Rebalancing the stool
It’s time to de-emphasize the importance of attracting new business
Maury Forman is on a mission to rebalance the stool in rural communities. It’s the economic development stool—the widely accepted three-part theory for creating economically healthy communities. Traditionally, that strategy consists of community development, business retention and expansion, and business attraction.
That may have been successful during a strong economy in the 20th century, Forman says, but rural communities need to shift focus today towards entrepreneurial development. It’s time to rebalance the stool.
A shift in theories
For the last 50 years, the economic development mantra has been to live by the three-legged stool theory, but there’s a problem if any of the legs are weak. Business retention and expansion is considered the Rodney Dangerfield of economic development (they just don’t get no respect), and business attraction—the sexy part of the stool—gets all the attention.
“What has happened,” Forman says, “is that rural communities have realized that the three-legged stool theory is not working. There are only about 150 to 200 companies relocating in the United States each year, and there are 15,000 communities competing for them. It is a rare event when a community attracts new business, yet that is where most of the energy and resources are going in small economic development organizations.”
Many communities are now turning to a new three-legged model: asset building, entrepreneurial development, and technical assistance.
First leg: Find your assets
Entrepreneurs are where the real job growth is in a community. Identify community assets in order to create entrepreneurial
opportunities. There are many different kinds of assets. Arts and culture are huge attractions, and a driving reason for people relocating. (See story on page 6.) Infrastructure elements can also be valuable, particularly broadband which is a necessity in entrepreneurial communities. Educational opportunities, through community colleges or universities, can promote job diversity.
Second leg: Encourage entrepreneurship
Entrepreneurship works for rural communities, and Forman wants to promote that mindset at a very earlyage. Realizing this, some communities participate in national Lemonade Day. Last year, more than 150,000 children registered in 36 cities to “build a stand and spark a dream.”
“We need to allow our children to be creative,” he says. “Entrepreneurship is what creativity is all about. We need to allow them to understand that failure is part of the learning process. By the time kids are young adults, they have lost the capacity to take chances and that means they won’t succeed as entrepreneurs.”
Third leg: technical assistance
Technical assistance services can help communities prepare for economic development. Peer-to-peer mentoring between businesses, tutoring on marketing intelligence, staff assessment, training on how to access capital, export assistance — all can add to a skill base that helps position a community for growth.
“It’s no longer just about the public sector providing technical assistance,” Forman says. “It’s about working with the private sector through strategic thinking, stimulating conversations, new ideas and innovation entering the marketplace, and an understanding of a new way to create economic development in rural communities.”