Innovation in rural Spain. What drives innovation in the rural-peripheral areas of southern Europe?

Abstract

Abstract In Europe, a core-periphery model has been allowed to develop in rural areas, leading to the marginalization and even abandonment of farms due to low competitiveness, which in turn has negatively impacted on the local agri-food industry. Innovation serves to reduce differences across regions, but little is known of innovative behaviors in the agri-food sector in peripheral regions. The aim of this study is to identify the determinants of innovation in the agri-food industry in Castilla-La Mancha, a rural-peripheral region in the south-east of Spain. The region presents a semi-arid environment, characterized by large geographical distances and a dispersed population. The productive structure is dominated by small and medium enterprises dedicated to traditional industries, the largest of which is wine production. A linear regression was conducted using the Box-Cox transformation method on a database of 771 regional agri-food companies, integrating factors of the companies’ structure with other from the socioeconomic environment, following the interactive approach of the evolutionary theory of innovation. The internal factors or specific characteristics of the company are those which most influence the propensity to innovate, while external factors also have an impact, especially the level of training in the area, the knowledge exchange undertaken with research centers and the location of companies in intermediate rural and peri-urban areas. In short, capacity and effort are key factors in explaining the level of innovation of companies in an area, but our research leads to the conclusion that these are determined by the geographical location. Thus, the particular space, even in peripheral rural areas, is asymmetrical and conditions the possibilities of innovation of rural areas, with the most innovative companies being located in areas with the greatest comparative development. This, therefore, constitutes a threefold territorial framework: center – intermediate periphery - periphery of the periphery, thus nuancing the more traditional view of economic geography.