Building entrepreneurial capacity in rural areas: The use of AHP analysis for infrastructure evaluation

The purpose of this paper is to verify the development of economic activities in rural areas in terms of their public infrastructural equipment.

As a case study, the Polish rural areas were selected. A two-stage survey was conducted in 2015. The first stage involved entrepreneurs from rural areas. The second stage of survey was data collection for rural areas regarding economic activity and infrastructural equipment. In total, 121 objects (communes) were selected. The multicriteria analytic hierarchy process (AHP) method was used for the analysis.

The results demonstrate that for each kind of business, communication accessibility is the most important criterion. By contrast, environmental awareness and concern for the environment is the least important element for pursuit of the economic activity in rural areas.

Limitations are connected mainly with the applied AHP method. The number of the comparable elements at the same hierarchy level is limited due to practical purposes. In addition, an assumption of full comparability of elements (criteria and alternatives) in the hierarchy model can be discussed. Furthermore, data quality and availability limit the scope of the empirical work. This study is a major simplification of reality modeling, but it gives practical benefits by simplifying the decision support procedure.

The findings of this paper contribute to the advancing theory of local development, with public infrastructure being one of its basic elements (factor of production). This paper explores the importance of physical infrastructure for different economic activities, and thus offers theoretical insights in two areas. First, this paper indicates the uneven weight of each infrastructure element for the various business sectors. Second, based on the collected data, this study also contributes to the literature, by using the AHP method to explore the relationships between infrastructural equipment and economic activity in rural areas. As the practical implication for local and regional development policies, this study indicates, that the most important criterion for each kind of economic activity is communication accessibility. This kind of public investment should be undertaken primarily to support entrepreneurship, especially in rural areas.

The uniqueness of the method lies in assumption about the uneven weights of infrastructure elements and therefore their impact on the process of ranking the objects (rural areas). The weight of individual infrastructure elements will vary depending on the kind of economic activity; therefore, the way of ordering will also be different for each economic activity.