A New Look at Rural Self-Employment Trends

While many economic developers are focused on supporting high-growth entrepreneurs, non-employer businesses (or sole proprietorships) are also an essential part of any region’s entrepreneurial ecosystem. This is especially true in rural areas where self-employment ventures play a more important role when compared to urban or suburban locales.

A new report from Choices, an academic journal focused on food and farm issues, provides some useful context for understanding the role of self-employment in regional prosperity.  The study offers a useful summary of recent trends, and the new picture is somewhat mixed.  Between 2000 and 2021, the overall number of self-employed in the US grew by 70%. Sadly, that growth was also accompanied by a slowdown in the number of employer businesses, especially those employing between 1 and 9 people. Across rural America, the general pattern is that businesses with employees are growing larger, and smaller employer firms are shrinking, going out of business, or transitioning to non-employer business status via a shift to contract (i.e., gig) workers. 

The authors conclude with a number of good suggestions, but I’ll summarize with their main points.  If we want to understand rural economic development opportunities, the self-employed need to be a key part of the discussions, as they represent both an important driver of rural development and a means to help rural Americans capture new economic opportunities.