Opportunities in Rural Economic Development

Opportunities in Rural Economic Development


With all of the discussion of mega clusters and urban advantage, what role can rural communities hope to have in the economic future? How can communities that are not city-based make the most of their natural assets, and plan for economic sustainability?

We at ICA have been working on this question a lot lately. Whether in rural Indiana, Michigan, Virginia, Maine, British Columbia, and Alberta the question of how to compete as a small remote community in a global economy often means the difference between stagnation or success. Each of these areas has a definite history of economic activity – each was established for a sound economic reason. However each is facing its own uncertain future due to globalization, and each needs to adapt with a very small infrastructure and few resources.

Our team is often called in at key points in transition. For example perhaps the community had once been a manufacturing or industrial center, but on a smaller scale, and for one particular company or industry. After decades of decline and market change, many of these communities found themselves with a constrained and declining economy after perhaps a major paper mill closed, or a steel industry left. Or perhaps the demand for the product declined. Or – as may increasingly be the case – global climate changes are making the original form of agriculture untenable.

The legacy of past successes may themselves be either a benefit or a hindrance. Maybe there is significant infrastructure remaining in place that may be renewed. In others, perhaps the industry created a lasting environmental hazard that must be addressed before reuse.

The Opportunity and Risk

Rural areas can develop functional economic development strategies, but they need to be aware of the outside world. Books such as Michael Shuman’s The Small-Mart Revolution show how buying-locally-and–creating-locally-reinforcing economies can provide some foundation for sustainable local networks. Getting these local networks and relationships in place must be a priority, but they cannot fully provide long-term success for a rural community. For this, it is necessary to create outside linkages.

Our virtual and internet enabled economy has allowed for the considerable transposition of economic activity. Many activities can happen absolutely anywhere. Small communities and rural areas may have an advantage in innovating in this kind of environment due to their small size and ability to change nimbly. In addition to these virtual roles, smaller industries and production shops (with corresponding lower and sometimes more flexible capital investment), may be able to act on their own versatility to shift into supply roles.

Our work with our rural public sector clients has focused on exactly these transformations – small industries, internet businesses, and local collaboratives. Whether it means tracking logistics movement that traverses a rural area, or through new critical and high-value roles at a remote location, the opportunities may be found.

Add to this the fact that rural areas often have a cultural advantage: That of the indigenous innovative and entrepreneurial (or pioneering) spirit. Life in a remote location requires people to find ways of getting things done without much outside support. A broken piece of equipment cannot be spared to be fixed at a remote repair facility if a harvest needs to come in or if a local manufacturer needs to keep the line moving. Instead, individual resiliency rules the day and often results in some form of local innovation to keep things running, or to make them run better. This pragmatic problem solving approach can enable small scale action that makes a difference.

However, the remoteness of these areas is also a risk to be managed. By not having direct interaction in day-to-day dealings, rural businesses need to take extra efforts to stay in-the-know on critical topics.

Possibilities and Solutions

Our work with regional economic development agencies has focused on helping the public sector better understand the economic opportunities open to them and then facilitating the development of local knowledge and execution networks.

The same basic tools that can be used for determining what works for a site selection for a company can be used to determine what activities a region might be good at. Reverse site selection remains a powerful tool for rural entities. In this case understanding the community’s natural assets for workforce, economic networks, and access to raw materials can provide the framework for a new dialogue on how to change an economic base to satisfy tomorrow or tomorrow’s needs while also preserving world character. The reverse site selection process explicitly catalogs these attributes and shows them as strengths or liabilities for specific industries and uses.

From here, the challenge is less technical and more organizational and cultural. Rural economic development organizations are at their heart community outreach organizations. In the economic redevelopment context, these are the organizations that help collect data on needs from outside, help supplier/vendor networks to form, and ensure that collective action among residents, industry and such institutions as the education system all work well together to a common goal.

Rural communities face the challenge of small size and scale. However, these same limitations also point to opportunities which can be attained if properly understood and acted upon.
Chris Steele