Position: Policy for Rural Areas – Take Initiatives Seriously and Support Innovations!

Committed, creative, innovative – social enterprises and initiatives are helping to promote rural areas. The research of the IRS shows that even regions that are considered peripheral and "disconnected" have potential for new ideas and solutions and use it. However, in order to have a wider impact, the commitment needs better framework conditions. For politics and funding practice, this means: providing infrastructures, creating recognition and helping innovations to break through.

The problems of rural areas, especially in structurally weak and remote regions, are well known: Emigration and vacancy, loss of cultural offerings, services and infrastructures, too few job, educational and living prospects. But not only since the COVID 19 pandemic has there been an opposite trend in the rural "hinterland" of large metropolises, namely growing migration from the city to the countryside, which brings new challenges with it: Is there enough bandwidth, rail kilometres and daycare places for the new rural dwellers? Will new commuter traffic be induced? Will working from home be feasible in the long run, or will office workplaces have to follow suit?

In our research, we asked how new solutions for typical problems of rural areas emerge. In doing so, we focused on two phenomena: the emergence processes of social innovations that produce novel solutions to the problems mentioned at the beginning, and social enterprises that combine a social or ecological mission with a private-sector business model. Both are highly relevant for the sustainability of rural areas. What we have learned about them should, in our view, be an important point of orientation for rural development funding policy.

Prioritise Digitisation

New ideas are driven by problems and opportunities. The line between the two is not sharp and is often a matter of perception: an empty inn is a problem from the point of view of the village community, but from the point of view of an architect moving in, it may be a potential. A lack of mobile phone and broadband coverage creates the impetus to revive the old village shop as a wireless hotspot. Thinning medical care is the impetus for new telemedicine concepts, rural coworking is (perhaps, see p. 16) the answer to a lack of digital workplaces, and the village car that can be booked via smartphone responds to mobility bottlenecks. This provokes the question of whether the innovativeness of rural society can possibly overcome supply deficits itself - and thus release the state from its obligation to create equal living conditions.

The answer is clearly “no”. Because the innovations in question are by no means created everywhere and only under rare conditions - more on this later. The state plays a contradictory role here, sometimes as an impediment, sometimes as an enabler. In any case, the public sector is responsible for essential framework conditions - infrastructures, regulations, administrative capacities, qualification offers – for the emergence and, above all, the successful spread of innovations. We advocate that infrastructure policy for rural areas should embrace the idea of innovation and actively take up the creative ideas that rural residents develop.

Digitalisation must take a central position in this. Digital tools, digital connectivity and digital skills are the crucial resource for the development and implementation of new concepts. While self-help may be an innovation driver in individual cases where broadband is lacking, the role of digitalisation as an enabler, for medicine, mutual aid, local supply, mobility, education, entrepreneurship and work, far outweighs this. Almost all villages have also recently experienced a loss of communication in and about the village, a loss of the most important "glue" of a community. We have observed that digitally mediated communication can lead to improved face-to-face communication and thus revitalise villages, making them more attractive to newcomers. Any strategy for rural areas must therefore also consider the digital capacity of all people in these areas at every step. Broadband at every milk can? Yes, please.

State or Society? State and Society!

When we ask the question, who specifically drives new solutions, it becomes apparent once again that the dichotomy “state versus society” does not hold. Socially innovative initiatives are driven by a wide range of committed people: Newcomers and old residents, experts and laypersons, mayors and municipal representatives. It is striking that it is not civil society alone that is the driving force behind the initiative, but that government agencies at different levels are also involved. It is often the administration at district and municipal level that makes the difference. If they are competent and committed – which they are in many places, though by no means always and everywhere – they multiply the power of the citizens. This central role illustrates how essential it is to digitally equip the administration. Ministries at the state and federal level, in turn, make important contributions to supra-local networking and the dissemination of new concepts.

One type of organisation in particular stands for acting at permeable system boundaries, namely the social enterprise. Whether in care, education, inclusion, tourism, agriculture, trade, culture or regional development, social enterprises creatively develop new business models and thus pursue a social or ecological mission. In this way, they generate social innovations themselves or participate in their creation. Social enterprises are profit-oriented to a certain extent, but do not transfer their profits to external investors. They regularly subsidise a social agenda, for example in education, with a business operation, such as a retail offer. In a study for the federal state of Brandenburg’s Ministry of Economics, we were able to show that social enterprises have an above-average presence in rural areas and address rural problems to a large extent, for example in agriculture and environmental protection.

Social enterprises fill gaps left by the state, but they do not replace it. They act differently from public institutions. Their local ties in conjunction with networks beyond the region, enable them to recognise local opportunities and recombine them with "imported" ideas into innovative approaches. In doing so, social enterprises cooperate with the public sector and are also dependent on its concession.

In this open space of interaction, visibility and recognition are a shared good that must be cultivated. Citizens and local politicians in rural communities, but also local administrations, must be taken seriously as shapers of rural areas and be given the appropriate resources and leeway, especially by higher administrative levels. Conversely, social enterprises need more recognition in administrations and ministries, where the image of enterprises is still shaped by the classic private-sector investor. The social enterprise scene itself is often too little networked and not always aware of its role. It needs to become more visible - internally and externally. Measures at different levels, from an award for the social enterprise of the year to a reform of the restrictive tax law for non-profit organisations, would help.

Innovation-Friendly Funding Landscape

Social innovations cannot be forced. Their emergence depends on numerous favourable factors coming together. In an ideal-typical situation, it could unfold like this: In local conversations, people recognise a problem as an opportunity. A view from the outside can help with this reinterpretation, which is why people who have moved or returned are often the creative initiators. They generate an idea from their own experience and the opportunity they have identified. The idea is shared in a small circle, receives support and is decisively pushed forward by one or more key figures - a generic term for particularly committed, strong leaders and networked individuals. Thanks to good networking and previous experience, funding can be obtained, a pilot project started, perhaps a social enterprise founded. External expertise is added: Experts from outside bring in technical, administrative and strategic competences, professionalise the project. People use the new offer, first at the location, then beyond. The project can be expanded, gains a broad user base and eventually becomes a reference project for other regions.

We have systematised this - idealised - sequence of a successful innovation into phases. Each of these phases brings its own challenges, and an innovation can fail due to any of these challenges. We have therefore named measures that can be applied in a phase-sensitive manner at different political-administrative levels to help social innovations in rural areas achieve a breakthrough. In the latency and problematisation phase, it is important that communication takes place at all. Spaces must be created for this, both digital (e.g. platforms) and “analogue” (e.g. meeting places in villages). In the development phase, the challenge is to find and address the right people who can drive a project forward and giving them resources. This requires networks and help in applying for funding. In the adjustment phase, teething problems are ironed out and a new solution is rolled out. This requires access to expertise, regulatory concessions - and financial support.

Speaking of money. Overall, there is enough project funding for rural areas. However, the funding landscape is mainly geared to economic sectors, such as tourism or agriculture. This is at odds with the logic of social innovations, which are similar across sectors and often link several areas, but differ greatly depending on the stage of development. Especially in the early phase, the actors usually lack knowledge about suitable funding programmes. Instead of demanding more funds for rural innovation support, we therefore recommend that the existing funding landscape be much more cross-sectoral and that material as well as immaterial measures (coaching, consulting, networking) be geared to the concrete needs of the people who drive innovative ideas in rural areas. Ideas still cannot be forced. But the chance that they will emerge can be increased. In future, their success should depend less on chance and more on their potential.

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Research Associate
Research Associate