Extension Communications
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12/3/99
Contacts:
Mark Edelman, Extension Economics, (515) 294-3000, x1edelma@exnet.iastate.edu
Del Marks, Extension Communication Systems, (515) 294-9807,
dkmarks@iastate.edu
PLAIN ECONOMIC SENSE, Column 392
For release Dec. 6, 1999
Economic Engines For Powering Rural Communities
By Mark A. Edelman
Extension Public Policy Economist
Iowa State University Extension to Communities
A recent article from the "Futurist Magazine" highlights several types of rural communities that can be successful by developing their comparative advantages. The analysis by Coates, Jarratt and Ragunas was based on "Work in Rural America" sponsored by the Office of Technology Assessment. While many rural communities will continue to decline, others will grow for a variety of reasons. Some of the reasons for success and failure are beyond the control of local leaders, others are not. An interesting aspect of the article is that the authors identified examples of successful communities for each of the following types.
Type 1. Rural Retirement Communities offer affordable real estate, friendly and scenic atmospheres and senior-oriented services such as quality medical facilities, transportation and senior activity centers. The retirees bring pensions, social security benefits and savings bolstered by profits from the stock market and sale of urban real estate. This infuses new equity and cash into the community and area economy. Retirement community strategies can help save rural hospitals from financial decline and provide patient-customers for both long-term and outpatient care. On average medical professions provide above average pay relative to the local work force. Example: Green Valley, Ariz.
Type 2. Rural Regional Trade Centers service the surround areas with jobs, services and retail shopping. The auto allows rural residents to travel farther in less time. As mobility increases individual communities often fail to provide the required customer base for local businesses while trade centers provide more variety. One rural town becomes the trade center for surrounding towns, sometimes acquiring this status by constructing a shopping center or mall. Generally, all businesses in the trade center, except those directly competing with the mall, benefit from the presence of the mall. Example: West Burlington, Iowa.
Type 3. Government Centers include regional sites for federal, state and local facilities such as prisons, military bases, road maintenance facilities, etc. In many rural communities, city, county, school and hospital services often represent some of the larger employment and income generators. As rural towns decline in population, many find it difficult to support the established public facilities on their own and examine regional approaches to sharing functions without losing control. County seat towns and regional government service centers often become the beneficiary communities of neighboring smaller towns. Example: Quantico, Va.
Type 4. Recreation Communities define some local attribute as an "entertainment or recreational attraction" and market it. This might be a historic site such as a battlefield or a scenic vista, lake or waterfall. Several trends are supporting recreational communities, including trends toward early retirement, environmental awareness and increasing numbers of dual-income families with less leisure time that makes short trips to nearby places more attractive. Travelers spend money on food, lodging and equipment rental. However, many of the jobs created often provide lower than average wages. Example: Deadwood, S.D.
Type 5. Exurban Rural Communities develop within commuting distance to rapidly growing suburban communities. These communities often supply workers at lower labor costs to the suburbs and increasingly attract business and industrial development with cheaper land than can be found in the faster growing suburbs. Residents bring their income home from the metro area and spend it on local services such as restaurants, grocery stores and movie theaters. These rural communities are likely to be in the next wave of metropolitanization from suburban growth. Example: Spotsylvania, Va.
Type 6. Academic Rural Communities include those with boarding schools, colleges, universities, research laboratories and corporate training facilities. These institutions draw people from metropolitan and other nonmetro areas bringing new cash into the area. They also foster business development such as restaurants and retail outlets for students, workers and guests. An academic institution in a rural setting is like a factory. The institution is a basic employer in the area and the fortune of the town rises and falls with that of the school. While the baby boom boosted the fortunes of many small rural academic communities, unfortunately the baby bust over the next decade may wash some out. These communities do have a unique opportunity to annually replenish local labor with new talent if complemented with business and entrepreneurial development programs. Example: Plainfield, Vt., (Goddard College).
Type 7. Entrepreneurial Towns primarily focus on attracting new business using business recruiting professionals and government policies designed to provide competitive location incentives. They bid for specific business or government operations such as off-site data processing, manufacturing operations and/or warehousing operations. Entrepreneurial communities often maintain active retention and expansion programs. In addition, increasingly some entrepreneurial communities are forming innovative seed capital programs, development foundations, business incubators and entrepreneurial technical assistance programs. Example: Ottawa, Ill., which wooed and won three Japanese manufacturing firms.
In the final analysis, economically vital rural communities in 2010 have leaders who today are busy nurturing the economic engines that will power their community through the first decade of the next millennium.
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