Rural Manufacturing Matters, Part 2

Over the past month or so, the US Department of Agriculture’s Economics Research Service has been releasing some new and interesting data on the state of rural manufacturing.  The upshot is that rural manufacturing matters—a lot—for the economic health of rural America.    The annual report, Rural Manufacturing at a Glance, finds that manufacturing employment is nearly twice as high in rural America as urban America.  It accounts for 14% of non-farm employment in rural regions, and 7% of jobs in urban areas.  It also accounts for 21% of rural earnings, versus 11% in urban areas.   Since the Great Recession, rural regions have lost manufacturing jobs.  However, a related study finds that rural firms have significantly higher survival rates than their urban counterparts.  One reason for this steady performance may be that many of these rural manufacturers are particularly entrepreneurial and innovative.  A final study examines innovation in the rural economy and finds that the long-touted urban innovation advantage may be overstated.  Smaller urban manufacturers and service firms tend to be more innovative, but, among larger manufacturers (with more than 100 employees), the urban-rural differences remain minor.  A majority of large rural manufacturers were considered to be “substantial innovators.”

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