The Big Picture Context for Rural Entrepreneurship

Brian Dabson, Rural Policy Research Institute & Truman School for Public Affairs, University of

Missouri

Iowa Community Entrepreneurship Academy

Manning, IowaOctober 21, 2005

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Presentation “National and International Perspectives on

Best Practices in Supporting Entrepreneurs in Non-metro Communities and Rural Areas”

1. Major Trends and Challenges facing rural America

2. Principles for a new vision for rural America3. Entrepreneurship as a key strategy

1. Principles in practice2. Economic development3. Essential ingredients

4. Open discussion on relevance for Iowa

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Complexity & Dynamics of Rural America I

Competitive global economy major restructuring – farm commodities, collapse of industrial sectors, restructuring of retail

Demographic shifts population loss or new immigration – health & wealthy or poor & aspiring

Rural poverty lessened but more concentrated – regions of persistent poverty

No vision

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Complexity & Dynamics of Rural America II

USDA Economic Research Service 4 out of 5 rural counties have non-

farm economies – manufacturing, services, government

Farm-based economies weak not from agriculture but from non-competitive non-farm sectors – remoteness, low densities

One-third rural counties dependent on manufacturing – vulnerable to global forces – move overseas if low cost; move regionally if high skill

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Complexity & Dynamics of Rural America III

Strategies (ERS): Add value to food and fiber – luring

processing plants, new uses for farm products, direct marketing

Capitalize on natural resource base – water filtration, carbon sequestration, renewable energy

Tourism and recreation – varied topography, large lakes or coastal areas, warm winters, temperate summers, historical & cultural assets

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Farming-dependent counties

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Manufacturing-dependent counties

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Recreation counties

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Alternative Futures? Homogenization

The loss of rural identity and advantage – highway exits, failure to recognize assets as competitive advantage

Commoditization The loss of diversity – working landscapes, trade and price

distortions = downward pressure on prices, corporate farms, intensive production, power of food processors and retailers, monoculture, genetic modification

Urbanization The loss of the “non-urban” – progress defined as more

urban (new homes, jobs, infrastructure, tax base), ex-urbs and rising prices, conflicts, rural land with no intrinsic value other than waiting to be developed

Colonization The loss of rural power – decisions made by outsiders in

name of wider interests, resentment, distrust of authority

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Principle No. 1 Emphasize regional competitive

advantage Global competitiveness =regional

competitiveness Integrated urban & rural regional strategies Rural competitiveness based on leverage of

natural, human, social, economic, physical, cultural assets

Innovation and entrepreneurship translates assets into competitiveness

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Principle No. 2 Treat and value rural people as

stewards of critical resources Place market value on assets

That are assumed to be there for the taking at little or no cost – clean water

That we like but take for granted – landscape, vistas

That we don’t appreciate – wetlands for flood control, water cleansing, wildlife habitat

Recognize that these assets require skillful stewardship and management – jobs for rural people

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Principle no. 3

Amplify the rural voice Welcome new voices to the table –

newcomers, reticent, minorities, youth

Organize a coherent voice across broad range of perspectives – challenge public policy and resource allocation

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Principle No. 4 Champion basic rights

Education, healthcare, economic opportunity for all Americans wherever they live

Policy discussions not about whether but how – e.g. school consolidation as a violation of rights

Opportunities for common ground between inner city and rural communities

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Principle No. 5

Encourage and reward collaboration Break down silos of discipline, profession,

resource streams, geography, political jurisdictions – search for common vision, common strategies

Strategies for connecting the dots, encouraging multi-use of facilities, cross-training front-line workers, using ICT…

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An International Perspective

IICA – Inter-American Institute for Cooperation in Agriculture Poverty + Food Security + Ecological

Sustainability Investment in rural development –

multi-sector, regional, asset-based, capacity-building, innovation (private + public), entrepreneurship

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Principles in Action

Entrepreneurship Development Systems for Rural America Stimulate national & state interest in

rural entrepreneurship Encourage and reward thinking &

action around systems development & collaboration

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Entrepreneurship Development Systems

Rigorous RFP process attracted 184 proposals from 46 states – 2,000 organizations

Six selected -- $2 million each Listening sessions across country

showing continuing interest

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Entrepreneurship Development Systems

Commitment, creativity, and resourcefulness across rural America

Key principles – systems, entrepreneur focus, regionalism, inclusiveness, effectiveness – accepted and embraced

Collaboration shows the way for rural America

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Simple Definitions Entrepreneurs…people who create and

grow enterprises Entrepreneurship…the process through

which entrepreneurs create and grow enterprises.

Entrepreneurship development… the infrastructure of public and private policies and practices that foster and support entrepreneurship.

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Differing Motivations Survival entrepreneurs – resort to creating enterprises

because there are few other options Lifestyle entrepreneurs – choose self-employment to

pursue personal goals Growth entrepreneurs – motivated to grow their

businesses to create wealth and jobs in their community Serial entrepreneurs – over their lifetimes will create

several businesses

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Economic Development Attraction

Persuading companies to come to your community – bidding wars, expensive, risky, unaccountable, long on promises but short on results, displace entrepreneurial activity

Retention Looking after what you already have – integrate

companies into community life, overwhelmed by global forces

Entrepreneurship Growing your own jobs and wealth – not a

panacea but appropriate for rural communities

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Economic Development Pyramid

Recruitment

Retention

Entrepreneurship

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Key Concepts

Pipeline: Infrastructure of lifelong learning –

never too early or too late to be an entrepreneur

Creating a large, diverse pool of people with many motivations – out of which flow a steady stream of high achievers

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Key Concepts Seamless systems:

Focus on graduating significant numbers of start-ups into companies that offer quality jobs

Coordinates multiplicity of programs – tailors them to meet diverse needs of entrepreneurs

Comprehensive, flexible, culturally sensitive, integrated, collaborative

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Key Components

Pipelines Entrepreneurship education Entrepreneurship networks

Systems Access to training and technical

assistance Access to equity and debt capital

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Entrepreneurial Response

Create climate and culture in which entrepreneurs and entrepreneurship can flourish

3 organizing principles: Community-driven Regionally-orientated Entrepreneur-focused

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#1 Community-driven Communities provide immediate

environment – heavily influences entrepreneurial success

Communities need tools, resources to identify/build upon assets, make choices, learn, innovate

All sectors of community should be invited/expected to contribute

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#2 Regionally-oriented Political jurisdictions have no economic

rationale; few have resources to match opportunity/need; regional cooperative an imperative

Arbitrary distinctions between urban & rural interests mask issues of common concern, prevent regional solutions

Entrepreneurs need access to regional economic drivers

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#3 Entrepreneur-focused

Entrepreneurship development efforts ineffective when programmatic and uncoordinated

Most programs fail to differentiate between entrepreneurs with different education, skills, motivation

Requires systems thinking

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Entrepreneurial Response 2 essentials:

Anchor institutions – capacity to articulate vision, advocate for change, build partnerships, attract & mobilize resources

Supportive public policy – ensure adequate resources, send positive messages, ensure programs are flexible to meet different regional needs

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Promising Developments Statewide rural centers – new spotlight on

rural issues and opportunities Enterprise coaches – identify, counsel, support

entrepreneurs – new networks and retooled existing

Community capacity-building programs – focus on assets, place-based strategies

Distance learning methodologies Systems of business support – new partners,

new approaches Entrepreneurship education in and out of

school

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For more information visit:Rural Policy Research Institute (RUPRI)

www.rupri.orgRUPRI Center for

Rural Entrepreneurshipwww.ruraleship.org

www.energizingentrepreneurs.org