Recap of the 2022 Rural Economic Development Conference: Part 2—Assessing Economic Development Efforts and Improving the Quality of Life in Rural Areas
This is the second of two blog posts summarizing Creating Conversations on the Challenges and Opportunities Facing Rural Economic Development—a conference cohosted by the Federal Reserve Bank of Chicago and the W. E. Upjohn Institute for Employment Research on September 28–29, 2022, in western Michigan.
As explained in greater detail in the first blog post, the conference featured two major segments—one at Montcalm Community College (MCC) in Greenville, Michigan, and the other at the primary event site in Grand Rapids, Michigan. Moreover, the conference was structured to include practitioner responses to each of the research papers presented. This format yielded robust discussions, which provided momentum to continue related policy work and research. Both this blog post and the previous one identify overarching themes from the event and summarize the researchers’ and practitioners’ findings.1 Videos of each of the conference panels are available online.
This second post summarizes panel discussions on recent economic development efforts in the rural Midwest, the importance of rural roadways and other infrastructure, and ways to improve rural areas’ access to key services, such as health care and broadband internet. This post also goes over how some local governments and nonprofits have been able to help maintain or raise the quality of life in rural communities by overcoming the challenges associated with their own capacity constraints—which the first post covered in more depth.
Assessing rural economic development efforts
A May 2022 St. Louis Fed blog post listed infrastructure, public services, and workforce development as key priorities for rural economic development over the coming years. Infrastructure improvements in rural areas can be overlooked, even though they often have outsized impacts on rural economies. Over two-thirds of the United States’ total lane-miles (the number of lanes multiplied by the roadway length) in 2020 were in rural areas, yet a little over one-fifth of all people living in rural areas had no access to intercity bus transportation in 2018. The lack of good roadway infrastructure and public transportation options primarily affect those with low and moderate incomes who must drive (or must be driven) to work or school in rural areas.
Improvements in broadband internet access—which will require further investments in broadband infrastructure to build out networks—are vital for advancing rural economies. In 2020, over 20% of people living in rural areas did not have access to reliable broadband. Nowadays broadband access is critical given the increased number of people who engage in school, work, and community activities via the web.
Rural areas need not only greater broadband internet access, but also other technological advancements in order to improve their economic conditions. Johnny Park (CEO, Wabash Heartland Innovation Network) and Stacy Nimmo (executive director, Red Wing Ignite) described their experiences with introducing new technologies—as well as new working approaches that leverage broadband and other technologies—to rural communities. Park shared that his firm has been working to bring rural Indiana advancements in farming technology, including technology automating traditionally labor-intensive agricultural work. Nimmo said that while her region—made up by Red Wing, Minnesota, and the surrounding rural areas—has had issues with gaining greater broadband internet access, it has found success through different tech programs that have introduced rural places to innovations such as coworking spaces with high-speed internet connections. Advancements like these provide people living in rural areas the chance to work and learn without radically altering the characteristics that make a place rural or diminishing the benefits from living in the countryside.
As nationwide and worldwide shocks affect the way people work, programs that bolster access to work (like those that create coworking spaces) and workforce training programs are important. Economic and financial crises can have disparate impacts on the workforce in rural versus urban areas—for instance, the labor force participation rate among adults aged 25–64 declined three times more in rural areas than in urban areas over the period 2007–19 (i.e., during the Great Recession and the following decade). The threat of major employers leaving rural areas—either for nearby urban areas or different regions of the country altogether—often looms. Therefore, efforts to maintain a viable workforce and employers are a large part of rural economic development.
One MCC panel discussed a model of what a dedicated school-to-workforce pipeline looks like in a rural area. Susan Hatto (dean for industrial education and workforce training, Montcalm Community College) described the current challenges facing students at MCC and in the Greenville area. Transportation and access to broadband internet are big issues for students—with some working from the school’s parking lot after hours and over weekends to access its Wi-Fi signal. Andrew Nielsen (instructor, Montcalm Community College) spoke about his experiences growing up in Montcalm County, returning to MCC to pursue an apprenticeship, and gaining employment in the area by following that educational track. He now teaches welding at MCC along with Peter Murr (instructor, Montcalm Community College). Murr said that as a welding instructor, he saw a lack of marketable skills among many MCC students. According to Murr, MCC now coordinates with local employers to determine the skills needed for students to get jobs with these employers after they graduate; in addition, MCC works with the employers to produce measures of consistency in skill standards. Rich Ring (manager of human resources safety, Greenville Tool & Die) described the collaborative efforts of area employers and MCC to provide a clear education-to-employment track for the college’s students. Local employers, including manufacturers, work closely with Hatto to ensure that students are aware of apprenticeship opportunities and to help tailor MCC’s curriculum, so that students can get the training they need to find employment with them after graduation.
The partnership between MCC and local employers serves as a good example of what can be achieved through strong collaborations that build a robust employment base in a rural area. However, there are still challenges with assuring students that they can live and work affordably and sustainably in a rural area like Montcalm County. Olivia Blomstrom (assistant manager, business solutions, West Michigan Works!), Terri Legg (executive director, United Way Montcalm–Ionia Counties), and Travis Alden (senior director of community development, The Right Place) discussed organizational capacity constraints, similar to the ones described for local governments by Dood and Falcon (as summarized in the first blog post). They, along with Dood and Falcon, emphasized that day-to-day governing—including addressing problems arising from insufficient housing, broadband internet access, and transportation options—can make it challenging for them to find the time to write those critical grant applications, especially given their staffing constraints. Housing was one issue that stood out to Legg. Although rural areas engage with economic development initiatives, said Legg, there is often not enough housing stock for retirees, working-age people, or younger people who want to live and work in rural areas. Legg asserted the Covid-19 pandemic has made rural housing less affordable for locals mainly because so many people from cities moved into rural areas in 2020–21 but continued to work for employers based in urban areas such as Grand Rapids, retaining their relatively higher salaries.
Several academics shared their research about rural economic development programs, the local economic impact of rural infrastructure investments, and rural–urban labor market dynamics. Andrew Van Leuven (assistant professor, Oklahoma State University) presented his research on the Main Street America program and its impact on small-town business districts.2 His results ultimately showed disparate effects across Midwest towns. Towns in Iowa reaped economic benefits as a result of participating in the program, whereas those in Wisconsin, Michigan, and Ohio saw little benefit from joining the program. Van Leuven said that there is more research to be done on why Iowa might have differed from other Midwest states and had a higher success rate with Main Street America. However, he suggested it might have to do with Iowa having fewer large cities and thus small-town Main Streets being relatively more important to that state. David Albouy (professor, University of Illinois Urbana–Champaign) presented his research on the value of public infrastructure in rural and urban places. He said his research shows that public infrastructure increases employment in urban counties and property values in rural counties.3 Christiana McFarland (research director, National League of Cities) shared her research on industry clusters, which shows that local employment grows faster when that employment is part of a regional industry cluster.4 Oudom Hean (assistant professor, North Dakota State University) presented a paper suggesting that growth in technology in urban areas leads to worse labor market performance in the surrounding rural areas, which is partially due to brain drain.5 As McFarland’s research shows, a rural area’s labor force can benefit from being part of an industry cluster (normally) centered in an urban area. However, Hean’s research shows that overall labor force growth in an urban area can lead to worse labor market outcomes in rural areas because of the competition from the urban area. This is an example of how rural economic development issues are not always so straightforward to address.
Practitioners with experience in rural economic development and infrastructure investment responded to the research. Jeremy Solin (co-owner, Tapped Maple Syrup, and global affiliate scholar/instructor, University of Wisconsin–Stevens Point) shared his experience working with the Main Street Program in Stevens Point, Wisconsin. He said that the program gave downtown Stevens Point long-lasting credibility and a sort of revival. Solin noted that one negative aspect of the program might have been its rigid structure. In his experience, many successful programs adapt their structure to meet the needs of the local community.
Some practitioners at the conference had worked with large governing bodies, such as regional development organizations or multicounty groups, to pass infrastructure and economic development initiatives. Kristin Pruitt (president, Lake City Bank), Neil Sheridan (executive director, Michigan Townships Association), and Raymond Lai (executive director, McLean County Regional Planning Commission in Illinois) all spoke about their experiences working with such governing bodies. States and localities within a region have been increasingly working together on regional economic development programs, especially because some state and local funding is dedicated for regions rather than individual local governments of counties or townships. As a region’s localities work together to pursue state funding, they often gain opportunities to identify their comparative strengths and weaknesses, recognize industry clusters, and move forward economically together. Such regional development efforts can help alleviate some capacity problems as rural towns pool their resources and collaborate with urban areas. Along with pooling resources with urban areas to advance economic development goals, some rural places have had success increasing access to medical care in similar ways.
Improving access to key services and raising the quality of life
Having reasonable access to key services such as health care is not a given in some rural areas because of their physical remoteness from medical facilities. Indeed, health care can be downright difficult to access in rural areas because of the “scarcity of services, a lack of trained physicians, insufficient public transport, and poor availability of broadband internet services.”6 The U.S. Department of Agriculture’s Economic Research Service noted that rural counties had “fewer health care facilities and were more likely to have health professional shortage areas” than metro areas. Xiaochu Hu (research manager of workforce studies, Association of American Medical Colleges) presented a paper on why physicians choose to practice in rural areas and what incentives and policy initiatives might help increase the number of physicians who work in rural areas.7 Where physicians grew up and where they got their medical training are both significant factors in their decision to practice in a rural area; more specifically, if physicians have a rural upbringing and their medical training has been in a rural setting, then they’re more likely to practice medicine in a rural place. Because of declining enrollments in rural medical schools, many of these institutions try to recruit and admit students who plan to remain in rural areas after their medical training. Marie Barry (director of community economic development, Rural Wisconsin Health Cooperative) and Lydia Watson (president and CEO, MyMichigan Health) are experts in the rural health care sector, and they responded to Hu’s research. Both touched on existing programs that encourage doctors to practice in rural areas. And based on their own experiences in the field of health care, they agreed with Hu’s finding that doctors most frequently remain in rural areas if they are originally from rural areas themselves. Barry and Watson also pointed out that there are initiatives to share health care and ambulance services across hospitals and other medical facilities—which can be helpful to physically isolated rural communities.
There were some research papers that focused on the relationship between economic development and the quality of life in rural areas. These papers demonstrated the complexity of rural economic development efforts—in that they could either lower or raise the quality of life: Both underdeveloping (e.g., by not providing enough services) and overdeveloping (e.g., by destroying the natural beauty of the countryside with capital investments) can hurt the local rural economy. J. Tom Mueller (research assistant professor, University of Oklahoma) presented a paper linking “natural resource dependence” (meaning a local economy’s overspecialization in a natural resource’s sector) and nonmetropolitan economic prosperity.8 He explained that nonmetropolitan areas’ natural resource development takes one of two forms—the “extractive” form (e.g., oil drilling, mining, or logging) and “nonextractive” form (e.g., tourism and real estate). According to Mueller’s paper, there is some evidence from the 2000–15 period that indicates that while low levels of extractive development were beneficial to nonmetropolitan areas, higher levels of specialization in either form of natural resource development were associated negative outcomes for some measures of economic prosperity—specifically, lower per capita income and higher rates of poverty. Xue Zhang (postdoctoral scholar, Syracuse University) presented a research paper suggesting that as people age, they increasingly value the characteristics of rural communities, like active civic and social engagement among residents and easy access to a natural environment.9 Such features are as important as economic development strategies, if not more so, for drawing people to rural areas and convincing them to stay, Zhang contended. Jeremy Solin (who is the co-owner of Tapped Maple Syrup) stated that people who are civically and socially engaged in their local communities and also actively involved with food systems usually gain a greater sense of place, which spurs them on to make further personal investments in their communities.
This rural economic development conference was originally scheduled to be held in 2020, but those plans were upended by the Covid-19 pandemic. Over the course of the pandemic, the inequalities between rural and urban areas—especially in regard to health care and broadband internet access—were exacerbated. Nonmetropolitan areas had higher cumulative mortality rates on average than metropolitan areas during the pandemic. As many panelists described during the conference, it can be difficult to access health care from rural areas. Additionally, metropolitan areas saw a surge in outmigration to suburban, micropolitan, or rural areas as people sought more space during Covid-19 lockdowns. This put upward pressure on home prices in rural regions and decreased the stock of affordable housing for some of the rural workforce. As economic development agencies increasingly market their respective areas to try to attract large employers to relocate to their areas, the shortage of affordable housing is highlighted as an issue to work on. The pandemic also underscored the importance of essential workers, who were not able to work remotely throughout much of the pandemic. Many of the essential jobs included manufacturing jobs, and therefore, some rural manufacturing workers like those in Montcalm County, Michigan, were adversely affected. For those who were able to do work or attend school from home, the pandemic made clear the importance of broadband internet access.
Indeed, the pandemic turned the spotlight on a good many of these issues. This has led to some funding from the federal government to help address the needs of rural communities. For instance, the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) has a specific high-speed internet fund for rural areas, and the American Rescue Plan Act has various funds and grants for providing housing, food, education, and health care to rural areas. As a result of the national attention paid to rural areas—as well as the wealth of research presented at this conference and produced over the pandemic—there is now greater financial support for economic development practitioners across the Midwest and the rural communities they serve. Yet there is still much more work to be done.
1 In this post, the panelists’ titles and affiliations reflect their roles as of May 2023, when this blog post was composed; some of their titles and affiliations are different from what they were in late September 2022, when the event was held.
2 Andrew J. Van Leuven, 2022, “The impact of Main Street revitalization on the economic vitality of small-town business districts,” Economic Development Quarterly, Vol. 36, No. 3, August, pp. 193–207. Crossref
4 Christiana K. McFarland and Erica H. Grabowski, 2022, “Local employment impacts of connectivity to regional economies: The role of industry clusters in bridging the urban-rural divide,” Economic Development Quarterly, Vol. 36, No. 3, August, pp. 317–328. Crossref
5 Oudom Hean and Mark D. Partridge, 2022, “The impact of metropolitan technology on the non-metropolitan labour market: Evidence from US patents,” Regional Studies, Vol. 56, No. 3, pp. 476–488. Crossref
7 Xiaochu Hu, Michael J. Dill, and Sarah S. Conrad, 2022, “What moves physicians to work in rural areas? An in-depth examination of physician practice location decisions,” Economic Development Quarterly, Vol. 36, No. 3, August, pp. 245–260. Crossref