Resilient rural businesses innovate and diversify during Covid

NICRE

Rural businesses have shown remarkable resilience during Covid-19 by innovating and adapting in response to the severe economic challenges of the pandemic, according to a major new survey from the National Innovation Centre for Rural Enterprise (NICRE)

More than a third of rural firms in the South West, West Midlands and North East diversified their business in the wake of Covid with half of these developing new sales channels and two-thirds expanding their customer base.

NICRE’s evidence shows that the most common response from the more than 2,600 rural businesses surveyed was that the pandemic had both positive and negative effects, with more of them able to maintain or increase their turnover, and generate a profit or surplus, than urban businesses.

But despite this, the impact of Covid and related control measures still caused substantial disruption to rural enterprises, with 42 per cent of rural firms experiencing decreased turnover and 37 per cent reporting mainly negative effects in the 12 months prior to the survey. While almost half of rural firms reported economic uncertainty due to Covid as a major obstacle to success, with high numbers citing reductions in sales/income and productivity and interruption to supplies.

Rural Business infographicThe findings from NICRE, established to foster rural enterprise and unlock the potential in rural economies, provides an assessment of the effect the Covid-19 pandemic has had on the experiences and resilience of rural businesses in three regions of England. It is the first in a series of State of Rural Enterprise Reports.

NICRE director Jeremy Phillipson, Professor of Rural Development at one of its founding academic partners the Centre for Rural Economy at Newcastle University, said: “For the first time we have a clear picture of how rural businesses have been affected so far by Covid-19 as we begin another year confronting the pandemic and looking to recovery.

“The resilience and adaptation that rural firms have shown is phenomenal. Many thousands have responded to Covid-19 by diversifying their business, creating new sales platforms and finding innovative ways to reach existing and, crucially, new customers. Their efforts have been helped by tremendous support from local communities and often backed by a strong family network.

“This not only demonstrates the deep-rooted determination we’ve seen in rural areas during previous crises, such as the foot and mouth disease outbreak, but evidence of a desire to innovate and pivot their business model in response to market challenges and opportunities.

“But we must not allow these results to mask the need for ongoing support for rural enterprise as the Government seeks to Level Up Britain. Rural areas must not be neglected nor marginalised as ‘hard to reach’ when restoring disruption to supplies – a key issue during the pandemic – and, given the wider infrastructure challenges that rural businesses and communities face, all agencies must work together to bolster business resilience.”

The survey, led by fellow NICRE founding university partner the Enterprise Research Centre, also found there was widespread uptake of government support with 79% of rural businesses accessing at least one form of support, and they used a range of mechanisms to cope with family and community support key.

The report has been welcomed by the Department for Environment, Food and Rural Affairs and business leaders.

Minister for Rural Affairs Lord Benyon said: “Rural businesses are central to this Government’s ambitious levelling-up agenda.

“This report demonstrates both the fundamental resilience of rural businesses and the success of government initiatives to help businesses keep going through the pandemic.

“It also underscores the importance of rurally-sensitive and local approaches to economic development to ensure a sustained recovery. By better understanding the needs and experiences of rural businesses, we can continue to help rural areas grow and improve, both socially and economically.”

Mike Cherry, National Chair, Federation of Small Businesses (FSB), said: “Covid prompted many small businesses to reinvent themselves, adding new products and services and adapting their offering to new types of customers, moving to new sales channels, creating or expanding their online presence, and much more. This report is a testament to the resilience of small businesses, which are the lifeblood of rural communities.

“But despite their resilience, the pandemic also demonstrated that businesses in rural parts of the country are having to cope with inadequate physical and digital infrastructure, and the Government should do more to level the playing field for rural firms.

“As the country embarks on the road to recovery, the Government support that was a lifeline for businesses during the pandemic should be translated into investment in rural communities, to help them Level Up. From pressing ahead with the rollout of gigabit capable broadband to guarantee full coverage by 2025 as initially promised, to offering support for businesses ready to transition to net zero, no business – regardless of its location – should be left behind.”

The National Innovation Centre for Rural Enterprise (NICRE) was set up in September 2020 with funding from Research England to collaborate, research and co-design ideas and solutions to foster rural enterprise and unlock the potential of rural economies.

It brings together the strengths of its founding university partners: Centre for Rural Economy and Business School at Newcastle University, Enterprise Research Centre at Warwick University and Countryside and Community Research Institute at the University of Gloucestershire and Royal Agricultural University.