A new view of how to build vital, vibrant and viable rural economies through comparative advantage at the local level. Clustering of comparative advantages can develop regional and national advantages over the more convention downward policy diredctives fron nations states and CAP reform.

1. Rurality: Renaissance
economics
Jamie MacAskill PhD

2. Bridging the route to market
Concept of Creative destruction Joseph Schumpeter 1942
Entrepreneurial outcomes
E.F. Schumacher “Small is beautiful” 1973,
concepts of appropriate technologies & sustainable development
Destructive innovation
C.M.Christensen “Innovator’s Dilemma” 1997
From partnership to profit
Policy into reality

3. To sustain or disrupt
• Sustainable approaches
• Improving existing or established products
• Discontinuous, radical or incremental
• Enormous potential for “drift”
• Builds on existing paradigm
• Disruptive approaches
• Very different value proposition
• Targeting different market segments
• Long-term benefits may be obscured by short –term
performance
• Enormous capacity to move minor markets into mainstream

4. Cornerstone
• Asking the customer what they want
• Corporate inertia even in well run businesses leads to loss of effectiveness
– Managers don’t make decisions Stakeholders do
• Incremental change to maintain growth & profit
– Policy drift leads to divergence from original benefits
• Retreat from small markets in search of big profit
• Customers are fickle and technologies can outstrip obvious need and hence
fail
• Governments seeking re-election give the biggest lobby what they want but
this leads to unintended consequences
• Rural Economies
• Farmers keep farming
• CAP reform is actually policy drift
• FDI becomes a quick win
• Become progressively deskilled
• Social capital is undervalued
• Youth migrate to urban environments
• Increasing social welfare issue
• Why should rural economies be any different from urban economies but with
a different set of “quality of life” measures

5. CAP Reform
• Today CAP has built a dependency
culture rather than an empowered society
• Disruptive approach might ask
• Do traditional economic models work
• Do direct subsidies help transformation
• Do current perspectives “stall” rural development
• Does current “framing” of the issues maintain or
worse promote Policy drift.
– What is the countryside for
– Who is the countryside for
– What era is being preserved
• Are we asking the right question

6. Governments dilemma
• World already produces more than
enough food to support global growth
– We still have for famine and crisis
• Policy is a blunt instrument
– Should build infrastructure for success
– Not try to solve individual problem
• Society, that is individuals, must assume
responsibility
– Otherwise you remove responsibility
– Build dependency

7. Convergence

8. Convergence
• CAP remains at 41% of EU budget
• CAP over the last 30 years spend on direct
subsidies
• 1980-1993 25-30% CAP
• 1992-2006 25-30% CAP
• 2005-2009 25-30% CAP
• Despite large increases in budget and shifts to
different “Pillars”
• Funding farmers to farm however efficiently
• Preserving the countryside
• Is this sufficient to transform the sustainable use
of natural resources and promote food security

9. Comparative Advantage
Source Eurostat 2012

10. Renaissance Economics
• Disruptive approach
• Get rid of subsidy “junkies”
• Data demonstrates opportunity for local comparative
advantage
• Traditional economic approaches maintain status quo and
keep rural economies essentially agricultural or old age
communities
• We should operate a two tier economic strategy
– National states support infrastructure
– Local competitive advantage delivering real value
• Require to produce viable, vital & vibrant rural
economies: sustainable and growing
• Direct subsidies effectively block new entrant or
indeed distort market opportunities

11. Unconventional times
• Renaissance Economics
– Resets Policy back from the divergence of Policy “Drift” affects
– New rural renaissance economic model
• Re-engages fully with market demand more Hayak than Keynes
• Reduce to zero direct subsidies
• Re-addresses the true value of food chain
• Remove inefficient farming practices
• Re-shape the vision for what rural economies should offer
– Net inward migration
– Job prospects for youth
– Entrepreneurial opportunities
– Job creation through quality of life improvements
– Harnessing local comparative advantages
– Intervention is at infrastructural level & planning legislation
– Government “leans” down and local “entrepreneurs” re-invigorate social
capital availability
– Builds real re-assessment of value chains and supply chains at local
levels

12. Thank you
Dr Jamie MacAskill
www.bite.ac.uk
Tel: +44 (0)2085523071
email: jmacaskill@bite.ac.uk
“Some people
see things as
they are and
say why. I
dream things
that never
were and say
why not?”
George
Bernard Shaw
www.academy-zone.com

13. Principles of Disruptive Innovation*
• Companies depend on customers and investors for resources
• Managers do not control investment decisions, Shareholders and Customers
do
• Small markets don’t solve growth needs of large companies
• Hence big companies tend to innovate through acquisition
• Markets that don’t exist can’t be analyzed
• Data is historical and so can historical data forecast the future or is it a
sustaining and incremental route bound to fail
• Use discovery based planning
• An organization’s capabilities define its disabilities
• Strengths correlate with weaknesses and so companies may find it difficult
to engage with disruptive innovation and lean start-ups
• Technology supply may not equal market demand
• Companies constantly seek to move up market leaving behind poorer
profitable markets for more high value : high profit markets
• Inevitably competitors invade these markets and disrupt the market
• Sometimes investing in smaller less profitable markets is correct to avoid
entrants stealing your market space
*Innovator’s Dilemma (1997) Clayton Christensen

14. Disruptive Innovation
*Innovator’s Dilemma (1997) Clayton Christensen