04 December 2024

How does resourcefulness shape the resilience of rural SMEs?

Fahimeh Malekinezhad

Research Assistant

Fahimeh Malekinezhad

Research Assistant

State of Rural Enterprise evidence

Resourcefulness and resilience in businesses are interlinked, writes Fahimeh Malekinezhad, Research Assistant. Drawing on evidence from NICRE’s State of Rural Enterprise survey in 2021, I, Evgenia Micha, and Damian Maye have examined the resilience of rural SMEs in the UK, focusing on how various forms of resourcefulness (behavioural, financial, and social) contribute to their survival and growth. 

The study builds on the concept of resilience as not just surviving a crisis but thriving through it, turning challenges into opportunities. Through a distinctive typology of resilience strategies, the research provides valuable insights into the dynamic approaches rural SMEs use to prepare for, and respond to, crises. As revealed in this study, resilience emerges from a combination of proactive preparation and adaptability, empowering SMEs to turn challenges into pathways for growth and innovation. 

Key findings: Four types of resilience behaviours

The study clusters rural SMEs into four different types based on their firm-level characteristics, resourcefulness and resilience strategies: 

  1. The well connected: These SMEs are highly involved in local communities and networks, building strong relationships and mutual support within their communities. They often rely on social capital to manage risks and overcome challenges.
  2. The local traders: This group of SMEs prioritises buying and selling within their immediate environment. Their resilience strategies rely heavily on local economic links and are more vulnerable to regional disruptions.
  3. The reactive: These SMEs are characterised by smaller size and limited planning. They tend to react to crises as they occur, rather than preparing for them proactively. They seek to return to pre-crisis operations without significant change, demonstrating a more traditional resilience model.
  4. The big planners: This group represents the larger rural SMEs and emphasises strategic planning and proactive risk management. They were the most resilient, with strong financial results and even growth during the Covid-19 pandemic. 

Preparation and adaptability

The findings of this study highlight that resilience outcomes result from both preparation and adaptability, underscoring the need for tailored interventions that respect each SME’s unique characteristics and requirements rather than relying on a 'one size fits all' approach. 

For instance, businesses within the 'well-connected' cluster could benefit from programmes aimed at strengthening community networks, enabling resource sharing and fostering collaborative opportunities. In contrast, 'big planners' may benefit from financial incentives that promote long-term strategic investments and the development of advanced planning skills. 

By aligning support with the diverse resilience strategies of rural SMEs, these targeted interventions empower businesses not only to survive but also to innovate and thrive, fostering sustainable growth and stability during times of crisis. 

Resources

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