Business Challenges and Opportunities in Sparsely Populated Areas: Strengthening Regional Innovation Ecosystems

Sparsely populated areas represent a significant share of Latvia and many European regions. These territories face complex challenges, including population decline, labour shortages, limited access to markets, and lower innovation capacity. At the same time, they offer substantial opportunities for developing knowledge-intensive businesses through digitalisation, green transition, circular economy, bioeconomy, and smart regional specialisation.

Latvia's Research and Innovation Strategy for Smart Specialisation (RIS3) identifies five strategic knowledge areas—Knowledge-intensive Bioeconomy, Information and Communication Technologies (ICT), Smart Energy and Mobility, Smart Materials and Engineering Systems, and Biomedicine. However, the successful implementation of RIS3 depends on strong regional entrepreneurial ecosystems capable of transforming research and innovation into sustainable business growth, particularly outside capital.

This research proposal is a horizontal scientific discipline supporting the implementation of RIS3 by investigating how businesses in sparsely populated regions create, adopt, and commercialise innovation within regional innovation ecosystems.

The aim is to develop an evidence-based framework explaining how businesses operating in sparsely populated areas contribute to the implementation of  Smart Specialisation Strategy (RIS3) and how regional innovation ecosystems can strengthen business resilience, competitiveness, and sustainable regional development.