TERA Territorial aspects of enterprise development in remote rural areas Contract no.: FP6-SSP-2005-006469 6th Framework Programme Priority 8: Specific Support to Policies (SSP)

Project main goals: - Identifying and analysing the main economic factors which influence the creation and survival of enterprises in European peripheral rural areas and measuring the degree of their influence, with appropriate empirical methodologies. We think that territorial economic factors (labour pooling, backward linkages, forward linkages and the development of infrastructures) and growth promoting factors (state of human capital and the degree of technical knowledge) provide the main determinants for the creation and survival of enterprises in rural areas. - Assessing the extent to which current and recent EU, national and regional development policies, programmes and projects take account of these “territorial” factors. This appraisal would concern itself in particular with parallel support policies such as CAP direct payments and national social welfare support systems. We will compare the weight of these factors, as measured by our empirical results, with the effective relevance they have (if any) in the actual policies. - Specifying new policy interventions which can better promote the development of European remote rural areas. The design of these policies would embody those elements of the previous “territorial” analysis most useful for achieving the final goal. The project will generate new knowledge on the territorial factors which influence the development of economic activity in remote rural areas of Europe. The identification of these factors and their degree of influence on the development of local enterprises will lead to the assessment of the effectiveness of current development policy instruments and to the suggestion of new alternative policies if so required. Our research will provide valuable insights on the composition, structure and weaknesses of European rural economies. It will also consider the wide range of on-going social and economic trends (such as globalisation, economic transformation towards knowledge-based activities and services, the declining role of agriculture, etc.) in order to provide more suitable and reliable measures to promote the sustainability of remote rural areas development policies in Europe. The tools and models used by TERA will assess the suitability of current policy approaches to promote integrated rural development and attempts to provide new “insights” on the factors that influence competitiveness and employment in remote rural areas. By providing a “more targeted” policy framework, TERA will alleviate the concerns of the costs of structural development policies in a larger EU and will increase the effectiveness of the allocation of scarce resources. The achievement of the objectives will allow the identification of those territorial factors crucial for the development of economic activity in remote rural areas of Europe. The identification of these factors will result in the following relevant interrelated outcomes: a) an appraisal of the degree of compatibility between these “factors” and current policies in remote rural areas; b) an analytical framework for understanding the structure, composition, and weaknesses of European local rural economies; c) the analysis, within the TERA proposed structure, of a wide range of on-going social and economic trends (globalisation, economic transformation towards knowledge-based activities and services, the declining role of agriculture, etc…). Such an analysis would provide suitable and reliable measures to promote growth and sustainability of remote rural areas in Europe; d) the design of a new framework for policy development vis à vis the newly proposed analytical structure; e) the development of a new methodology for the appraisal of current policy approaches to the promotion of integrated rural development