University engagement in regional economic development is not a process only limited to urban
regions but also it can bring vital benefits to rural regions and upgrade their economies competitively.
Although such engagements can provide crucial underpinnings for the rural economic development of
developing and emerging countries, most of those countries still experience limited contributions from
universities. While university involvement is vital for those issues, it remains still unclear about diverse
potentials and possible pro-active and inducing approaches of universities of emerging countries.
Based on some specific initiatives implemented by a leading university in Sri Lanka (University of
Colombo), this study aims to examine how the university can involve to empower rural SME sectors and
contribute for rural economic development through “Co-adaptive academic entrepreneurship”. In
particular, it explores the background reasons for institute establishment, engagement approaches
taken by the institute, institutional level adaptations and inducements, commitments of rural sectors
and effectiveness of engagement approaches for the development of the rural economy. The findings
reveal that as well the university internal environment should be adjusted considering the place-based needs, their inducements on rural sectors are important to develop better interactions and
make promising economic impacts as well as social benefits to rural agribusinesses.