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Creating jobs in rural areas


The LEADER way to job creation

by Elena Saraceno



The implementation of the LEADER

Initiative has shown that even though it was not meant to deal with employment problems, it has nevertheless produced some illuminating ideas, tools and methods that have had a significant impact on employment creation in rural areas, even in the most disadvantaged areas. Elena Saraceno explains.

In the past, employment trends in general and in rural areas in particular were described in a homogeneous and undifferentiated way, as if finding a job in a rural area of Spain or Sweden would be the same thing.

While this standardised approach has helped to identify some important trends, such as the decline of agricultural employment in all areas, some of the more contextually-linked trends which are visible on a smaller territorial scale only, have remained diluted and largely invisible. This neglects certain local factors that influence the creation of new job opportunities, such as environmental employment in environmentally attractive areas, or activities linked to manufacturing crafts or adding value to agricultural products.


Job creation as a part of an area-based,
integrated development

The LEADER Initiative promotes a new approach to rural development based precisely on the assumption that available resources are indeed quite different from one rural area to the next. This implies that the demand and supply for labour become increasingly more area- specific and differentiated.

This has contributed significantly to an acknowledgement of the relevance of the diversity of rural labour markets, and to the creation of specific projects and tools which have proved extremely efficient in responding, among other development issues, to local employment problems. This implies that one area might have been very successful and another not at all, depending on the type of activity, the local entrepreneurs' participation, the technical and financial assistance offered, and the availability of training and skilled workers.

The second important contribution of LEADER to the current employment debate, is that job creation in rural areas is better solved as a policy objective when it is set as an indirect rather than as a direct aim. In other words, rather than aim for job creation directly, it would be better to carry out a SWOT analysis of the area, and then define and implement the strategies and actions accordingly - an approach promoted by LEADER. Within this global project area framework, it is more appropriate to identify employment needs for the local active population as well as from the perspective of local enterprises and foreseen initiatives. In this way a fatalistic approach based on subsidies and assistance is more easily avoided and job creation becomes more adapted to local conditions, more sustainable and real, even if the jobs created are often insecure in terms of duration, intensity and revenue.

In general we may say that the undifferentiated perspective does not give an overview of the ongoing diversification of economic activities. This process is by definition area specific because it is frequently associated with adding value to endogenous resources, and varies from one area to the next. The LEADER Initiative has "fitted" very neatly in this new territorially differentiated perspective and has contributed to job creation through an area- based, integrated development process.

In the next sections these aspects will be dealt with in more detail, but let us first consider the trends in employment outside rural areas and the opportunities that these are bringing to rural areas.


General employment trends and rural opportunities

Three major general trends appear to have emerged in the last 10 to 15 years in the most developed countries and these have influenced rural labour market opportunities:

  • growth without employment - The increase in production or new investments are no longer automatically associated with the creation of new jobs. Without going into the reasons for this new trend - they are related to the labour saving effect of some investments - it is clear that employment policies must distinguish, more clearly than in the past, between those activities which create new jobs and those which tend to lose them;

  • small and medium enterprises are the main source of new jobs, while large enterprises have been losing or maintaining their existing share of employment. This implies, on the one hand, that risk-taking activities and new entrepreneurs are slowly renewing the stock of European businesses and, on the other hand, that SMEs are not necessarily a residue from a pre-industrial period but on the contrary may develop the advanced organisation that has traditionally been associated with large firms. This is primarily due to new communication technologies, the capacity of SMEs to co- operate and a more quality oriented demand for products and services;

  • urban areas are seeing a significant change in their labour market structure and their economies are no longer creating jobs. Losses are mostly in the industrial manufacturing sector while gains are mainly in the service sector; the balance however is often negative. The most important implication of this trend is that rural areas are no longer "drained" of their human resources, as in the past, and so they have to provide job opportunities.

These global changes have affected significantly the terms of reference generally used to promote development - the most appropriate actions - as well as the framework in which rural areas identify their disadvantage and their possible strategies. Both these aspects have been present in the conception of the LEADER Initiative and are part of its innovative approach: the business plan has to address the specific problems of the area and find economically feasible solutions, with an emphasis on endogenous resources and small enterprises, crafts and services as a tool for creating added-value. The orientation towards the diversification of rural activities in all sectors of the local economy implicitly abandons the old idea that all rural areas should specialise in agricultural production while urban areas do the same in the other sectors of the economy.

These global changes imply that rural areas are no longer quiet places where nothing but slow decline happens. Even if the circumstances vary from one area to the next, the response to these trends reshuffles the set of traditional constraints and opportunities for each area. This sets the stage for grasping or passing over the challenges brought by these trends.

Rural areas are responding dynamically in some cases, exploring new paths and developing new forms of exchange and integration with external markets. This in turn may affect population mobility, the convenience of maintaining farming activities, rural incomes, the identity and attractiveness of the area, the mix of activities present, and naturally as a result of all these, the characteristics of the local labour market; for instance, the type and nature of the required skills, the opportunities for men and women, the combination of part-time activities, self-employment and waged employment, the availability of local and external labour, the security and duration of work, its legal and fiscal aspects, etc. All these characteristics may turn out to be both positive or negative for the development of rural areas, and should be considered as part of the employment impact of LEADER.


The LEADER way to job creation

The implementation of the LEADER Initiative has shown that even though it was not meant to deal with employment problems it has nevertheless produced some illuminating ideas, tools and methods for job creation in rural areas, and has also had a significant employment impact.

Let us consider these two aspects:

  • very few local action groups appear to have organised their actions around the specific aim of creating employment (even though some did and have been successful as we will see further on); however, all groups have had some type of employment impact as a result of their actions;

  • the indirect way in which LEADER groups have dealt with job creation has been most appropriate due to its area-based approach, the emphasis on innovative actions and development, the limited amount of resources available and immaterial investments.


Jobs tailored to local territorial needs

The area-based approach implies that labour market issues are not treated as general issues, typical of all rural areas, but rather as local issues, at micro level, where the factors influencing demand and supply are carefully analysed as an integrated whole.

The result is naturally different for each area: in one area it could be the need to find alternatives for the declining farm opportunities which is the main objective; in another it may be the out-migration of the young, the lack of entrepreneurial capacities or the predominance of an assisted mentality; in others, this could be the inadequacy of training and of qualified, skilled workers for innovative activities or concern about the lack of opportunities for women; in others still, it may be the predominance of part-time, seasonal and precarious jobs of an informal nature, or excessive commuting with nearby centres or vice-versa; elsewhere, it may be the need to break the isolation and inaccessibility of the local economy.

These different concerns clearly demonstrate the diversity of employment problems in rural areas and the ineffectiveness of a single rural labour market as a tool to solve rural job creation. The different solutions to each of these problems accentuates even further the diversity of situations.


Self-employment, small enterprises,
complementary activities

The emphasis on innovative actions and development has usually been interpreted in terms of adding value to endogenous resources. Here the dividing line between creating an enterprise, creating ones own job (self-employment) and diversifying an already existing activity in order to increase income is very difficult to draw. As a result, it is never clear whether a new enterprise - generally a micro- initiative - has been created to take advantage of a market opportunity, to expand its market, to employ other people and an organisation, to make a profit; or whether the prevailing logic has been that of creating employment for oneself to ensure a more satisfactory income, even if this is made up of different bits and pieces.

An interesting finding about the LEADER way to job creation is that what were usually found as opposing positions in the labour market (the employer and labour demand on the one hand, the employee and labour supply on the other) are much closer than expected in rural areas and that one can easily turn into the other depending on its market success.

In other words, an activity that starts as a secondary income in a self-employment perspective, for instance an agri-tourism initiative, may easily turn into a small enterprise when the number of activities offered increases (in the case of rural tourism, restoration, walking tours, bike rides, children's programmes, etc) and employment needs increase correspondingly. Vice-versa, a marketing activity launched as an enterprise for local producers may turn out to generate part-time employment for one person only. This fluidity in the passage from one situation to another is a great advantage of the LEADER approach because it allows for the continuous adjustment to real conditions.

In this sense it could be said that the LEADER approach contributes to employment by constructing both a new demand for labour (coming from new activities and enterprises) and a new supply of labour (coming from complementary activities and new jobs created in existing or new enterprises).

These can be adapted to the resources available in the area (sometimes traditional but sometimes extremely innovative) through ad hoc training, which takes into account the very small scale of micro enterprises. This process can even go as far as blurring the differences between demand and supply and the social distance usually associated with both positions.

This situation is of course modest and fragile when compared to an urban labour market, but it is a small and important step towards jobs that are remunerated on the market rather than through public transfers.

This is real progress for rural employment. Because of their fragility these initiatives need technical support and services: LEADER local action groups have often acted as resource centres for the provision of this support or served as an interface between the demand and supply of these services.


Jobs linked to endogenous resources are more competitive

Another advantage provided by LEADER's emphasis on adding value to endogenous resources is that the jobs created in activities that are based on local resources and are typical and unique to one area (a particular cheese, an architectural feature, a type of knife, a source of mineral water, a specific environmental interest) are more protected from potential non-local competitors in the supply of labour. This is because they possess the relevant know-how that only the people who are part of the local culture have, and are consequently in a privileged position to exploit. This implies that these jobs will be more sustainable and qualified than those which require standardised skills (a teacher or a computer analyst, for instance) and where the local supply has no competitive advantage.


Immaterial investments create growth WITH employment

The relatively modest funding for the LEADER Initiative and the emphasis on animation activities and immaterial investments was a requirement that helped Groups to focus on the mobilisation of local human resources and the elaboration of an area analysis with a coherent strategy, rather than emphasising material investments.

This had several positive effects on the employment impact of LEADER:

  • it has helped avoid the danger of concentrating on material investments whose employment impact is uncertain, while immaterial investments have been able to create "growth with employment";

  • it has created personnel who are skilled in local development issues, which has had both an immediate positive return on strategically relevant employment and established a close linkage with and knowledge of the employment needs of the local population.

The ideas and approach introduced by LEADER have had very interesting employment effects. The ex-post evaluation of the LEADER I Initiative has shown that 25 000 new jobs were created in the LEADER areas, which means slightly over 100 jobs for every local action group on average.

The increase in employment has favoured both the diversification of existing activities (especially in rural tourism and agricultural marketing measures) as well as the creation of new enterprises and self-employment opportunities (more frequent in small and medium enterprises, crafts and services).

These results are most encouraging given the remoteness of most areas (especially in the Objective 1 regions) and the lack of experience with the approach. Female and skilled jobs were more frequent than male and unskilled ones, thus confirming the re- balancing effect that LEADER has had on small-sized rural labour markets.


Learning from good practice

The LEADER way to job creation in rural areas has produced a set of positive (and negative) experiences from which useful tools and good practices may be extracted.

Area mobility and pluriactivity

LEADER belongs to the type of policy intervention which is based on a local development project that is integrated and adapted to local conditions. As such it operates in a small area where specific employment needs may be expressed by the local population (the desirable jobs) and where enterprises demand a certain quantity and quality of labour which may or may not be adapted to the local supply. A meeting of these two factors must not be forced because it should not be assumed that the area of labour supply should necessarily coincide with the area of labour demand: room should be allowed for those who want to work outside the area and for external workers who have a job in the area. Therefore the project area may or may not coincide with a local labour market and the needs of the labour supply may be treated independently from those of the demand for labour.

Within this framework a dual strategy in rural job creation should always be kept in mind. On the one hand, if an individual has a highly skilled profession to which he or she is particularly attached, area mobility can sometimes enable this person to maintain a single profession: for example, sport instructors may have to move seasonally to be able to make a living from their profession throughout the year. The second strategy concerns pluriactivity. This gives an individual the opportunity to remain in the locality but requires alternating jobs, such as, mountain paths guide and walking equipment shopkeeper.

Work as an integral part of a life project

In the experiences and case studies analysed during the LEADER seminar on "A changing rural job scene" (1), the definition of the employment problem and the tools and instruments that were considered most useful led to an acknowledgement that employment should not be considered as "time sold in exchange for money" but within a much wider perspective that places the individual within a life project which needs to make sense, often includes a family and gives value to the feeling of identity with the area. In many cases of people returning to rural areas to live, work and invest, their employment needs become understandable only within the framework of a life project which has a very particular quality, duration, status and remuneration constraints. Not everyone wants full-time waged employment but may aspire and look for other qualities in work. This appears to be particularly true in sparsely populated rural areas. Consequently the tools for job creation must consider this starting point and construct individual paths following the various phases which transform an idea into a sustainable and profitable job or enterprise. The most important aspects are:

  • not to wait for the expression of needs but go out and stimulate participation and help potential ideas to come out through animation and mobilisation activities;

  • to provide individualised support to strengthen self-esteem, ad hoc training and technical and administrative tutoring over a sufficient period of time, financial aid not "alone" but as part of an overall "package" of necessary services and assistance to each initiative;

  • to place individual and small initiatives within a local network which facilitates solidarity and "learning by doing" attitudes, favours co-operation and partnerships between producers of goods and services, facilitates linkages with other outside networks and combines the advantages of both formal and informal association;

  • to organise study tours in order to analyse concrete and successful experiences from which lessons may be drawn;

  • to publish and disseminate journals, newsletters and information which help maintain cohesion among the client group.

Facilitate and support new rural jobs

Even though it was not specifically designed to create jobs, the LEADER programme has proved to be extremely effective in the field of employment. This is especially the case when we consider the failure or the limits of the traditional forms of direct intervention (subsidies, public jobs, training not adapted to the local context which strengthens emigration) in disadvantaged rural areas that are about to lose their resources and competitiveness. The LEADER way to employment offers a new perspective on the issue of unemployment because it emphasises the creation of activities adapted to the area and its endogenous resources. In this context, it can be said that the LEADER experience has produced good practice, tools and local development methods, which have had a positive impact on the diversification of types of employment. Three elements could reinforce further these results: an enhanced consideration of the specific characteristics of rural employment; the adaptation of employment-related policies, administrative practices and regulations; and, the introduction of support services required to consolidate these jobs.

Jobs created by LEADER have different characteristics from the types of employment encountered in cities: rural areas offer few full-time regular jobs and therefore particular attention should be paid to multi-skilled training and work, composite activities, synergies and complementary aspects between activities, time-sharing, distance working, and part-time, seasonal and irregular arrangements. Rather than dismiss these forms of work as a second-best type of employment, more attention should be given to the solution that they bring to problems (the challenge is to learn how to combine these different activities and sources of revenue in an efficient and sustainable manner). This would lead to the creation of specific support measures and a different formulation of support and work regulation policies.

Rural public authorities, in partnership with collective interest representatives, should study and provide solutions to the most common problems, such as social security, health and safety at work, unemployment benefits, fiscal payments, social insurance, legal status, professional identity etc.

The challenge in defining new "occupational identities", based on exercising complementary and diverse activities, is the delivery of professional, multi-skilled training that takes into account the different possible combinations of activities as well as the entrepreneurship and collective dimension of numerous rural activities.

It is also clear that the local action groups, as resource and employment support centres, will continue to play an important role. Thanks to animation, project "combing", the creation of linkages between different activities and increasingly broader support, the LAGs will strengthen their role of injecting dynamism in rural areas and boosting the jobs of tomorrow.


(1) "A changing rural job scene",
a European LEADER seminar organised
in the Ouest-Aveyron LEADER area
(Midi-Pyrénées, France).


        Elena Saraceno is the Director of CRES ("Centro Ricerche Economico-Sociali" / Centre for socio-economic research) in Udine (Italy) and lecturer in Regional Economics. She has worked on migration, labour market, rural development, the problems of mountainous areas, small- and medium-sized enterprises, pluriactive farming and the evaluation of rural and local development policies. She has been a consultant to the European Commission, the LEADER European Observatory and Regional Administrations on rural policy implementation. She took part in the "ex-post" evaluation of LEADER I (1992-95).

source: LEADER Magazine n°20 - Spring, 1999

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