New firm formations can boost the rural areas show results from study at Jönköping International Business School

Jönköping University 19 August, 2010 Economics

– The sparsely populated rural areas become depopulated and jobs disappear, job opportunities and growth is developed more and more in the cities and the city adjacent areas. New firm formations are vital to the rural areas and our research shows the effects on entrepreneurship with connection to jobs and economic growth, says Johan Klaesson, Associate Professor of Economics at JIBS and director of RUREG (Research Unit for Rural Entrepreneurship and Growth).

The number of new firm formations is lower in places that are further away from the big cities. A region with low education levels often have low numbers of new firm formations. The number of new firm formations also follow the unemployment rates; there is more support for starting your own business where there the job market conditions are poor.

– Our research demonstrates that the rural areas are not a homogenous part of the country. There is a vast disparity between different rural areas. Generally speaking rural areas within a closer proximity to a city will do better than the sparsely populated rural areas. This is distinguished by longer distances in time and fewer possibilities for commuting, says Johan Klaesson.

RUREG is the only research institute in Sweden which studies the rural areas with focus on entrepreneurship. They collaborate closely with the Swedish Board of Agriculture. Rural development research is topical both nationally and internationally. 50 percent of EU money is concerned with rural, development and agricultural policies. RUREG is one of three research institutes within Centre for Innovation Systems, Entrepreneurship and Growth (CISEG) at JIBS.

Johan Klaesson will be presenting some of his research findings at this year’s ERSA Congress. This assembly is the 50th Anniversary ERSA (European Regional Science Association) Congress. ERSA has some 3 500 members, both academics, policy professionals and researchers interested, in 17 active associations across Europe. ERSA is one of the 3 supra-regional associations of RSAI (Regional Science Association International).

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