Final Report Summary - TERA (Territorial aspects of enterprise development in remote rural areas)
The principal objective of the TERA research project was to investigate the role of territorial factors in the development of enterprises in remote rural areas. From a general point of view, TERA aimed at contributing to the development of a new policy framework able to promote cohesion and sustainable spatial development in a larger European Union. More specifically, TERA was concerned with:
1. the economic development of remote European rural areas through the identification and analysis of the relevant 'territorial' factors
2. the integration of these factors in current structural policies, and
3. the design of new policy measures that could be used to promote the development of these areas in a more effective and targeted manner.
In particular, by taking into account the relationship between regional, urban and rural policies, TERAs findings should help towards the proper evaluation of the effects of existing agricultural policies and their potential changes on rural economies and communities. As such, the specific project objectives were to:
1. identify and analyse the main economic factors that influenced the creation and survival of enterprises in peripheral rural areas of Europe and measure the degree of their influence with appropriate empirical methodologies
2. assess the extent to which current and recent European, national and regional development policies, programmes and projects took account of these territorial factors
3. specify innovative policy interventions to promote the development of European remote rural areas.
The study mainly focussed on the location of economic activity; therefore space was the primary parameter under consideration. However, the project also relied on a more consolidated framework of analysis, i.e. on computable general equilibrium (CGE) modelling that took into account remoteness, transport costs and factor mobility. A key analysis requirement was to take into account remoteness, transport costs and factor mobility, along with the need to simulate the impact of policy changes both for rural areas and regions as a whole. Thus, the TERA working plan relied on two distinct complementary analytical approaches, namely the new economic geography (NEG) and CGE modelling. Moreover, social accounting matrices (SAMs) were built exclusively for the project purposes, for each of the six examined countries, so as to utilise the obtained data to calibrate the models and perform NEG and CGE analyses under various scenarios.
The territorial factors pertaining to the TERA study areas identified typical rural zones which were in need of targeted development measures. Among the project conclusions was the lack of coordination between structural funds (SFs) and the investments or land management practiced by individual farmers or entrepreneurs. Moreover, development programs had not, in several cases, taken into account these territorial factors and available funds were insufficiently used. Another serious concern was that remote areas did not have enough possibilities to influence the design of the development programmes. This political aspect, however, was not within the field of TERA research. The developed policy recommendations concerned necessary measures regarding labour supply and migration, agricultural policies, regional trade, transportation and infrastructure, tourism and, finally, harmonisation of policy implementation with the local formal or informal development strategies.
1. the economic development of remote European rural areas through the identification and analysis of the relevant 'territorial' factors
2. the integration of these factors in current structural policies, and
3. the design of new policy measures that could be used to promote the development of these areas in a more effective and targeted manner.
In particular, by taking into account the relationship between regional, urban and rural policies, TERAs findings should help towards the proper evaluation of the effects of existing agricultural policies and their potential changes on rural economies and communities. As such, the specific project objectives were to:
1. identify and analyse the main economic factors that influenced the creation and survival of enterprises in peripheral rural areas of Europe and measure the degree of their influence with appropriate empirical methodologies
2. assess the extent to which current and recent European, national and regional development policies, programmes and projects took account of these territorial factors
3. specify innovative policy interventions to promote the development of European remote rural areas.
The study mainly focussed on the location of economic activity; therefore space was the primary parameter under consideration. However, the project also relied on a more consolidated framework of analysis, i.e. on computable general equilibrium (CGE) modelling that took into account remoteness, transport costs and factor mobility. A key analysis requirement was to take into account remoteness, transport costs and factor mobility, along with the need to simulate the impact of policy changes both for rural areas and regions as a whole. Thus, the TERA working plan relied on two distinct complementary analytical approaches, namely the new economic geography (NEG) and CGE modelling. Moreover, social accounting matrices (SAMs) were built exclusively for the project purposes, for each of the six examined countries, so as to utilise the obtained data to calibrate the models and perform NEG and CGE analyses under various scenarios.
The territorial factors pertaining to the TERA study areas identified typical rural zones which were in need of targeted development measures. Among the project conclusions was the lack of coordination between structural funds (SFs) and the investments or land management practiced by individual farmers or entrepreneurs. Moreover, development programs had not, in several cases, taken into account these territorial factors and available funds were insufficiently used. Another serious concern was that remote areas did not have enough possibilities to influence the design of the development programmes. This political aspect, however, was not within the field of TERA research. The developed policy recommendations concerned necessary measures regarding labour supply and migration, agricultural policies, regional trade, transportation and infrastructure, tourism and, finally, harmonisation of policy implementation with the local formal or informal development strategies.