There is much talk in government and academic circles of ‘innovation ecosystems’, in which focused government interventions create an environment (or ecology) in which companies can be nurtured, grown and developed. Similar to ecology where organisms interact with one another and with their physical environment, the expectation is that with the appropriate start in life, the innovation ecosystem will blossom, put down roots and eventually become sustainable. There are several well-known examples where this has happened around the world, mostly where there is a cluster of high technology companies located near a world-leading university. Within the UK, the example most frequently cited is Cambridge, where over many decades strategic corporate partnerships and spin off companies have worked with the University, leading to a plethora of science parks, supplier relationships and new collaboration opportunities. In the USA, there are several examples, notably Silicon Valley, California and Boston, Massachusetts. And there are other examples in Europe, Asia and even a fledgling ICT Village in Madagascar, facilitated by the United Nations. In an innovation ecosystem, there may be an ‘anchor institution’ (usually a university), that provides an environment for knowledge exchange, skills development, and networking. There will be many innovative small companies, which could be spin offs, subsidiaries of large companies or independent. There are opportunities to find out about new technologies and ways of working, leading to collaboration and the development of new products and services. Business angels and venture capitalists will be drawn to the area to invest, large companies will seek to develop their supply chain there, and all this should lead to new jobs and wealth creation.
Apart from a few cases, most of the successful innovation ecosystems are in urban areas. Clearly, networking and collaboration are enabled by closer physical proximity, but there is no doubt that such activities would be of great benefit in rural areas, which are characterised by lower levels of productivity and economic performance. In a recent article in the Journal of Corporate Citizenship (Marshall and Murphy, 2017), we have explored some of the issues facing rural innovation ecosystems. Rural settlements are defined in terms of population density. The dispersed populations obviously mean that businesses and communities are more isolated, so that travel times to access customers or collaborators, or to undertake normal business activities are longer. There are other issues too. Opportunities for young people, particularly those with higher level skills, tend to be fewer; typically they leave and move to urban areas. This makes the population demographics relatively older. This effect is further enhanced as rural areas attract people in later life, as retirees, commuters to urban areas, or home-based workers – all seeking a better lifestyle, or enhanced ‘wellbeing’. Larger employers, in the public, voluntary and private sectors, are more likely to be smaller subsidiaries. There do not tend to be specialist medical centres, or leading research hubs located rurally. There is a vicious circle around attracting, retaining and developing skilled professionals into the area, as it is hard to provide a package that supports their career development.
However, rural areas do attract a particular type of mid-career, skilled professional. They may have held senior roles in larger urban organisations and may have good networks in their own field. They are often attracted to relocate to a rural area, perhaps to accompany a spouse taking up one of the few senior professional roles, or possibly more proactively because they seek a better work-life balance, a desire for a rural lifestyle and wellbeing. Many become self-employed and many are highly innovative. There is evidence that rural economies are sustained by more varied types of businesses, including new business models, social enterprises and clustering of micro-businesses. Unlike what seems to be the conventional image held by policy-makers, these business owners may not be desirous of growth, but to prefer lower risk choices. They may also be older and they may be more likely to be female. Social enterprise models in which there is a major volunteer element (such as Broadband for the Rural North (B4RN)) are prevalent. There may be links to cultural industries, particularly associated with the landscape and heritage of the area. The reasons for these differences are, of course, related to the population sparsity, the difficulties in accessing resources, people and skills. However, there is emerging evidence that there are also differences in aspirations, lifestyle choices and preferences. Rural areas are populated by individuals, many of whom work in more than one part-time role. Their lives can be a complex mix of paid and unpaid work, self-employment, educational and caring activities. Of course, this is not only a rural phenomenon, but there are certainly fewer opportunities for more conventional roles, meaning that this pattern is prevalent. This means that a rural innovation ecosystem could be something very different from a conventional urban one. It may be less about supporting high technology businesses to grow fast and more about developing individuals to sustain a balanced rural economy. It may require different types of structure, leadership and ‘anchoring’.
As a starting point, we need to understand more about the kinds of businesses in our rural economy, how they use new knowledge to innovate, how they network and collaborate, and what kind of external business support is useful to them. At the University of Cumbria, we are starting to explore this in a small pilot study on the Innovation Capabilities of SMEs, funded by the Economic and Social Research Council (ESRC) and Innovate UK, in collaboration with the Universities of Exeter, Edinburgh, Essex. For further information: firstname.lastname@example.org
Alison Marshall, David F Murphy and Katie Carr
Institute for Leadership and Sustainability
12 July 2018