Human Capital, Entrepreneurship and Rural Growth of the Serbian Economy

In the new economy, based on knowledge and innovation, the concept of human capital is becoming an increasingly important factor of growth (and development) not only for urban, but also for rural areas. The studies dealing with the analysis of the available human capital at the local level have highlighted its significant presence in rural areas characterised by a “specific environmental quality”, defined in the literature as rural outdoor amenities. Highly educated individuals who live and work with their families in these areas are responsible for the successful transformation of the local economy, employment growth, the improvement of living standard, development of entrepreneurship, and achievement of high rates of economic growth. This paper is aimed at analysing the relevance of the concept of human capital for rural development, with special emphasis on the rural development of Serbia. The paper presents the results of an empirical study of the model of economic growth of rural areas in Serbia, based on the panel data analysis, during a five-year period. According to the results, human capital and entrepreneurship have a significant impact on economic growth. Additionally, there are significant differences in the rate of economic growth between the rural areas with high and low outdoor amenities in Serbia. Human capital and entrepreneurship are represented in the models of rural economy growth as determinants of the development mechanism through which rural economies grow