Liz Truss told the BBC Radio 4 Today programme that improvements to infrastructure and growing numbers of entrepreneurs have ensured Britain outside towns and cities is a hive of innovation.
The Cabinet minister defended the rollout of high speed broadband, insisting it would be available across 95% of the country by 2017.
Ms Truss said: “At the moment what we have is a gap between productivity in rural and urban areas.
“We are seeing that gap closing and the reason the gap is closing is we are getting better connectivity, we are getting the sharing of technology.
“What that means is we are seeing an increasing number of business start-ups in rural areas - people are now more likely to start a business in a rural area than an urban area.
“There is a myth out there that innovation happens in cities, it happens in major towns. But in fact we are seeing lots of innovation and lots of exports, we are seeing lots of technology start-ups in rural areas.”
Ms Truss highlighted a Norfolk firm selling airport security equipment to Dubai and China, while exports of traditional goods like Wensleydale cheese are also expanding.
She also promoted Government policies on freezing fuel prices and road spending.
The Environment Sectary said wages would rise in future in rural economies, but pressed on slow broadband rollout, she said: “We are working on that ... across the country. It will be 95% by 2017.”