Earlier this month, the Kauffman Foundation published a piece on “After generations of disinvestment, rural America might be the most innovative place in the U.S.” arguing that the current narrative of rural decline is wrong. Rather, the author, Chris Harris, notes that rural America has the underlying foundation for prosperity:
“We must recognize that innovation, diversity of ideas and people, and new concepts don’t need to be imported to rural communities – they’re already there. Rural entrepreneurs and community leaders have always, by necessity, been innovative.”
The problem is not the lack of potential; the problem is the lack of investment to unleash that potential.
He goes on to argue that because of the misdiagnose of the problem, policy makers follow the wrong solutions. Using tax breaks to recruit businesses to rural locations have the perverse result of lowering communities’ tax base and thereby hampering their ability to make the long-term community and infrastructure investments needed to sustain the local economy. In other words, tax incentives to attract companies in the short term end up making the communities less attractive in the long run. Furthermore, he argues that the often-utilized strategy of targeting corporate retailers ends up damaging local entrepreneurs.
Instead, communities should follow a “build, not buy” strategy of growing local businesses. He cites the examples of Emporia, KS and Ord, NE as success in investing in technical support and capital to local entrepreneurs.
Of course, the idea of investing locally is not new. In the past, this was often referred to as “economic gardening.” But Harris’ argument of underlying strengths in rural America is worth repeating. A decade and a half ago, I make a similar argument in the piece called “Building on Local Information Assets.”
In that piece, I pointed out that “All communities have the opportunity to benefit from capturing and using their local knowledge. In this new age of information and knowledge, rural areas can continue to thrive by being the special places they are.” I argued that communities must first map their intangible assets to better focus their strategies. Especially important are the hidden assets such as the tacit skills of the local workforce. It needed to be noted that tacit knowledge is only partially based in the individual; it also resides in the special circumstances and situation of the community.
At the end of my article, I closed with the thought that “it can be economically ‘cool’ to be rural.” For that to happen, however, we need to embrace Harris’ new narrative about rural America and build upon the positive strengths. Let’s hope that policymakers are listening.