Innovation, changes in the economy, growth patterns of large metropolitan areas and a shift to regional thinking are ingredients that can set the stage for reinvigorating small town America. Many small towns are missing the boat by aspiring to growth patterns of larger cities. Keeping an eye on assets that distinguish small towns is an integral part of the competitive strategy for rural communities. Quality compact development and locally owned business are strengths to be nurtured along with developing brainpower connections to research institutions. While many small communities seem determined to repeat growth mistakes of cities, many of these larger metropolitan areas are learning how to make cities function more like a collection of villages. Must be something about the quality of life and efficiencies. Learning to “Think small in big ways” is how author Roberta Gratz describes the tactic.

Small communities face problems and are not effectively planning to take advantage of their assets. The National Governors Association is focusing on strategies to help rural America. The following excerpts are from a recent NGA publication, Innovative State Policy Options to Promote Rural Economic Development:

“America’s rural areas and small towns face unique and difficult challenges in the 21st-century economy. Rural economies generally face challenges from poverty, geographic isolation, infrastructure deficiencies, poor links with metropolitan and global markets, weak community infrastructure for business development and growth, and the flight of skilled human capital to metropolitan regions.”

“Three promising strategies for governors interested in rural economic dynamism are:

• Adapt cluster-based principles. Economically successful regions have clusters of interconnected businesses that collaborate. States can support clusters by encouraging the development of industry networks that provide a channel for businesses to work together. To meet the need of cluster businesses for highly skilled workers, states have deployed colleges and universities as training centers. States can ensure that cluster businesses in remote, rural communities have access to the same capital and technical resources as their more advantageously located competitors.
• Promote entrepreneurship outside the agricultural sector. As traditional resource-based, extractive rural industries decline, entrepreneurship development can be an effective strategy for states to consider. States can best serve entrepreneurs by providing access to seed capital; by developing local ability to identify, encourage, and train entrepreneurs; and by using online networks and other technology to connect entrepreneurs with critical information and financial resources.
• Reinvigorate the agricultural sector through diversification and value-added agriculture practices. There is more to farming today than simply growing commodity crops. Farmers know they can earn more by growing different types of crops or by raising nontraditional species of livestock. Other farmers are directly processing their crops into finished products that they market themselves. To support this new agricultural environment, states can provide the capital and technical assistance that allow farmers to follow these new paths to wealth creation.”



“Entrepreneurial businesses are responsible for the vast majority of job creation in the U.S. According to the National Commission on Entrepreneurship, entrepreneurs create 600,000-800,000 businesses annually” (See National Commission on Entrepreneurship web site). “High concentrations of entrepreneurs create robust economies highlighted by more growth and better quality jobs” (Interview with Don Macke, September 25, 2002).


“Entrepreneurship policies rely upon developing assets that are unique to the community, are flexible with specific conditions of rural regions, can be scaled to the size and needs of the community, and can be implemented through local intermediaries.”

“Entrepreneurship policies are especially attractive options for rural areas.

Several characteristics of rural communities and regions present special challenges for entrepreneurship. Small population and low density limit the availability of producer services and access to markets. Many rural areas also face serious human capital constraints. Highly skilled individuals tend to seek employment in metropolitan areas, and those remaining in rural areas may not be aware of entrepreneurial opportunities or possess the skills necessary to take advantage of them. Finally, rural areas frequently lack the institutions for collaboration in business, and the linkages to urban markets and businesses that permit business growth. States should explore policy and program options to facilitate rural entrepreneurship. Effective tools include the following.

• Provide access to capital through budget appropriations or by support of venture capital fund intermediaries. Capital is one of the most critical and glaring needs in rural entrepreneurship.
• Develop community capacity—the ability to identify and encourage local entrepreneurs—through specialized training programs.
• Use technology such as online networks to connect far-flung rural populations to the informational and financial resources that can assist entrepreneurial business development.”

“…Rural economic development policies must build upon the inherent strengths of rural America—abundant natural resources, close-knit communities, strong local business networks, and a largely untapped tradition of entrepreneurial creativity.”

Also see a September 17 entry at Ed Morrison’s blog, Small Town Opportunities.

Additional information is available at the Center for the Study of Rural America.