Report reveals importance of incomers to rural economy

Jun 29 2010 by Tony Henderson, The Journal

THE vital role of incomers to the North East’s rural economy of almost 25,000 businesses is highlighted in a new report.

The study, released yesterday, by Dr Jane Atterton and Arthur Affleck from Newcastle University’s Centre for Rural Economy suggests that many are living out the dream of settling in a pleasant rural environment and starting their own business.

But as only one third said they actually moved with the intention of starting their business within a couple of years, the results indicate that relocating to a rural environment actually inspires many people to become their own boss.

Consequently, planning policies that seek to severely limit new house building or to restrict it to meeting the needs of those defined as local may be misplaced, says the study.

Business support providers must also recognise the varying motivations of incomer business owners and the different resources and talents that they bring to the economies in which they choose to settle.

The survey, which was part-funded by One North East, the Northern Rock Foundation and Newcastle University, also highlighted the older age profile of rural business owners, with more than 60% of the respondents over 50 years old. “Planning and economic development policies and programmes need to encourage and enable younger people to live in the countryside and create new businesses,” said Dr Atterton.

“But at the same time it’s essential that the right level of support is available for older people who choose to remain in the workforce for longer as they have a great deal to contribute to rural economies in terms of skills, knowledge, experience and financial capital.”

The study found that just over 44% of respondents were newcomers to the rural North East, with the majority having moved from outside the region.

The evidence suggests that newcomers and locals tend to operate in different sectors, with incomers more dominant in accommodation, information and communication and professional activities and locals more prevalent in the traditional rural sectors such as agriculture, construction and manufacturing.

Of almost 1,000 respondents to the survey, 88% were sole traders or ran micro businesses, mainly working in accommodation, retail, information, communication or professional activities.

The most heavily represented sectors in the sample were professional, scientific and technical activities (16.5%), wholesale and retail activities (14.8%), agriculture, forestry and fishing (10.1%), construction (9.1%) and accommodation and food service activities (9.0%).

In terms of education, 27% had a degree and 26% a post-graduate qualification.

The survey demonstrates the significantly increased reliance of businesses on the internet and broadband since a similar study 10 years ago.

Concerns were raised by respondents over the adequacy of present provision to meet business needs in the future and that ongoing investment will be required to ensure that all businesses continue to have access to fast and reliable broadband infrastructure.

The importance of home-based businesses in the rural North East is clear, with 38.2% of respondents reporting that their business premises were part of or attached to their home.