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Image: Rural Economy & Population

Designing an Effective Rural Development Strategy

Experts agree: an effective development strategy builds on local strengths, adjusts for local weaknesses, recognizes market realities, and attempts to achieve development that can be sustained for the foreseeable future. In addition, such a development strategy attempts to meet local residents' objectives, since local support is necessary for implementing most development strategies.

Local strengths and weaknesses vary from place to place. A community's strengths may include an education system that produces a highly skilled labor force or natural amenities that attract tourists and future residents. Local weaknesses may include inadequate infrastructure, lack of a highly skilled workforce, or a housing shortage.

Market realities also vary from place to place. For example, where there is unmet demand, the potential to increase supply, and suitable transportation infrastructure, some communities may find it economically advantageous to focus on developing local or regional foods or renewable energy industries.  Communities lacking one or more of these economic requirements may not find this approach economically feasible.

Rural development strategies have both costs and benefits. For example, communities have historically tried to attract or retain industry through the use of tax incentives and other economic concessions. While in some cases such an approach may be cost effective, in others the costs may outweigh the benefits.

Strategies are Evolving

  • Traditional approaches include industrial recruitment (mentioned above), often aimed at diversifying the economy; transforming into regional centers that specialize in providing goods or services to the surrounding region or bedroom communities that provide basic services to the families of workers who commute to work in cities; and amenity-based development, such as attracting tourists, retirees, and recreationists to a place that features desirable natural or cultural amenities.
  • Nontraditional approaches include small business and entrepreneurial development that uses venture capital and other means to promote self-supporting networks of entrepreneurs;cluster-based development that builds on the economic advantages of collaborative and competitive networks of existing local or regional businesses and institutions; rural innovation and knowledge-based development that enlists the aid of local educational and research institutions and high-tech firms to develop innovative products and services; attracting the creative class (highly educated or skilled individuals) responsible for the development of many new and innovative businesses, by enhancing local quality of life demanded by such individuals. (See Rural Wealth Creation: Concepts, Strategies, and Measures, ERR-131, March 2012).

How Can Communities Identify the Best Strategies?

The most effective strategies will vary from place to place, building on local economic strengths and addressing the most pressing local community and economic problems.  For example, in places experiencing long-term population decline, efforts might be made not only to create jobs, but also to improve local amenities and quality of life, since amenities and quality of life issues are in many places the main limitation to growth (See Nonmetropolitan Outmigration Counties: Some Are Poor, Many are Prosperous, ERR-107, November 2010).  In contrast, in places with high rates of growth, strategies may be more concerned with the need to mitigate growth-related problems, such as traffic and sprawl (See Development at the Urban Fringe and Beyond: Impacts on Agriculture and Rural Land, AER803, June 2001). 

Communities may find it advantageous to employ decision-making aids, such as strategic planning and research-based industrial targeting or cluster analysis, to guide them in identifying and implementing local-based development strategies.  Outside facilitators are often employed to assist in these efforts, but local officials still make the decisions based on local objectives and resources. (See Rural Wealth Creation: Concepts, Strategies, and Measures, ERR-131, March 2012).

Regional approaches can enable small communities with limited staff or expertise to capitalize on the region's more ample pool of resources, such as universities, airports, broadband access, and amenity attractions.  Such approaches also can focus on the creation and nurturing of regional networks of firms, organizations, and communities.  Regional approaches can also more effectively address negative externalities (problems originating from surrounding areas) such as pollution, crime, and traffic congestion.  Regional planning and collaboration may be informal, through mutual agreements among locally elected officials, or formal, through regional (multicounty) organizations, which generally have economic development staff and ready access to Federal funding sources (See Impacts of Regional Approaches to Rural Development: Initial Evidence on the Delta Regional Authority, ERR-119, June 2011). 

Last updated: Wednesday, May 30, 2012

For more information contact: Faqir Bagi

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