Across Europe, cities remain centres of entrepreneurial dynamism and innovation. However, evidence from a recently published JRC policy brief suggests that rural regions can be engines of growth, hosting innovative businesses in diverse and knowledge-intensive sectors.
The sectors in which rural startups are active show, as expected, a comparative advantage in the agri-food area. Other sectors however, including transport, energy, or high-tech industries such as robotics and semiconductors, are also well represented. Significantly, rural regions account for over 11% of all EU robotics startups.
The emergence of startups – young, innovation-driven firms with strong growth potential – is a crucial element of entrepreneurial dynamism. The policy brief found that the urban-rural divide remains substantial, with 76% of all EU startups based in cities and 18% in towns and suburbs in 2024, compared to just 6% in rural areas.
However, some rural regions display remarkable performances. In regions such as Val-d’Oise (France), Alb-Donau-Kreis in Baden-Württemberg (Germany), and the province of Imperia (Italy), the share of rural startups is well above the national average when compared with the share of the rural population. This illustrates how rural regions can nurture innovative activity under the right local conditions.
These findings highlight how place-based policies can help harness the untapped entrepreneurial potential of rural regions, turning them into places of opportunity and drivers of European competitiveness.