Rural and Small Community Technology Clusters: Back to the Basics

Throughout the United States, disadvantaged, declining and struggling rural and smaller communities have wrestled with the problem of developing a sustainable base for economic activity. In North Carolina, for example, although statewide unemployment for the end of 2004 is a very respectable 4.8%, many rural counties are over 7.0%. And in general, economic growth in smaller communities under 50,000 residents lags well behind the larger, more urban such as Raleigh and Charlotte. The same picture is painted in almost every state. The questions usually asked by community leaders appear ominously similar. How can we attract industry to our community? What can we do to stem the tide of unemployment? What is the role of entrepreneurial activity in rural economic growth? And what about high technology, the intellectual engine of the nation’s economic future – can’t rural or smaller communities get even a small slice of the new industrial pie? To some extent, we can answer these questions a little better now – but the true success stories are still rare. Most rural regions, in fact, continue to lose their traditional industries. And in spite of the best efforts of local economic development agencies armed with an arsenal of subsidized incentives, tax breaks, and cash payments, the refurbished factory shells and newly minted incubators remain mostly empty. So what went wrong? – probably many things. But most importantly, government policy makers haven’t paid close enough attention to the important customers in the economic development game. What exactly does high technology look for in a region? What encourages home-grown start-up innovative activity and do some types of entrepreneurs add more value than others to economic development? Early regional economic development thought was built mostly upon the intellectual foundation of sociology, education, and government policy research. More recently, economic and strategy researchers such as Michael Porter of the Harvard Business School have attacked the cluster issue by looking at industry structures and supplier-buyer relationships. Certainly this work has provided valuable insights, but economic structures, labor indices, and cluster maps can only tell part of the story, albeit an important one. More can be added to the storyline, however. Developing a sustainable economic development strategy around the idea of rural and small community technology clusters requires returning to the basics. We need to reexamine more closely the opinions of technology-based entrepreneurs, venture capitalists, and corporate managers. These are the real drivers of economic growth and success.