An interesting new on-line data set from Go Daddy takes a look at internet use by rural residents and rural entrepreneurs. Researchers are digging into this data and producing some interesting early results. For example, the data suggest that places with more active adoption of internet and denser concentrations of businesses with an on-line presence outperform other rural regions on many important economic measures. This is an interesting and very important set of findings. It adds further fuel to the case for major investments in broadband to ensure full access for all Americans—regardless of where they live or their economic circumstances. It also highlights the importance of adoption as opposed to simple access. Rural adoption rates for high-speed broadband are much lower than in other communities, even when broadband is available. And, many Main Street businesses still do not do business on-line. So, we need to make broadband available, but we also need to encourage people to use it and to use it regularly as part of their daily lives. Making this case will be certainly easier in the aftermath of the COVID-19 pandemic. (The Go Daddy data and related analysis are publicly available here.)
I would make one further point about this research—it also shows the importance of promoting traded businesses in your community. (Note: A traded business sells outside of your community and brings in money from other locations.) I would argue that an on-line presence suggests that a rural business is doing business outside of their home community, and is thus increasing the local store of wealth. A strong base of these businesses is going to improve local economic performance. So, the Go Daddy data results may reflect this combination of broadband use and a larger share of traded sector companies.
Some additional new research offers further evidence in support of this hypothesis. A new London School of Economics study looks at the role of entrepreneurship in combating urban poverty in the US. It finds that higher levels of urban entrepreneurship in traded sectors have strong impacts on reducing local poverty and increasing local incomes. High levels of entrepreneurship in non-traded sectors have much lesser positive effects.
So, what’s the lesson here? We need to support more entrepreneurs—in rural and urban settings. And, we need to focus especially on helping them do business outside of their home communities. That’s a recipe for local wealth creation in every type of community.
I’ve been trying to keep my pandemic era reading on the lighter side, but I couldn’t help myself and I picked up Midwest Futures after seeing it plugged in a James Fallows blog. I can highly recommend this interesting and idiosyncratic book. It’s a combination of history, memoir, and critique of the Midwest region, along with some ideas on future trends and regional prospects. I enjoyed learning about the initial development of the region with a heavy emphasis on the development of the railroads and mass-scale agriculture. It’s not a pretty story, with massive displacement of Native peoples and a general disregard for the plight of the poor and dispossessed. The author, Phil Christman, is highly critical, but also shows his love of his home region, warts and all. His thoughts on the region’s future directions, in the face of climate change (and now COVID 19) are also worth considering.
Let me also add another early plug for new E-book from the folks at VOX EU and the Centre for Economic and Policy Research: Mitigating the COVID 19 Economic Crisis: Act Fast and Do Whatever It Takes. This book offers a very early but useful assessment on what will be needed to recover from our current economic mess. It includes chapters from around the world and from renowned economists like Paul Krugman. The title says it all. We need to keep investing and as the title says, “do whatever it takes.” All of the chapters are early takes on what we’ll need to do, but they offer some excellent ideas from around the globe.
Recovery from the COVID-19 crisis is going to be a tough slog for all of us, but It’s going to be especially tough for communities, businesses, and people who have already been left behind. This challenge also has a regional twist. Poverty and economic distress exist across the US, but certain regions, such as Appalachia and the Mississippi Delta, suffer from deeper historical patterns of discrimination, disinvestment, and neglect. The creation of regional commissions focused on these areas has been one effort to combat historic patterns of economic distress, and the oldest regional body, the Appalachian Regional Commission, has been operating since the mid-1960s. More recently, a host of other ARC-like commissions has been chartered. These include the Delta Regional Authority (DRA), the Denali (Alaska) Commission, and the Northern Border Regional Commission, among others. (Here’s a map of existing Commissions).
These historically challenged regions are now facing even greater peril, as they are among the hardest hit by COVID-19. They are going to require extensive investment and support on the road to recovery. Revitalizing and jump-starting the work of regional Commissions can and should be one tool in this effort. We know that the existing Commission investments have worked, as attested to by long-term assessments of ARC programs, for example. In addition, ARC and other partners have recently done great work in assisting coal-dependent communities via the POWER program. Yet, beyond ARC and DRA, most of these Commissions operate with tiny budgets or exist only on paper.
It’s time to change this, and reboot the regional Commission process. All of these authorities should be revitalized and used to help bolster regional recovery from the COVID-19 crisis. In particular, we should focus special resources on the Southeast Crescent Regional Commission (SCRC), which serves a seven state region spanning southward from Virginia to Mississippi. This heavily rural region encompasses much of the heart of the South, and is, along with Appalachia, the US’s largest contiguous region of concentrated and persistent poverty. COVID-19 is only serving to deepen the region’s economic challenges. A new effort to reboot the SCRC is underway, and it deserves a chance to succeed. We need the SCRC, and all of these regional commissions, to be fully operational and key investors in economic recovery and revitalization.
The latest issue of our semi-regular e-newsletter, EntreWorks Insights, is now available here. This issue offers some thoughts on what might happen on the long and winding road back to economic recovery for communities dealing with the COVID-19 crisis. Thanks for reading. You can see archived newsletters and subscribe for future issues here.
We’re going to need every possible type of support to get the economy back on track in the midst of our current crisis. Once the current Congressional rescue package gets enacted, we’ll start to see some investments flow to needy communities, businesses, workers, and families. But, we’ll need to try lots of different solutions. Work sharing is one potentially underutilized approach. Work sharing programs, which exist on the books in 28 states, provide support to companies as they temporarily reduce workforce hours due to seasonal business fluctuations or other events, such as the current Coronavirus crisis. Several states, such as Pennsylvania and California, are using this approach. In addition, Denmark’s widely publicized program to guarantee the wages of all workers, utilizes this approach as well. If your state has a work sharing program on the books (list of states is here), consider this as one need tool in your policy toolkit for layoff aversion and economic recovery.
While we are in the midst of an unprecedented economic crisis, local economic and workforce developers are moving quickly to respond. Around the country, the Department of Labor has released funds for “lay-off aversion,” i.e. to help small firms keep their employees on the job. In Virginia, we are trying to get these funds out the door quickly to address immediate business challenges. If you happen to reside in either Arlington or Alexandria, Virginia, please check out the opportunity noted below. Other jurisdictions in Virginia and around the US are also offering such grants. These are quick turnaround opportunities: the money will be dispersed quickly, but you need to apply this week! This is a limited program for now, but we can expect more follow on efforts soon. Program details are below. Stay safe and stay healthy!
The Alexandria/Arlington Emergency Layoff Aversion Assistance Program will award 11 grants to local small businesses who require financial assistance in order to retain their workforce during the COVID-19 emergency.
How the Program Works
- Participating businesses or non-profit organizations with employees located in Alexandria City and Arlington County that has 250 or fewer employees.
- Fill out and submit the Emergency Layoff Aversion Assistance Program application at https://workforcecouncil.arlingtonva.us/covid19/.
- Application requests shall not exceed $7,500. Smaller requests are encouraged.
- Decisions for funding approval will be made by March 30, 2020 at 5pm. Grants will be awarded to applicants who can save the largest number of jobs.
Examples of Acceptable Use of Funding
Layoff aversion funds could be used for innovative strategies to maintain business operations, including, but not limited to:
- Hiring a cleaning/sanitization service.
- The purchase of software/online programs that employees would need to use from home to support their work.
- The purchase of remote access supplies, including laptop computers and/or smart phones, which the employees would need to use from home to support their work.
- The purchase of an online sales platform to sell services virtually so that existing staff roles can be repurposed for order fulfillment.
Application Deadline: 5pm EST, March 27, 2020.
For full requirements and to apply, https://workforcecouncil.arlingtonva.us/covid19/.
In recent years, many states and communities have embraced food systems and ag/food sector development as core economic development strategies. This is a field with lots of innovation and creativity underway, but one of my favorite efforts has been Vermont’s Farm to Plate programming. This effort kicked off in 2009, and, since then, a wide and deep statewide network has been pushing goals of supporting sustainable economic development, improving soil and environmental quality, and ensuring that every Vermont resident has access to healthy local food. The effort can point to many achievements, but the local ag sector has been hit by many challenging outside forces as well. These include a collapsing dairy industry, climate change impacts, and hopefully only limited impacts from the current coronavirus crisis. In an effort to spur action, share lessons learned, and chart new directions, a new 2020 Food System Plan for Farm to Plate was released earlier this year. It’s definitely worth a read even if you’re not a Vermonter. It offers an excellent review of recent trends in ten food sectors (e.g. dairy, cider, hemp) and nine issue clusters (e.g. access to capital, changing consumer demand, agritourism trends) that are relevant to food systems development and support. A whole host of additional issue briefs is to be published throughout 2020 as well. This is a great place to not only learn about Vermont’s model efforts, but also about the opportunities and challenges of supporting food systems development in your region as well. You can learn more and sign up for updates here.
I’ve got lots of travel on the agenda this month, but I’m especially excited to be getting up to Boston on March 30 to participate in ICBI34, the 34th annual International Conference on Business Incubation. In addition to my regular schmoozing, hanging out, and learning from a global cast of thinkers and doers, I’ll also be heading up a panel on “Fostering Success for all Entrepreneurs in Rural America.” I’ll be joined by my good friend and colleague, Cathy Renault, with whom I’ve been collaborating on a series of projects in Central Virginia. We’re going to discuss that work, and generally talk about the challenges and opportunities facing America’s rural entrepreneurs. You can find the ICBI34 schedule here. Our session is on Monday, March 30, from 11:00AM to 12:15PM, but there’s lots of other great stuff on the schedule throughout the event. Hope to see you in Boston
Many years ago, I was doing some writing and consulting work for the Organization for Economic Cooperation and Development (OECD) and was introduced to the concept of innovation vouchers, which are small grants to new companies to help defray the cost of innovation-related advances, such as getting a patent, developing a prototype, or tackling a new market. This tool works very well—it not only helps the assisted firms, but it also helps local service providers who gain new business and new skills along the way. I’ve written about the power of innovation vouchers on numerous past occasions, and still remain surprised (and saddened) that we don’t embrace this useful tool here in the US. At present, only a few locales in the US use this tool. Examples include Connecticut, Minnesota, New Mexico, and Rhode Island.
I’m glad that these states have seen the light, but they shouldn’t be alone. Innovation vouchers are a low cost tool that works. Don’t take my word for it—check out a new rigorous evaluation from the Netherlands which used randomized controlled trials to assess voucher program impacts on the performance of hundreds of firms over a 12 year period. We have had good evidence that vouchers work over the short term; these new results show important long-term impacts. When compared to a control group, the assisted firms were more likely to stay in business, to do significant R&D work, and to have slightly higher productivity rates. This is yet further evidence that these voucher tools work and that they need to be part of the toolbox for economic developers here in the US.
Next week, I’ll be up in Shepherdstown, WV, as one of the speakers on an excellent Conservation Fund program, “Balancing Nature and Commerce in Rural Communities and Landscapes.” Shepherdstown is a good location for this event, as it is a beautiful spot that faces its own development pressures thanks to the booming nearby DC metro area. I’ve participated in this program for several years and can highly recommend it. It engages small teams from rural regions around the US. Project teams typically hail from locations with large national or state parks, or some other unique or precious natural resources. This year’s teams come from Maryland, Oregon, Pennsylvania, Puerto Rico, and Virginia. They hail from differing locales, but they all share a commitment to doing economic development right, i.e. in a manner that builds local wealth (across all kinds of capital) while preserving the natural assets that make their places unique. This will be a fun and inspiring event.