A core responsibility of a chamber or local economic development agency is to support the economic vitality of the communities they serve. Success requires paying attention to trends in society so that you can anticipate change and stay ahead.
After spending two years working closely with the Nevada County Economic Resource Council to develop a marketing plan to support the growth of rural Nevada County in California, I have been mulling over the difficulty of rural economic development and what chambers of commerce and local workforce and economic development agencies face when developing strategies to grow their communities. It's difficult but these organizations are well suited and well positioned to tackle the challenge.
During my time in Nevada County I learned that it was critical for these organizations to leverage existing resources and tools wherever possible, and empower community leaders with a toolkit for courting individuals and businesses to consider relocating to their towns.
Here are some of the challenges we faced as we navigated the discovery phase of developing our marketing plan, as well as some of the positive trends and steps to action that I took away from the experience.
- Population migration. Rural economies are losing their younger residents to urban areas in search of jobs or continuing education. This results in a negative feedback cycle: the more talent that leaves an area, the less talent there is to grow the economy.
- Automation. What can or will be automated? Through manufacturing and industrial practices, we have optimized the work of the hands: manual labor. We are now in the age of Artificial Intelligence (AI), which is automating the work of the mind: knowledge work. What is left that isn’t yet automated?
- Globalization and Offshoring. Jobs have migrated to low-wage economies with poor labor and environmental protections, creating unfair competitive advantages.
- Reduced Access to Medical Services. Communities with insufficient population and/or social programs are losing basic medical care. Add to this the fact that employers with under fifty employees are not obligated to provide healthcare. 102 rural hospitals have closed in the last decade.
- Underemployment. A parallel problem to automation is underemployment. 33.4% of Americans over age 25 hold bachelor’s degrees or higher, but many of the jobs they are prepared for are unavailable. Overqualified employees now work part-time and temp jobs.
- Population Reverse-migration. Rent in large urban areas and cities are at all-time highs and fewer Americans can afford home ownership. Talented employees who have achieved a level of economic security seek a more affordable and balanced place to live and raise families. 30% of the American population lives in a county where you need an annual income of at least $100,000 to buy a median-priced home. These trends are driving migration to “secondary” cities.
- Distributed Knowledge. The Gutenberg press brought the power of knowledge to the world, enabling literacy throughout print. This knowledge flows through schools, libraries, and bookstores. In today’s fast-paced digital world, knowledge – and the power of knowledge – is distributed via a mesh-network: anyone is an author, and everyone is a reader. As the internet spreads, rural areas can distribute knowledge and opportunity.
- Long Tail of Services. The long tail refers to the impact of internet and cloud-based applications on the distribution of product and services. The internet can geographically extend products and services anywhere, anytime. These applications include technology services, business services such as accounting, marketing, distance education, telemedicine, and all-things enabled by video conferencing.
- Gig Economy. For better (freedom of self-employment) and worse (always job hunting), the gig economy continues to grow. According to Intuit CEO Brad Smith, “The gig economy...is now estimated to be about 34% of the workforce and expected to be 43% by the year 2020.” Those who can make it as freelancers will gain economic stability and as a result, geographic flexibility.
- Economic Opportunity. This is the flip side of underemployment. For creative thinkers and entrepreneurs, the playing field looks good. Opportunities to develop viable and profitable businesses have never been better.
Rural economies need contributing taxpayers. What conditions will help rural communities retain their sons and daughters, attract city-escaping talent looking to improve their quality of life, and companies who can bolster the economy? Here are some observations and suggestions.
- A healthy economy requires a diverse and resilient talent ecosystem supported by intentional projects like the U.S. Chamber Foundation's Talent Pipeline Management (TPM) program. These types of strategies are a perfect fit for rural areas that need to efficiently and accurately identify market requirements, develop an action plan, execute, then rinse-wash-repeat. The tools exist and rural communities cannot afford to start from scratch.
- Promoting what your market offers to someone shopping for a new place to land requires the chamber of commerce or economic development agency to be practiced at communicating the story of the local market. Use work completed through needs assessments, community input, stakeholder interviews, and more to identify what makes your local economy strong and write the pitch to new companies to help grow what's already there.
- We are increasingly in an experience economy. Communities that provide opportunities such as arts, community theatre, diverse social experiences, and healthy outdoors opportunities will attract residents. Build and support local media, arts, culture, and quality internet infrastructure. It's worth it.
- Embrace diversity and delight in learning new perspectives. The healthy integration of diverse viewpoints produces the best outcomes.
- Healthy physical and work environments are mandatory. People with the mindset and access to quality resources to be healthy are the people who will help you grow and thrive. Nurture the pride of stewardship.
In short, follow best practices and take advantage of what's out there. Practical Academics regularly works with local economic development champions and Talent Pipeline Managers to identify and create training and development programs to grow local economies. It's hard work that pays off.