Developing the Rural Dimension of Business-Support Policy

Abstract

The development of rural business-support policy depends on the proper identification of those factors that have a differential impact on the success of rural as opposed to urban businesses. A number of studies have pointed to differences between urban and rural businesses in the business constraints and opportunities they face, and how they respond to them. This issue is investigated by use of a multivariate econometric model to analyse data generated by a survey of almost 800 businesses in all areas of Northern Ireland. The locations of the businesses in the study were mapped carefully according to an urban, accessible-rural, and remote-rural spatial typology. There is particular interest in the shape and form that rural business support policy might take in order to assist businesses in rural areas where there will be a reduction in traditional EU Common Agricultural Policy (CAP) assistance as well as a phased withdrawal of Objective 1 Structural Fund support. This is currently the case in Northern Ireland. The research should be seen as a pilot study designed to demonstrate how further work might be undertaken in an area where the search for appropriate interventions is likely to be a continuing theme in policy debate. Further research might usefully be directed towards examining the factors that are responsible for causing some of the differences observed. The research suggests that the business areas that will have the greatest impact on rural business competitiveness, relative to their more urban counterparts, are training, business-service provision, transport and communication infrastructure, costs of production, and the environment. This complex set of factors cuts across traditional departmental and national boundaries and highlights the importance of ensuring customised rural business support responses and the effective ‘rural proofing’ of strategically important public policies in general.