By encouraging innovative state-industry partnerships, legislators
can help corporations leverage their own investments in workforce education and cutting-edge R&D, making them players in the New Economy. During the boom of the 1990s, when many cities showed signs of economic comeback, much of rural America continued to stagnate or decline. Some decline of rural industry is the inevitable result of technological progress, as, for example, new approaches rapidly cut the number of people needed to sustain agriculture. But some rural decline stemmed from the opposite: a failure to bring technological innovations to rural enterprise.
To remedy this, policymakers from different rural areas of the country are innovating with a range of policies reflecting local needs and campaigning on the prospect of bringing much needed innovation to those rural parts of each state that are lagging. The most promising of these are predicated on facilitating inter-industry cooperation in utilizing new technologies and techniques or increasing access to the high-speed Internet.
Perhaps the most ambitious of these new and innovative approaches to develop rural areas has been the initiative to widen the circle of those with access to cutting edge technology. Broadband Internet access, the high-speed data transmission that allows computers to send vast amounts of information to one another in an instant, is key to the production of a successful rural industry in the New Economy. Satellite technology, available anywhere that can see the sky, is too slow for many industry applications.
Since May 2004, New Hampshire's Rural Development Council (NHRDC) has been engaged in a large-scale project to develop a plan for substantially increasing technological access in rural areas in the state. The NHRDC will take a "community-needs-based" perspective, remaining "vendor-neutral," as well as "technology neutral." The NHRDC began by assessing the capabilities, needs, and wants of certain types of entitities in the community such as schools, entrepreneurs, municipal buildings, etc. The NHRDC will next meet with vested partners to develop the structure that can make the technology fit the community.
The challenge for rural legislators has been that dispersed demand could not justify a service provider's deployment cost. To wire rural New Hampshire, the NHRDC will aggregate demand for broadband, thereby making it an attractive investment. By making the state's rural broadband competitive with prices in major cities, the NHRDC's model helps rural industries overcome the first major hurdle of New Economy competitiveness, high-speed Internet access.
Broadband will not in itself spur competitive rural industry. For rural Americans to reach their economic potential, policymakers must also invest in developing new products and production processes. The public-private partnership approach that is crucial to aggregating broadband demand is also a good model for investing in R&D. By pooling diffuse public and private resources into development clusters, partnerships effectively target the resources to ag-industrial R&D, technical education for small farmers, "co-marketing" between small agricultural businesses, and giving participating manufacturers access to a large research team.
A particularly good model of this approach is the San Joaquin Valley's New Valley Connexions program, which coordinates technology development, infrastructure deployment, workforce education, marketing research, and industry cooperation among eight counties in California. The accomplishments of the Connexions program have spurred many other initiatives including the California Geographic Information System, a tool that takes economic, demographic, and social data from throughout the state and helps to identify strategically prioritized locations for development.
Another example of a program that has helped develop activities to add value to regional agricultural products can be found in Vermont in the form of Cabot Cheese, a co-operative of dairy farmers who use the milk they produce to make cheese and other dairy products in the region.
Other strategies for developing rural economic potential include South Dakota's Value-Added Agriculture fund, which supports feasibility and marketing research for agricultural processing projects. Established in 1999, the South Dakota program provides companies with an initial 50 percent grant to study the feasibility of proposed innovative agricultural projects, which is eventually paid back if the projects evolve into successful enterprises. Thus far, more than $16 million dollars has been outlaid for 25 different projects, including two multi-state ventures, the results of which are expected soon.
An altogether different type of approach currently being employed can be found in Virginia, where former Gov. Mark Warner helped boost entrepreneurial, growth-oriented business located in the rural areas of his state. Before he was governor, he helped set up seed capital funds to promote such entrepreneurship in parts of Virginia such as Roanoke, Charlottesville, and Hampton Roads. Similarly fashioned initiatives can also be found in Minnesota's Technical Corporation Investment Fund, Iowa's Product Development Corporation, Kentucky's Rural Innovation Fund, and the Small Enterprise Growth Fund of Maine.
Initiatives need not necessarily focus directly on agri-business development to be beneficial. Oregon, for example, has set up a public-private partnership called the Oregon Wood Products Corporation. The organization has targeted and helped encourage industry clusters, which can be exceedingly beneficial to those inhabitants and companies in the same vicinity (see the "Regional Industry Clusters Play").
Clearly, there are many ways to help rural industries become more competitive. But increasing access to the Internet and facilitating inter-industry cooperation in developing and utilizing new technologies and techniques show the greatest promise for helping rural Americans benefit from New Economy innovations and reach their economic potential.
New Valley Connexions
www.greatvalley.org/nvc/index2.html
Value Added Agriculture
www.state.sd.us/doa/ag_dev/loan/
New Hampshire Rural Development Council
www.ruralnh.org
California Assembly Bill 1391, 2001
www.leginfo.ca.gov/pub/01-02/bill/asm/ab_1351-1400/
ab_1391_bill_20010625_amended_sen.pdf
Robert D. Atkinson, The 2002 State New Economy Index, Progressive Policy Institute, June 2002
www.neweconomyindex.org/states/2002/strategies.html
Robert D. Atkinson, Reversing Rural America's Economic Decline: The Case for a National Balanced Growth Strategy, Progressive Policy Institute, February 2004
www.ppionline.org/ppi_ci.cfm?contentid=252381
&knlgAreaID=107&subsecid=123
Mr. Chuck Fluharty
Director
Rural Policy Research Institute
214 Middlebush Hall
University of Missouri
Columbia, MO 65211-6200
(573) 882-0316
cfluharty@rupri.org
Nancy DuBosque Berliner
Executive Director
New Hampshire Rural Development Council
21/2 Beacon Street
Concord, NH 03301
(603) 229-0261
nhrdc@mcttelecom.com
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