Analysis of the model "One village One product" and the formation of "clusters of non-agricultural activity" in rural areas

Because of agricultural businesses and lower incomes, people in villages usually are poorer than those living in rural areas. The Poor development of rural area due to poverty compared to urban areas is one of the main issues of economic development nowadays. Therefore, in many countries, the people of rural areas decided to set up industries in the villages to get rid of poverty, so that they could earn high income through non-agricultural employment. Therefore each village has acquired skills to produce a distinctive product that can reduce poverty in rural areas. The aim of study is realizing the influential factors of formation and establishment of such industries in the villages. For this purpose, a set of Hamadan villages with non-agricultural activities was selected. Study follows a qualitative approach, that is, empirical evidence is beside in-depth-study of the literature on the historical origins of non-farm agricultural activities upon more than 50 interviews with experts and owners of establishments. The results shows that among the villages that established the “one village- one product" activities,one of the important factors is "market access" of their products. Low cost of living in the new point of production-villages-in terms of cost of rent and labor was another leading factor for forming the industrial businesses in rural places. Besides, the inheritance of routines from initial firms located in urban areas and knowledge exchange between skilled workers and pool labor are main factors of creating new business in new areas. Dependent activities have been formed to eliminate the needs for materials and devices and repairs, that caused be complete the specified cluster of activities. Along with these developments, some villages have witnessed reverse migration and people have moved from cities to villages. Investigating these activities revealed that better income prospects, flexibility, less stressful work environment and job stability were important reasons for continuing these activities.