The paper addresses psychological knowledge in innovation processes in rural areas in the North. The empirical base is the introduction of an innovation program realized through the University of the Arctic, a cooperative network of universities, colleges and other organizations committed to higher education and research in the North. We attempted to stimulate innovation in the rural villages of Northern Russia using workshops centred on building social capital through psychological knowledge. Our analysis shows that good family health and psychological knowledge among villagers is important for sustaining the innovation process in the North. We also found that technological infrastructure is a crucial but often lacking component in this process.