Barriers to innovation in Spanish rural Small and Medium-Sized
Enterprises
Gargallo-Castel, A.*, Esteban-Salvador, L. ** and Pérez-Sanz, J.*
Department of Business Administration. University of Zaragoza*.
Department of Accounting and Finance. University of Zaragoza**.

Abstract:In the context of globalisation, innovation has been recognized as a key driver of national and regional economies, whether rural or not. Nevertheless, rural firms are considered less innovative than firms in urban agglomerations. Rural areas represent three-quarters of the land of the OECD countries and are home to a quarter of its population. This paper reviews the barriers to innovation indicated throughout literature and brings out the main barriers in rural Spanish Small and Medium-Sized Enterprises (SMEs). Data were collected through a survey carried out among managers of 511 SMEs in a rural area of Spain. The results identify key factors that hinder innovation, namely those related to economic reasons, such as high costs of the innovation or the difficulty to obtain financial resources, and risk aversion issues. Specific research related to the study of innovation obstacles in SMEs firms in rural areas is limited. This paper fills this research gap by expanding the body of knowledge in the field of rural SMEs innovation and provides further evidence on this phenomenon. The results also offer relevant insights for managers and policy makers when formulating and implementing strategies to diminish innovation barriers in rural SMEs.

Keywords: SMEs, innovation, rural, barriers.