Volume 14, Number 2 – July 2017

Connecting Workforce & Business Development for Rural Entrepreneurs

If I had a trademark on the phrase “workforce development is economic development,” I’d likely be a wealthy person.  But, like many such phrases, this one is more style than substance.  Economic and workforce developers talk a good game about collaboration, but these partnerships are rarely strong, lasting, or effective.

There are many good reasons for the “disconnect” between economic development workforce development.   I don’t want to review this debate here as there is lots of good research on this topic.   Instead, I want to offer one specific area for collaboration that is close to my heart and close to EntreWorks Consulting’s past and ongoing work in promoting entrepreneurial development in rural America. 

When it comes to supporting rural entrepreneurship, many regions suffer from a lack of capacity and a lack of resources.   They don’t have the money to invest in training and technical assistance for new business owners, and they even lack trained people to manage this kind of programming.  This is a gap that can and should be filled by the workforce development system, which has capacity and staff on the ground across rural America.   They also see a steady stream of people who likely have an interest in pursuing business ownership.    And, for most rural regions, economic prosperity or recovery is going to rely heavily on their ability to nurture new business growth.

At present, few rural entrepreneurship programs contain workforce development elements—despite the fact that most entrepreneurship advocates recognize talent development as a critical part of successful ecosystems.   Several factors are at work.  Small business owners typically lack the time or resources to access workforce development programs, and may under-invest in workforce training.  Meanwhile, few Workforce Investment Boards (WIBs) provide entrepreneur-friendly programs or support services.  A 2010 survey of WIBs found that only 5% targeted small business as a top priority, and few provided lower cost services targeted to small or new companies.

WIBs and other workforce organizations face resource constraints of their own, and may often opt for working with larger employers where larger scale outcomes are likely and where the return on investment is larger.  Recent changes in federal law are designed to encourage greater WIB focus on supporting local entrepreneurs, but these changes are too recent to allow for strong conclusions on their impact. 

Where Should Workforce Efforts Fit In?

While the connection between regional entrepreneurship and workforce development efforts are currently limited, the potential for closer linkages is significant.   Closer linkages can improve outcomes on traditional business and talent measures, such as business starts, new job creation, and improvements in the local talent base.   They can also generate broader community outcomes by enhancing economic inclusion and by supporting a more diverse and sustainable local economy.

These efforts could include the following:

• Promoting Self-Employment:  Providing training for those with an interest in business start-ups
• Supporting Economic Diversification:  Providing training and specialized business services in sectors that are part of a wider economic diversification strategy.  In rural areas, this would include sectors like tourism, food systems, and alternative energy.
• Youth Engagement:  Entrepreneurship programs, like summer camps, can help keep kids in school and interested/committed to the local community.
• Business Services to New Firms:  Human resources management is one of the biggest challenges to company growth.  Workforce boards should provide HR services for small rural firms, not just for big employers. 

This is a very brief introduction to a complex set of issues—I welcome your reactions and feedback.  Yet, for me, this seems like something of a no-brainer.   For today’s rural economic developers, success depends on their ability to nurture local entrepreneurs and to build a strong local talent base.   At present, workforce development and entrepreneurship/small business programs operate on separate pathways, with few efforts to align program objectives and activities.   Both sides suffer from the status quo.   Rural ecosystems struggle to develop a strong pipeline of new entrepreneurs, and workforce development professionals miss out on opportunities to work with emerging local employers and to provide new learning opportunities for rural youth.

Closer alignment is possible without major new investments or massive shifts in policy directions.  Current rules and regulations permit most of the activities discussed in this essay.  What is needed is the will and the commitment to move forward.  By building closer collaborations between workforce and entrepreneurial development initiatives, rural regions can improve the quality of services provided to emerging rural ventures while also building a stronger entrepreneurial ecosystem for businesses of all types.

What’s New at EntreWorks Consulting?

It’s been a busy spring and summer seasons here at EntreWorks Consulting.  We continue to support long term research and evaluation projects for the Appalachian Regional Commission and the Pentagon’s Office of Economic Adjustment.  In addition, we continue to work with the National Association of Counties and the National Association of Development Organizations to provide technical assistance regions affected by the downturn in coal.  And, last but not least, we are kicking off several new projects including work in Central Louisiana and Northwest Pennsylvania. 

We have numerous upcoming training engagements, including teaching at the North Carolina Basic Economic Development Course in Chapel Hill (July 27) and the IEDC’s Small Business and Entrepreneurship Course in Omaha on August 24.  We’ll also be providing a webinar on “Benchmarking Innovation” for the Pennsylvania Economic Development Association on September 13.  Send us an email (info@entreworks.net) if you want to learn more.   Hope to see you on the road!

We have also added a new article, “Lessons from the Coal Industry Transition,” to the EntreWorks Library and we continue to provide more regular news and updates at the EntreWorks blog at http://entreworks.net/blog.   Recent posts have discussed the benefits of employee ownership, new data on the gig economy, and the growth of “little data” in economic development.  You can also access blog updates at our Facebook and LinkedIn pages and on Google Plus.