ASA 2013 Conference Localizing the Rural Economy from the Inside Out
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Transcript of ASA 2013 Conference Localizing the Rural Economy from the Inside Out
Localizing the Rural Economy from
the Inside Out
36th Appalachian Studies ConferenceAppalachian State University
Boone North Carolina
March 22, 2013
Peter Hackbert and Jalissa Hunter
Berea College
Introduction
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 2
Resilience
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“at the heart of resilience is a very
simple notion – things change – and
to ignore or resist this change is to
increase our vulnerability and forego
emerging opportunities, in so doing,
we limit our options.”
3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 4
The Appalachian Region
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 5
EPG searches for “real-world”
solutions
• Mission statement -
educating and inspiring
students from Appalachia to
become service-oriented
leaders
• 1,600 liberal arts students
• 150 years
What better way to encourage young Appalachians to start their own businesses than to reach out to them while they’re still trying to figure
out what they should be doing with their lives?
The EPG Program defines
“Entrepreneurial Leadership” as:
"A process when one person or a group of
people in a community originate an idea or
innovation for a needed change and influence
others in that community to commit to
realizing that change, despite the presence of
risk, ambiguity, or uncertainty".
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 8
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 9
Small Rural Appalachian Community Economic
Development (CED)
Traditional ED Strategy / Tool
Alternative ED Strategy / Tool
CD Capacity Building Strategy /
Tool
Economic Development
Approaches
Economic
Outcomes
Other
Outcomes
Direct, Short-term
Indirect, Long-term
• Industrial development
• Business retention / expansion
• Workforce development
• Tourism
• Entrepreneurship
• Downtown development
• Arts / Creative economy
• Cluster-based development
• Residential development
• Transportation
• Broadband / Internet / Social Media
• ED finance
• Philanthropy
• Strategic planning
• Leadership development
• Organizational development
1. Recruit firms from the outside
2. Strengthen/expand existing firms
3. Promote development of new firms
• jobs
• firms
• prosperity
• wealth
• social
• civic
• environmental
“Would you tell me, please, which way
I ought to go from here.” asked Alice.
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3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 12
“That depends a great deal on where
you want to go,” said the Cheshire Cat.
Lewis Carroll, Alice in Wonderland
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 13
Begin with a vision statement
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Possible Community Goals
• Economic Goals
• Social Goals
• Environment Goals
• Political Goals
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 15
Problem Statement
How do rural communities hit hard by the 2008
economic recession approach economic
development?
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 16
Review of the Literature
• Scholars Lambe, 2008; Drabenstott & Moore, 2009; Morgan, Lambe, & Freyer, 2011
• Rural local economic development writers (Shuman, 2012; Cortese, 2011; Moltz & McCray, 2012)
• Both advance strategies for homegrown prosperity
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 17
Localization
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 18
Local Ownership Matters
1. Higher multipliers
2. Great community wealth: Fleming and Goetz (2011)
3. More dynamic
4. Healthier residents: Blanchard, (2012)
5. Better community planning
6. Greater creativity
7. Greater political participation
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 19
Producing better, truer, ways of
measuring economic, environmental
an social performance, is a critical step
in making progress towards building a
better world.
- Joseph Stiglitz, Nobel Laureate in
Economics
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How can this be accomplished?
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 21
Develop Census Indicators
Go to:
quickfacts.census.gov
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3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 23
Develop Small Business Indicators
Go to:
www.census.gov/eos/www/naics
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3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 25
To learn about NAICS
explore this site
Develop Small Business Indicators
Go to:
www.census.gov/eos/www/naics
www.census/gov/econ/cbp/index.html
Self-Employed
www.censtats.census.gov/cgi-
bin/nonemployer/nonsect.pl3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 26
Develop County Business Patterns
Go to:
www.census/gov/econ/cbp/index.html
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3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 29
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 30
Develop Small Business Indicators
Pick two or three NAICS categories
• How many small businesses?
• Does the data appear accurate?
• Is the number growing or contracting?
• How to you compare against similar communities?
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 31
Develop Self-Employed Indicators
Go to:
Self-Employed
www.censtats.census.gov/cgi-
bin/nonemployer/nonsect.pl
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 32
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 33
Develop Small Business Indicators
Pick two or three NAICS categories
• How many categories have small business
growth?
• If the number of categories are growing this is
an indicators of diversification.
• What categories are shrinking?
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 34
Environmental indicators
Go To:
www.epa.gov/ncea/roe
www.epa.gov/myenvironment
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 35
Other Building Block Indicators
• Local Foods
• Renewable Energy
• Green Building
• Community Capital
• Local Arts
• Independent Retail
• Green Manufacturing
• Human Capacity
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 36
City of Berea Case Study
Methods
• County Business patterns from the Census Bureau
• Nonemployer Statistics from the US Census Bureau
• Zip code analysis indicated that all but two of the 392establishments in Berea have fewer than 500 employees and therefore qualify as small businesses.
• The Census Bureau’s Nonemployer Statistics, revealed an estimated 1,548 individuals have their own businesses in Berea, with sales of $47 million per year.
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 37
City of Berea Case Study
Methods (continued)
• The IMPLAN Input-Output model unifies
various federal databases and fill in the gaps
• Compare Berea’s economy to composition
sister cities, State of Kentucky, and the United
States as a whole.
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 38
Berea’s Profile
• 329 Establishments
• 1,534 Self employed
• 294 Farmers
• 2,500 Public employees
• $413M in wages
• $25M in state and local taxes
• $1.9B GDP
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 39
Compared to the USA
• 23% of the workforce is in manufacturing—more than 2 X the national average.
• Berea also has much greater numbers of people in education, health, and social services.
• 1/3 less than the national average of its workforce in the arts, entertainment, and tourism.
• Finance sector is about 1/2 the national average, which suggests how little capital is available for business growth.
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 40
Shuman argues in Going Local (1998);
The Small-Mart Revolution (2006)
“ economic development performs best when it
is focused, laser-like, on businesses “ that are
locally owned and import substituting. Local
ownership means that working control of a
company is held within a small geographic area.
Import-substituting means that the company is
focused first and foremost (though not
exclusively) on cost effective production for local
markets.
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 41
Leakage analysis
Identifies all those sectors in the economy where a community is unnecessarily importing outside goods and services. Every unnecessary import represents a loss of dollars and a loss of the "multiplier" impacts those dollars locally.
Represents a loss of other documented benefits that local businesses bring: knowledge, skills, tax payments, charitable giving, revitalized downtowns, tourists, stronger civil society, and more political participation.
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 42
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 43
BALLE Job Leakage Calculator
5,739 additional jobs
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 44
40 Export Industries
• Manufacturing parts for automobile supplying the assembly plant in Georgetown, KY.
• Role of Berea College, and many nonprofits promoting human rights and environmental protection;
• Presence of a largely retirement population, nursing homes, funeral parlors, and cemeteries
• Major services sector providing residents throughout the region (some of whom may be coming to work in Berea) with child care, taxis, limited restaurants
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 45
40 Local businesses that could meet
demand
1. Global companies (no headquarters)
2. Professional services (outsourcing pros)
3. Intermediaries (outsourcing warehousing)
4. Tourism (lacks critical mass)
5. Food and retail (not capturing shopper fair share)
6. Finance (no local insurance, securities brokers)
7. Health Care (need for full-service mental-health-care facilities)
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 46
What If 25% of Berea businesses could
meet 25% of local demand?
IMPLAN MODEL – forecasts 1,398 new jobs
BALLE Calculator – forecasts new 1,435 jobs
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 47
Some New Jobs Not Possible
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 48
3 Largest Sectors
Professional services (317)
Wholesale trade (198), and
Tourism (168)
•
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 49
Five Clusters – 1,300 jobs
• Goods distribution, warehousing, and trucking
(232 direct jobs);
• Professional services (247)
• Finance, insurance, and real estate (167)
• Local food (103)
• Tourism (60)
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 50
Findings
STRENGTHS
• Location
• Manufacturing
• Education
• Public Sector
• Infrastructure
• Civic Culture
• Tourism
• Local businesses
• Quality of life
WEAKNESSES
• Limits to manufacturing
• Finance gaps
• Empty storefronts
• No fun
• Youth out migration
• Tourism deficits
• Workforce shortcomings
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 51
Findings
STRENGTHS
• Location
• Manufacturing
• Education
• Public Sector
• Infrastructure
• Civic Culture
• Tourism
• Local businesses
• Quality of life
WEAKNESSES
• Limits to manufacturing
• Finance gaps
• Empty storefronts
• No fun
• Youth out migration
• Tourism deficits
• Workforce shortcomings
Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 20123/23/2013 52
Findings
OPPORTUNITIES
• Regional growth
• Industrial park
• Entrepreneurship innovation
• Arts and Crafts
• Broader approach to tourism
• Integrate the college more
thoroughly into the city’s
economic growth
• Partners
THREATS
• Aging population
• Over-focus on corporate
attractions
• Unplanned growth
• Divisions
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 53
Findings
OPPORTUNITIES
• Regional growth
• Industrial park
• Entrepreneurship innovation
• Arts and Crafts
• Broader approach to tourism
• Integrate the college more
thoroughly into the city’s
economic growth
• Partners
THREATS
• Aging population
• Over-focus on corporate
attractions
• Unplanned growth
• Divisions
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 54
Conclusion and Action Steps
Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference3/23/2013 55
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 56
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 57
Alcohol beverage sale[City-County]
4th Class cities with permits
1. Corbin – Whitley/ Knox
2. Central City – Muhlenberg
3. Cumberland – Harlan
4. Eminence – Henry
5. Falmouth - Pendleton
6. Madisonville-Hopkins
7. Mt. Sterling – Montgomery
8. Morehead – Rowan
9. Russellville – Logan
10. Shelbyville - Washington
11. Springfield – Washington
12. Vanceburg – Lewis
13. Elizabethtown – Hardin
14. Lancaster – Garrard
15. Vine Grove – Hardin
16. London – Laurel
17. Jenkins - Letcher
18. Whitesburg- Letcher
19. Vanceburg- Lewis
20. Somerset- Pulaski
21. Manchester- Clay
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 59
3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 60