Entrepreneurial activity – creating and developing a new business – provides the opportunity for new wealth creation in a community and creates the potential for new employment. In rural areas where alternative employment opportunities may be less accessible, local entrepreneurship may be particularly important. However, arguments have often suggested that entrepreneurial activity may be less rewarding in rural areas. Yet, prior experiences, local connections, and specific local knowledge have all been put forward as supporting levels of rural entrepreneurship.
We, using data from the 2019 Global Entrepreneurship Monitor (GEM) dataset, compared levels of early-stage entrepreneur and established business owners between UK rural and urban areas (outside London) prior to the Covid-19 pandemic.
I’m Co-Director of NICRE, Professor of Enterprise at Warwick Business School and Director of the Enterprise Research Centre (ERC). I am an economist with over 30 years’ experience of researching issues related to small and medium enterprises, innovation and innovation policy in the UK and internationally and have published widely in both areas. I have led over 70 externally funded projects, have been a member of a number of government advisory boards, and I regularly act as a consultant for OECD and the World Bank on issues related to small business development and innovation policy including projects in Austria, Abu Dhabi, Mexico, Israel, Columbia and Poland, Austria and Canada over the last four years. I am an Academician of the Academy of Social Sciences and a Fellow of the RSA.
The results suggested some, perhaps unexpected, contrasts between urban and rural areas with respect to entrepreneurial activities.
Individuals residing in rural areas of the UK were more likely to engage in early-stage entrepreneurship and own/manage new businesses compared to individuals in urban areas. This contradicted some prior studies which suggested that rural areas lag behind urban areas with respect to entrepreneurship.
Moreover, our results indicated that individuals’ characteristics, attitudes and market perceptions had similar impacts on the probability of engaging in early-stage entrepreneurship and own/manage new businesses regardless of where people reside.
Combined, these insights suggest potential opportunities for policies directed towards rural areas, and individuals in those areas, that can improve entrepreneurial attitudes and perceptions, and simultaneously decrease fear of business failure.
One example may be university-based training, entrepreneurship and networking programmes for individuals in rural areas to learn about real-life examples of successful entrepreneurs, to hone their start-up skills, and help identify relevant market opportunities.
Our analysis pre-dates the Covid-19 pandemic which may have significantly changed the entrepreneurial landscape due to acceleration of urban to rural shifts in population. Future analysis could usefully look at later waves of the GEM data, and potentially other data sources, to examine how the pandemic has influenced urban and rural start-up activity, as well as business survival and growth.
I am a Research Fellow at NICRE and a postdoctoral fellow at the Enterprise Research Centre at Warwick Business School. I hold a PhD in Economics and Innovation Management. My interdisciplinary research seeks to address real-world challenges through policy-relevant economic analysis, by examining the impact of innovation, in particular Environmental Innovations, on firm growth and competitiveness for manufacturing and agricultural enterprises. I use applied economic and econometric methods to understand how businesses and regions can become more sustainable. Latest work explores the institutional, demand and supply-side factors, and organisational dynamics, that drive conventional and environmental innovations, as well as firm performance. I am also currently working on a BBSRC Global Challenges Research project on Valuing Orchard and Integrated Crop Ecosystem Services.
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