Rural development strategies, at the local or regional level,
build upon local strengths (assets) or shore up local weaknesses
(liabilities). On net, these assets and liabilities can be
viewed as types of capital or wealth. A recent ERS report,
for example, noted 8 types of capital or wealth: physical,
financial, human, intellectual, natural, social, political, and
cultural (See Rural
Wealth Creation: Concepts, Measures, and Strategies, ERR-131,
March 2012). Most rural development strategies build on these forms
of capital through infrastructure improvement, business assistance,
education and training, and community development.
Infrastructure Improvements
Infrastructure, including facilities and equipment for
transportation, telecommunications, water, and energy, improves
rural quality of life and connects rural America with the urban and
global economies. Hence, infrastructure improvements may
contribute significantly to rural development strategies. For
example, transportation infrastructure (such as interstate highways
and airports) has been found to significantly contribute to rural
economic growth (see
Rural Economic Development: What Makes Rural Communities Grow?,
AIB737, October 1997). ERS research has also documented
broadband's beneficial rural impacts (see Broadband Internet's Value
for Rural America, ERR-78, August 2009).
Although infrastructure improvements can benefit rural
communities and their economies, they come with a price tag.
Infrastructure improvements often cost more, per job generated, in
rural areas than in urban areas because rural areas lack economies
of scale (see
Economic Impact of Water/Sewer Facilities on Rural and Urban
Communities
). Moreover, it is difficult to
predict the impact of infrastructure improvements on a local
economy. Hence, careful planning is important when undertaking
infrastructure projects.
Infrastructure also often has a regional dimension, partly
because it is more economical to build infrastructure for the
entire region than for each town separately, and partly because of
the need for a community to control negative externalities, such as
traffic congestion or pollution spilling over from neighboring
communities (See
Development at the Urban Fringe and Beyond: Impacts on Agriculture
and Rural Land, AER803, June 2001).
Business Assistance
Business development is an important component to rural
development strategies because businesses provide jobs, income, tax
base, and local access to goods and services. Many rural
businesses, however, face difficult challenges as globalization and
other factors are taking a toll. Because local conditions
vary significantly, business assistance strategies will vary from
community to community. For example, communities with natural
amenities might target assistance to businesses that capitalize on
amenities to attract tourists and new residents.
Research-based industrial targeting approaches have been
increasingly used to identify clusters of businesses ideally suited
to particular communities (See Rural Wealth Creation: Concepts, Measures, and
Strategies).
The traditional approach to rural business assistance involved
the use of tax concessions to recruit large business
establishments. This approach proved costly to the public and in
many cases offered little guarantee of lasting benefits to the
community. In recent years, communities have placed more emphasis
on nontraditional approaches involving credit, training, and
technical assistance to help strengthen existing businesses and
grow new small businesses capable of creating more long-term jobs.
For example, venture capital programs have been used to get more
out of small businesses with growth potential. In many
places, clusters of related businesses have replaced individual
businesses as targets for development, with assistance aimed more
at promoting improved functioning of networks of such
businesses. An increased focus on the use of educational and
research facilities has aimed at promoting the growth of
innovative, high-wage, knowledge-based industries. Some
communities have sought to promote the growth of innovative small
businesses by improving community facilities and public services
that add to quality of life in the hope that this will attract the
more highly educated "creative class" of people who become
innovative entrepreneurs (See
The Creative Class: A Key To Rural Growth, Amber
Waves, April 2007).
Education and Training
Technological change and globalization have ushered in an era in
which rural employees are increasingly required to have a higher
level of skills and education if rural businesses are to be
competitive. Recognition of this link between education and
economic development has led to a shift in rural development
strategies to place more emphasis on educational improvement.
This may be particularly beneficial to rural areas that have
most of the ingredients needed for development in place, but find
their potential limited by their populations' relatively low
education levels (see
Education as a Rural Development Strategy, Amber
Waves, November 2005).
To improve their education and skill levels, many rural
communities try to upgrade their schools. However, attracting
better teachers, providing more teacher training, and building new
and improved schools can be prohibitively expensive.
Consequently, rural communities are increasingly turning to
lower-cost alternatives, encouraging more residents to volunteer as
teacher aides or tutors and by providing advanced science classes
through distance learning. And to orient their schools more
toward local concerns, some rural schools have tried adopting
curricula that encourage students to identify more with the
community's challenges, including programs that help students
create small businesses or participate in local businesses and
other institutions. Other strategies use apprenticeships and
school-to-work programs that can lead students to productive
employment with local businesses (see The Role of Education:
Promoting the Economic and Social Vitality of Rural
America).
Community colleges and universities also play an important role
in rural economic development. In addition to providing basic
education and training, these institutions can help local firms or
industries directly by developing new industrial products and
processes, identifying new markets, and providing specialized
training for the workforce and for community leaders (see
Rural Community Colleges: Creating Educational Hybrids for the New
Economy ). They can also help
improve local quality of life by providing a more intellectually
stimulating environment that can help attract or retain creative
employees and entrepreneurs.
Community Development
People and businesses generally prefer places where the quality
of life is good. Hence, improvements in community conditions
(community development) may address such underlying community and
social issues such as crime, inadequate health and housing,
excessive traffic and sprawl, pollution, and neighborhood
blight. Problems in any of these areas can hinder economic
development. In contrast, communities with good community
facilities, such as libraries, hospitals, schools, senior centers,
parks and recreation facilities, police and fire departments, will
tend to offer quality of life advantages that attract and retain
people and firms. Thus many rural communities find they must
develop their community if they are to succeed in developing their
economy.
Community development is important for places lacking the local
support and leadership capacity needed to design and implement
economic development objectives-for example, in high-poverty
counties. (see
Community Empowerment: A New Approach for Rural Development ). In these places, improving
community conditions may address some of the most pressing local
needs, and thereby bring about more active involvement of local
leaders and community organizations in the development
process. This could lead to improved leadership and community
support for economic development strategies, and help establish
better connections with external support agencies.
Community development is also important for development
strategies that seek to attract tourists and recreation lovers (see
Rural Areas Benefit From Recreation and Tourism Development),
retirees (see
Retiree-Attraction Policies for Rural Development), innovative
entrepreneurs (see
The Creative Class: A Key To Rural Growth), and strategies to
reverse outmigration (see Nonmetropolitan Outmigration Counties: Some Are
Poor, Many are Prosperous). These people-based development
strategies aim to first attract or retain people by improving
amenities and quality of life, so that business and job growth will
follow.