Stimulating Economies
"Entrepreneurship represents the best,
if not the only hope for building stronger
economies and communities in rural America." (Charles
W. Fluharty, Director, the Rural
Policy Research Institute)
In recent years, changing world markets
and policies have had major effects on the
U.S. economy. With the loss of significant
numbers of manufacturing and agriculture-related
jobs, many parts of rural America have suffered
severe economic downturns, and communities
are looking for new ways to expand economic
opportunities. Research shows that fostering
the growth of small and home-based businesses
can be an important economic
development strategy.
According to the Small Business Administration,
there are approximately 24 million small
businesses in the U.S. "In 1997, the
U.S. economy created nearly 3 million new
jobs, with 6 out of 10 of the industries
adding new jobs being small-business-dominated
industries. Small firms hire a larger proportion
of employees who are younger workers, older
workers, women, or workers who prefer to
work part-time. Small
businesses also provide 67 percent of
workers with their first jobs and initial
on-the-job training in basic skills."
Fostering small and home-based businesses
is particularly important to rural communities,
where small markets and limited availability
of skilled labor may prevent the development
of large-scale firms. Rural communities that
promote new and innovative small enterprises
can stimulate new employment opportunities
and expand the local tax base, often contributing
to each citizen's quality of life.
In collaboration with land-grant universities
and other partners, CSREES is helping rural
entrepreneurs capitalize on local opportunities
in three specific ways:
- Providing educational opportunities to
improve business skills.,
- Helping entrepreneurs acquire sufficient
assets to invest in new enterprises.
- Identifying, through research, specific
areas where rural entrepreneurs need the
most assistance.
Through CSREES' Community Resources and
Economic Development base program, state
extension specialists and county staff, often
in collaboration with personnel from other
support organizations, provide training and
information to entrepreneurs across the U.S.
Topics include business plan development,
market and consumer preference surveys for
local businesses, and development of cooperatives
to enhance the value of agricultural production.
The University
of Maine's Small and Home-Based Business
Education Program is a good example of
this kind of partnership.
Traditional venture capital is often not
readily available in rural areas. Start-up
financing presents a major barrier for people
hoping to initiate or expand a small or home-based
business. Many prospective small business
owners look to household assets as the foundation
for funding. Across the country, educators
help individuals and small groups of people
develop and maintain savings plans. Examples
include America
Saves, a financial education program
coordinated by the Consumer Federation of
America in cooperation with CSREES.
The economic impact of small and home-based
businesses in rural America has only recently
been widely acknowledged and their importance
is often misunderstood. CSREES supports research
to expand the general understanding of these
enterprises and highlight specific areas
where small-scale entrepreneurs are most
in need of assistance.
For example, 13 land-grant institutions
participate in a multistate project called “Family
Business Viability in Economically Vulnerable
Communities.” This project has
undertaken detailed studies of 794 family
businesses since 1987. The project has also
shown that more than 18 million U.S. households
(almost 14 percent of the total) own at least
one business and together represent about
half of both the nation's gross domestic
product and total wages. These studies evaluate
not only the economic impact of family businesses,
but also the relationships among the family,
the business, and the community. The research
continues to prove the worth of small and
home-based businesses to their communities,
tracking their social and economic values
to the business owners and customers, as
well as the entire population.
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