The Recession, The Stimulus, and the “Livable Communities” Agenda: Creating a Livable Countryside Collaboration Presented to the Boundary Crossing Conference Central Michigan University August 6, 2009 Charles W. Fluharty Vice President for Policy Programs Rural Policy Research Institute University of Missouri

Four Considerations  The Current Rural Policy Context  The Global Recession, ARRA, and the Livable Communities Agenda: Rural Impacts  Why Regional Collaboration Matters: The Role for Regional Universities  Several RUPRI-CRC Examples

Realigning, and better integrating, agriculture and rural economic development Moving from sectoral, through multi-sectoral, to regional considerations Addressing the asymmetry between top-down and bottom-up “workings” Building local evaluative frameworks which actually influence central government action Valuing participatory process concerns as well as cost effectiveness considerations The New Rural Policy Framework: An Emergent Global Consensus

Policies and budgets are ultimately about visions and values. So several questions should frame our approach to this issue:

What are the principal policy goals of rural initiatives and programs? Who are the constituencies of each, and how are they benefited by public investments? Why have these programs historically been undervalued and under-resourced?

“If you do the same things, over and over, you’ll probably get the same outcomes!”

“The social and economic institutions of the open country are not keeping pace with the development of the nation as a whole... ” — President Teddy Roosevelt’s Country Life Commission

Critical Components in the Current U.S. Rural Policy Context Federalism and Regional / State / Local Policy Dynamics Rural / Urban Constituency Convergence New Governance, Innovation and Entrepreneurship Development Systems Landscape, Culture, Heritage and Arts as Asset- Based Development Drivers Defining and Driving a New Rural Vision Global Rural Futures

U.S. Moving Toward “Regional Rural Innovation Systems” Moving from attraction strategies to entrepreneurship Identifying and encouraging “functional economic regions” Asset-based development Higher education institutions anchoring and/or supporting new regional compacts New rural governance New regional intermediaries

Place-based policies are WTO-compatible, non- trade distorting. This approach is consistent with the fact that national competitiveness is increasingly determined by regional actions. Enables a rethinking of core missions and a leadership renaissance across all governments. Improves potential to retain existing funding baseline for Ag Committees, and continuing Ag Committee responsibility for rural development. The Promise of a Regional Rural Innovation Policy

Four Key Questions 1. Why is regional competitiveness the new framework for economic development? 2. What must regions do to compete? 3. How to connect innovation with regional development? 4. What policy initiatives are needed?

Four Key Questions 1. Why is regional competitiveness the new framework for economic development? 2. What must regions do to compete? 3. How to connect innovation with regional development? 4. What policy initiatives are needed?

Globalization makes regions the athletes in the global economic race. The impact of globalization is greater for regions than for nations.

6.2% range

The impact of globalization is greater for regions than for nations. 17 % range

Globalization has changed the field of play in this race. Innovation now matters more than simply being a low-cost place.

17 Innovation is now a powerful economic driver. National Entrepreneurship Index and GDP Growth Total Entrepreneurship Activity Index (2003) Average GDP Growth (2004 to 2006) U.S. Russia India Source: Global Entrepreneurship Monitor, 2003 and International Monetary Fund China Venezuela European countries Hong Kong Japan Source: Drabenstott & Henderson, 2006

Four Key Questions 1. Why is regional competitiveness the new framework for economic development? 2. What must regions do to compete? 3. How to connect innovation with regional development? 4. What policy initiatives are needed?

To prosper, rural regions must: strategy 1. Craft a regional strategy. governance 2. Build robust regional governance. innovation 3. Deliberately pursue innovation. entrepreneurs 4. Grow a lot of entrepreneurs.

A New System for Regional Development Strategy Entrepreneurship Governance Innovation RegionalProsperity

Four Key Questions 1. Why is regional competitiveness the new framework for economic development? 2. What must regions do to compete? 3. How to connect innovation with regional development? 4. What policy initiatives are needed?

Universities Innovation scattered across separate research centers. Innovation scattered across separate research centers. Economic benefits flow to unknown locations. Economic benefits flow to unknown locations. Competitive needs of regions not understood. Competitive needs of regions not understood.

Regions Competitive advantage poorly understood. Competitive advantage poorly understood. Do not know which innovations can help. Do not know which innovations can help.

Competitive advantages poorly understood Competitive advantages poorly understood Do not know which innovations might help Do not know which innovations might help Regions Innovation scattered across separate research centers Innovation scattered across separate research centers Economic benefits flow to unknown locations Economic benefits flow to unknown locations Competitive needs of regions not understood Competitive needs of regions not understood Universities The Problem Universities need regions… Regions need Universities… But there is no 21 st Century bridge connecting the two.

Competitive advantages poorly understood Competitive advantages poorly understood Do not know which innovations would help Do not know which innovations would help Regions Innovation centers pooled to create synergies Innovation centers pooled to create synergies Competitive needs of regions still not understood Competitive needs of regions still not understood Economic benefits flow to hometown Economic benefits flow to hometown Universities Intellectual Property & Technology transfer Research Parks Interdisciplinary Research Centers Hometown The Current Approach

Better understand Better understand competitive competitive advantages advantages Gain access to Gain access to innovations that innovations that leverage leverage competitive competitive advantages advantages Regions Engaged in helping Engaged in helping regions diagnose regions diagnose competitive competitive advantage advantage Research informed Research informed by competitive by competitive needs of regions needs of regions Universities New Institutional Mechanisms Innovation Bridge

Four Key Questions 1. Why is regional competitiveness the new framework for economic development? 2. What must regions do to compete? 3. How to connect innovation with regional development? 4. What policy initiatives are needed?

Innovation & Regional Development Policy Issues for the Future 1. It is not enough to have a “research engine.” We must build “bridges” that connect innovation with regions, the new athletes in the global economic race.

Innovation & Regional Development Policy Issues for the Future 2.These “bridges” represent a frontier in all OECD countries.

Innovation & Regional Development Policy Issues for the Future 3. Policy must focus on creating an effective “incentives” for new institutional mechanisms at universities.

Innovation & Regional Development Policy Issues for the Future 4. Building this “market” will take three steps:  Increasing the capacity of regions to define competitiveness strategy— ”the ask.”  Cataloging & filtering innovation in a “development friendly” way— ”the bid.”  Providing incentives for researchers and regions to come together— ”the market maker.”

21 st century regional innovation Link research to regional strategies.  Which research strands will most advantage which regions?  Today, there is no bridge between innovation and regional strategy. How to create this intermediary?

Universities & Economic Development: Standard Model OfficeOfTechnology Startups ? University Research Clusters The lesson of Netscape.

OfficeofTechnology Startups ? University Research Centers Startups Hometown Research Park Universities & Economic Development: Research Park Model

OfficeofTechnology University Research Centers Universities & Economic Development The Regional Competitiveness Model Regional Engagement

A trio of CRC regional strategy projects throughout the nation. Western AL—Eastern MS (37 counties, 1st generation WIRED) Southern MN Regional Competitiveness Project (38 counties) RiverLands Economic Advantage Project (14 counties in IA, IL, WI)

37 counties/1.027 million people Largely rural region with an emerging manufacturing base ringed by several automotive assemblers US Economic Development Agency (EDA), first- generation WIRED grant region Funded by EDA and led by 1 non-profit institution and 8 community colleges Western Alabama, Eastern Mississippi (WAEM) Project

14 counties/460,676 people Largely rural region, deep industrial and farming roots, with an emerging business services sector in Dubuque, IA Eight partners led by a regional utility, one university, and partial funding from EDA RiverLands Economic Advantage Partnership Project

38 counties/988,000 people Ag-intensive, strong manufacturing base region, with world-renowned medical research facilities. Self-funded project led by 16 partners from the private sector, led by a financial institution, two philanthropies, and others. Southern Minnesota Regional Competitiveness Project

8/5/09 What were the project goals? 1.Strategy. Compete in the global economy with critical mass based on what the Region does best. 2.Partnership. Strengthen the way the Region thinks and acts as one region. 3.Investment priorities. Identify public investments critical to being a world-class competitor. 4.Increase innovation capacity. Enhance the Region’s capacity to innovate, grow entrepreneurs, and create wealth. Southern Minnesota Regional Competitiveness Project

Strategy Summit May 2009 Project Partner Team Formed Summer 2008 Analysis Southern Minnesota Regional Competitiveness Project Partnership 10 Local Roundtables Leaders Sep./Oct Regional Roundtables 300 Leaders November 2008 Assemble regional data sets & First look at specializations In-depth look at “bests”:  Structural Analysis  Cluster Analysis  Roundtable Findings  Innovation Analysis Impact analysis Futures Summit 250 Leaders March 2009

 What does the regional economy specialize in now? Structural Analysis  What clusters give the Region a competitive edge? Cluster Analysis  What distinct assets could fuel new growth? Roundtable Synthesis How to identify the best strategic opportunities Three approaches to “best.”

Principal Finding: The Southern Minnesota Region has a remarkable collection of economic assets, yet incomes are eroding compared with the rest of the state and many parts of the nation. The Region has significant competitive strength in a handful of exciting new areas of opportunity that hold great promise in lifting incomes and creating wealth. To seize these competitive advantages, however, it must fortify its approach to development, commit to a new set of public and private investment priorities, and execute a new game plan focused on its best economic opportunities. Project Findings

Five Critical Functions  Set investment priorities for public funds.  Champion public policies critical to your future—speak with one voice.  Foster the best possible conditions for economic synergies to ignite—constantly “connecting the dots.”  Coordinate Game Plan actions—advocating for the “forest” of region-wide good.  Track progress against milestones and change course when necessary. What the Southern MN Opportunity Roundtable Must Do

The Southern Minnesota Economic Game Plan  The goal is to win. Winning is about boosting economic well-being, creating high-quality places, and retaining youth and talent.  16 action steps over the next 24 months organized around four Forums: Innovation Bioscience Renewable energy Bioscience

“What lies before us and what lies behind us are small matters compared to what lies within us.” —RALPH WALDO EMERSON

This presentation is available on the Internet at: Charles W. Fluharty Vice President for Policy Programs Rural Policy Research Institute University of Missouri