Turmoil in Traditional Industry: Prospects for Nonmetropolitan Manufacturing

D uring the last three decades, nonmetropoli-tan America has been relatively successful in recruiting and nurturing manufacturing activity. Yet with this success, rural America has realized that a development strategy focused on manufacturing, especially manufacturing in branch plants, will likely disappoint. There are simply too few new or relocating manufacturing plants to satisfy all communities interested. In addition, non-metro manufacturers have exhibited characteristics different from manufacturers in general, characteristics that have dampened potential positive influences on the local economy. Nonmetropolitan manufacturers have been disproportionately low-wage operations with few opportunities for professional and managerial positions, rural manufacturers’ linkages to local suppliers have been relatively weak, and branch plants have been impotent sources of entrepreneurial activity and new firm spin-offs. 1 The shortcomings associated with manufacturing branch plants rendered industrial recruitment “unfashionable.” The strategy pendulum has swung to services, small businesses, entrepreneurship, tourism , retiree attraction, and alternative agriculture as policies for sustainable community economic development. Yet some nonmetro development specialists believe the policy pendulum has swung too far away from manufacturing development, recruitment , and retention and expansion. The development of a manufacturing base remains an important component of a holistic development strategy for those nonmetropolitan communities with the requisite infrastructure, labor force, quality of life, and locational characteristics (Finsterbusch and Kuennen 1992). Manufacturing employs approximately one of every six workers in nonmetropolitan areas, behind only services and government as a source of jobs. In addition, employment in agriculture and services is positively influenced by manufacturing employment. Many farm families rely on off-farm employment for a significant share of family income, and manufacturing jobs are an important source of these off-farm employment opportunities in the Heartland. 2 Furthermore , nonmetropolitan export services depend on local manufacturers for almost one-quarter of their sales (Porterfield and Pulver 1988). The ambiguity regarding whether manufacturing development is a “good” or “poor” way to increase nonmetropolitan employment largely is attributable to the diversity of both the industry and nonmetropolitan communities. Appreciating the role of manufacturing in economic development requires an analysis that is relatively industry-and area-specific. This chapter presents an overview of the past performance and future prospects of the manufacturing sector for nonmetropolitan areas of the Heartland states. The discussion is organized as follows: First, the chapter analyzes employment trends from 1981 to 1991 for the states’ metro and