THE high quality of the North East’s rural landscape is attracting creative entrepreneurs from outside the region who set up businesses with growth potential, a new report says.
“This is a real competitive advantage,” says a study by Newcastle University’s Centre for Rural Economy and Newcastle Institute for Social Renewal.
Researchers have examined the potential contribution of the North East rural economy to the region.
Their study found that almost half of rural entrepreneurs in the North East have moved into the region from elsewhere. Only 11% had relocated from urban areas of the region. “Many young family and active older households aspire to live in more attractive market town and village environments, and some start businesses,” says the study.
It goes on to say that the quality of the rural environment can attract a “creative class” of incomers.
“Quality of life is important to many rural entrepreneurs, and the rural area’s landscapes and peacefulness are important assets for the region and its economy,” says the study.
“This search for beauty and quietness is particularly important for accommodation businesses, and for people looking to relocate to set up businesses, often from home, as a lifestyle choice.
“Incomers are more likely to be growth oriented than businesses run by local people.”
Around 65% of rural businesses are one to four person ventures, with homeworking common (38%).
“This is an attractive option for incomers, and homeworkers are more likely to be graduates,” says the report.
“For newcomers in particular, changing their work/life balance was an important motivation. A common pattern is for a business to start up in a rural area, to grow, and subsequently relocate to a more urban setting.”
Newcastle University’s Prof Mark Shucksmith, director of the Institute for Social Renewal, said: “Small businesses in rural areas can be incubators for tomorrow’s growth.”
The rural North East provides around a quarter of the region’s jobs and output, while also contributing environmental and cultural assets such as landscape, tranquillity and natural resources like water supply.
The study found that the region’s rural economy is not primarily land-based but has become more mixed.
“Agriculture, so commonly associated in people’s minds with rural areas, makes only a small contribution to employment. However, it is still a significant actor in the local economy of certain parts of the region,” says the study and is also important in terms of looking after the landscape.
The public sector, with jobs in areas such as education, health and councils, plays a leading role in rural areas followed by business services, distribution, hotels and restaurants, retail and tourism and manufacturing. A flipside of the rural coin is that the attractiveness of a location can also serve as a brake for growth on firms that might want to develop larger premises in valued landscapes.
The land use planning system to date has severely constrained development in rural areas, says the report.
“Through constraining housing development, the planning system has also been significant in making local housing unaffordable to many potential employees,” it says.
“Many employees cannot afford to live near their work and owning a car becomes essential. Accessing postal systems, banks and cash machines can involve significant journeys.
“One business in Teesdale told our researchers how they had to make a 24-mile round trip to find a postbox with an aperture large enough to take an A4 letter.“
The report also touches on the need for better broadband internet services, saying that Government plans to ensure that the “final 10%” of premises nationally (estimated as about half of all rural premises) are given at least 2mbps by 2015 seem “woefully inadequate”.
