Entrepreneurship as tool for rural development

by Eduardo J. Gómez-Araujo, 3/9/2012 

Nothing either good or bad, but thinking makes good or bad things

(William Shakespeare)

When I talk about rural entrepreneurship with experts in rural development (academics or students, generally coming from areas like humanities and life science) I sometimes feel that people see entrepreneurship a bit sceptical. In my opinion this is because people might relate entrepreneurship with the negative perception of the term capitalism, where money and profit is the most important, and not the people and environment.

Even though entrepreneurship is part of the dynamics of capitalism, it would be wrong to perceive entrepreneurial activity in general as negative for the territorial development. In the last years, certain international institutions such as the European Union and the Organisation for Economic Co-operation and Development (OECD) have included entrepreneurship in their recommendations for development policies, as an instrument for the economic and social reactivation of rural areas (European Commission, 2003 and 2008; OECD, 2003 and 2006).

So what are some of the reasons that support this approach of the mentioned organizations? According to Bryden and Hart (2005) entrepreneurial activity in rural areas helps to diversify the economic network and thus avoid dependence on mono-production and be able to offer a greater range of services, thus improving the quality of living in these areas. Therefore, entrepreneurship is a good way to generate opportunities for professional development, social and economic integration, the maintenance of the rural population and the attraction of new residents to these territories (Akgün et al., 2010). When experts are taking about maintaining and attracting people in the rural areas, they are specifically thinking about young persons. Reason for this is partly population logic, as young people are key for the future of rural areas. Without youths these areas cannot remain viable or maintain their long-run economic functions (Muilu and Rusanen, 2003). Thus, entrepreneurship is an optimal tool for these functions; it is a good way to optimize the human capital of these young people living in rural areas (Chigunta, 2002; Lafuente, et al. 2012). Entrepreneurship provides the environment where youth can actively participate in local society, contribute their talents and visions for the future and develop a sense of commitment and belonging for theirs communities (Lyngdoh, 2005).

The above academics therefore argue that entrepreneurship works as a tool to provide sustainable rural economic and social development. In my opinion this argument is not simply an academic and political discourse, but it is a very real and logic perspective. Coming back to the persons who distrust in the advantages of entrepreneurship for rural areas, I admit that there is certainly no doubt that entrepreneurship is also used for capitalistic reasons in it is negative meaning; but there is also the trend to focus on the human and social value of entrepreneurship.

Finally, my conclusion is that entrepreneurship like many things in the society can be used well or badly. The use depends on the motivation of each community and of how they understand entrepreneurship. I think that national, regional and local governments should develop policies in order to promote entrepreneurship in rural areas focusing on the development of human capital and through that achieve territorial development. In this way, entrepreneurship is a good and efficient tool to develop rural areas.


Akgün, A., Nijikamp, P., Baycan, T. and Brons, M. (2010). Embeddedness of entrepreneurs in rural areas: a comparative rough set data analysis. Tijdschrift voor Economische en Sociale Geografie. Vol. 101, No. 5, pp. 538–553.

Bryden, J. and Hart, K. (2005). Why local economies differ: the dynamics of rural areas in Europe. The Edwin Mellen Press: Aberdeen, Scotland.

Chigunta, F. (2002). Youth Entrepreneurship: Meeting the Key Policy Challenges.  Oxford, UK. Oxford University Press.

European Commission (2003). Rural Development in the European Union. European Communities. http://ec.europa.eu/agriculture/publi/fact/rurdev2003/en.pdf

European Commission (2008). Rural Development policy 2007-2013. Online: http://ec.europa.eu/agriculture/rurdev/index_en.htm . Access 10/01/09

Lafuente, E. Vaillant, Y. and Gómez-Araujo, E. J. (2012). The differentiated impact of role models and social fear of failure over the entrepreneurial activities of rural youths. Working paper, May of 2012.

Lyngdoh, B. (2005). Skills for Work in the Future: A Youth Perspective. Quarterly Review of Comparative Education, 35 (3), pp. 311-316.

Muilu, T. and Rusanen, J. (2003). Rural young people in regional development, the case of Finland in 1970–2000. Journal of Rural Studies, Vol. 19, pp. 295–307

OECD (2003). Entrepreneurship and local economic development: Programme and policy recommendations. OECD.  Paris and Washington, D.C.

OECD. (2006). The New Rural Paradigm: Policies and Governance. OECD. Paris.

Photo courtesy by rachelvoorhees

Eduardo J. Gómez-Araujo comes from Colombia and studied History (1999-2003) at the Universidad del Atlántico (Barranquilla-Colombia). He has been an assistant professor  in Entrepreneurship and Business History and researcher (2004-2008) at the Centre of Entrepreneurship at the Universidad del Norte (Barranquilla, Colombia). Scholarship recipient for doctoral studies abroad of the School of Business in the same institution. He has a Master of Science (2008-2011) and is now a Ph.D. candidate in Entrepreneurship and Business Management at the Universidad Autónoma de Barcelona (Spain). His research fields are rural entrepreneurship, young entrepreneurs and regional development. Eduardo participated in ICRPS 2011 in Norway and in 2012 in Quebec. He is also linked with Global Entrepreneurship Monitor (GEM)-Catalonia.