can missouri’s rural communities prosper in a flat world? brian dabson, rural policy research...

Can Missouri’s Rural Communities Prosper in a Flat World?Brian Dabson, Rural Policy Research Institute

Missouri Community Benefit Organization Annual

ConferenceColumbia, MO

October 23, 2006

October 2006 Missouri Community Betterment

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A Flat World?

“The world is being flattened. I didn’t start it and you can’t stop it…But we can manage it for better or for worse…” Thomas Freidman p.469


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Three Friedman themes


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1. The Triple Convergence

1. New playing field: Internet allows sharing of knowledge and work in real time – ignoring geography, distance, language.

2. New plays: Emergence of new business practices, new occupations, new habits.

3. New players: from China, India, Russia, Eastern Europe, Latin America, Central Asia – 3 billion more


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2. Three “Dirty Little Secrets”

1. The Numbers Gap: US stock of scientists & engineers shrinking – retirement, fewer students, fewer immigrants

2. The Ambition Gap: not a race to the bottom (low wages) but a race to the top

3. The Education Gap: foreign workforce not only less expensive but better educated


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3. The “Untouchables”People whose jobs cannot be outsourced

1. Specialized workers: knowledge workers whose skills are in high demand and leading edge

2. Adaptable workers: able to change as jobs change – adopt new skills

3. Anchored workers: tied to a specific location, face-to-face contact with customers, patients


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The Three Ts

Globally Competitive regions have: Talent

Technology

Tolerance


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The World is Spiky?Richard Florida, Atlantic Monthly, October 2005


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The modern economic landscape:1. City regions that generate innovations –

capacity to attract global talent, create new products & industries

2. Places that manufacture the world’s established goods, take its calls, support its innovation engines

3. Places with limited or little connection to global economy and few immediate prospects


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Major structural challenges: Greater concentration of wealth and

power in economic innovation leaders Major transitional shifts in second order

industrial/commercial centers – some adapt and grow, others decline painfully

The unconnected fall behind – social strife, mass migration, global instability


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A Spiky America?

R. Florida Top 20 Creative Regions


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The Context Warped perceptions of rural America

Utopia vs. Dystopia Farm policy still drives rural policy

6% rural people work in agriculture; 89% farm household income off-farm

Persistent rural disadvantage built into federal funds flows

Per capita shortfall, higher proportion of transfer payments, fewer capacity-building & infrastructure dollars

Major demographic and economic shifts Growth in high amenity areas, declines in Heartland;

still areas of persistent poverty


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The Context Homogenization

The loss of rural identity and comparative advantage, fail to capitalize on distinctiveness, leverage assets

Commoditization Working landscapes radically changing; corporate

farms, intensive production, power of retailers and processors, technology; exiting of small family farms

Urbanization Desire to be urban/suburban; development

pressures, no intrinsic value in non-urban Resignation

The loss of rural power; outsiders make decisions in name of national, special interests with/without rural say


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New Economic Development Framing

Economic regions are basic units of global competitiveness

Innovation and entrepreneurship in a regional context are the engines of job creation, growth, prosperity

Creativity is what distinguishes successful regions in new economy


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Competitiveness Regional prosperity based on sustained

productivity growth New paradigm: converting assets into

intellectual capital, added value No longer exploitation of location, natural

resources, low cost labor Depends on productivity of all

industries and assets; productivity based on continuous innovation


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Innovation

Transformation of knowledge into potential commercial products, processes, services

Entrepreneurs are the drivers of the transformation process

Applies in every sector – not just in “high tech” areas


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Rural Competitiveness A region’s competitiveness depends on the

productivity of all of its places, urban and rural

Rural competitiveness means addressing the challenges of lack of critical mass – markets, capital, infrastructure…

Fostering innovation and entrepreneurship requires a focus on three success factors


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Success Factors

Assets Focus Systems Approaches

Regional Framing

Rural Innovation &Entrepreneurship


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Success Factor #1: Regionalism Effective rural entrepreneurship

depends on regional framing at national, state, and local levels

Major shifts in rural America – No ‘one size fits all’ policy, need for regional-specific approaches

Urban and rural interdependence – Economic, social, environmental – balanced and mutually supportive strategies

Economic opportunity independent of jurisdictional boundaries -- investments needed in leadership capacity, economic information, tools

Regional connectivity -- Entrepreneurs need connections to regional markets, regional collaborations, regional networks


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Success Factor #2: Systems Entrepreneurial climate can be

improved by more effective support systems for entrepreneurship

Programmitis – No shortage of programs, agencies purporting to help entrepreneurs and small businesses; But often disconnected, categorical, competing, under-resourced, confusing

Entrepreneurs have multiple needs – Different education, skills, motivation

Systems approach – Coordinated infrastructure of public/private supports; Integrates programs, tailors products to meet diverse needs


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Success Factor #3: Assets All rural areas have assets that

can be leveraged for economic prosperity

Many types of assets/capital – cultural, social, human, political, natural, financial, built

Some well-endowed regions Entrepreneurship link to knowledge spillover from

higher education, technology companies Creative class theory applies to rural America

especially in high amenity areas and higher density counties with access to metropolitan areas


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Challenges to decision-making Regionalism, Systems, and Assets factors

represent major challenges to the way decisions are made in rural America

Coincides with other pressures Under-resourced, overwhelmed elected officials Tax structures that encourage wasteful cross-

border competition, turf, and parochialism Lack of vision for rural America


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New Rural Governance Governance: the process of making and

carrying out decisions More than government

Voluntary, business, education, faith-based groups Leadership development, community capacity-building “Behind the scenes” and exclusive, vs. open and

empowering New governance implies focus on three

aspects Collaboration Engagement Regional Resources


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Collaboration Crossing sectors

Bringing public, private, nonprofit organizations to the table – making formal, sustained commitments to work together

Crossing jurisdictional boundaries Bringing together all levels of governments;

encouraging local jurisdictions to work together for a common regional advantage

Crossing functions Bringing together education, training, technical

assistance, access to capital, networking


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Engagement Welcoming new voices

Identifying and encouraging new leaders to inject fresh life and ideas – newcomers, the reticent, the young – the entrepreneur

Visioning a different future Bringing new perspectives, achieving

community commitment, giving hope Strengthening local leadership

Building capacities of elected officials, agency heads…


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Regional Resources Identifying regional competitive

advantage Building on regional assets, embracing

urban and rural, cultural diversity Engaging key intermediaries

Making full use of regional assets – community colleges, regional foundations, rural nonprofit agencies

Building community equity Accumulating local resources to leverage

external investment – community foundations


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Rebuilding the Economic Development Pyramid

Recruitment

Retention

Entrepreneurship

Entrepreneurship

Retention

Recruitment


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Policy Priorities

Create a diverse pool of people wanting to create new businesses – no picking winners

Create conditions for increased rates of survival and growth


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Entrepreneurship Development

Training &TA

SupportiveEnvironment

EntrepreneurNetworks

Access to Debt &Equity Capital

EntrepreneurshipEducation

ED


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Models Rural EDS

Six Kellogg-supported initiatives putting key principles to the test – NC, NE, NM, OR, SD, WV

Hometown Competitiveness Mobilizing local leaders, energizing

entrepreneurs, engage & attracting young people, capturing wealth transfer – NE +

Entrepreneurship League Systems Lyons & Lichtenstein – entrepreneur

diagnostics, service delivery systems – WV, KY, MN


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Models Enterprise Facilitation

Sirolli – support/counseling to entrepreneurs and linking to resources

Entrepreneurship Education REAL – K-12, community colleges – experiential

learning for young people (and adults) – NC, GA, + Rural Innovation

Kentucky Innovation Fund – taking rural innovators to capital markets

Energizing Entrepreneurs (e2) RUPRI/CRE – training and tools for entrepreneurship

development by communities


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Three main points Rural competitiveness is dependent

upon effective entrepreneurship development

Effective entrepreneurship development is based upon three principles – regionalism, systems, and assets

These principles require a new approach to rural governance


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Brian DabsonRural Policy Research Institute

Truman School of Public AffairsUniversity of Missouri-Columbia

www.rupri.orgRUPRI Center for Rural Entrepreneurship

www.energizingentrepreneurs.org

can missouri’s rural communities prosper in a flat world? brian dabson, rural policy research...

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