Building Livelihoods in Rural Areas: A Comprehensive Guide

Building Livelihoods in Rural Areas: A Comprehensive Guide

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In the face of growing urbanisation, intractable development challenges and unprecedented climate risks, rural areas are undergoing a transformation. In many developed and developing countries, people are moving from rural to urban centres, while in others there is a reverse migration back to smaller towns and villages. This shift is having a profound impact on rural economies and societies. As young people leave their hometowns to find better career opportunities in cities, many small communities struggle to attract businesses or young entrepreneurs willing to stay. Moreover, for many people, living in remote locations makes commuting prohibitively expensive or time-consuming; this often limits them to jobs (or job opportunities) that can be accessed conveniently by car or public transport. These shifts have led many local governments and organisations worldwide to invest in new initiatives focused on diversifying the economy of rural livelihoods areas through sustainable and inclusive growth.

What does the future hold for rural areas?

A quick scan of recent trends shows that the future of rural areas is uncertain. On the one hand, the world's population is set to grow from 7 billion to 9 billion people by 2050, and many of these people will be choosing to live in urban areas – creating more demand for

urban infrastructure and services. On the other, climate change is having an increasingly devastating effect on rural areas, especially in low- and middle-income countries, where many communities are already highly vulnerable. As temperatures rise, droughts and floods become more frequent, and populations of insects, pests and diseases increase, making agriculture more difficult and less reliable as a livelihood. In many countries, climate-related problems are compounded by economic and political factors. Political instability has led to a large-scale migration out of several countries in the Middle East, Africa and Central America.

And the economic slowdown in China, which has been a key driver of growth in recent decades of rural livelihood, appears to be having a significant impact on rural economies in many Asian countries.

Building Livelihoods: Some definitions In most economies, the sectors that produce goods and services for domestic use (rather than for export) are known as the ‘primary sectors’. In developed countries, these sectors are typically agriculture, fisheries and forestry; in developing countries, they are often manufacturing (including textiles, garments, footwear and other light industries), mining, energy production and water and sanitation. When we talk about building livelihoods in rural areas, we are often talking about developing these primary sectors, rather than building urban sectors such as construction, retail or professional services. This can include promoting sustainable agriculture, renewable energy and other green industries; developing artisanal industries and tourism; and making better use of natural resources.

Why invest in rural areas?

There are several reasons why it makes sense to invest in rural areas. Firstly, it addresses the growing trend towards urbanisation in the Global South, and the reverse migration in the Global North. This is happening at a time when the world's population is growing and capital is getting increasingly concentrated in cities. Secondly, people's changing priorities and new ways of life – including the desire to live in more sustainable and less stressful environments – make it more difficult to attract and retain talent in cities. This makes rural areas more attractive to people who want to work and live sustainably, create a community or start families.

Developing rural economies through entrepreneurship When people relocate to rural areas, one of their main concerns is often about finding a good job. This can be a challenge, especially if the local economy is dominated by one sector (such as agriculture) that is not growing or even declining due to changing consumer tastes or market conditions. For this reason, many governments and development agencies are investing in entrepreneurship as a way of diversifying the rural economy. This can involve providing training and education in start-up and business management, or public procurement that favours small and medium-sized enterprises (SMEs) and social enterprises.

Developing rural economies through infrastructure

Rural areas often suffer from a lack of infrastructure: poor roads and communication networks can make it difficult for SMEs and social enterprises to find customers and markets, while limited access to clean and modern energy sources can make it expensive to use advanced technologies and processes. Government investment in rural areas can help to address the problem of developing rural livelihood, especially if it is designed to be inclusive and open to the private sector and social actors. This can include providing public services such as electricity grids; telecom networks; airports and seaports; or internet services.

Developing Rural Economies Through Tourism and Arts Tourism is a rapidly growing sector in many economies, both developed and developing. And rural areas – in particular, those with cultural or historical significance – are often favoured destinations for tourists. This can provide a significant boost to the rural economy and create new livelihood opportunities for locals – including, for example, through the development of local hotels or restaurants, or the hosting of cultural or artistic events.

Developing Rural Economies Through Agriculture Agriculture is one of the oldest and most important sectors in the economies of many countries. In many rural areas, it is also the sector that employs the most people, especially women. Many government policies, development initiatives and private-sector investments focus on improving agricultural productivity and increasing the profitability of farming and agro-processing. These efforts include promoting sustainable agricultural practices that produce higher yields using fewer resources (such as water, energy and fertilisers); providing access to loans and other financial services targeted at farmers; and investing in research and development in the agricultural sector.

Summing up Rural areas are undergoing a significant transformation, as many countries see a shift in population from urban to rural areas, and many others experience a reverse migration back to smaller towns and villages. This shift is having a profound impact on rural economies and societies. Since young people are leaving their home towns to find better career opportunities in cities, many small communities struggle to attract businesses or young entrepreneurs willing to stay. For many people, living in remote locations makes commuting prohibitively expensive or time-consuming, which often limits them to jobs that can be accessed conveniently by car or public transport. We are also seeing climate change having an increasingly devastating effect on rural areas, especially in low- and middle-income countries where many communities are already highly vulnerable. As temperatures rise, droughts and floods become more frequent, and populations of insects, pests and diseases increase, making agriculture more difficult and less reliable as a livelihood. These trends make it more important than ever to invest in building the livelihoods of rural areas, through entrepreneurship, infrastructure (including effective public transport), agriculture or tourism, and arts and culture.