Innovative Rural Entrepreneurship in Chile

Abstract

Successful policies seeking to promote rural entrepreneurship require a conceptual model consistent with the features of rural spaces and free of stereotypes of entrepreneurship as being only technologically sophisticated. The objective of this essay is, first, to argue that rural areas can be fertile ground for entrepreneurial activities in middle-income countries such as Chile and, second, to discuss policy options to achieve the goal of encouraging a more innovative entrepreneurship in rural areas. The scientific literature on entrepreneurship and the definitions, types and roles of entrepreneurship in development are reviewed. The literature on the location of entrepreneurship is summarized to understand the drivers of observed territorial differences in entrepreneurial activity. One conclusion is that rural areas face a (seemingly) adverse economic geography for entrepreneurship, although there is a recent tendency for amenities-led growth. We then present the geography of rural entrepreneurship in Chile. Contrary to conventional wisdom, the rates of entrepreneurship in Chilean rural areas are high, although presumably of a limited growth potential under current conditions. Nevertheless, this entrepreneurial base provides a stock of knowledge from which a greater sophistication could be reached, and we discuss potential policy approaches to stimulate more innovative rural entrepreneurship. In the case of Chile, available policy options are coherent with the recently enacted National Rural Development Policy. A systemic, amenity-based approach gives middle-income countries opportunities for the development of more innovative rural entrepreneurship through territorial policies that provide local public goods and improve living conditions.