By John Phair, Reporter for Today’s Farmer published in Chatham, ON
September 27, 2008,
Economic development in a small town often requires a heavy dose of long-term thinking, risk taking and often avoiding traditional methods for alternative strategies.
So says Will Lambe, associate director of the Community and Economic Development Program at the University of North Carolina.
Lambe was the keynote speaker at the Small Towns, Big Ideas seminar held by the Sarnia-Lambton Economic Partnership, held Sept. 18 at Wyoming.
Lambe said for the past 80 years the government of North Carolina has had a specific mission of working with public officials within the state, and consequently has had a good deal of experience working on consulting projects and advising elected officials.
As a result, he spent nearly two years studying small U.S. towns with populations of less than 10,000.
“I did a study on 50 communities that had some degree of success and tried to figure out what they did and how they did it,” he said, adding that he will soon publish a book with title Small Towns, Big Ideas.”
He said by using that study as a starting point he’s currently working with rural communities across the U.S. in developing strategic initiatives.
“The projects I’m talking about focus on community economic development and cover a broad range of strategies and contexts,” he said.
He said the case studies he has did on the 50 small communities in his book were done in a narrative form and largely for an academic audience.
Nevertheless, he said he likes to define economic development as “the activities that take place at the intersection of public policy and private commerce to create jobs, business prosperity and wealth within the community.”
He said he likes that definition because it gives puts forth the notion that economic development is not the sole responsibility of either the private sector or the public sector but is what happens when the two combine their efforts, ideally in a strategic way, to create jobs and increase the indicators of prosperity and wealth within the jurisdiction, adding that wealth within a community can take many forms.
Lambe said there are three basic approaches to achieving those outcomes: Recruit businesses from outside the jurisdiction; strengthen the existing business base; or work to develop new businesses.
He said there are traditional strategies and tools that have been used over the years to achieve those ends: industrial development; business retention and expansion programs; and work-force development (training and upgrading the work-force with new skills) and tourism, which he says is another traditional strategy.
“The point is really not to make a value judgment of what is traditional or alternative but rather to point out that in rural communities traditional strategies tend to be the ones that are more direct and more short term,” he said, adding the time required to develop an industrial program to attract an industry is relatively direct from activity to outcome.
He pointed out that the alternative strategies such as entrepreneurship, downtown development and cluster-based development takes much longer and often transcends political terms.
“In a world in which folks have to be elected every two or three years, the more traditional strategies tend to be more politically palatable,” he said.
“In a rural community there must be some capacity or buy in of the public or sometimes it can require an individual leader or organization to pull people and organizations together.”
He said in the 50 more successful communities in his study, he found that community development is tantamount to economic development and it isn’t always about jobs.
“In the more successful of these communities when discussing economic development it is usually not long before the conversation steers to those issues that make people feel as though they are successful,” he said.
“Outcomes such as social, civic and environmental consequences.
“In 50 small towns we looked for success in all of these categories and discovered that what we are really talking about is community development; the development of economic prosperity but not at the expense of environmental, civic or social circumstances within that jurisdiction.”
He said most small rural communities can be slotted into one of four categories: towns that are retirement or recreational destinations; towns with historic downtowns or cultural attributes; towns that are hosts to college campuses; and towns that are adjacent to metropolitan areas.
He said the top five strategies that worked in these type communities were entrepreneurship, downtown development, tourism, industrial development and organizational development.
For the alternative strategies to work you’ve got to have a heavy dose of long-term thinking,” he said, adding that requires projecting beyond the political cycle and putting in place a strategic plan that takes advantage of opportunities that will play out over a long period of time.
“What you can read into that is the most successful places we’ve looked at were thinking long term.”
He gave the example of Ord, NE, population 2,300, located in a corn-growing area 65 miles from the nearest stoplight.
The town’s only industry, a textile mill, had closed down and the town was losing population.
Consequently, its only high school was threatened with closure.
“They needed to attract young families with children to their town or they were going to lose their school,” he said.
Lambe said in most cases there is something that triggers economic development and that school was Ord’s trigger.
“That even galvanized the town’s people, they were going to do something to keep their school,” he said.
“The first thing they realized was that saving that school was related to economic development.”
He said some town leaders met and put some tools together.
First, they developed a local revenue sharing agreement between the town, the chamber of commerce and the county.
Each entity agreed to contribute $15,000 annually, which was essentially used to start an economic development office.
Secondly, they lobbied their state government for the right to impose a local sales tax.
“Now they had two steams of revenue and once these tools were in place the community came up with a strategic plan based on five basic strategies,” said Lambe.
He said they started by developing entrepreneurial education.
The group worked with an economic professor at their local high school and developed a program called Opportunity Analysis.
“Kids from grade-8 upward were required to take this course, which taught them to identify, assess, and take advantage of opportunities and included economics, business law and finance, said Lambe, adding that from this program kids created products and opened coffee shops.”
He added that a Leadership Development Program was initiated that was tied to a scholarship and was available to all ages.
Third, they created small business support teams made up of local accountants, tax experts, lawyers etc. that would provide small business owners in the community with several hours each month of free access to business and management expertise.
Fourth, since they lived in an area with many land rich but cash poor farmers, they developed a trust where landowners could contribute a percentage of their land for a tax benefit.
The revenue generated from the trust was used to attract doctors, dentists and other business professionals to the area.
And fifth, they set out literally knocking on doors in other communities trying to convince people to invest in their town.
Lambe said as a consequence, the town has attracted a $75-million ethanol plant.
In 2005 alone, the community had 17 ribbon cuttings for new businesses, which increased retail sales per capita in the town significantly as well as average household incomes.
He said the reason they were able to attract the ethanol plant is because they had their act together and were able to offer the company a quick turn-around.
“They were already beginning to be known as a progressive community,” said Lambe.
“But again, they took a long-term approach.”