Firm-level innovation in rural areas: a path to sustainable growth?

The goal of my recent study - Revisiting research on firm-level innovation in rural areas: A systematic literature review and future research direction published in the Journal of Rural Studies - was to fill this gap by conducting a systematic literature review on firm-level innovation in rural areas. I examined 152 articles published between 2003 and 2023 to offer an overview of the evolution of this research field, identify key trends, and propose future directions. Through the provision of an integrated framework that outlines the major antecedents (i.e., regional, firm, community, and individual levels) and outcomes of innovation in rural firms (e.g., productivity, competitiveness, rural resilience, and community legitimacy), this work illuminates the intellectual structure of firm-level innovation.

This content review contributes to the ongoing conversation about firm-level innovation in rural areas. By offering a clear picture of the current literature, identifying critical gaps, and providing a roadmap for future research, it encourages both scholars and policymakers to pay greater attention to the potential of rural firms. As the world moves toward more sustainable economic business models, innovation in rural areas will play an increasingly vital role in ensuring inclusive growth and sustainability. To determine the connection between firm-level innovation and the achievement of a net-zero emissions target, more research is required in light of climate change and the 2030 Agenda for Sustainable Development.

The State of the Art Review (SOTA) - Unlocking potential through investment in rural innovation - to which I contributed for NICRE’s investing in rural innovation module on our innovation portal aligns closely with findings from my recent study. While industrial policy alone cannot drive innovation, it plays a vital role in enhancing a nation's innovative capacity by providing direction and resources. Effective rural innovation requires a balanced approach that combines government support with private sector dynamism to foster a sustainable and resilient ecosystem. By investing in, and addressing the unique challenges of, rural areas, we can unlock their growth potential, enhance community well-being, and support diverse, community-led initiatives for a prosperous rural future.

This link between firm-level innovation and rural resilience is critical as policymakers increasingly look to rural areas to help meet national sustainability goals. In particular, eco-innovation by rural firms can contribute to reducing emissions, supporting sustainable agricultural practices, and developing renewable energy solutions, all of which are essential to achieving net-zero targets. By connecting insights from my study with the aforementioned SOTA, we can better understand the importance of supporting rural firms and community-led initiatives in fostering sustainable development. Emphasising both academic findings and practical examples reinforces the importance of targeted investment in rural innovation to build resilient rural communities.