Developing Rural Entrepreneurship in America by Melvin Feller MA
Melvin Feller MA states that the past 12 to 15 years have seen an increasingly wider acceptance of entrepreneurship as a core rural economic development strategy. While very few new organizations have been encouraging enterprise creation as a means of revitalizing rural places for 20 years or more, broader interest in the potential of entrepreneurship in rural communities and regions is relatively new and Melvin Feller MA believes that is due in part to an increase of 65% new businesses EIN Numbers as just reported by IRS and an increase of floods of new people into rural suburbs since Covid 19.
Why the new sharp interest in rural entrepreneurship? Several factors come into my educated guess. Traditional economic activities, which are defined as routine manufacturing, agriculture, and natural resource-based activities, have struggled to remain competitive in the face of increased worldwide competition. As a consequence, the traditional economic development strategies of industrial recruitment and retention and/or expansion have generated fewer favorable conclusions in rural places.
Rural economic developers and the communities they serve are struggling to find new sources of competitive advantage. Many of these development practitioners are willing to think outside the box in the face of old tools and strategies that are simply not working. Such as destination cities. Cities that have exclusive twists on products and services. At the same time, representations of successful entrepreneurship development now exist, so rural entrepreneurship practitioners are not alone on the modernization frontier. A growing body of research describes the outcomes of entrepreneurship development initiatives and tools that can be used to create a new, sustainable economic future for rural places. These must be looked at with the community and stakeholders of various rural areas and regions.
Getting to the heart of entrepreneurship development means that it is about more than building a support system for entrepreneurs; it is a strategy of transformation. It is about creating entrepreneurial communities, about changing the culture of rural places and people so that they embrace the potential of entrepreneurship. It also includes fostering public policy that invests in entrepreneurship development and is embraced by public and civic organizations and leaders. That is generally harder to do than said. But it can be done. For this to truly take place it is usually best to bring in outsiders who have a clear and unimpeded look at the possibilities on a grand scale.
Embracing entrepreneurship requires observing economic development in a new way, one that holds the community accountable for creating development from within. In searching for new sources of competitive advantage, communities and regions must identify and build on their exclusive local assets and take a proactive approach to defining their futures and possibilities. Bottom line is there direct and long-term impact on creating jobs and revenue for their areas.
This approach suggests that there is no better model for entrepreneurship development. In some ways, local communities and regions are analogous to entrepreneurial startup enterprises, discovering and testing the products and approaches to entrepreneurship development that intertwined well within local expectations and results wanted. While there may be a tendency to want to wait until the models have been tested and proven, Karl Stauber, an expert in economic development, argues that: “America is in the middle of a transformation of its rural areas. It does not have time to find perfect or guaranteed solutions. It must take the best ideas where it can find them and begin to adapt and adopt those ideas.”
Drawing on observation and study of entrepreneurship development practices across rural America by the Kellogg Foundation, and the CFED, they developed a framework for economic development practitioners who are trying to adapt the best ideas about entrepreneurship for their various rural cities and towns.
Melvin Feller MA Outlines the Five-Part Rural Development Framework
The first is the part of a strategy of Understanding Entrepreneurial Talent. In other words, entrepreneurship development is a human development strategy even more than a business development strategy. The entrepreneur and their dreams need to be at the center of any strategy.
According to Melvin Feller MA, the first step in creating an entrepreneur-focused strategy is to identify and understand the entrepreneurial capacity in a rural place. Every rural community or region has a range of entrepreneurial talent, from those who have the potential to become entrepreneurs. They include young people, displaced workers, people reentering the workforce, all the way down to existing business owners who aspire to create new business models and expand their reach into new markets, to those high-tech, high-growth entrepreneurs who have the possibility to generate a significant impact on a local economy.
The mix of entrepreneurial talent may include micro-enterprises generally defined as employing fewer than five people, larger enterprises defined as employing more than 50 employees, people with limited skill sets as well as, entrepreneurs who are creating their third or fourth financial ventures. Melvin Feller MA, also sees one more under reported or even looked at in the mainstay which are special populations such as, youth, artisans, and/or new immigrants whose entrepreneurial aspirations need to be nurtured.
Melvin Feller MA stands firm and remains focused in order to create a strategy focused on the needs of entrepreneurs, communities and regions and that it must develop an understanding and appreciation for the full range of existing and potential entrepreneurs in all solutions to better economic development.
The second strategy is that of Making the Case. This is mandatory aspect because entrepreneurship development is a newer approach to the age-old practice of economic development for most rural regions, local leaders which may require significant conversations in order to embrace this new approach.
In overall, making the case for entrepreneurship requires a two-fold strategy. First, the plethora of national and international research that describes the positive relationship between entrepreneurial activity and economic growth should mandatorily be shared with policy makers and leaders at both the state and local levels.
Part of making the case, is an inclusion for making the case in the stories of local entrepreneurs, who all too often are less visible to local leaders and economic developers. Stories of their struggles and their victories can often help to make the case in a way that data cannot. Rural areas that are successfully implementing entrepreneurship development strategies have found ways to actively engage entrepreneurs as advisors and leaders in this process.
The third strategy is that of Laying the Groundwork for Entrepreneurship Development.
It must be understood that all leaders and advocates of entrepreneurship must lay the groundwork for strategy development. Otherwise, they risk the temptation to reach for the mixed development strategy instead of building a made-to-order strategy appropriate to the region’s unique features.
It needs to be noted that there are three steps to laying this type of economic development groundwork. The first step is determining readiness for entrepreneurship, which includes the Understanding Entrepreneurial Talent and Making the Case elements as described above. It also includes determining whether there are organizations or individuals who already embrace entrepreneurship and can lead the way, and whether or not the capacity exists within the community to undertake entrepreneurship development. In additionally, if they do undertake that development what is that cost?
Once a community has determined that it is ready for entrepreneurship, the next step is to identify the development assets in the area on which the strategy can be built upon. Also, who is already working to support entrepreneurs? What service providers and capital providers exist within the community and the broader area? What youth programs currently exist to encourage entrepreneurship, or that could encourage entrepreneurship? What unique assets exist in the region that could become a source of new competitive advantage, such as, local artists, community colleges, heritage tourism destinations, natural resources, and niche farmers?
And finally, the community needs to understand their own capacity to undertake any type of economic development effort. Entrepreneurship development requires innovative thinking and leadership. Who will become the leaders of entrepreneurship development? How can you actively engage entrepreneurs in leadership and strategy development? What new leaders and capacity can be tapped within the community and even the wider region to support entrepreneurship development?
The fourth strategy is that of Creating a Strategy or Building an Entrepreneurship Development System. However, based on observation of successful entrepreneurship development efforts throughout rural America, a consensus has emerged — an entrepreneurship development system (EDS) is absolutely necessary to transform a rural region. Our thinking about entrepreneurship development systems has evolved over the several years.
This definition has evolved, through the work of the non-profits, government, city and rural economic development practitioners to include a set of guiding principles for the creation of an Economic Development Standard.
A solid Economic Development Standard should be:
• Entrepreneur-focused and asset based as described above.
• Collaborative because leadership for the economic development standard should be drawn from public, private and non-profit sectors and should engage service providers from all those sectors in building a system of support for entrepreneurs.
• Comprehensive and integrated. The system should focus on meeting the full range of entrepreneurial needs such as technical and capital assistance, entrepreneurship education, networking opportunities, as well as on building an environment that supports investment in entrepreneurship development with a community engagement, policy development. Entrepreneurship should be integrated into other aspects of the regional economy such as, workforce development, education, the health care system.
• Linked to policy. This is done by demonstrating the implementation and success of entrepreneurship development in communities and regions, an economic development standard can inform economic development policy at the local and state levels.
• Community-based but regionally focused — A systems approach should be rooted in communities and have the ability to using the resources of the broader region to achieve scale of impact.
• Sustainable over time. This type of entrepreneurship development is a long-term strategy.
Finally, the fifth strategy is that of Measuring Outcomes. Thereby, establishing outcome measures that truly reflect the goals of an Economic Development Standard is a necessary part of the framework. In the early stages of application, these measures will primarily capture the process of building an entrepreneurship development system such as the capacity that is built, the collaborative leadership team that is developed, the cross-learning opportunities that are institutionalized. As implementation continues, the measures will reflect the expected outcomes of the system which include new enterprises created, entrepreneurship education capacity built in the schools, youth engaged in entrepreneurial ventures, and cultural changes that reflect greater support for entrepreneurship.
These outcome measures provide a way to build and maintain momentum for entrepreneurship development, and are critical to informing the policy-making process. In addition, measuring outcomes can support a commitment to continuous improvement. Progress toward achieving these outcomes can be used to fine-tune, redirect, retool and rethink as entrepreneurship development moves forward in a regions and rural areas in general.
Entrepreneurship is not a new concept in America. In some ways, the recent excitement and embrace of entrepreneurship reflects the old adage that “what is old is new again. Entrepreneurial aspirations guided the opening of the Western frontier and the cyber frontier. Communities across the country are rediscovering their entrepreneurial roots as they seek new ways to generate economic growth from within.
The results of these innovative models will provide continued guidance to economic development practitioners and community leaders as they embrace entrepreneurship as a way to transform the economic futures of rural regions, cities and towns across this country country.
