Hannover A5 rural divide

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Hannover policy forum background paper


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Workshop objectives

  • To show that the loss of jobs in rural areas is one of the central challenges for employment policy for the EU and many national and regional economies.
  • To demonstrate that strategies for inclusive entrepreneurship can play a major role in creating a sustainable jobs in rural areas and reducing pressure on the cities.

What is the challenge?

While industrial action often accompanies the closure of major factories and violence erupts in the poorest areas of our cities, it is often forgotten that more jobs have been lost in agriculture and rural areas than in any other sector. In the twenty five years between 1977 and 2002 Europe lost of 7.5 million jobs in agriculture compared to 7 million jobs in industry.

Moreover, this trend is expected to continue with a vengeance in the future. Between the year 2000 and 2014 the fifteen Old Member States are expected to lose between 28-35% of their agricultural workforce representing between 4-5 million people . In the 12 New Member States the situation is even more dramatic and the figures could vary from 28% and a massive 58% of the agricultural wok-force representing a further 3-6 million people. Unless these people are offered viable alternatives, they will emigrate to the cities, swelling the ranks of the unemployed and putting even further pressure on services and infrastructure in deprived neighbourhoods.

Yet despite these shocking figures, the development of new economic activities and employment in rural areas still tends to be seen as a secondary problem within both national and EU policy. This is partly because issues concerning rural development are often considered as a subset of agricultural development In the past, only about 10% of the measures funded by the EU’s Rural Development Regulation have been spent on economic diversification. Most of the rest has been, and is likely to continue to be, spent on measures to increase the competitiveness of the agro food chain and to enhance the environment. On their own neither of these priorities is likely to create many new jobs.

What kinds of solutions are being tested?

A significant of the EQUAL projects exploring innovative solutions to business creation in old Member States like France, Spain, Portugal, Greece have focussed on the specific problems in rural areas. Many of these EQUAL projects have been closely associated with around 1,000 local LEADER partnerships that have been implementing bottom-up local strategies for rural development. In addition, several Interreg projects (e.g. “Rural Innova” and “Territoria”) have also created transnational networks to exchange and mainstream the lessons from these and other pilot initiatives to create new activities in rural areas.

One of the main conclusions of all these projects is that the employment problems faced by rural areas are structural and are closely related, if not the mirror image, of the situation in the cities. They cannot be dealt with simply through sectoral policies for agriculture or the environment, or by one fund or ministry. Rural areas are a prime example of the need for integrated action plans which bring together different policies, instruments and territorial levels to create jobs and new activities for local people.

Many projects also point to the fact that the future of rural areas lies in integrating, retaining and attracting young people, women and increasingly immigrants. Entrepreneurship plays a central role here because there simply are no other jobs that these groups can do in the area.

The tools and methods for supporting inclusive entrepreneurship in rural areas tend to be similar to those used in cities - although they have to deal with the problems of low densities, remoteness, a specific sectoral mix and problems related to entrepreneurial culture and education.

In addition, to improving the general conditions, for competitiveness and entrepreneurship, many projects have tried to encourage the creation of new activities in and around sectors related to be the new functions and major opportunities open to rural areas. These include food security and quality, energy, water conservation, dealing with climate change, tourism and leisure, caring for an aging population, health, the full use of ITC and so on.

Questions for discussion

  • What needs to be done to bring the problems of employment and entrepreneurship in rural areas closer to mainstream policies?
  • What are the main conditions and ingredients of successful strategies to create new activities in rural areas?
  • What sectors and areas of economic activity hold out most possibility for the future? For whom?
  • What can be done to form closer alliances with urban and other actors to ensure a better coordination of policies?

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