Modernizing Rural Economies: Strengthening Economic Growth in the 21st Century

Most rural regions are weak participants in the modern economy. As a result they are often seen as inherently incapable of sustained economic growth. Yet, OECD evidence shows that there are rural regions with relatively high rates of economic growth. Increasing the number of high performance rural regions requires transforming rural economies so that they can take advantage of their underlying opportunities. Although the modern economy is largely held to be best suited to an urban environment it has important opportunities for rural regions if they can manage to take advantage of them. In particular, rural regions must increase productivity, not only because this is the main driver of economic growth, but because an imminent crisis in labor availability will lead to rural economic decline unless the remaining workers can become more efficient. While the necessary transformation should be mainly driven by local strategies, rural regions will require external funds and technical support from national governments to implement the modernization process.