1. The Big Picture Context for Rural Entrepreneurship Brian Dabson, Rural Policy Research Institute & Truman School for Public Affairs, University of Missouri Iowa Community Entrepreneurship Academy Manning, Iowa October 21, 2005

2. 2 Presentation “National and International Perspectives on Best Practices in Supporting Entrepreneurs in Non-metro Communities and Rural Areas” 1. Major Trends and Challenges facing rural America 2. Principles for a new vision for rural America 3. Entrepreneurship as a key strategy 1. Principles in practice 2. Economic development 3. Essential ingredients 4. Open discussion on relevance for Iowa

3. October 21, 20053 Complexity & Dynamics of Rural America I Competitive global economy  major restructuring – farm commodities, collapse of industrial sectors, restructuring of retail Demographic shifts  population loss or new immigration – health & wealthy or poor & aspiring Rural poverty lessened but more concentrated – regions of persistent poverty No vision

4. October 21, 20054 Complexity & Dynamics of Rural America II USDA Economic Research Service 4 out of 5 rural counties have non-farm economies – manufacturing, services, government Farm-based economies weak not from agriculture but from non-competitive non- farm sectors – remoteness, low densities One-third rural counties dependent on manufacturing – vulnerable to global forces – move overseas if low cost; move regionally if high skill

5. October 21, 20055 Complexity & Dynamics of Rural America III Strategies (ERS): Add value to food and fiber – luring processing plants, new uses for farm products, direct marketing Capitalize on natural resource base – water filtration, carbon sequestration, renewable energy Tourism and recreation – varied topography, large lakes or coastal areas, warm winters, temperate summers, historical & cultural assets

6. October 21, 20056 Farming-dependent counties

7. October 21, 20057 Manufacturing-dependent counties

8. October 21, 20058 Recreation counties

9. October 21, 20059 Alternative Futures? Homogenization The loss of rural identity and advantage – highway exits, failure to recognize assets as competitive advantage Commoditization The loss of diversity – working landscapes, trade and price distortions = downward pressure on prices, corporate farms, intensive production, power of food processors and retailers, monoculture, genetic modification Urbanization The loss of the “non-urban” – progress defined as more urban (new homes, jobs, infrastructure, tax base), ex-urbs and rising prices, conflicts, rural land with no intrinsic value other than waiting to be developed Colonization The loss of rural power – decisions made by outsiders in name of wider interests, resentment, distrust of authority

10. October 21, 200510 Principle No. 1 Emphasize regional competitive advantage Global competitiveness =regional competitiveness Integrated urban & rural regional strategies Rural competitiveness based on leverage of natural, human, social, economic, physical, cultural assets Innovation and entrepreneurship translates assets into competitiveness

11. October 21, 200511 Principle No. 2 Treat and value rural people as stewards of critical resources Place market value on assets That are assumed to be there for the taking at little or no cost – clean water That we like but take for granted – landscape, vistas That we don’t appreciate – wetlands for flood control, water cleansing, wildlife habitat Recognize that these assets require skillful stewardship and management – jobs for rural people

12. October 21, 200512 Principle no. 3 Amplify the rural voice Welcome new voices to the table – newcomers, reticent, minorities, youth Organize a coherent voice across broad range of perspectives – challenge public policy and resource allocation

13. October 21, 200513 Principle No. 4 Champion basic rights Education, healthcare, economic opportunity for all Americans wherever they live Policy discussions not about whether but how – e.g. school consolidation as a violation of rights Opportunities for common ground between inner city and rural communities

14. October 21, 200514 Principle No. 5 Encourage and reward collaboration Break down silos of discipline, profession, resource streams, geography, political jurisdictions – search for common vision, common strategies Strategies for connecting the dots, encouraging multi-use of facilities, cross- training front-line workers, using ICT…

15. October 21, 200515 An International Perspective IICA – Inter-American Institute for Cooperation in Agriculture Poverty + Food Security + Ecological Sustainability Investment in rural development – multi- sector, regional, asset-based, capacity- building, innovation (private + public), entrepreneurship

16. October 21, 200516 Principles in Action Entrepreneurship Development Systems for Rural America Stimulate national & state interest in rural entrepreneurship Encourage and reward thinking & action around systems development & collaboration

17. October 21, 200517 Entrepreneurship Development Systems Rigorous RFP process attracted 184 proposals from 46 states – 2,000 organizations Six selected -- $2 million each Listening sessions across country showing continuing interest

18. October 21, 200518 Entrepreneurship Development Systems Commitment, creativity, and resourcefulness across rural America Key principles – systems, entrepreneur focus, regionalism, inclusiveness, effectiveness – accepted and embraced Collaboration shows the way for rural America

19. October 21, 200519 Simple Definitions Entrepreneurs…people who create and grow enterprises Entrepreneurship…the process through which entrepreneurs create and grow enterprises. Entrepreneurship development… the infrastructure of public and private policies and practices that foster and support entrepreneurship.

20. October 21, 200520 Differing Motivations Survival entrepreneurs – resort to creating enterprises because there are few other options Lifestyle entrepreneurs – choose self-employment to pursue personal goals Growth entrepreneurs – motivated to grow their businesses to create wealth and jobs in their community Serial entrepreneurs – over their lifetimes will create several businesses

21. October 21, 200521 Economic Development Attraction Persuading companies to come to your community – bidding wars, expensive, risky, unaccountable, long on promises but short on results, displace entrepreneurial activity Retention Looking after what you already have – integrate companies into community life, overwhelmed by global forces Entrepreneurship Growing your own jobs and wealth – not a panacea but appropriate for rural communities

22. October 21, 200522 Economic Development Pyramid Recruitment Retention Entrepreneurship

23. October 21, 200523 Key Concepts Pipeline: Infrastructure of lifelong learning – never too early or too late to be an entrepreneur Creating a large, diverse pool of people with many motivations – out of which flow a steady stream of high achievers

24. October 21, 200524 Key Concepts Seamless systems: Focus on graduating significant numbers of start-ups into companies that offer quality jobs Coordinates multiplicity of programs – tailors them to meet diverse needs of entrepreneurs Comprehensive, flexible, culturally sensitive, integrated, collaborative

25. October 21, 200525 Key Components Pipelines Entrepreneurship education Entrepreneurship networks Systems Access to training and technical assistance Access to equity and debt capital

26. October 21, 200526 Entrepreneurial Response Create climate and culture in which entrepreneurs and entrepreneurship can flourish 3 organizing principles: Community-driven Regionally-orientated Entrepreneur-focused

27. October 21, 200527 #1 Community-driven Communities provide immediate environment – heavily influences entrepreneurial success Communities need tools, resources to identify/build upon assets, make choices, learn, innovate All sectors of community should be invited/expected to contribute

28. October 21, 200528 #2 Regionally-oriented Political jurisdictions have no economic rationale; few have resources to match opportunity/need; regional cooperative an imperative Arbitrary distinctions between urban & rural interests mask issues of common concern, prevent regional solutions Entrepreneurs need access to regional economic drivers

29. October 21, 200529 #3 Entrepreneur-focused Entrepreneurship development efforts ineffective when programmatic and uncoordinated Most programs fail to differentiate between entrepreneurs with different education, skills, motivation Requires systems thinking

30. October 21, 200530 Entrepreneurial Response 2 essentials: Anchor institutions – capacity to articulate vision, advocate for change, build partnerships, attract & mobilize resources Supportive public policy – ensure adequate resources, send positive messages, ensure programs are flexible to meet different regional needs

31. October 21, 200531 Promising Developments Statewide rural centers – new spotlight on rural issues and opportunities Enterprise coaches – identify, counsel, support entrepreneurs – new networks and retooled existing Community capacity-building programs – focus on assets, place-based strategies Distance learning methodologies Systems of business support – new partners, new approaches Entrepreneurship education in and out of school

32. October 21, 200532 For more information visit: Rural Policy Research Institute (RUPRI) www.rupri.org RUPRI Center for Rural Entrepreneurship www.ruraleship.org www.energizingentrepreneurs.org