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Green economy-based business in rural development

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How is demand for organic and local food met?

According to the results of Sitra’s Landmarks barometer survey, consumer demand directed towards the countryside focuses on organic and local food as well as the countryside as a living environment. The momentum of organic and local food shows that demand exists for the green economy. It also shows the weakness of overall structures and the lack of functional practices, which may endanger the utilisation of the new natural resource economy.

For example, meeting the existing demand for organic food in the Helsinki metropolitan area in the short term is difficult, unless imports are increased. Depending on the product, either the level of domestic production is insufficient, or the transport and processing chain is not efficient enough to satisfy demand. Because of the rural support policy and the competition structure of the field, livestock production businesses and processing plants in particular have moved their operations further north, far from the consumers in the major population centres of southern Finland. The green economy may only deliver its great promises in Finland if sustainable businesses with links to the countryside are developed around it. The policy should also be revised to support organic primary production and processing and/or production and processing which is close to the consumer. Integrating agriculture with the future bioeconomy also outside the food sector is a further challenge.

The new natural resource business is still distant from the countryside

Responses to the barometer survey show an increasing awareness of the natural resource economy and the green economy. However, those supporting this approach are still a minority in Finland, although in many other countries, the green economy is already a priority. A particularly significant aspect emerging from the responses is the discontinuity between expectations and views: although green solutions are expected, their role in rural industries and promoting business operations is not recognised.What kind of green industry can there be without rural stakeholders?

The green economy is likely to be a significant source of new jobs. At the moment, the advocates of the natural resource economy are not opening links between the business operations they promote and rural industries, entrepreneurship, and jobs.

Thus, although a green economy is attractive, the ability to translate it into action is lacking, as is the ability to determine what the green economy requires of rural industries and infrastructure. According to the results of the Landmarks barometer survey, the respondents who believe in the opportunities of the natural resource economy are of the opinion that data communications connections, for example, are not particularly needed in rural areas.

The respondents were divided into those in favour of increasing the production of renewable energy and those who support the development of the natural resource economy. The first group favoured actions aimed at developing rural industries and promoting business operations, but were less enthusiastic about the development of a sustainable, modern natural resource economy. If these two approaches cannot be brought together, the revival of the countryside and its role in delivering the promises of the natural resource economy and the green economy will be ineffective.

In the light of the responses made to questions concerning policy issues, the realization of the green economy is less certain than the future of the countryside as a living environment, for which both demand and support undoubtedly exist. If we wish to promote the bioeconomy, careful thought must be given to both the message and tangible actions.

New entrepreneurs and business models are also far from the countryside

The barometer results show that the countryside is associated with business opportunities and that it is regarded as a good operating environment for innovative entrepreneurship. The interaction between rural and urban areas emerged as a problem. According to the respondents, city-based companies should utilise the countryside to a greater degree, while rural businesses should increase the urban dimension of their networking efforts.

Compared with rural entrepreneurs, those based in large cities or small towns saw more potential in the business opportunities created by the increasing demand for eco-efficiency. For example, creating closer ties between the countryside and an open innovation environment was seen as an opportunity. Our current innovations policy does not fully recognise rural innovation environments. The horizon of the innovations policy lacks rural innovations based on a decentralised structure, such as local bioeconomy solutions, the local material cycle or local energy creation through micronetworks.

The authors

Hilkka Vihinen, Professor, Doctor of Social Sciences, MTT Agrifood Research Finland
Kari MikkoVesala, Academy Researcher, Doctor of Social Sciences, University of Helsinki
Leena Rantamäki-Lahtinen, Senior Research Scientist, Ph.D., MTT Agrifood Research Finland