Rurality: Renaissance     economics   Jamie MacAskill PhD
Bridging the route to market   Concept of Creative destruction Joseph Schumpeter 1942   Entrepreneurial outcomes          ...
To sustain or disrupt• Sustainable approaches     •   Improving existing or established products     •   Discontinuous, ra...
Cornerstone•   Asking the customer what they want         • Corporate inertia even in well run businesses leads to loss of...
CAP Reform• Today CAP has built a dependency  culture rather than an empowered society• Disruptive approach might ask     ...
Governments dilemma• World already produces more than  enough food to support global growth  – We still have for famine an...
Convergence
Convergence• CAP remains at 41% of EU budget• CAP over the last 30 years spend on direct  subsidies      • 1980-1993      ...
Comparative Advantage                    Source Eurostat 2012
Renaissance Economics• Disruptive approach     • Get rid of subsidy “junkies”     • Data demonstrates opportunity for loca...
Unconventional times•   Renaissance Economics    – Resets Policy back from the divergence of Policy “Drift” affects    – N...
Thank you                    Dr Jamie MacAskill                     www.bite.ac.uk                 Tel: +44 (0)2085523071 ...
Principles of Disruptive Innovation*•    Companies depend on customers and investors for resources          • Managers do ...
Disruptive Innovation*Innovator’s Dilemma (1997) Clayton Christensen
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Rurality

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A new view of how to build vital, vibrant and viable rural economies through comparative advantage at the local level. Clustering of comparative advantages can develop regional and national advantages over the more convention downward policy diredctives fron nations states and CAP reform.

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  • Schumpeter : Theory of economic innovation and progress Concept of Creative destruction Joseph Schumpeter, particularly in his book Capitalism, Socialism and Democracy , first published in 1942. Applying similar approaches to rural economies on the basis that they represent fractured markets where agriculture or rural economies are failing where entrepreneurs enter the rural economy to replace or develop agriculture this will form a force for log term economic renewal that can develop: Vital, Vibrant, Viable rural economies and societies
  • Rurality

    1. 1. Rurality: Renaissance economics Jamie MacAskill PhD
    2. 2. Bridging the route to market Concept of Creative destruction Joseph Schumpeter 1942 Entrepreneurial outcomes E.F. Schumacher “Small is beautiful” 1973, concepts of appropriate technologies & sustainable development Destructive innovation C.M.Christensen “Innovator’s Dilemma” 1997 From partnership to profit Policy into reality
    3. 3. To sustain or disrupt• Sustainable approaches • Improving existing or established products • Discontinuous, radical or incremental • Enormous potential for “drift” • Builds on existing paradigm• Disruptive approaches • Very different value proposition • Targeting different market segments • Long-term benefits may be obscured by short –term performance • Enormous capacity to move minor markets into mainstream
    4. 4. Cornerstone• Asking the customer what they want • Corporate inertia even in well run businesses leads to loss of effectiveness – Managers don’t make decisions Stakeholders do • Incremental change to maintain growth & profit – Policy drift leads to divergence from original benefits • Retreat from small markets in search of big profit• Customers are fickle and technologies can outstrip obvious need and hence fail• Governments seeking re-election give the biggest lobby what they want but this leads to unintended consequences• Rural Economies • Farmers keep farming • CAP reform is actually policy drift • FDI becomes a quick win • Become progressively deskilled • Social capital is undervalued • Youth migrate to urban environments • Increasing social welfare issue• Why should rural economies be any different from urban economies but with a different set of “quality of life” measures
    5. 5. CAP Reform• Today CAP has built a dependency culture rather than an empowered society• Disruptive approach might ask • Do traditional economic models work • Do direct subsidies help transformation • Do current perspectives “stall” rural development • Does current “framing” of the issues maintain or worse promote Policy drift. – What is the countryside for – Who is the countryside for – What era is being preserved• Are we asking the right question
    6. 6. Governments dilemma• World already produces more than enough food to support global growth – We still have for famine and crisis• Policy is a blunt instrument – Should build infrastructure for success – Not try to solve individual problem• Society, that is individuals, must assume responsibility – Otherwise you remove responsibility – Build dependency
    7. 7. Convergence
    8. 8. Convergence• CAP remains at 41% of EU budget• CAP over the last 30 years spend on direct subsidies • 1980-1993 25-30% CAP • 1992-2006 25-30% CAP • 2005-2009 25-30% CAP• Despite large increases in budget and shifts to different “Pillars” • Funding farmers to farm however efficiently • Preserving the countryside• Is this sufficient to transform the sustainable use of natural resources and promote food security
    9. 9. Comparative Advantage Source Eurostat 2012
    10. 10. Renaissance Economics• Disruptive approach • Get rid of subsidy “junkies” • Data demonstrates opportunity for local comparative advantage • Traditional economic approaches maintain status quo and keep rural economies essentially agricultural or old age communities • We should operate a two tier economic strategy – National states support infrastructure – Local competitive advantage delivering real value• Require to produce viable, vital & vibrant rural economies: sustainable and growing• Direct subsidies effectively block new entrant or indeed distort market opportunities
    11. 11. Unconventional times• Renaissance Economics – Resets Policy back from the divergence of Policy “Drift” affects – New rural renaissance economic model • Re-engages fully with market demand more Hayak than Keynes • Reduce to zero direct subsidies • Re-addresses the true value of food chain • Remove inefficient farming practices • Re-shape the vision for what rural economies should offer – Net inward migration – Job prospects for youth – Entrepreneurial opportunities – Job creation through quality of life improvements – Harnessing local comparative advantages – Intervention is at infrastructural level & planning legislation – Government “leans” down and local “entrepreneurs” re-invigorate social capital availability – Builds real re-assessment of value chains and supply chains at local levels
    12. 12. Thank you Dr Jamie MacAskill www.bite.ac.uk Tel: +44 (0)2085523071 email: jmacaskill@bite.ac.uk“Some peoplesee things asthey are andsay why. Idream thingsthat neverwere and saywhy not?”GeorgeBernard Shaw www.academy-zone.com
    13. 13. Principles of Disruptive Innovation*• Companies depend on customers and investors for resources • Managers do not control investment decisions, Shareholders and Customers do• Small markets don’t solve growth needs of large companies • Hence big companies tend to innovate through acquisition• Markets that don’t exist can’t be analyzed • Data is historical and so can historical data forecast the future or is it a sustaining and incremental route bound to fail • Use discovery based planning• An organization’s capabilities define its disabilities • Strengths correlate with weaknesses and so companies may find it difficult to engage with disruptive innovation and lean start-ups• Technology supply may not equal market demand • Companies constantly seek to move up market leaving behind poorer profitable markets for more high value : high profit markets • Inevitably competitors invade these markets and disrupt the market • Sometimes investing in smaller less profitable markets is correct to avoid entrants stealing your market space *Innovator’s Dilemma (1997) Clayton Christensen
    14. 14. Disruptive Innovation*Innovator’s Dilemma (1997) Clayton Christensen

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