RURAL ECONOMIC DEVELOPMENT:

MATCHING STRATEGY WITH POTENTIAL

Box Elder Economic Development Summit

November 4, 2011

Dr. Richard Gardner Bootstrap Solutions, Boise, Idaho

A WORD ON CURRENT EVENTS

GLOBAL COMPETITION

Post-WWII Dominance American Declining?

The Dollar Still Standard?

Or World Catching Up?

New Competitors New Opportunities

GREAT RECESSION

Most significant economic event in our life times!

A new economic

and social world will emerge from this recession.

GREAT RESET 1870s The Long Depression

1930s The Great Depression

1982-86

The Farm Crisis

2007 to ??? Great Recession

1870S – THE LONG DEPRESSION

1st Industrial Revolution Assembly Line

Telecommunications Modern Electrical System

Good Government Movement Labor Reform

Recreation & the Weekend Professional Sports

1930S – THE GREAT DEPRESSION

2nd Industrial Revolution Modern Banking

Highways & Suburbia College Educations

Modern Aviation Civil Rights

Internet

1980S - FARM CRISIS

End of Commodity Production Focus Emphasis on Value-Added Product

Differentiation Organic and Origin-Branded Foods

Local Food Movement >> Farmers Markets

2007 TO ? – THE GREAT RECESSION

Real Estate & Banking Bubbles

“Shrinking City” Movement? Less Reliance on Cars?

Service Job Improvements?

THE RESET PROCESS

Crisis Unraveling

Opportunity Space

New Innovation

New Ventures

Prosperity

THE COMMUNITY RESET PROCESS

MOST TOWNS HAVE AN ECONOMIC REASON FOR BEING

Develop Natural Resources Fur Trade Mining Strikes Sawmill Towns Fertile crop or grazing

land Transportation Hubs

River Junction or Falls Port or Ferry Pony Express, Wagon

Road Railroad Highway, Interstate

Trade Centers Source of Water

Desert Oasis Hot springs Irrigation water

Defensible Locations Natural Beauty, Spiritual

Retreat Indian Country is the

Exception

SWITCHING ECONOMIC ENGINES IS PAINFUL AND SOMETIMES FREQUENT CHANGE

Island Park, Idaho Fur Trapping Stage lines to Yellowstone Park Sheep & cattle ranching Logging Railroad Tourism & recreation – First as membership clubs, but now as an

emerging destination Real estate development & Construction – This is by

definition a non-sustainable enterprise. Part-year residents, retirees, and vacation home rentals –

This is what the building boom will produce.

WHAT HAPPENS TO COMMUNITIES WHO CANNOT

ADJUST?

They Become Remnant Communities, and Then…

They Become Ghost Towns.

UTAH’S RESOURCE INDUSTRIES ARE MATURE

% of Employment

% of Personal Income

Farming 5.2% 0.8% Forestry, Fishing, Etc 0.3% 0.2% Mining 3.1% 5.8% Manufacturing 6.4% 11.9%

Non-Metro Utah, 2009

COMMUNITY POTENTIAL MATRIX ECONOMIC DIVERSIFICATION OPTIONS

1. Value-Added Agriculture 2. Value-Added Forest

Products 3. Value-Added Mining 4. Value-Added Fisheries &

Aquaculture 5. Energy Diversification 6. Environmental Restoration 7. Business Retention &

Expansion 8. Plugging Retail Leakage 9. Entrepreneurship Dev. 10. Business Recruitment

11. Local/Regional Tourism 12. Pass-Through visitor

Services 13. Destination Tourism 14. Cultural Tourism 15. Attracting Retirees 16. Attracting Lone Eagles 17. Transportation Hub 18. Telecommunications

Business 19. Health Care 20. Bedroom community 21. Attracting Government

Offices

LET’S REVERSE THE ECONOMIC DEVELOPMENT PYRAMID!

Business recruitment is the icing on the Econ Dev cake Nice places attract visitors, retirees, and Lone Eagles. Pay attention to existing businesses & capture local spending All communities have innovative private, civic, and social entrepreneurs.

Recruitment

Amenity-Based Strategies

Retention

Entrepreneurship

Recruitment

Amenity-Based Strategies

Retention

Entrepreneurship

WHY THESE PRIORITIES?

Economic Development should be efficient. Pursue those opportunities with highest returns,

highest probability of success State of Utah, 1999-2008, 172,201 more jobs

94,841 net new jobs from businesses opened 78,742 net new jobs from expanding businesses -1,382 net new jobs from firms moving into Utah Larger firms (>100 employees) had negative growth

in each category Source: National Establishment Time Series, Lowe Foundation

BOX ELDER COUNTY

Net Job Growth, 1999-2008 Total = -11,114 net new jobs

Net Opened = -1,410 Net Expanded = 8,672 Net Moved In = -18,306 Note: Net opened was 2,224 for firms of less than

10 employees. Entrepreneurs did their job!

ENTREPRENEURSHIP

RUPRI CENTER FOR RURAL ENTREPRENEURSHIP

www.energizingentrepreneurs.org Don Macke, Lincoln, NE Deb Markley, NC E2 Program Self-assessments E-coaching program HTC program Transfer of Wealth studies

Much more

THE MANY FACES OF ENTREPRENEURS

Aspiring & Youth

Lifestyle

Serial Growth

Startups

Civic & Social

Transitional

Necessity

TAKING IT FORWARD: ENTREPRENEURIAL DEVELOPMENT SYSTEM

1. Adult Entrepreneurship Education 2. Youth Entrepreneurship 3. Customized Technical Assistance 4. Capital Access Programs 5. Networking & Mentoring 6. Programs to Create Cultural Change

“The Key to Your Success”

MODEL APPROACH: KEEP IT SIMPLE

Shenandoah, Iowa

CULTURAL CHECK: HOW DO WE TREAT OUR ENTREPRENEURS?

Do we value, encourage and support them?

Or do we gossip about and criticize them?

AMENITY-BASED STRATEGIES

WHY AMENITY MIGRANTS?

Migration Demographics of 1990-2005 People moving to Mountain West, moderate South, and

places with mountains, water, vibrant cultures Richard Florida – Rise of the Creative Class

Quality of life matters Aging Baby Boomers – Non-labor income rising

Non-Metro Utah from 22% in 1970 to 35% in 2009

Congestion and crime in big cities are push factors Much easier to convince than corporations

Decision unit is family or couple

TYPICAL MIGRATION PROCESS

1. Familiarity with Area- from family and friends, past education, military service, job, or family vacations

2. More and More Frequent Visits (link to tourism) 3. Move to Community

a) Part-year Residents w vacation home b) Retire to community c) Move with family & become self-employed d) Move business to community

RETIREES LOOK FOR:

Mild, four-season climate Low to moderate cost of living Cheaper housing w variety of choices Access to good health care High natural &/or cultural amenities Small town feel, safety, walkable downtown

UTAH RETIREMENT COUNTIES

MIGRATING RETIREES:

Tend to have more income, assets, education, and more likely to be married

Bring equivalent of a job with them (pensions are payments for work done in past)

Are interested in volunteering and integrating into community

May bring different values and expectations of public services…

Myth or Reality: May vote against bond issues?? Can be recruited very cost-effectively…

LONE EAGLES OR LIFESTYLE ENTREPRENEURS:

Need high speed telecommunications Need access to air travel Are often little known to community leaders:

Who are they are ? Where do they come from? Why did they move here? What do they like? What else do they need to succeed? Do they have friends who might want to come? How do we get more of these folks?

Two surefire strategies for:

BUILDING COMMUNITY CAPACITY

CAPACITY-BUILDING– THE NEVER-ENDING STORY

Tupelo Model & most experts say it all begins with effective leaders

Collaborative community leaders require a different skill set than business leaders.

Two recent losses Northern states lose NWAF’s Horizons program RC&D program funding eliminated by USDA

TUPELO, MISSISSIPPI MODEL OF DEVELOPMENT

We’ve been looking at Economic Development

Infrastructure & community systems support business.

It takes organizations to support strategies and projects.

Leadership is the foundation.

It all begins with people

BEST PRACTICE: OREGON’S FILP PROGRAM

Led by Tom Gallagher & Ford Family Foundation Implemented by RDI (Rural Development Initiatives)

5 year community engagement Year 1: Leadership Class Year 2: Effective Organizations Year 3: 2nd Leadership Class Year 4: Community Collaborations Year 5: 3rd Leadership Class (self-trained)

8,000 trained community leaders across rural OR Goal: No community grant given to a stranger

ONTARIO OREGON LEADERSHIP CLASS

BEST PRACTICE: RURAL PHILANTHROPHY

NEW TOW SCENARIOS

Boston College: 1998-2052

High = $136 trillion Medium = $73 trillion

Low = $41 trillion RUPRI: 2010-2060

High = $91 trillion Low = $75 trillion

Constant = $63 trillion Zero = $43 trillion

Our revised and most

likely scenario of future TOW for the U.S. is estimated at $75 trillion between 2010 and 2060.

Inflation adjusted 2010 dollars.

TOW & GIVE BACK A FRAMEWORK OF HOW TOW IS BEING USED

Opportunity Awareness Amount of Wealth Kinds of Wealth

Sources of Wealth

Wealth in Poor Places There is Wealth

Potential for Give Back Asset Based Development

Threat – Call to Action Depopulation Outmigration

Timing of Wealth Transfer

Donor Targeting High Net Worth Households

Types of Wealth Messaging Strategies

HOMETOWN FUNDS

All communities have more wealth than they think Many residents, and past residents, feel loyalty to

hometown Challenge is to develop community attachment by

new retirees, part-year residents & Lone Eagles Create a Hometown Fund in a local community

foundation Start a campaign to give back, now or in estate

planning, with 5% of TOW as goal

“DON’T BE PARALYZED BY COUNSELS OF PERFECTION” BEN FRANKLIN

Please use what you’ve learned, and take action to benefit your community!

THANK YOU! Richard L. Gardner Bootstrap Solutions 752 E. Braemere Rd. Boise, ID 83702 (208) 859-8878 bootstrap1@msn.com