Lithuanian SMEs in rural areas: how to become social and competitive

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LTReikšminiai žodžiai: Mažos įmonės; Kaimo vietovės; Socialinė sritis; Verslumas; SMEs; Rural areas; Social; Entrepreneurship.

ENAccording to the document of Lithuanian Rural Development Programme (2007), rural areas are defined as all territories, which do not fall under the categories of urban territories or urban type settlements. In the final report of European Commission (2008) it is distinguished that rural area is a territory dominated by the natural environment and depopulated density. Rural areas form significant part of Lithuanian territory and make contribution to economic and social development. Farmland comprises 60% in Lithuania and 42% of population lives in rural areas (European Commission, 2016). The aim of the paper is to present current situation of Lithuanian SMEs in rural areas and propose innovative solutions for activity development in terms of becoming social and competitive enterprises. Research object is Lithuanian SMEs in rural areas and their development. Research methods of the paper: scientific literature analysis, comparative analysis, statistical data analysis. The main characteristics or/ and problems of rural areas in Lithuania are: emigration of young people, decreasing birth rate, aging of population, people are less prepared for undertaking various business activities than people in city areas, poor development of business, lacking alternative employment, lack of human capital (European Commission, 2008). Agriculture, hunting, forestry and fisheries are the part of economic sector in rural areas in Lithuania.Another group of population is working in industry and construction, services such as education, health care, social work, tourism and other activities (Stakeniene, n.d). Lithuania has good conditions to develop the agriculture and rural settlements: climatic conditions are supportive of dairy and meat farming, stock-breeding and growing cereals, vegetables, potatoes, fruits, sugar beets, flax and other plants; sufficient agricultural resources and their natural productivity (Stanaitis, 2004). On the other hand, there are a low competitiveness of small and medium-sized farms, an aging farming community: 35% of farmers are 65-years-old or more (EUaverage of 30%) (European Commission, 2016). Shortly discussed problems provide the need of deeper analysis of business in rural areas. Especially, combination of complex recommendations and workable solutions for SMEs are needed. One of the perspectives for Lithuanian SMEs is to develop social entrepreneurship. [From the publication]