European Startup Village Forum: scaling up rural innovation through trust, coordination, and investment
Rural innovation is already delivering – but scaling it requires better data, simpler rules, coordinated funding and empowered local actors, concluded the European Startup Village Forum 2025 of 29 October. The Forum brought together policymakers, researchers, financiers and local leaders to turn rural innovation from isolated success stories into a mainstream driver of competitiveness and cohesion.
© European Union, 2025
One of the key components of the EU rural vision’s flagship initiative on research and innovation, the Forum highlighted the European Commission’s commitment to closer synergies between cohesion, rural development, and research and innovation policies within the post-2027 EU budget. With rural areas covering three-quarters of the EU’s territory and home to one-quarter of its population, participants agreed that rural innovation is not peripheral but pivotal to achieving Europe’s green, digital and social transitions.
New evidence from the European Commission’s Joint Research Centre (JRC) and OECD showed that while rural regions show lower levels of investment in research and development (R&D) compared to cities, many innovation hotspots are emerging – particularly where local creativity meets access to skills, testing facilities, and renewable resources. Once rural firms reach scale, their growth rates rival those in urban areas, underscoring the importance of tailored early-stage support. These trends still need to be better measured and recognised, especially through indicators that capture the innovation that does not stem from R&D or patents.
Three priorities for action emerged from discussions at the Forum:
- Cohesion and competitiveness – equally needed: European innovation policies should not only support the “champions league,” said JRC’s Mikel Landabaso. They should make it possible for all territories to generate wealth. Rural innovation spans all sectors, from renewable energy to manufacturing and services. Enhanced use of smart specialisation and Interregional Innovation Investments (I3) can help connect rural and urban strengths across regions.
- Simpler pathways from idea to market: EU initiatives such as the European Innovation Council and Regional Innovation Valleys are bridging late-stage financing gaps, while CAP support for basic services, cooperation and nearly 3 000 Smart Village strategies are strengthening the enabling conditions for rural innovators to thrive and are helping local projects scale up through participatory governance.
- Governance that starts with people and places: horizontal and vertical coordination, place-based approaches to innovation and transformation, such as Community-led development (such as LEADER and EIP-AGRI), rural-proofed programmes, and ‘human infrastructure’ – including local leadership, networking agents, and shared spaces – are essential to mobilise local potential and build trust.
Case studies from Slovenia, France, Italy, Finland, and Austria showed how municipalities and entrepreneurs are using public buildings as startup hubs, linking local procurement to innovation, and attracting new talent through coworking and co-living spaces. Financial institutions such as the European Investment Fund (EIF) and Italy’s Cassa Depositi e Prestiti (CDP) offer new investment tools that crowd in private capital, especially in cohesion regions.
Discover the latest Rural Pact resources on smart and startup villages.