The rural economy is strong but has so much more to give

In 2016, the rural economy is about so much more than food and farming. Here, in an article first published in the LGA First magazine, Warwickshire County Council's Economy & Skills Group Manager Dave Ayton-Hill discusses the huge untapped potential of the county's rural areas.

The usual perception of the ‘rural economy’ is one of food, farming and tourism.

While these are important elements, it hugely misrepresents the strength and diversity of these areas and the entrepreneurialism that exists within them. Nearly 40 per cent of advanced engineering businesses in Warwickshire are in rural areas, as are 36 per cent of our IT and digital media companies.

Our rural areas also contain huge economic opportunity, with a much higher new business start-up rate, on average, than our urban areas.  However, many of these businesses remain small and do not, for a variety of reasons, fulfil their growth potential, thereby limiting job-creation and economic prosperity in these areas. 

Traditional business support programmes have historically focused on urban areas because it is often cheaper and easier to engage with potential clients and generate the outcomes demanded by funding bodies. This approach misses out this significant and largely untapped rural market.

Warwickshire was one of just five areas to pilot new and innovative ways to support the growth of our rural economy, through the Government’s Rural Growth Network (RGN) initiative. Our focus was on supporting the growth of our small and micro-businesses. We provided a growth-orientated business start-up programme and provided support to existing small businesses committed to growth. 

We also invested in a number of programmes specifically tailored to the needs and issues of rural areas. These included support for businesses around accessing finance for growth and, in partnership with LaSalle Investment Management, the development of a rural innovation centre, providing much needed incubation space for small, growth-orientated businesses.

Our programme explicitly recognised some of the issues facing the delivery of business support in rural areas, including the dispersed nature of these businesses which can reduce business-to-business networking and joint working opportunities, and increase service delivery costs. Many of the businesses we were looking to work with were also ‘micro-enterprises’ (0-9 employees), so the scale of activity, such as size of grants and intervention rates for funding, numbers involved in innovation partnerships, sizes of workshops, etc.,  was adjusted accordingly to make them more effective for this client-base.

The programme was an undoubted success, and I am proud to say led to Warwickshire being highly commended in the recent Enterprising Britain Awards as one of the most enterprising places in Britain.

The legacy of this project will continue well into the future. Over the last three years the RGN has supported 738 small businesses, helped 185 people to start a business and created or safeguarded more than 550 jobs in rural Warwickshire. The legacy will also continue through new investment (private-sector funded) by La Salle Investment Management in a second Rural Innovation Centre at its Stoneleigh Park site based on the success of the first centre.

Following a thorough evaluation of the programme we have learnt a number of lessons that are now being applied to a new Warwickshire-wide business support programme.

In particular, we are maintaining a focus and filter for support towards companies with growth potential. This provides patient, long-term mentoring and support for businesses as they move through their growth journey - spending 3-5 times the ‘normal’ amount of support than traditional programmes; and helping businesses consider and access a wide range of finance to support their growth ambitions rather than a narrow focus on grants. 

Targeted investment in business support, based around sound evidence and research, and tailored to the specific needs of the local area and business community was at the heart of our award-winning approach. This continues to enable a strong and effective approach to small business growth within the Warwickshire economy.

You can find out about our new Business Support Programme by visiting www.warwickshire.gov.uk/cwbsp