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Stimulating Rural Business Innovation. Dr. Kevin Heanue Rural Economy Research Centre (RERC) Teagasc, Athenry, Co. Galway, Ireland NPP Annual Conference, Bunratty Castle Hotel, Co. Clare, September 9 th 2010. Outline of presentation. Rural areas and economic development

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stimulating rural business innovation

Stimulating Rural Business Innovation

Dr. Kevin Heanue

Rural Economy Research Centre (RERC)

Teagasc, Athenry, Co. Galway, Ireland

NPP Annual Conference, Bunratty Castle Hotel, Co. Clare, September 9th 2010

NPP Annual Conference 2010

outline of presentation
Outline of presentation
  • Rural areas and economic development
  • Rural enterprise innovation
    • What is it? How does it happen? What types?
    • Industrial organisation of innovative rural enterprises
  • A case study
    • European Economuseum Project
  • Conclusions

NPP Annual Conference 2010

rural areas and economic development
Rural areas and economic development
  • The current recession: rural under development
  • Globalisation and localisation
  • Sources of economic development
  • Rural enterprise – innovation; industrial organisation

NPP Annual Conference 2010

evidence on rural enterprise innovation
Evidence on rural enterprise innovation
  • UK (North and Smallbone, 2000)
    • Remoteness may stimulate new market development
    • Introducing products based on traditional rural craft skills (food and tourism)
    • Barriers – poor telecommunications infrastructure (internet access);
    • Lower levels of advanced manufacturing technology use
    • More innovative sectors under represented in remote rural areas
  • In Ireland (Audit of Innovation in the BMW Region, 2004)
    • Firms in BMW region less innovative
    • One third of companies involved in partnership/joint venture/network
    • Culture of innovation and entrepreneurship is neutral at best
    • Organisational capability needs improvement to upgrade performance

NPP Annual Conference 2010

innovation
Innovation
  • What do we mean by innovation?
    • Innovation - using creativity to add value
    • Innovation - generating 'new combinations' of existing resources
    • Adds value by putting 'new combinations' into use as either new or changed products, processes, services, ways of organising businesses or entering new markets segments.

NPP Annual Conference 2010

how do businesses develop and innovate
How do businesses develop and innovate?
  • Resources
    • E.g. knowledge, ideas, skills, physical assets
  • Activities
    • Research, production, marketing etc
  • Capabilities
    • Bundles of related routines governing the exploitation of resources. Capabilities are functionally based, e.g. technological and marketing.
  • Core competence
    • Competitive advantage
  • Co-ordination

NPP Annual Conference 2010

understanding types of innovation
Understanding types of innovation

NPP Annual Conference 2010

understanding economic co ordination
Understanding economic co-ordination
  • Internally (within the firm)
  • The market
  • Cooperation/collaboration/networking

NPP Annual Conference 2010

the ene project
The ENE project
  • Economuseum Northern Europe (ENE)
  • An Economuseum is a “private” craft business which :
    • Uses traditional techniques or knowledge in its production
    • Opens its doors to the public in order to promote its know-how and its craftspeople
    • Has an area designed for the animation and interpretation of its production
    • Completely funds its operation through the sale of its products.

NPP Annual Conference 2010

partners in the ene project
Partners in the ENE project
  • Lead Partner
    • Norway: Hordaland County Council
  • Partners
    • Eastern Canada: IENS/Economusee
    • Greenland: Tourism and Business Council
    • Iceland: Innovation Centre, Høfn
    • Faroe Islands: Research Centre for SD
    • Ireland: Teagasc (Agr & Food Development Authority)
    • Northern Ireland: Causeway Coast & Glens Heritage Trust
    • Sweden: New partner (2011)

NPP Annual Conference 2010

objectives of the ene project
Objectives of the ENE project
  • Promote heritage that ‘earns its keep’
  • Help artisans to become financially self sufficient so as to facilitate intergenerational knowledge transfer
  • Conserve the best of tradition
  • Meet a market need
  • Develop cultural tourism

NPP Annual Conference 2010

the ene network in 2009 2010
The ENE Network in 2009-2010
  • 53 ECONOMUSEUMS in Canada and Europe (crafts and agro- and fisheries food artisans):
    • 34 Economuseums in the province of Quebec
    • 17 Economuseums in Atlantic provinces
    • 2 Economuseums in Norway
  • Economic contribution
    • More than 500 employees (60% permanent, 16% casual and 24% seasonal);
    • Total sales :$27 500 000
    • More than 825 000 visitors per year

NPP Annual Conference 2010

goals for the end of 2010 2013
Goals – for the end of 2010 & (2013)
  • 16 (40) new Economuseums
  • Preservation of heritage and crafts as well as creating new learning experiences.
  • Increased sales and value added
  • Increased competence and knowledge.
  • New organisational network structure.

NPP Annual Conference 2010

technological capabilities
Technological capabilities

NPP Annual Conference 2010

technological capabilities 2
Technological capabilities (2)

NPP Annual Conference 2010

market capabilities
Market capabilities
  • ENE providing ‘club good’
  • Cultural tourism market
    • Knowledge about, access to and communication with, different customers

NPP Annual Conference 2010

ene and enterprise innovation
ENE and enterprise innovation

NPP Annual Conference 2010

ene and industrial organisation
ENE and industrial organisation

NPP Annual Conference 2010

teagasc
Agriculture and Food Development Authority

National body providing integrated research, advisory and training services to the agriculture and food industry and rural communities.

Teagasc

NPP Annual Conference 2010

teagasc 2
Teagasc (2)
  • Rural business and tourism specialists
  • Actual and/or potential partnerships
    • LEADER; Failte Ireland; Bord Bia; Crafts Council of Ireland
  • Mainstream
    • A ‘node’ for rural development

NPP Annual Conference 2010

conclusion
Conclusion
  • ENE - niche/regular innovation; club good; institutional mechanism; possible technological capability building
  • One model for rural enterprise development
  • Mainstreaming
  • Parallel model for start up enterprises/early stage – what would this look like?

NPP Annual Conference 2010

thank you

Thank You

Email: Kevin.Heanue@teagasc.ie

Tel: + 353 91 845 834

NPP Annual Conference 2010