Local products as a means to facilitate the development of less favoured areas of the European countryside

Abstract

Local products –due to their perceived characteristics of "authenticity" and "quality", both of which are reflected in their prices– can be viewed as appropriate sources of development for rural areas and particularly Less Favoured Areas. Primarily, since they may assist in the "reconstruction" –under completely different terms– of an integrated local productive system, which, most likely, used to exist in the region. This does not constitute a claim in favor of endogenous development or a suggestion for a "backwards leap", since the current socio-economic conditions are completely different.

There are, at least, three types of dynamic "local" enterprises. These are either very small firms –they constitute the large majority of local enterprises– they are vulnerable to adverse economic climate, with little impact on the locality, or SMEs, often very dynamic (producing for highly specialised markets), or embedded to the region (producing traditional products). The last type refers to large firms, or even MNE subsidiaries, benefiting from the "local product" label with very weak, or often inexistent, links to the local economy.

The role of "local enterprises" in the development of their locality may be significant, however, it is rarely sufficient. On the other hand, firms with a degree of foreign (not  local) ownership, at first appear to be less beneficial to the region than the locally owned firms. If, however, we assume that a prerequisite in the development of rural areas is the introduction of new/innovative ideas, know-how, etc. (mainly produced outside the local society) and on the other hand the ability of local enterprises to sell their products to wider national and foreign markets, it becomes very clear that non-locally owned firms can play a significant role in the development of rural areas.

To achieve this, there is a need for initiatives that will successfully exploit local advantages, which are confined to the economic and technical infrastructure of the regions, but also include their particular local characteristics ("local milieu"), in other words, the characteristics of human capital (education, skills, experience etc.) and social capital (a culture of trust and co-operation between enterprises, local know-how, customs and attitudes favouring entrepreneurial activities, networks of development agencies and institutions etc.).