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ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
ASA 2013 Conference Localizing the Rural Economy from the Inside Out
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ASA 2013 Conference Localizing the Rural Economy from the Inside Out

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The purpose of this workshop is to describe one Appalachian communities approach to developing a rural economic development strategy for creating jobs through new and expanded businesses in the …

The purpose of this workshop is to describe one Appalachian communities approach to developing a rural economic development strategy for creating jobs through new and expanded businesses in the context of the current recessionary times.

The workshop demonstrates methods for executing a community “strategic plan” and visioning process that lead to the identification of thirteen strategies for strengthening local rural businesses and three final community actions (alternative energy initiatives, community food system assessment, and crowdfunding) that can be particularly relevant for replication of Appalachian grassroots actions.

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  • 1. Localizing the Rural Economy from the Inside Out36th Appalachian Studies Conference Appalachian State University Boone North Carolina March 22, 2013 Peter Hackbert and Jalissa Hunter Berea College
  • 2. Introduction3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 2
  • 3. Resilience3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 3
  • 4. “at the heart of resilience is a verysimple notion – things change – and to ignore or resist this change is to increase our vulnerability and forego emerging opportunities, in so doing, we limit our options.”3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 4
  • 5. The Appalachian Region3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 5
  • 6. EPG searches for “real-world” solutions • Mission statement - educating and inspiring students from Appalachia to become service-oriented leaders • 1,600 liberal arts students • 150 yearsWhat better way to encourage young Appalachians to start their own businesses than to reach out to them while they’re still trying to figure out what they should be doing with their lives?
  • 7. The EPG Program defines “Entrepreneurial Leadership” as:"A process when one person or a group ofpeople in a community originate an idea orinnovation for a needed change and influenceothers in that community to commit torealizing that change, despite the presence ofrisk, ambiguity, or uncertainty".
  • 8. 3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 8
  • 9. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 9
  • 10. Small Rural Appalachian Community Economic Development (CED)Traditional ED Strategy / Tool Direct, Short-term • Industrial development Economic • Business retention / expansion Outcomes • Workforce development • jobs • Tourism • firms Economic Development • prosperity • wealth ApproachesAlternative ED Strategy / Tool • Entrepreneurship 1. Recruit firms from the outside • Downtown development 2. Strengthen/expand existing firms • Arts / Creative economy 3. Promote development of new firms • • Cluster-based development Residential development Other Outcomes • social • civic • environmentalCD Capacity Building Strategy /Tool Indirect, Long-term • Transportation • Broadband / Internet / Social Media • ED finance • Philanthropy • Strategic planning • Leadership development • Organizational development
  • 11. “Would you tell me, please, which way I ought to go from here.” asked Alice.3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 11
  • 12. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 12
  • 13. “That depends a great deal on whereyou want to go,” said the Cheshire Cat. Lewis Carroll, Alice in Wonderland3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 13
  • 14. Begin with a vision statement3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 14
  • 15. Possible Community Goals• Economic Goals • Environment Goals• Social Goals • Political Goals3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 15
  • 16. Problem StatementHow do rural communities hit hard by the 2008 economic recession approach economic development?3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 16
  • 17. Review of the Literature• Scholars Lambe, 2008; Drabenstott & Moore, 2009; Morgan, Lambe, & Freyer, 2011• Rural local economic development writers (Shuman, 2012; Cortese, 2011; Moltz & McCray, 2012)• Both advance strategies for homegrown prosperity3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 17
  • 18. Localization3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 18
  • 19. Local Ownership Matters1. Higher multipliers2. Great community wealth: Fleming and Goetz (2011)3. More dynamic4. Healthier residents: Blanchard, (2012)5. Better community planning6. Greater creativity7. Greater political participation3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 19
  • 20. Producing better, truer, ways of measuring economic, environmentalan social performance, is a critical stepin making progress towards building a better world. - Joseph Stiglitz, Nobel Laureate in Economics3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 20
  • 21. How can this be accomplished?3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 21
  • 22. Develop Census Indicators Go to: quickfacts.census.gov3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 22
  • 23. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 23
  • 24. Develop Small Business Indicators Go to:www.census.gov/eos/www/naics3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 24
  • 25. To learn about NAICS explore this site3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 25
  • 26. Develop Small Business Indicators Go to:www.census.gov/eos/www/naicswww.census/gov/econ/cbp/index.html Self-Employed www.censtats.census.gov/cgi- bin/nonemployer/nonsect.pl3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 26
  • 27. Develop County Business Patterns Go to:www.census/gov/econ/cbp/index.html3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 27
  • 28. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 28
  • 29. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 29
  • 30. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 30
  • 31. Develop Small Business IndicatorsPick two or three NAICS categories• How many small businesses?• Does the data appear accurate?• Is the number growing or contracting?• How to you compare against similar communities?3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 31
  • 32. Develop Self-Employed Indicators Go to: Self-Employed www.censtats.census.gov/cgi- bin/nonemployer/nonsect.pl3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 32
  • 33. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 33
  • 34. Develop Small Business IndicatorsPick two or three NAICS categories• How many categories have small business growth?• If the number of categories are growing this is an indicators of diversification.• What categories are shrinking?3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 34
  • 35. Environmental indicators Go To: www.epa.gov/ncea/roe www.epa.gov/myenvironment3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 35
  • 36. Other Building Block Indicators• Local Foods• Renewable Energy• Green Building• Community Capital• Local Arts• Independent Retail• Green Manufacturing• Human Capacity3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 36
  • 37. City of Berea Case Study Methods• County Business patterns from the Census Bureau• Nonemployer Statistics from the US Census Bureau• Zip code analysis indicated that all but two of the 392 establishments in Berea have fewer than 500 employees and therefore qualify as small businesses.• The Census Bureau’s Nonemployer Statistics, revealed an estimated 1,548 individuals have their own businesses in Berea, with sales of $47 million per year.3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 37
  • 38. City of Berea Case Study Methods (continued)• The IMPLAN Input-Output model unifies various federal databases and fill in the gaps• Compare Berea’s economy to composition sister cities, State of Kentucky, and the United States as a whole.3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 38
  • 39. Berea’s Profile• 329 Establishments• 1,534 Self employed• 294 Farmers• 2,500 Public employees• $413M in wages• $25M in state and local taxes• $1.9B GDP3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 39
  • 40. Compared to the USA• 23% of the workforce is in manufacturing—more than 2 X the national average.• Berea also has much greater numbers of people in education, health, and social services.• 1/3 less than the national average of its workforce in the arts, entertainment, and tourism.• Finance sector is about 1/2 the national average, which suggests how little capital is available for business growth.3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 40
  • 41. Shuman argues in Going Local (1998); The Small-Mart Revolution (2006)“ economic development performs best when itis focused, laser-like, on businesses “ that arelocally owned and import substituting. Localownership means that working control of acompany is held within a small geographic area.Import-substituting means that the company isfocused first and foremost (though notexclusively) on cost effective production for localmarkets.3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 41
  • 42. Leakage analysisIdentifies all those sectors in the economy where acommunity is unnecessarily importing outside goods andservices. Every unnecessary import represents a loss ofdollars and a loss of the "multiplier" impacts those dollarslocally.Represents a loss of other documented benefits that localbusinesses bring: knowledge, skills, tax payments,charitable giving, revitalized downtowns, tourists,stronger civil society, and more political participation.3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 42
  • 43. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 43
  • 44. BALLE Job Leakage Calculator 5,739 additional jobs3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 44
  • 45. 40 Export Industries• Manufacturing parts for automobile supplying the assembly plant in Georgetown, KY.• Role of Berea College, and many nonprofits promoting human rights and environmental protection;• Presence of a largely retirement population, nursing homes, funeral parlors, and cemeteries• Major services sector providing residents throughout the region (some of whom may be coming to work in Berea) with child care, taxis, limited restaurants3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 45
  • 46. 40 Local businesses that could meet demand1. Global companies (no headquarters)2. Professional services (outsourcing pros)3. Intermediaries (outsourcing warehousing)4. Tourism (lacks critical mass)5. Food and retail (not capturing shopper fair share)6. Finance (no local insurance, securities brokers)7. Health Care (need for full-service mental-health- care facilities)3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 46
  • 47. What If 25% of Berea businesses could meet 25% of local demand? IMPLAN MODEL – forecasts 1,398 new jobs BALLE Calculator – forecasts new 1,435 jobs3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 47
  • 48. Some New Jobs Not Possible3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 48
  • 49. 3 Largest Sectors Professional services (317) Wholesale trade (198), and Tourism (168)•3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 49
  • 50. Five Clusters – 1,300 jobs• Goods distribution, warehousing, and trucking (232 direct jobs);• Professional services (247)• Finance, insurance, and real estate (167)• Local food (103)• Tourism (60) 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 50
  • 51. Findings STRENGTHS WEAKNESSES• Location • Limits to manufacturing• Manufacturing • Finance gaps• Education • Empty storefronts• Public Sector • No fun• Infrastructure • Youth out migration• Civic Culture • Tourism deficits• Tourism• Local businesses • Workforce shortcomings• Quality of life3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 51
  • 52. Findings STRENGTHS WEAKNESSES• Location • Limits to manufacturing• Manufacturing • Finance gaps• Education • Empty storefronts• Public Sector • No fun• Infrastructure • Youth out migration• Civic Culture • Tourism deficits• Tourism• Local businesses • Workforce shortcomings• Quality of life3/23/2013 Hackbert, P.H. “Localizing the Rural Economy from the Inside Out.” ASBE Conference, October 5, 2012 52
  • 53. Findings OPPORTUNITIES THREATS• Regional growth • Aging population• Industrial park • Over-focus on corporate• Entrepreneurship innovation attractions• Arts and Crafts • Unplanned growth• Broader approach to tourism • Divisions• Integrate the college more thoroughly into the city’s economic growth• Partners3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 53
  • 54. Findings OPPORTUNITIES THREATS• Regional growth • Aging population• Industrial park • Over-focus on corporate• Entrepreneurship innovation attractions• Arts and Crafts • Unplanned growth• Broader approach to tourism • Divisions• Integrate the college more thoroughly into the city’s economic growth• Partners3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 54
  • 55. Conclusion and Action Steps3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 55
  • 56. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 56
  • 57. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 57
  • 58. Alcohol beverage sale[City-County] 4th Class cities with permits1. Corbin – Whitley/ Knox 11. Springfield – Washington2. Central City – Muhlenberg 12. Vanceburg – Lewis3. Cumberland – Harlan 13. Elizabethtown – Hardin4. Eminence – Henry 14. Lancaster – Garrard5. Falmouth - Pendleton 15. Vine Grove – Hardin6. Madisonville-Hopkins 16. London – Laurel7. Mt. Sterling – Montgomery 17. Jenkins - Letcher8. Morehead – Rowan 18. Whitesburg- Letcher9. Russellville – Logan 19. Vanceburg- Lewis10. Shelbyville - Washington 20. Somerset- Pulaski 21. Manchester- Clay
  • 59. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 59
  • 60. 3/23/2013 Hackbert, P.H. and J. Hunter. Localizing the Appalachian Economy from the Inside Out, ASA Conference 60

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