Barriers to innovation in Spanish rural Small and Medium-Sized Enterprises

In the context of globalisation, innovation has been recognized as a key driver of Europe’s national and regional economies, whether rural or not. Nevertheless, rural firms are considered less innovative than firms in urban agglomerations. Rural areas represent three-quarters of the land of the OECD countries and are home to a quarter of its population. Moreover, small and medium enterprises (SMEs) are the backbone of the economy. This paper reviews the barriers to innovation indicated throughout literature, brings out what constitutes the main barriers in rural SMEs and presents an understanding of some of the factors that determine the position of these firms in responding to new requirements. Data were collected through a questionnaire for managers of 511 SMEs in a rural area of Spain. Statistical analysis was performed with SPSS software package. The results identify key factors that hinder innovation in rural SMEs, namely those related to economic reasons, such as high costs of the innovation or the difficulty to obtain financial resources, and risk aversion issues. Specific research related to the study of innovation barriers in SMEs firms in rural areas is limited. Therefore, this paper fills this research gap by expanding the body of knowledge in the field of rural SMEs innovation and provides further evidence on this phenomenon. The results also offer relevant insights for managers and policy makers when formulating and implementing strategies to diminish innovation barriers in rural SMEs