Rural places are often spoken about in sweeping terms, but one of the clearest messages from the OECD’s Rural Policy Review of Ireland 2026 is that rural areas are anything but uniform.
The report suggests that rural policy begins with recognising that rural regions differ dramatically in opportunity, connectivity and economic structure. Treating these as singular risks masks the real challenges facing rural economies.
According to the report, Ireland is a rural success story, close to half of the country’s population lives rurally and these regions have seen strong, and above national average GDP growth. Strongest performances are in rural areas near urban centres, and the evidence concludes to a two-speed rural economy – connected versus remote. Greenhouse gas emissions are higher in rural areas because of agricultural production and higher car dependencies, but also these regions show strong performance in renewable energy generation.
Ireland provides a fascinating comparison with Scotland. In many respects, the two countries share similar geographies and rural identities. Both have large rural land areas, strong agricultural sectors and dispersed populations. Yet their rural demographics and policy approaches differ in important ways.
Perhaps the most striking difference you see when you travel round rural Ireland and Scotland is the proportion of people living in rural areas. In Ireland, approximately 42.5% of the population lives in rural regions, slightly above the OECD average of 41.5%.
In Scotland, the picture is very different. Rural areas account for around 98% of Scotland’s landmass but only about 17% of its population, roughly 930,000 people.
This contrast helps explain some of the differences in rural policy priorities. In Ireland, rural regions remain central to the country’s demographic and economic structure. In Scotland, rural areas occupy a much larger share of the landscape but support a far smaller share of the population.
Population trends also diverge. Ireland stands out internationally for strong rural population growth. Between 2001 and 2021, rural areas experienced annual population growth of around 1.2%, one of the fastest – and enviable – rates in the OECD.
Scotland, by contrast, faces stronger demographic pressures in rural regions. While accessible rural areas have grown slightly in recent years, remote rural areas have seen slower growth and ageing populations, with a rising share of older residents and fewer younger workers.
These demographic differences shape rural economies. Ireland’s rural areas benefit from a relatively large working-age population and strong connections to growing urban centres such as Dublin, Cork and Galway. Scotland’s rural economy is more constrained by labour shortages and ageing populations, particularly in remote areas and island communities.
Yet the two countries face many of the same structural challenges.
One is the widening gap between accessible rural areas and more remote regions. In both countries, rural regions located close to cities tend to perform better economically. They benefit from access to labour markets, services and infrastructure. Remote areas, by contrast, often struggle with weaker labour markets, lower productivity and limited service provision.
Housing and infrastructure are also emerging as critical barriers to rural growth. Businesses in rural Ireland report increasing difficulty recruiting staff because employees cannot find housing locally. Similar concerns are frequently raised in Scotland, particularly in tourism-dependent areas where second homes and short-term lets have reduced housing availability for local workers.
Ireland has attempted to address these challenges through one of the most structured rural policy frameworks in the OECD. Unlike many countries where rural policy sits largely within agriculture ministries, Ireland has created a dedicated Department of Rural and Community Development and a national strategy, Our Rural Future (ORF), which coordinates more than 170 rural initiatives across government.
This “whole-of-government” approach is rightfully praised in the OECD’s review. Yet the report also highlights a familiar problem: even the most ambitious national strategies struggle to translate into tangible change on the ground if local authorities lack resources and analytical capacity. Something that is very familiar when you live and operate a business in Scotland.
Economic diversification is another shared challenge. Ireland’s rural economy has benefited enormously from agrifood, export manufacturing, tourism and foreign direct investment. But the OECD warns that reliance on a relatively narrow set of sectors risks creating the aforementioned “two-speed economy”, particularly when foreign investment remains concentrated in urban regions.
Scotland faces similar questions about how rural economies diversify beyond traditional sectors such as agriculture, tourism and energy.
Perhaps the most important lesson from the review is the need for better “rural intelligence”. Despite the sophistication of Ireland’s policy framework, the OECD notes that governments often lack detailed spatial data about how rural economies actually function.
Without this information, policy can easily default to a simple urban–rural divide, overlooking the complex relationships between towns, hinterlands and remote communities.
What this means for rural businesses in Ireland and Scotland
For rural businesses, the OECD review highlights a crucial point: business success is increasingly shaped by the wider rural ecosystem rather than by individual sectors alone.
In Ireland, rural regions support a much larger share of the population – around 42.5% – creating larger labour markets and stronger local economies. In Scotland, rural areas cover most of the country’s land but support only about 17% of the population, which makes sustaining services, skills and infrastructure more challenging.
Across both countries, rural enterprises face similar barriers. Housing shortages, limited childcare, transport gaps and patchy digital connectivity all affect whether businesses can recruit staff and expand operations.
The OECD also identifies a policy gap affecting many rural firms: locally focused small and medium-sized enterprises often fall between support systems designed for either start-ups or export-oriented companies.
Encouraging entrepreneurship in sectors such as renewable energy, food processing, tourism, care services and the bioeconomy could help diversify rural economies on both sides of the Irish Sea. Social enterprises – something OECD cited as one of Scotland’s key strengths in their 2023 Enhancing Rural Innovation in Scotland report.
Ultimately, thriving rural businesses depend not only on policy, markets and investment, but on strong local infrastructure, skilled workforces and – crucially, inclusive and well-functioning communities.