$500,000 grant to focus on how rural innovation happens, how to inspire more

A Penn State economist will receive $500,000 over three years to study innovation in rural communities and find ways for communities to support rural entrepreneurs.

The grant from the United States Department of Agriculture is aimed at better understanding and inspiring innovation in rural areas, said Stephan Goetz, professor of agricultural and regional economics, Penn State, and director of the Northeast Regional Center for Rural Development. Goetz is collaborating on the grant with two economists based at the Economic Research Service of the United States Department of Agriculture in Washington D.C.

"When we think about innovation, we tend to think about big research companies and tech firms in places like Silicon Valley, but a lot of innovation is happening in rural communities, it just doesn't get recorded like other forms of innovation," said Goetz.

He added that access to a new data set will give the researchers a better understanding of how innovation works in rural communities and help them capture data about that innovation, which is often missed by other surveys and studies. They plan to use data collected from the Economic Research Service's Rural Establishment Innovation Survey, the first nationally representative survey of self-reported innovation in rural areas.

"Innovation in rural areas usually isn't the patent and R&D type activity as representing innovation, but, in reality, there's a lot of innovation that happens throughout the economy that doesn't involve a patent," said Goetz. "In rural economies, innovation might be a rural manufacturer introducing a new process to their assembly line. In practice, innovations like these can be incredibly important."

Goetz said he expects the study to produce actionable ideas and practices that rural communities can use to inspire more innovation among established and budding entrepreneurs.

"This grant is trying to understand the different types of innovation that are occurring," said Goetz. "But it's also about figuring out what the impact of these innovations is on communities and what can communities and policy makers do to create a more conducive environment that supports this innovation."

One of the important measures the researchers expect to investigate is the connection between innovation and export capacity – whether the firm can compete on the export market.

"That's really the gold standard -- if you can compete with other countries then you're doing something right," said Goetz. "Clearly, imports from other countries are putting pressure on U.S.-based firms to innovate, so that's something we also want to look at."

Rural economies, once primarily driven by agriculture, are increasingly diverse and interdependent with farming, said Goetz. He expects the study to deepen the understanding of that economic diversity and find ways for communities to promote enterprises from a range of industries.

The researchers will also examine ways to inspire innovation, from increasing awareness of innovation and entrepreneurship to celebrating the success of entrepreneurial individuals and companies.

Goetz added that the establishment of Penn State's Census Research Data Center is critical to accessing this type of information and undertaking this research. Penn State is home to one of 30 Federal Statistical Research Data Centers located around the country, which provide researchers with secure access to restricted economic, demographic, and health data collected by the U.S. Census Bureau, the National Center for Health Statistics, and the Agency for Healthcare Research and Quality.

"We may not have received the grant if we didn't have this center here," said Goetz.