Innovative firms and the urban/rural divide: the case of agro‐food system

This paper aims to analyse the capacity of rural and urban spaces to promote innovation in the agro‐food firms. The purpose is to determine if the rural/urban division affects the innovative behaviour of agriculture, food processing and food distribution firms.

Business data have been obtained for over 2,000 firms based in the Valencia region, Spain. Out of them, over 200 declared to have taken part in R&D&i activities, mainly in partnership with public support institutions. The database supplies data of micro and small enterprises, which have been typically underestimated in the Spanish Survey on Technological Innovation in Enterprises. The database also makes it possible to identify the main location of agro‐food business, and the territory is divided in Local Labour Systems (LLS). LLS were in turn classified as rural or urban according to alternative criteria (OECD, national legislation). A logit model has been used in the analyses.

The location of enterprises according to the rural/urban divide does not appear relevant concerning innovation, although businesses orientated to the primary sector seem less innovative. Co‐op businesses appear to be more innovative.

The paper offers an approach of innovation in the agro‐food traditionally considered as a non‐innovative system. It explores how territory affects innovation using data from firms.