initiatives can also create durable and unexpected spillover effects. In rural Japan, for instance, an initial public subsidy for a public good related to marine life brought unanticipated benefits for decades to come. In the 1990s, Kamo Aquarium received municipal funding to withstand a decline in visitors. Following this initial support, Kamo Aquarium linked up with university researchers and local schools to reconnect with the local community and build interest in their services. The aquarium decided to invest in expanding its jellyfish collection, noticing their popularity with visitors. Coincidentally, the 2008 Nobel Prize in Chemistry was awarded for research that used the biolumiscent properties of the Aequorea victoria jellyfish to identify cancer biomarkers (OECD, 2024[13]; Murakami, 2016[19]). At the time, Kamo Aquarium was the only one exhibiting this species, further driving visitors to the aquarium.
Established in 2005, Interface is a central hub connecting organisations from a wide variety of national and international industries to all of Scotland’s universities, research institutes and colleges. Based regionally throughout Scotland, Interface works with businesses of all sizes in all sectors to match them to Scotland’s academic expertise to help them grow. Interface has established efficient processes that will help save time and money in finding and accessing academic expertise, research, technologies, specialist facilities and funding. It also seeks to facilitate clusters of businesses and academics working together to tackle industry sector challenges leading to transformational outcomes and impacts.
Now in its seventeenth year of operating, Interface’s success story is reflected in 6 261 business-led expertise searches sent to academic partners and facilitated 3 399 business-academic discussions. A 2020 evaluation estimated that Interface’s contribution to the Scottish economy from R&D projects between businesses and academics enabled was GBP 88.9 million gross value added (GVA), which supported 1 595 jobs, with expectations to reach GBP 222.3 million GVA and 3 193 jobs. The Interface website presents a set of case studies from across Scotland, including rural areas, of how this support has helped transform businesses.
In addition to the proactive matchmaking advice provided by the Interface team (with regionally located specialists across Scotland), Interface is able to provide funding through 3 types of innovation vouchers to encourage linkages between universities and companies, including one for matching funding to innovation activities: either encouraging sustained relationships with academia and enable existing partnerships to continue the development of a project or for those companies who are beginning their collaborative journey with a higher education institutions (HEI)/further education (FE) college partner.13
Source: OECD (2023), Enhancing Rural Innovation in Scotland, United Kingdom, https://doi.org/10.1787/33b8c803-en.
Build scale with regional alliances and entrepreneurial ecosystems
Low-density rural communities build density and scale through linkages with other communities, rural and urban, to build ecosystems. For entrepreneurs, an entrepreneurial ecosystem is often established through the agglomeration of local service providers, or through the initiative of a systemic entrepreneur that seeks to bring innovation to local systems. When networking is more physically limited, initiatives to substitute for natural networking can create the ecosystem needed for innovation. And digital technologies can help. Such ecosystems often develop around specific sectors such as the high-end tourism hub in the island community of Fogo Island (linked to environmental, cultural and art-focused initiatives) supported by local authorities and the Shorefast foundation.14
The development of an entrepreneurial eco-system within a rural place can be encouraged through the role of regional ambassadors as brokers, or “match-makers.” There are two examples of this that help illustrate the role of regional ambassadors. A first example comes from Dumfries and Galloway, in the south of Scotland. The Galloway Glens Landscape Partnership is an initiative that was driven initially by the council government to connect individuals with natural heritage. It received support from national heritage funds, local council funding, regional development support and UNESCO biosphere programme. As an initiative, it created the opportunity to create a joint development plan that manages tourism and natural resources to promote local economic and social opportunities. However, as part of the initiative, leadership worked as regional brokers that actively searched for investment and skills to develop the local eco-system. A second example are regional brokers that are integrated as part of regional development initiatives, such as those in Brainport Eindhoven in North Brabant, the Netherlands. To build an ecosystem of entrepreneurs, Brainport Eindhoven engaged with regional brokers seeking investment, skills and international resources for rural start-ups and entrepreneurs as described in Box 3.5.
Ecosystems can help rural places transition to new economic activities. For instance, the Go Forward Pine Bluff (GFPB) was an initiative that offered a pre-start-up programme and incubation services in Pine Bluff, Arkansas (United States), a community that suffered the decline of the automobile manufacturing industry. GFPB was a strategic plan to bring stronger fiscal support to community development through four pillars: economic, educational, government and infrastructure, and quality of life. With public support, the initiative was able to gather business investments, private donations and grants to create a community centre for promoting education and entrepreneurship. The initiative brought systemic change to the community and entrepreneurial environment, and provided opportunities for youth to engage in the community’s fab lab that let them test out their business ideas in a low-cost manner and then supported them in the commercialisation and formalisation process. In a context of skills gaps15, declining population and relatively low opportunities for employment, the community centre and incubator provided services to revitalise the community and provide basic educational services to youth. Several young female entrepreneurs in Pine Bluff were able to anticipate and provide the future needs of the community, including for example, digital educational services (OECD, 2023[20]).
Brainport Development is a cluster collaboration platform that is directly incorporated into a regional development agency. It carries several independent networks that specialise in different activities such as energy, high tech, health tech, smart mobility, food tech, safety programmes, and a designer programme, and currently increasing clusters to include the High-Tech Software cluster, augmented reality and virtual reality cluster and integrated photonics. Brainport Development focuses on stimulating new projects, investing in start-ups and scale-ups, attracting foreign companies, and helping local companies go abroad. In recent years, the initiative also includes human capital programme. There are a few characteristics that makes Brainport stand out among other cluster specialisation initiatives which include:
Strong partnership culture in the public sector, private sector and universities, that includes a board composed of the mayor of Eindhoven (location of headquarters), mayors of other participating municipalities, local private sector representatives, such as ASML, Philips but also small and medium enterprises, and representatives of universities and research institutions.
A bottom-up approach to determine priorities with partnering companies and organisations, and the financial participation of all partners (central, regional, local, universities and private sector) in the elaboration of the services offered for the cluster strategy.
The use of regional ambassadors as brokers, or “matchmakers” to attract activities from national and international resources to the region and to build local buy-in
Economic Board of South Holland initiative
A new initiative to bring a similar model to South Holland in the Western part of the Netherlands, was initiated by Economic Board of South Holland in the South Holland region. This region is characterized as a region with two big cities, some smaller ones, and rural surroundings. The structure of the model in South Holland included several similar characteristics to the original Brainport. It was directed by the Economic Board South Holland, a high-level council that brings together industry, institutions and governments, in combination with the regional development agency, Innovation Quarter, and therefore had a strong engagement with the private sector, local partners and universities that builds trust and buy-in from local communities. However, it also faced different challenges and opportunities:
A more diverse mix of chairpersons, industry leaders and local leaders in the board, because of a more diversified economic structure and a geographical area with more municipalities.
Difficulties to formulate a joint strategy and common goals due to insufficient regional cohesion.
More participation from regional development agencies mobilising executive power for regional strategy.
Many hidden champions with a good market position, and a short and local supply chain that are initially not well connected to regional eco-systems.
Less informal networks creating barriers, with more transparent rules for entry into the market as compared to the Brainport Region.
Source: OECD (2023), Enhancing Rural Innovation in Scotland, United Kingdom, https://doi.org/10.1787/33b8c803-en
A functional approach to rural innovation, with alliances between various neighbouring rural areas to form a functional area beyond administrative boundaries, helps build scale. Functional areas seek to integrate services (including for entrepreneurship and innovation) to reduce costs, improve quality and increase access. These help overcome the cost of public service provision resulting from remoteness and sparsity due to transportation costs/distance, loss of economies of scope and scale (OECD, 2021[21]; OECD/EC-JRC, 2021[22]), similar to approaches used to provide more general public services such as education and health. This can also entail joint planning, the co-operation or communication among service providers, collaboration among professionals across different sectors, the physical or virtual collocation of complementary services, or a mix of thereof. In general, grouping up such provisions enables delivering policies at a functional, rather than administrative level. There are many successful examples of this approach. In Italy, the Inner Areas Strategy offers a good example to how to work with municipalities to enhance coordination of services within a multi-level governance framework.
The creation of functional areas is often also combined with bottom-up initiatives to provide opportunities and encourage innovation. In the case of Canada and Japan, specific programmes that enable bottom-up solutions are a hallmark of rural development. Some examples of functionality incorporated within bottom-up programmes have been available in the United States, Switzerland, Canada and the European Union.
In the United States, the Billion Dollar Build Back Better Regional Challenge was a challenge-based initiative that accepted local applications from government and non-profit organisations grouped together across county administrative and state administrative lines. The initiative challenged communities to identify a set of interconnected investments that, together, could transform their local economy, expand economic opportunity and competitiveness, and create jobs (OECD, 2023[20]; US Economic Development Administration, 2024[23]).
In Switzerland, the approach for generating a regional innovation unit, follows the logic of a functional approach: to form a Regional Innovation System (RIS), local government entities, often in collaboration with Cantonal offices, request to partner with a regional neighbour to form a unit that becomes eligible for funding through the Regional Innovation System programme. In addition, a bottom-up approach allows local residents to make decisions on where and how to invest the funding, following federal guidelines (OECD, 2022[17]).
In Canada, the Community Futures Programme provides the resources to implement plans for development in rural areas that either go beyond administrative boundaries or are enclosed within administrative boundaries. A similar programme, entitled LEADER, is also implemented across European Countries. Further information on these initiatives are available in (OECD, 2024[13]).
Building scale for innovation can involve initiatives to support linkages and networks among different entrepreneurs. Examples of this include the Scottish Rural Leadership Programme, which provides entrepreneurs the opportunity to learn and network with other rural entrepreneurs and builds a network between low density areas. Japan’s sake industry offers an example of a peer-to-peer model: various small business owners to network and build branding opportunities (Box 3.7). A third example is the EU Leader Programme, which pursues a bottom-up approach to rural innovation by building partnership and co-operation (Box 3.6).
Community Futures, Canada
Launched in 1985, the Community Futures Program (CFP) tackled chronic underemployment in rural Canada by defining “community” around local labour markets, prompting small places to apply jointly and larger ones individually. Applicants had to co-design a five-year economic strategy with local government, business and civil society, implemented through a new Community Futures Development Corporation (CFDC) and overseen by a federal case officer.16 Although framed as economic development, CFP built local capacity and cohesion by mandating inclusive governance in CFDCs and collaboration from application to delivery, The programme continues, now primarily supporting business development; many loan funds have grown through profitable lending, expanding finance for rural SMEs.
Policy relevance: Demonstrates a scalable, place-based model that links community co-design, blended financial instruments, and institutional capacity-building.
Rural Planner programme, Yamagata Prefecture, Japan
Yamagata developed a bottom-up rural development approach: mapping stakeholders, running focus groups, and supporting community-led solutions in public service delivery. Designated Rural Planners (prefectural officials) facilitate visioning and action, accompanying residents rather than imposing external projects. Their skills grew through land-based projects to raise agricultural productivity, where infrastructure decisions require community consensus; this built public-sector capability for deliberation and planning. In 2009, Yamagata introduced a four-step training and certification (funded by the prefecture; taken in work hours) combining classroom and fieldwork. In Tsuruoka’s marine community, the Rural Planner convened groups into a unified committee that launched coastal cafés and leisure fishing, earning national recognition from the Minister of Agriculture, Forestry and Fisheries.
Policy relevance: Shows how embedded facilitation capacity inside government can unlock collective action, accelerate service and business model innovation, and institutionalise participation via training.
European Union’s LEADER programme
Introduced in 1991, LEADER (Liaison entre actions de développement de l'économie rurale ) responded to the limits of top-down policy by empowering local actors as co-producers of rural development through area-based Local Action Groups (LAGs) spanning public, private and civil sectors. Extended in 2007 to fisheries and made a mandatory component of EU rural policy, and from 2014 to community-led local development across rural, fisheries and urban areas, LEADER operationalises seven features: (i) bottom-up; (ii) area-based; (iii) tripartite local partnerships; (iv) integrated, multi-sector strategies; (v) networking within and beyond rural areas; (vi) innovation in service delivery; and (vii) inter-territorial and transnational co-operation.
Policy relevance: Provides a proven governance method to mobilise local knowledge, blend sectors, and network territories, making rural innovation systematic rather than episodic through long-term, partnership-driven investment.
Source: OECD (2025), Enhancing Rural Innovation in Japan, https://doi.org/10.1787/8d3b682a-en; OECD (2024), Enhancing Rural Innovation in Canada, https://doi.org/10.1787/a9919c66-en.; OECD (2023), Enhancing Rural Innovation in Scotland, United Kingdom, https://doi.org/10.1787/33b8c803-en.
Scottish Rural Leadership Programme, Scottish Enterprise, Scotland
Since 2006, Scottish Enterprise, an RDA in Scotland, has been running an annual Rural Leadership Programme that engages with business leaders and owners from rural Scotland. The participants come from a wide range of sectors in Scotland, including agriculture, tourism and hospitality, goods and drink, energy, horticulture and the services sector. The programme was developed in partnership with Highlands and Islands Enterprise and the South of Scotland Enterprise. The programme has over 700 leaders that have gone through it as of 2022 and it is expected to grow to close to 900 by 2025.
The programme provides a core 6-month session that builds the capacity of individuals as leaders through workshops, one-on-one coaching to support a growth mindset, building industry and parliamentary connections, and widening personal networks. The rural team at Scottish Enterprise hosted two Global Connection events during the pandemic, connecting rural leaders in Scotland with counterparts in Australia, Canada and the United States.
Peer-to-peer partnerships in the sake industry, Yamagata, Japan
Led by the private sector, in rural Yamagata, business leaders set up a strategy to simultaneously promote linkages between rural sake producers, regional branding and an export strategy that can promote the regional products. Through a local (prefectural) branding initiative, the Yamagata sake industry was given Geographical Indicator (GI) status, which is an indicator of the producer’s quality of land, resources and processes. This was a first for the industry (sake, a branch of food and drink). The uniqueness of the Yamagata sake GI is that, although GI protection is normally given to limited local areas, sake GI is given over the whole area of Yamagata prefecture.
As a part of the strategy to attain branded status, the Yamagata Sake Brewery Union association initiated a study that involved focus groups of breweries to help them learn and improve each other’s skills. This peer-to-peer partnership is rarely seen in the sake industry as they are competitors for the local market and brewery skills are kept as family secrets. However, in the case of Yamagata, with a shrinking domestic sake market, they changed their market strategy to a collaborative one, now intending to grow international export markets. This export-driven strategy has changed the mindset of the Yamagata sake industry and resulted in a lasting peer-to-peer partnership study group.
Source: OECD (2023), Enhancing Rural Innovation in Scotland, United Kingdom, https://doi.org/10.1787/33b8c803-en; OECD (2025), Enhancing Rural Innovation in Japan https://doi.org/10.1787/8d3b682a-en.
Strengthen rural-urban links
Public programmes can strengthen linkages to urban places, facilitating business opportunities but also access to services. Central platforms and one-stop shops are examples of such public programmes. Take the example of Switchboard in Ontario (Canada), a business ecosystem pathfinding tool to assist start-ups and scale‑ups in connecting with available resources, offering entrepreneurial wherever you live.17 Except for some rural places that are relatively close to cities and well connected by road, rail and broadband services, rural entrepreneurs have not had access to support from their counterparts in the country’s major cities. Recognising this issue, the Federal Economic Development Agency for Southern Ontario, which provides funding to the three major business accelerators, included a provision in recent funding negotiations to develop rural-urban linkages between the three major business accelerators and innovation centres serving smaller communities and rural areas across the region. The resulting Southern Ontario Scale-Up Platform brings together each major city’s business accelerator organisation into a new partnership. A goal of the new platform is to make the programming, advisory services and other support offered by these organisations in their urban locations available to entrepreneurs and SMEs located outside the major cities by partnering with local innovation centres so that people innovate in their own communities. Linkages forged via the Scale-Up Platform are also expanding the capacity of smaller innovation centres outside the major cities while fostering a stronger network between these centres and the major platform members, creating new opportunities for knowledge sharing and idea development across a wider area.
Improved co-ordination between urban and rural policy can have an amplifying effect on sectoral policies conducive to rural innovation. In Switzerland, the Federal Network on Coherent Urban-Rural Spatial Development is facilitating the co-ordination between both policy areas at the federal level. Regionally, rural-urban coverage of innovation support is ensured through funding and programme conditionality defined in the New Regional Policy (NRP). The RIS provides more support to regions with less access to resources than those of major urban centres. Their activities also connect entrepreneurs with universities and other knowledge partners in urban centres to benefit innovation in rural areas. Regional agencies are allowed to jointly apply for innovation funds for new initiatives through collaborations with metropolitan areas, with the condition that at least 50% of the expenditure on programmes (point of entry and coaching) must be done in non-metropolitan areas. These areas are defined by the NRP perimeter. In practical terms, this means that in large cities such as Basel and Geneva, RIS services can only happen because of co-operation with more rural cantons through the RIS. There is still room for improvement. Evaluation reports have stated that existing co-operation mechanisms are insufficiently used despite the importance placed to rural and mountainous areas in sectoral policy discussions. This hinders synergies between rural and urban policies. There is a need to better define which issues co-operation between the policies could bring added value to and how clarifying roles between the existing bodies can make processes efficient (Schweizerische Eidgenossenschaft, 2019).
Connect to global markets
Facilitating regional and rural access to foreign markets is increasingly part of both national and regional agencies and initiatives, and coordination helps. Some initiatives are national. For example Innovation Norway develops a strategy for innovation development in sparsely populated areas at the same time as trade promotion (Innovation Norway, 2024[24]). Innovation, Science and Economic Development Canada (ISED) is the federal department in charge of helping firms grow and serves the ministers in charge of innovation and trade, while also collaborates with the seven Canadian regional development agencies (OECD, 2024[13]). In other cases, regional trade promotion is directly in the mandate of regional actors. For example, in Scotland, the regional enterprise agencies co-ordinate with Scottish Development International to promote trade and increase rural entrepreneur’s access to regional and foreign markets (OECD, 2023[18]). Multilevel governance and collaboration can focus efforts. Costa Rica’s CINDE (Costa Rican Investment Promotion Agency) and Czechia’s CzechInvest both highlight the importance of inter-ministerial collaboration in turning investment-promotion agencies into enablers of territorial knowledge diffusion rather than narrow FDI brokers.
Connections to global markets and supply chains can materialise via wide ecosystem partnerships and rural-urban linkages. Denmark connects foreign investment, innovation, and rural-enterprise policy through a network of regional business hubs and innovation partnerships. These hubs link municipalities, universities, and firms to accelerate knowledge diffusion from global investors to local SMEs. This approach provides a governance model where FDI agencies, local authorities, and higher-education institutions jointly deliver regional innovation and diffusion strategies.18 Other OECD countries show that supplier-development, foresight intelligence, and local partnerships are crucial to spreading the benefits of FDI beyond major cities.
Supplier upgrading initiatives enable rural and peripheral SMEs to join complex value chains, though uptake varies regionally. Portugal’s COMPETE 2030 Innovation and Digital Transition Programme (budget € 3.9 billion) provides a model for linking regional SMEs (especially in agriculture and manufacturing) to global investor networks while raising technological capability. Administered by IAPMEI (Agency for Competitiveness and Innovation) under Portugal 2030 and co-funded by ERDF and ESF+, the programme supports SME internationalisation, digitalisation, and integration into multinational supply chains. It co-finances supplier certification, R&D collaboration, and technology adoption, particularly in food processing, automotive, and green industries.
Direct FDI-SME linkage schemes can strengthen rural and regional business ecosystems when funding and technical assistance target verified supplier potential. Czechia’s Supplier-Development Programme, implemented by CzechInvest with the World Bank Foreign Investment Advisory Service piloted between 2000 and 2002 in automotive and electronics, it paired MNEs with local SMEs for joint process certification, mentoring, and quality audits (using EFQM benchmarking).19 The framework later expanded through EU PHARE and ERDF funds to regional suppliers, laying the foundation for CzechTrade’s competitive-cluster system.
This section covers Pillar 4 of the policy toolkit. Labelled Experiment for local solutions, it covers actions to recognise the diverse forms and entrepreneurial types in which rural innovation take place, including recognising social enterprises as key innovation players, granting them access to funding and facilities. It also covers actions to enable more open forms of innovation in the local community, notably via platforms that facilitate experimentation.
Recognise and support social innovation
Social entrepreneurs, innovators and community initiatives can overcome challenges in rural service delivery, if well recognised and supported. Such activities help improve social outcomes in rural communities (OECD, 2021[25]; OECD, 2023[18]). An illustrative example of rural social innovation support can be found within the strategy of Highlands and Islands Enterprise Agency in Scotland (UK). The HIE, covering the northern remote and island regions of Scotland, incorporated social innovation and entrepreneurship as a critical aspect of both its regional development strategy and its innovation strategy. Social entrepreneurs provide services to communities and to other entrepreneurs (OECD, 2023[18]). This is made possible because social enterprises are recognised as legal entities, thus becoming eligible for direct and indirect support. Furthermore, regional development agencies provide financial and in-kind support. Beyond innovation grants, they also receive access to facilities at low cost and can benefit from regulatory exceptions to maintain profitability while they deliver community services. Solutions by the social enterprises supported include older men’s mental health facilities (Men sheds) and recreational centres providing childcare, entrepreneurial, and community services (Beith Community Development Trust).
Public agencies often have the greatest impact locally via a facilitation role. The Glasgow Chamber of Commerce is an example of business support for specific social missions. Since 2015, it hosts Circular Glasgow in joint effort with Zero Waste Scotland, the Glasgow City Council (UK) and key stakeholders - to build best practices and capacity on the circular economy among local businesses, helping them identify opportunities to implement circular ideas. This is done through business-to-business workshops and events; a tool (Circle Assessment) which helps businesses understand opportunities to become more circular, the Circle Lab; an online hackathon to find a circular solution to local challenges. The challenge is to extend such kind of support to rural areas. This can be done with stronger rural-urban linkages.
Structure open innovation for pressing challenges
Radical ideas can emerge in an environment of open innovation, and government support can extend this environment to more remote areas. Government programmes are creating platforms for individuals to work collaboratively on innovative new solutions to local (or global) challenges akin to the hack-a-thons and other challenged based initiatives widely used in the private sector. For example, Innovation Boosters in Switzerland are sponsored by the federal innovation agency, and work with regional and local partners on setting the thematic problem to solve within different regional contexts (Box 3.8). The programme is increasingly reaching more remote areas, and participants can access funding of new entrepreneurial ideas, in-kind support for launching and mentorship and training programmes. In Japan, the Rural Planner programme in Yamagata Prefecture (Box 3.7) incorporates challenged-based initiatives for solutions to local problems to be developed by residents, followed by either grants or in-kind support such as mentoring.
Powered by Innosuisse, the programme is designed to specifically support radical ideas in a culture of open innovation. Supporting the primary stage of an open innovation process, they provide the impulse for innovative ideas and help them get off the ground into the market. Key goals include:
Bringing together players from research, business and society on various innovation topics, promoting knowledge transfer and co-operation with partners along the value chain.
Using design thinking and other use-centric methods to help start-ups and other organisations explore problems in interdisciplinary teams and develop new and radical solutions.
Providing funding and assistance to test and scale promising ideas.
There are boosters corresponding to specific challenges via regular calls for proposals. The selection is based on a range of criteria, notably the likelihood that it will give rise to future innovation projects and impact society (locally and nationally, in terms of job creation, social inclusion, quality of life and environmental outcomes), and sound technical and financial proposals.
The criteria include: (i) the appropriateness of the methods and mechanisms used to promote the transfer of knowledge and technology; (ii) the competency to address the innovation topic and to involve the relevant actors on a national scale; (iii) the plausibility of the budget and cost-benefit ratio, the degree of own-funding and the contribution of third-party funds; (iv) the contribution to the sustainable development of society, the economy and the environment; (v) measures to ensure appropriate gender representation in the organisation and at activities.
Source: OECD (2022), Enhancing Innovation in Rural Regions of Switzerland, https://doi.org/10.1787/307886ff-en.
Build a culture for experimentation
The rural innovation process hinges on harnessing locally embedded knowledge and scaling of grassroots initiatives, which requires a safe experimental ecosystem. Living Labs, “fab labs” and similar initiatives bring previously financially inaccessible tools requiring heavy investment to budding innovators looking to explore ideas and create prototypes. The Interreg Europe Policy Learning Platform is one of the agencies supporting the increased use of such tools that create a place to learn, experiment and enjoy the process of innovation. While the different labs vary, they generally provide a mix of services such as skills, materials and advanced tools to participants that can include university-industry collaborations and provide prototyping services for SMEs. Additional examples are available in (OECD, 2022[17]).
Regulatory facilitation can then help test new products and business models under an assisted environment. Regulatory sandboxes can be particularly effective in rural areas. Regulators across the globe are using sandboxes to provide a safe environment for emerging technologies to test regulatory boundaries. Concrete examples include a fintech sandbox in Australia, a digital sandbox in the United Kingdom initiatives in the agri-tourism sector of the Jura region of Switzerland (OECD, 2022[17]). They are instruments that provide a regulatory waiver (temporarily or permanent) to new business models and innovative technologies. If such new services or products are considered more beneficial than harmful (particularly for local communities), local governments can then decide to scale up. Some sandboxes are sectoral. In 2016, the first regulatory innovation sandbox allowed experimentation in the financial technology (fintech) industry. According to a recent study, since then, 73 fintech sandboxes have been established in 57 countries, with more than half between 2018 and 2019 (World Bank, 2020[26]).
Living Labs, Portugal
The experience of implementing Living Labs in Portugal dates to the 1990s. To date, eighteen projects have been developed, some of which are part of the European Network of Living Laboratories (ENoLL). There are diverse types (local, sectoral and thematic Living Labs) organized in regional, national, and transnational networks. Sectoral and thematic Living Labs include labs for energy, well‑being and health, e-government and digital participation, sustainable environment, mobility, rural and territorial development, and industry and logistics.
The Smart Rural Living Lab (SRLL), founded in 2007 in central Portugal (Penela) has established itself as a centre for innovation, best practices, and sustainable development of rural areas, particularly where the agri-food and forestry sectors are strong. Its goal is to explore innovative technologies, methods, and applications to achieve better integration of rural areas into the global supply chain, create new services/ systems/ products and business opportunities, and promote citizen participation. For example, for the problem of the lack of shepherds to take care of sheep needed for local Rabaçal cheese protection (protected designation of origin), a Smart Farm called “FarmReal” concept was tested. This involves investment into a community herd via crowdfunding and the adoption of individual animals by investors who would then survey their physical activity and milk production digitally via specific sensors. Users become “virtual shepherds” of real goats and can follow the day-to-day life of the adopted goats, monitoring their behaviour and socialization through updated photos and videos, their GPS location, as well as the area and amount of vegetation used by the herd.
Living lab e-Health and Smart Energy Grids, Eindhoven, The Netherlands
As part of the Brainport Development Cluster, Eindhoven also houses an example of a living lab that focuses on the development of time-limited trial runs for new products and services. Brainport works with local stakeholders, higher education institutes, government and a consortium of private sector parties, to focus on experimenting new solutions to pre-existing issues. Through Living labs, individuals are given a license to test out a new initiative in a short time frame to get feedback as soon as possible, and determine the feasibility, benefit and scalability of such a project. For example, Living Lab eHealth provides elderly people the opportunity to try out new medical and healthcare services and a Smart Energy Grids project provides new energy solutions for social housing. In the same region, a similar example of living labs setup by Eindhoven University of Technology exists. It includes the largest indoor living lab (Atlas) of Europe with integrated sensors to study energy management, building safety and health and wellbeing of its residents.1
Fintech Sandbox in Australia
The Australian government established an Australian Licensing Exemption Scheme through the Australia Securities and Investment Commission that allowed exceptions for eligible fintech companies on certain products and services for up to 12 months without a license. This allowed firms to begin operating quickly, with low barriers to starting a new fintech company through lower compliance costs. The firm is required to notify the ASIC of their plans but remains momentarily free to experiment on product and services offered.
Digital Sandboxes in the United Kingdom
Starting with the beginning of the global COVID-19 pandemic in May 2020, the Financial Conduct Agency in the UK began piloting a “digital sandbox.” The initiative is currently in its initial stages that attempt to provide guided support for firms looking for a digital testing environment with the aim of addressing some of the challenges of the pandemic. The initiative has a specific goal and is administered through a call for applicants who are given the right to participate based on whether their aim to accomplish one of the targets of the administration which includes preventing fraud, improving the financial resilience of consumers, and improving access to finance for SMEs.
Regulatory exemptions in tourism for the region of Jura, Switzerland
While not directly marketed as such, two examples of regulatory sandboxes with the specific target of developing the tourism sector are found in the mountainous region of the Jura, in Switzerland. Both initiatives were driven from the bottom-up and included the coordination efforts of the regional innovation system agencies. The first one was built in collaboration with TalentisLab, which requested exemption from environmental protection legislation that limited activities associated with eco-tourism. After an application for exemption and a call for proposals, a new initiative to encourage eco-responsible tourism is being put into place that provides housing in camping sites.
Secondly, exemptions from visiting publicly protected places while visiting local towns, through an initiative that provides access to a “secret route” (circuit secret)1 to groups of tourists that have acquired digital keys. The community of Porrentruy, jointly with the regional innovation system’s agency services, jointly worked on reducing regulations on access to public places that may be of interest to increasing tourism in areas. This has allowed the town of Porrentruy to gain visibility and attractiveness that suffered strong losses of business due to COVID-19.
This section covers Pillar 5 of the policy toolkit. Labelled Facilitate with simplified and coordinated support, it covers actions to simplify governance and service delivery to boost business creation, and coordinate across levels of government and policy programmes to offer integrated support packages to undeserved local firms. The effectiveness of all policy actions is strengthened by developing the local authorities' capabilities for agile governance, with monitoring and evaluation and piloting capabilities to enable adaptation over time.
Simplify access to services and advice
One-stop shops can facilitate access to services for rural entrepreneurs, though they still do not seem tailored enough for rural needs. These services exist in many contexts but may not be well tailored to supporting innovation in rural places. In Switzerland, services for connecting researchers to firms are provided through the “no wrong door policy” of federal and cantonal government administration that similarly looks at helping entrepreneurs get access to innovation partners at universities or research institutes (OECD, 2022[17]). Other more general services exist within OECD countries that provide services that are useful for rural entrepreneurs. For example, in Canada, the one-stop shop BizPal supports firms when establishing and scaling up. BizPal helps SMEs gain access to permits and licenses for establishing businesses. The initiative is jointly managed by governments at the federal, provincial, territorial and municipal levels, with leadership for the initiative provided by Innovation Science and Economic Development (ISED) on behalf of the Government of Canada (OECD, 2020[27]). Similarly, ISED also manages a similar Business Pathfinder Tool to facilitate access to general business services. Other examples of one-stop shops, such as those in the UK, are elaborated in Box 3.11. France has also developed one-stop shops for citizens that support auxiliary services for entrepreneurs. For example, Maisons de services au public ("Public service houses") offers access to post offices, public transport ticketing, energy utilities, unemployment insurance and welfare services in one local area.
Platforms in Canada: for research, SMEs support and scaling up
The Canadian federal government has set up a Business Benefits Finder, which aims to provide businesses with a list of tailored supports, advertised through several channels. The tool is designed based on questions and answers that help filter through hundreds of federal, provincial and territorial programmes.20 A key objective of the tool was to develop a fun, interactive and user-friendly site while providing the best results. It also aims to reach people who might not know what they are looking for and equip them with information on what the government can do for them. Importantly, the process does not collect or track individual information. The more questions are answered, the more customised and accurate the results will be. Behind the tool sits a team of four people working on keeping information up to date, summarising programmes and creating the right tags for them.
The Canada Business App, released by Innovation, Science and Economic Development Canada in 2019, provides access to an umbrella of programmes and services that are directly relevant to SMEs in Canada. It is an all-in-one resource to connect people to over 15 000 government programmes and services in a simple, accessible and easy-to-understand way. BizPal, exists to support firms when establishing and scaling up a business. It serves, in large part, SMEs to have access to permitting and licenses for establishing businesses. The initiative is jointly managed by a partnership involving governments at the federal, provincial, territorial and municipal levels with leadership for the initiative provided by Innovation Science and Economic Development (ISED) on behalf of the Government of Canada (OECD, 2020[27]).
Entrepreneurial support and funding access in England and Scotland (United Kingdom)
The Business Support Simplification Programme, initiated by the then Department for Business Enterprise and Regulatory Reform for English regions, aimed to make it easier for businesses and entrepreneurs to understand and access government-funded grants, subsidies and advice on how to start and grow their businesses. It was estimated over 3 000 publicly funded business support schemes existed, so businesses reported that they were confused by the large number and discouraged from applying. Better targeted schemes have more impact on businesses and provide the public sector with greater value for money from a leaner system. The schemes were reduced to 100 or less by 2010 and made available through the nationally sponsored and regionally administered Business Link Gateway. The Business Gateway network, operated at the level of the 32 local authorities in the United Kingdom, offers a range of professional resources, support and tools to help entrepreneurs learn new skills, create new opportunities and develop sustainable strategies for growth. Innovation partners like enterprise agencies and Skills Development Scotland further support growth beyond the local area/scale.
Source: OECD (2024), Enhancing Rural Innovation in Canada, https://doi.org/10.1787/a9919c66-en, OECD (2023), Enhancing Rural Innovation in Scotland, United Kingdom, https://doi.org/10.1787/33b8c803-en.
Coordinate policy packages
Indirect support for entrepreneurs is critical but often scattered. Training access, for instance, is a critical determinant of individual entrepreneurship and innovation efforts, including in rural places, because it enhances the capacity to absorb knowledge spillovers from other regions and sectors (OECD, 2022[12]), (OECD, 2006). But support for skills or entrepreneurship may not be in the hands of rural or regional policymakers. Building mechanisms for co-ordination by working with other ministries, departments or agencies is critical for tailoring policies to the needs of local and rural communities. Below are examples of coordinated efforts to address the top rural innovation challenges identified by the OECD survey.
Skills: though skills policies are often not an exclusive mandate of regional development agencies, there is coordination with national agencies. Skills policies need to match local firms’ demands, and opportunities in the region (OECD, 2023[20]). In many cases, there is regular co-ordination mechanisms between skills service provides and regional entrepreneurial and innovation support entities (OECD, 2022[17]), (OECD, 2024[13]), (OECD, 2023[18]). In Switzerland, the regional innovation system establishes a joint strategy for regional development and innovation co-ordinating at a central level with the federal skills strategy. Cantons and regional innovation system units are then responsible for pitching a strategy from the bottom-up that considers the skills opportunities and demands in the region (OECD, 2022[17]). In the case, of Scotland, the three enterprise agencies regularly collaborate with the regional arm of the Scotland skills development agency to better understand the needs of employers and population (OECD, 2023[18]). In Quebec, community colleges (Centres Collégiaux de Transfert de Technologie, CCTT) and universities are incentivised to work with rural enterprises within their strategic mandate (OECD, 2024[13]). There are also examples of coordination for migrant attraction initiatives.21 For example, in Canada, the Innovation, Science and Economic Development department is supporting the piloting of a rural visa programme including the Atlantic Immigration Pilot and the Rural and Northern Immigration Pilot programme. Similar programmes are now being piloted in rural parts of Scotland.
Finance: regional development agencies can also work on helping entrepreneurs gain access to investors and financial institutes. For example, Quebec’s regional development agency provides “pitch” roundtables for entrepreneurs that bring public, private and alternative finance to meet with rural entrepreneurs (OECD, 2024[13]). Still, coordination is needed with central agencies since interest-rate setting, collateral and bankruptcy regulation is outside the scope of regional and rural policymakers. Coordination is also important for the establishment of local and community-based loan facilities that know the community clientele and understand the business. National directives can help. In the United States the Community Reinvestment Act requires financial institutions to re-invest a portion of profits in local communities (OECD, 2023[20]). In the case study city of Pine Bluff, Arkansas, the local bank hired an employee from the region who was specifically in charge of understanding local risks, including those that may go beyond the threshold of risk accepted in more developed areas. However, this Act only functions when a bank is physically located within a community. In the case of depopulating rural places, the physical availability of a bank may become more of a scarcity or be replaced by digital banking solutions that overlook the local risks and larger context for rural entrepreneurs.
This section covers Pillar 6 of the policy toolkit. Labelled Measure and learn with wide rural data access, it covers policy actions to improve data and information access that help to understand and address rural realties and adapt policies accordingly.
Improve access to information in rural areas
Access to information in rural areas is critical to making informed decisions for rural development and innovation. However, rural features are often not well captured in statistics, which are often developed from the perspective of non-rural places (OECD, 2022[12]).22 This can create unfavourable outcomes for rural places. Government agencies, particularly national governments, can start addressing this with three main steps:
Integrate rural realities to standardised territorial classifications. For instance, in many cases, classifications of rural are measured by distance and proximity to agglomerations without taking into consideration rural mobility patterns. But in addition to better measurements of rural ‘remoteness’, the bigger challenge is harmonisation. Across countries, different types of classifications of rural areas are used. The variation in part reflects different priorities of each agency and diverse territorial coverage with different economic developmental needs (e.g. mountainous regions, islands). Both the OECD and the European Commission are looking at understanding the rural area’s functionality from their own perspective (Dijkstra and Jacobs-Crisioni, 2023[28]).
Define comparable measurements of rural innovation. The OECD’s Oslo manual, a consensus-based definition agreed upon among OECD countries, provides a harmonised definition of innovation that allows international comparability. Several statistical agencies have started adopting the definition within firm surveys on innovation, such as Eurostat’s Community Innovation Survey, or the United Kingdom’s Innovation Survey. The definition captures the development of products, processes and business models that are new or a significant improvement to the firm or any other organisation or community (OECD/Eurostat, 2018[29]), and has some degree of novelty which is new to the firm, new to the market, or new to the world. However, often the low-density nature of many rural places means that without an over sampling of surveys for rural analysis, survey-based data tends to overlook rural innovations.
Improve access to information in and about rural areas. Rural areas lack data about themselves. There are many country examples of how to address this information gap (Box 3.12). For example, the European Commission established a rural observatory that works on producing knowledge and improving data dissemination and collection in EU rural areas. The observatory works as the mechanism for “rural proofing” to provide evidence for policymaking in rural areas. It includes quick snap shots of rural places, and thematic analysis including on current issues such as renewable energy production. Similarly, there is an initiative entitled the Rural Pact, that provides a collection of practices in rural revitalisation and other rural-based community initiatives to share information more widely on policies and initiatives for rural development.
The region of Quebec, Canada is establishing a new centre for rural analysis (tentatively entitled Centre de développement de la recherche pour les ruralités durables [INRS]) that focuses on bringing data and insight to researchers and policymakers.
In Korea, the Population Policy Task force, works to gather evidence and produce analysis to anticipate changes occurring across regions, including rural regions. In a round of consultations, they targeted collecting and discussing initiatives to counter-act the hollowing out of small and mid-sized regions, that included plans for vacant housing and more elderly transport policies. The task for starting on January 2021, addressed four major strategies around demographic change and sustainability. They included initiatives on 1) absorbing labour shortage shocks caused by demographic change, 2) responding to the shrinking society, 3) taking pre-emptive action against possible local extinction, and 4) improving the sustainability of the entire society. The strategies target improving opportunities for populations such as women, the elderly, as well as local citizens and the wider public.
Networks for rural information dissemination can also be under-taken by non-governmental organisations. In the United States, a non-profit entitled The Center on Rural Innovation builds visual tools for policymakers that provides research and analytical tools to create data-driven maps, and provide analysis on the geography of innovation. It provides both policymakers and investors tools to scout rural tech economy opportunities and tech talent trackers.
Sources: Canada: Ruralité INRS (ruralite-inrs.ca), accessed 02 April 2024. Korea: Korean Ministry of Land, Infrastructure and Transport, and OECD Territorial Review of Korea adapted from OECD (2022), Enhancing Innovation in Rural Regions of Switzerland, https://doi.org/10.1787/307886ff-en. United States: https://ruralinnovation.us/our-work/research_mapping/ , accessed 02 April 2024.
Set up monitoring and evaluation for adaptation and anticipation
Governance needs to anticipate and adapt to local, community-oriented dynamics to enable rural innovation. Governance is still a challenge for rural innovation: the OECD survey evidence indicates that the mandate for rural innovation is most often located in only one ministry (71%). In the remaining 30% of countries, the mandate is spread across several sub-national, regional, or sector-specific development agencies. Anticipatory innovation governance is the broad-based capacity to actively explore possibilities, experiment, and continuously learn as part of a broader governance system (Tõnurist and Hanson, 2020[30]). It embraces an interconnected, bottom-up and learning-by-doing approach to policymaking: strengthening horizontal and vertical linkages between innovation and regional development bodies, empowering local authorities to engage residents, anticipating rural trends with data observatories and new foresight approaches, and adopting and learning through experimental policymaking. In this way, adaptive and anticipatory governance are themselves forms of rural innovation.
Monitoring and evaluation enable adaptive policies that better supports rural innovation. The OECD defines policy evaluation as a “structured and objective assessment of an ongoing or completed policy or reform initiative, its design, implementation and results” (OECD, 2020[31]). Policy evaluation determines if a given policy is efficient, effective, impactful and sustainable. The OECD defines policy monitoring as the “formal reporting of evidence to show that resources are adequately spent, outputs are successfully delivered, and milestones met” (OECD, 2020[31]). Policy monitoring specifically compares a policy’s actual progress with planned targets.
Source: From OECD (2020) Improving Governance with Policy Evaluation: Lessons from Country Experiences, originally adapted from McDavid, Huse and Hawthorn (2006[10]), Program evaluation and performance measurement: an introduction to practice, Thousand Oaks, California: Sage, in OECD (2019[11]), Open Government in Biscay
Many countries and regions are setting up the capability for monitoring and evaluation for policy effectiveness. In Scotland (United Kingdom), for instance, the Cabinet Secretary for Rural Affairs, Land Reform and Islands oversees co-ordination on rural affairs, entrepreneurship and innovation, which is crucial for the successful implementation of initiatives such as the Rural Economy Action Group (REAG) and City Region Deals. The REAG identifies barriers and facilitators to progress and proposes indicators that enable the value of the rural economy to be captured and monitored. The group’s focus on establishing reporting mechanisms that build an understanding of the contribution of the rural economy to achieving the National Performance Framework (NPF)'s purpose and outcomes is crucial for monitoring progress and ensuring the sustainability of rural economic growth. Pilots can also inform the regulatory implications of innovations and new technologies. For example, the United States Federal Aviation Administration (FAA) launched the Unmanned Aircraft System (Drones) Integration Pilot Programme in 2018 to allow private firms to test drones with a waiver of airspace regulation for a period of 30 months. The FAA used the lessons learned from these projects to develop new enabling rules related to drones, notably for privacy and security regulation. This pilot programme indicates how monitoring policy programmes and experiments can yield useful new regulatory insights in the evaluation phase (Attrey, Lesher and Lomax, 2020[32]).
Monitoring and evaluation at the level of functional areas or across rural-urban linkages can enhance institutional capabilities and better capture the wide impacts of policies. In Switzerland, the regional innovation systems (RIS) foster cross-cantonal links. Still, the RIS impact across different types of areas within the perimeter can be uneven. Several reports analysed in the rural innovation country review state that SMEs and entrepreneurs in regional centres benefit more from the provided support than the more remote regions and mountainous areas. The reasoning behind this is that innovation in the peripheral regions functions differently than in the regional centres or the larger agglomerations and that the support currently provided does not sufficiently take geographic specificities into account. Consequently, better evidence is needed to help RIS evaluate and understand if their activities and programmes match and benefit the different needs existing within the perimeter, and across regions.
Anticipatory approaches to local trends can further inform policies for innovation. Anticipatory approaches (which involve mechanisms to anticipate economic, market and other trends relevant for local economies) are especially important for rural regions when it comes to facing the future. This type of public governance innovation brings important advantages given the greater exposure of rural regions to external shocks and relatively low financial and structural capacity to mitigate impacts. Finland demonstrates how integrating foresight and labour-intelligence tools into regional planning aligns foreign-investment priorities with education and R&D systems. Each region embeds foresight within its Smart Specialisation Strategy (S3), combining data on skills, investment trends, and technology diffusion to guide priorities such as bioeconomy, digitalisation, well-being, and tourism. Cross-regional foresight systems in Central and Northern Finland link universities, regional councils, and enterprises. Finland’s Anticipatory Innovation Governance Model (OECD and Government of Finland, 2022) institutionalises foresight across government, ensuring that RDI investment, FDI attraction, and workforce development evolve in tandem.
However, governments may face obstacles monitoring and evaluating rural innovation policy. Compared to higher levels of government, or urban municipal governments, local rural government may struggle to build analytical and data collection capabilities. Relatedly, institutionalizing evaluation, while necessary to ensure proper conduct and transparency, can also create challenges. As previous OECD research has suggested, “formal measures to undertake and use evaluation can create a fear of sanctions, which can prevent risk-taking, experimentation and innovation in policy and programme design” (OECD, 2020[31]).
The OECD (2020[30]) has identified two enabling conditions to promote the transition towards an anticipatory innovation policy approach: i) allowing policymakers do things differently and ii) creating an authorising environment that gives them the authority and legitimacy to undertake actions of anticipatory innovation.
In this framework, strategies to allow policymakers do things differently include:
Promoting exploration and experimentation in policymaking
Reading and interpreting signals from the present (e.g. with real-time data)
Uncovering underlying assumptions and making sense of trends
Promoting organisational structures that give autonomy and resources to explore transformative ideas
Developing approaches to create new knowledge about possibilities, creativity of thought, and operationalisation of innovations
Fomenting institutions that make room for experimentation and testing
Strategies to trigger anticipatory innovation within governments include:
Addressing incumbents’ interests and biases in thinking about the future
Promoting legitimacy by creating trust in government risk-taking, experimentation and explored futures
Supporting networks and partnerships by involving a variety of stakeholders and new perspectives, and facilitating discussions around value
Evaluating future options based on value and accounting for opportunity costs
Creating feedback loops from experimentation to dynamically inform policy choices
Source: Adapted from (Tõnurist and Hanson, 2020[30])
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← 1. The OECD Programme for International Student Assessment (PISA) is an international assessment that measures 15-year-old students' reading, mathematics, and science literacy every 3 years.
← 2. A study for Europe shows that students in remote rural areas have to travel on average 5 additional kilometres to reach a school compared to students in other areas, and that 9 out of 10 municipalities without a school were rural (Europ ean Commission et al., 2022[43])
← 3. Lack of access to quality opportunities in education has been shown to lead not only to lower lifelong employment opportunities, incomes and wellbeing, but also to higher intergenerational inequalities (Hanushek and Woessmann, 2020[44]).
← 4. Financial support can take the form of direct government funding or tax incentives that grant preferential treatment to R&D expenditures or to the income derived from R&D and innovation. Expenditure-based R&D tax incentives are the most favoured policy instrument across the OECD, representing 55% of total government support for business R&D (OECD, 2021[33]).These are structured as tax credits, tax allowances or tax relief (i.e., redeemable against payroll withholding tax or social security contributions) (OECD, 2021[33]).
← 5. OECD counties have adopted three main approaches to SME policy. The most common approach are SME action plans with select measures (OECD, 2021d). An alternative is to position SME policy actions in the context of wider policy frameworks regarding industrial, innovation or regional policy (OECD, 2021d). Finally, a small but growing number of countries have developed SME Strategies that include objectives and policy instruments in a variety of SME policy domains. The extent to which these initiatives address the specific needs of rural firms differs. Positioning SME policies within broader policy frameworks such as innovation policy can risk narrow definition of innovation that do not meet rural dwellers needs. In contract, positioning it within a regional policy framework may effectively support rural innovation, depending on the governance arrangements, instruments and third part delivery agents.
← 6. The voucher covers 50% of the costs and contra-financing can, if the project meets certain conditions, include the innovators own time (as a defined hourly rate) for prototyping, etc.
← 7. They started with just $25 million in 1985 and over the past three decades, AFIs have made an estimated 46,000 loans worth over $3 billion; each year over $100 million in new loans are made to Indigenous businesses, 500 start-ups are financed, and 750 existing businesses are financed (NACCA, 2020[16]).
← 8. At the beginning of 2021, Nordland County Municipality had a population of 240 559 inhabitants. Among these, 7 000 aged between 16 and 30 were not in employment, education or training (NEET).
← 9. There is a large empirical literature on how innovative activities are spatially clustered and their associated benefits. For example, on the demand side, clustering can reduce transaction costs, make it easier to understand customers’ needs and access local demand; on the supply side, it can help to access skilled workers, research services and transportation networks (Breschi, 2008[39]; Marshalian, Chan and Bournisien de Valmont, 2023[40]).
← 10. It is a research institute that grew out of the privatization of the largest nuclear plant in Canada (providing close to a third of Ontario’s energy) and a collaboration with local government officials.
← 11. An alternative approach is co-production – the involvement of community or non‑profit groups (i.e., the third sector) in service provision. Some countries have a long history of this tradition – e.g., Germany and the Netherlands (Brandsen and Pestoff, 2006[41]). A comparative study of co-production in different European states by Voorberg et al. suggests the effectiveness of such strategies depends on state traditions and governance cultures (Voorberg et al., 2017[42]).
← 12. Contaminants include mercury and other chemical substances. More recent collaborations include the impact of algal blooms, oil spills, and mercury pollution.
← 13. Standard Innovation Vouchers of up to GBP 5 000 of funding aimed at encouraging first-time partnerships between a company and a university or further education college; Student Placement Innovation Vouchers, up to GBP 5 000 to fund a PhD or Masters student to work within a business on a clearly defined project and continue the development of a Standard Innovation Voucher award; and Advanced Innovation Vouchers of up to GBP 20 000 of match funding to either encourage sustained relationships with academia and enable existing partnerships to continue the development of a project or for those companies who are beginning their collaborative journey with a higher education institutions (HEI)/further education (FE) college partner.
← 14. The foundation provided jobs to close to 30% of the local population and reinvested profits to provide opportunities for small entrepreneurial efforts. The foundation was built after to align with the goals of the Fogo Process where local stakeholders came together to create a regional plan for saving the community after a declining population challenges (OECD, 2024[13]). See also https://shorefast.org/about-us/ , accessed 28 March 2024
← 15. In the Pine Bluff School District, only 12% of the high school students tested at or above the proficient level for reading, and 8% tested at or above that level for math. This limits their ability to benefit from vocational and entrepreneurship training in the first place, and therefore to contribute to the local economy and workforce. It is necessary to provide a basic education that motivates students to study, training to give them skills for working, and opportunities for some to pursue higher education. Page 25 of OECD Enhancing Rural Innovation in the United States (2023).
← 16. Communities selected from five instruments (Andison, 1990, p. 59[64]): (1) self-employment assistance; (2) funding a Business Development Centre (BDC) – including operating support and CAD 1 million for a revolving loan fund; (3) relocation assistance; (4) a Community Initiative Fund (CIF) – up to CAD 1 million for a transformational project with local cost-sharing; and (5) skills training. Most chose BDCs and CIFs for medium-term impact, which required collective prioritisation (CIF) and stewardship of a local financial intermediary (BDC) (Freshwater and Ehrensaft, 1993[65]).
← 17. The tool is the result of a partnership between Invest Ottawa and local vocational college St. Lawrence College, with its three campuses across Eastern Ontario. The tool called Switchboard provides navigation support and visibility to all relevant public support activities in the area of Kingston. Results are clustered and displayed according to which stage of the business circle entrepreneurs are in, based on qualitative analysis. In case entrepreneurs are unsure of their best fit, the tool also provides assessment help and lets people research for support directed at specific needs, including for women and Indigenous people. The page is constantly updated through support providers, making it easily saleable to other regions and allowing for reporting on the most-searched-for support.
← 18. Supported by the Green Development and Demonstration Programme (GUDP) and the OECD’s FDI–SME Ecosystems Initiative (2025), Denmark prioritises knowledge upgrading and sustainable productivity over isolated project grants.
← 19. Forty-five suppliers completed tailored business reviews, securing an estimated USD 46 million in new contracts within three years.
← 20. As of 3 October 2023, the tool provided information on 1 600 programme streams (some programmes have multiple sub-services).
← 21. There is a well-document association with migrant’s and their innovation and entrepreneurial activities (Kerr and Lincoln, 2010[34]; Kerr, 2010[35]; Pekkala Kerr and Kerr, 2020[36]; OECD/European Commission, 2021[37]). However, legal pathways for immigration alone is not enough to meet the demands for immigrant workers in rural areas, as international migrants will tend to move for jobs or community connections. Support in resettlement is critical, and it can come in the form of local job placement and cultural integration within the region. For example, in Canada, supporting is provided to help with resettlement into rural areas (Gure and Hou, 2022[38]).
← 22. For example, mobility patterns that may determine classification systems across a country may be better suited to more densely populated areas.