ABSTRACT
The ability of firms and regions to renew themselves is becoming increasingly important from the perspective of survival and competitiveness. Renewal, technological change, or innovation is also commonly perceived as the main driver of economic growth, which implies that innovation is important from both a micro- and a macro perspective. Following Schumpeter, innovation should be regarded as a broad concept that incorporates not only new products, but also e.g. new production processes and new ways of doing business. This chapter focuses on the determinants of entrepreneurship and innovation in rural regions. The specific determinants for innovation and entrepreneurship can be broadly defined in three groups; knowledge, diversity and amenities. External knowledge in terms of collaboration with other firms and access to a diverse, but related, knowledge base provides potential determinants for innovation, as well as entrepreneurship.
