Earlier this month, the Department for Environment, Food & Rural Affairs (Defra) released a 2012 edition of its Statistical Digest for Rural England, packed with 118 pages of facts and figures on a wide range of demographic, social and economic topics.
This edition contains some illuminating economic statistics relating broadly to productivity. It is not long, of course, since the Government published the outcome of its Rural Economy Growth Review, a context for which was the Treasury's wish to see rural areas contribute fully to the nation's economic recovery.
The Digest confirms that rural economies are relatively enterprising and dominated by small firms. In 2010 around 70% of the rural workforce worked in a SME and predominantly rural areas had 420 registered businesses for every 10,000 of their population. Compare that with 360 in urban areas. Rural areas have also benefited, historically, from high business start-up rates, though in this respect they have slipped behind in the economic downturn.
Gross Value Added (GVA) figures in the Digest show that predominantly rural areas contributed £205 billion to the economy during 2009 or 19% of the England total. They also show 60% of that productivity coming from three industrial sectors, namely (in order) those described as: public administration, health and education; distribution, transport, accommodation and food; and production. Further evidence, then, of the significant role the public sector has played in rural areas.
Convert these figures into GVA per job and the two categories of rural area defined by Defra perform rather differently. Local authority areas classified as predominantly rural – the most rural category – have (at 87% of the national average) the lowest level of workforce productivity. In contrast, the next category, known as significantly rural areas, have the highest productivity outside of London.
Which begs the obvious question, why is this so? The Digest qualifies its findings, noting that some relatively low productivity areas may be performing reasonably well if factors such as their industrial mix and infrastructure are taken into account. It may also be that there are clues among some of the other data in this report.
For example, it shows that despite steady increases in the numbers of people working in predominantly rural areas who have qualifications, they still lag behind when compared with those working in more urban areas. This is true at both a NVQ2 (GCSE) level and a NVQ4 (university degree) level.
Predominantly rural areas also score poorly in terms of on-the-job training. Analysis shows that fewer than 12% of those working in these areas had received on-the-job training during the previous four weeks, compared with 14% in urban areas.
The figures presented on business innovation are rather more ambiguous and mixed, but on one key measure rural areas could do better. The proportion of rural businesses engaged in innovation activity is a few percentage points below the urban equivalent.
Finally, the Digest has some figures for businesses' capital investment. In 2009 those in predominantly rural areas invested around £2,850 for each of their employees. This is roughly £350 below the national average, though in fairness that average is somewhat skewed by high investment levels in London and some other urban areas are equally adrift.
It is tempting to try and explain away low productivity levels in predominantly rural areas by pointing to these figures for qualifications, training, innovation and investment. That would be overly simplistic. Neither would it allow for what must be variation between different rural economies in different parts of the country. But full marks to the Defra statisticians for including this material in the latest edition of their Digest.
This article was written by Brian Wilson whose consultancy, Brian Wilson Associates, can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it. . Brian also acts as RSN Research Director.
