Economic Development in Rural Wisconsin: Developing a 21st Century Response to Compete in Today’s Global Marketplace
In October 2011, the Federal Reserve Bank of Chicago’s Community Development and Policy Studies division co-sponsored a two-day conference that explored and discussed policies that speed, strengthen, and enhance economic development in Wisconsin’s rural areas to increase their competitiveness in today’s global economy. This article summarizes key points from presentations and discussions at the symposium.
Over 150 participants, representing community banks in the Seventh Federal Reserve District, economic development/finance agencies, small business owners, researchers, and policymakers, convened to explore ways to enable Wisconsin’s rural economy to compete in today’s global economy.
Day one proceedings
In her opening remarks, Alicia Williams, vice president, Federal Reserve Bank of Chicago and head of the bank’s Community Development and Policy Studies (CDPS) division, commented on the importance of how cities define themselves and relate to their surrounding regions. Leaders in those cities that “outperform” their peers articulate their connectedness with their rural surroundings, not only to the labor pool outside city limits, but also as partners in a region-wide economy. Williams further touched on the various efforts of CDPS and its counterparts throughout the Fed System to address the foreclosure crisis and to bridge obstacles to small business lending, which the Fed has identified as key to the overall economic recovery.
In his remarks, Wisconsin District Director of the U.S. Small Business Administration (SBA) Eric Ness, explained that the SBA organizes around three Cs: capital, contracting, and counseling. “Capital” refers to loans; “contracting” refers to getting more federal contracts for small businesses; and “counseling” refers to assistance provided to start and grow a small business. Ness explained how the SBA has been refining its three Cs to be highly responsive to the recessionary problems currently faced by Wisconsin’s small businesses. He highlighted the increase in SBA loan limits from $2 million to $5 million, which effectively makes SBA programs more suitable to the sizable borrowing needs of larger manufacturers and many franchise owners and franchisees. Also, for its export loan programs, the SBA increased the lender guarantee to 90 percent of the loan. At the other end of the lending spectrum, Ness stated that the SBA is working to expand its ability to make loans under $250,000 to business owners via credit lines to intermediaries, such as community development financial institutions and certified development companies.
As of September 30, 2011, the SBA made 2,025 loans for over $835 million, which represents a significant increase in both the volume and number of SBA loans made in Wisconsin over previous years. Of this total, rural markets accounted for 824 loans totaling over $379 million, also a significant increase.
Day two proceedings
In his opening remarks, Stan Gruszynski, Wisconsin state director, U.S. Department of Agriculture Rural Development (Rural Development), stated that the key goal of his agency is to promote self-sustaining, economically thriving rural regions and communities. As part of an overarching strategy to serve this goal, Rural Development coordinates its efforts with other U.S. Department of Agriculture federal investments, and other federal and state agencies. He cited working relationships with the Wisconsin Housing and Economic Development Authority (WHEDA), Farm Services Administration (FSA), community development finance authorities, and regional planners.
Gruszynski emphasized that working relationships and partnerships are even more important in an era of shrinking public sector resources.