Chapter 2 in Regional Resilience, Economy and Society: Globalising Rural Places, pp 11-32

This chapter reveals theories which are in favour of successful innovation activity occurring independently from the prerequisite of density and immediate proximity. Furthermore, the following literature study discusses the extent to which relatively agglomeration-based theoretical components might be reasonably transferable to rural areas. The chapter aims to find and assess empirical evidence with which to approach the question of whether industrial companies in rural areas are as innovative as their urban counterparts. In contrast, theoretical considerations and empirical examples regarding localisation effects allow for the assumption that there exist potential savings from industry-related economic activity in rural areas. A narrow definitional interpretation and corresponding methods of analysis cannot trace clearly enough the innovation dynamics in rural areas. Therefore, the following part points out potential empirical shortcomings and outlines a relatively broad understanding of innovation which considers the initial conditions of rural areas. Different economic policy measures have to be closely intertwined and innovation should be considered in all policy fields.