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Rurality

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James Macaskill
James Macaskill

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.

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Rurality: Renaissance economics Jamie MacAskill PhD
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 Innovators Dilemma 1997 From partnership to profit Policy into reality
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
Cornerstone Asking the customer what they want Corporate inertia even in well run businesses leads to loss of effectiveness Managers dont 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
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
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
Convergence
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
Comparative Advantage Source Eurostat 2012
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
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
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
Principles of Disruptive Innovation* Companies depend on customers and investors for resources Managers do not control investment decisions, Shareholders and Customers do Small markets dont solve growth needs of large companies Hence big companies tend to innovate through acquisition Markets that dont exist cant 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 organizations 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 *Innovators Dilemma (1997) Clayton Christensen
Disruptive Innovation *Innovators Dilemma (1997) Clayton Christensen

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Rurality

  • 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 Innovators 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 dont 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
  • 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 dont solve growth needs of large companies Hence big companies tend to innovate through acquisition Markets that dont exist cant 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 organizations 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 *Innovators Dilemma (1997) Clayton Christensen
  • 14. Disruptive Innovation *Innovators Dilemma (1997) Clayton Christensen

Editor's Notes

  • #3: Schumpeter : Theory of economic innovation and progress Concept of Creative destruction Joseph Schumpeter, particularly in his book Capitalism, Socialism and Democracy , first published in 1942. Applying similar approaches to rural economies on the basis that they represent fractured markets where agriculture or rural economies are failing where entrepreneurs enter the rural economy to replace or develop agriculture this will form a force for log term economic renewal that can develop: Vital, Vibrant, Viable rural economies and societies