A Futurist's View of Rural Minnesota


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Delore Zimmerman of Praxis Strategy Group, Grand Forks, ND provides guidance for rural community leaders about development trends and the steps communities must take to increase their investment attractiveness. He is part of a webinar series (Realizing Our Broadband Future) hosted by the Blandin Foundation

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A Futurist's View of Rural Minnesota

  1. 1. The Future of Communities inAmerica’s Resurgent HeartlandA Futurist’s View of Rural Minnesota<br />Delore Zimmerman, Ph.D.<br />President<br />
  2. 2. The Heartland is made up of places whose economy and traditions are deeply rooted in farming, mining, forestry or fishing but are now finding their way in the globally competitive, network-centric economy. It’s a religious, family-centered archipelago of regions where civility, education, a focus on marriage and children, and accommodations to create a balance between work and family are commonplace.<br />The resurgence is due to the fact that the pillars of the Heartland economy – food, energy, and manufacturing – are and will be in high demand in the global economy. <br />America’s Resurgent Heartland<br />
  3. 3. Today’s Webinar<br /><ul><li>The Resurgent Heartland
  4. 4. Thinking About the Future
  5. 5. Leveraging Trends Working in the Heartland’s Favor
  6. 6. High Performance Community Strategies
  7. 7. Building Communities of Aspiration</li></ul>America’s Resurgent Heartland<br />
  8. 8. Today’s Webinar<br />Foresight Exercises<br />Trends and momentum that our community can align our efforts with to create opportunities<br />Target opportunities that our community can focus on to have the most economic impact<br />Tell a compelling story that will commit people to the possibilities<br />America’s Resurgent Heartland<br />
  9. 9. Historical Contributions of the Heartlandto the Nation<br />Food<br />Cheap food - average cost today is 10% of disposable income for Americans <br />Talent<br />Migration to urban centers of educated workers<br />Values<br />Work ethic<br />Sense of patriotism & civic responsibility<br />Religiosity & family values<br />Frontier opportunity - the national outlet<br />
  10. 10. Repository of the Entrepreneurial Spirit<br />“Almost all the farmers of the United States combine some trade with agriculture; most of them make agriculture itself a trade.”<br />Alexis de Tocqueville, Democracy in America<br />
  11. 11. Changing Role of the Heartland<br />Economic function is no longer primarily the production side of agriculture<br />10% of rural people today live on farms<br />14% of rural workforce employed in farming <br />The heartland is urbanizing<br />Micropolitans growing and acquiring more urban amenities<br />Approximately three-fifths of non-metro residents are micropolitans<br />One in 10 Americans live in micros<br />Rural (non-core) areas that are growing are high amenity areas and places with critical mass in terms of infrastructure and skilled people<br />
  12. 12. Migration Trend 1960-2000<br />
  13. 13.
  14. 14. Regionalization Marches OnMetropolitan & Micropolitan“ruralplex”<br />
  15. 15. America’s Residential Preferences<br />Pew Research Center 2009<br />
  16. 16.
  17. 17. Overall Rural Economy: <br />Reliance on Government + Manufacturing<br />25<br />20<br />15<br /> Metropolitan<br /> Micropolitan<br /> Rural<br />10<br />5<br />0<br />Government<br />Construction<br />Information<br />Natural resources<br />Manufacturing<br />Professional and business services<br />Education health care and social assistance<br />Financial activities<br />Retail and wholesale trade<br />Transportation warehousing and utilities<br />Leisure hospitality and other<br />Earnings percent of total by sector<br />
  18. 18. Occupation of Civilian Employed Population 16 years and overMetropolitan, Micropolitan, Outside Metro/Micro <br />Source: The American Community Survey (ACS) 2008 <br />
  19. 19. Points of Departure for the 21st Century<br />Rural areas emerged from the 1990s having experienced a strong economic rebound. These gains, however, were highly concentrated. 40 percent of rural economies, namely those with scenic amenities, proximity to metropolitan areas, or ability to transform themselves into commercial hubs, accounted for nearly all growth. <br />CAPITALIZING ON RURAL AMERICA: CRAFTING A COMPETITIVE FUTURE. A Study by SRI International for the Federal Home Loan Bank of Des Moines. 2005.<br />
  20. 20. Amenities-driven<br />Black Hills Region, South Dakota<br />St. George, Utah<br />Wenatchee Valley, Washington<br />Bozeman, Montana<br />Heartland Growth NodesRegions that Are Thriving<br />Technology-driven (re-emerging hubs)<br />Red River Valley, ND/MN<br />Sioux Falls, South Dakota<br />Des Moines, Iowa<br />Greenwood, Mississippi<br />
  21. 21. A Short History of Technology: <br />Red River Valley Corridor<br />Food processing<br />Biotech Services<br />Genomics<br />Digital imaging<br />Business solutions software/systems<br />Nanotechnology<br />Electronics<br />Polymers & coatings<br />Wireless technology<br />Off-road vehicles<br />Crop &<br />Livestock<br />Science<br />Crop <br />Farming &<br />Animal<br />Husbandry<br />Agri-business<br />Management<br />& Finance<br />Machinery<br />&<br />Equipment<br />1870’s 1950’s2000<br />
  22. 22. Forces of Renewal<br />Nationwide people heading to smaller towns and cities<br />Housing prices on coasts reach critical level <br />Social trends strongly pro-rural<br />US population growth will increase interest in rural and small town areas<br />Technological evolution permits dispersion and accelerates opportunities<br />
  23. 23. Forces of Transformation and Renewal<br />Foresight Exercise<br />What do you believe will be the one trend or force of transformation that most impacts your community in the foreseeable future?<br />What existing momentum can we build on to create opportunities for the future?<br />
  24. 24. Looking Ahead<br /><ul><li>More of the same?
  25. 25. Transition and transformation?
  26. 26. Disruptive change?</li></li></ul><li>THE AGE OF HYPERCHANGE<br />The rate of change is accelerating. <br />“ Because of the explosive nature of exponential growth, the twenty-first century will be equivalent to twenty thousand years of progress at today’s rate of progress; about one thousand times greater than the 20th century.”<br />Ray Kurzweil<br />Inventor, futurist, author<br />
  27. 27. The Velocity of Change?<br />50 million users<br />Knowledge<br /><ul><li>3000 BC to 1966 knowledge factor of 1
  28. 28. 1966 to 1996 knowledge doubled
  29. 29. 1996 to 2006 knowledge doubled again
  30. 30. Radio = 30 years
  31. 31. TV = 16 years
  32. 32. Computer = 12 years
  33. 33. Internet = 4 years</li></li></ul><li>Just 3000 days ago<br />Couldn’t Google much of anything, a Blackberry was just a fruit, Amazon was only a river<br />Hybrids were plant varieties<br />Off-shoring was for oil rigs and banking<br />Housewives were desperate only on daytime TV<br />Homeland security meant a home security system to most people<br />
  34. 34. The future is already here. <br />It’s just not widely distributed yet.<br />“we have no idea, now, of who or what the inhabitants of our future might be. In that sense we have no future. Not in the sense that our grandparents had a future, or thought they did. Fully imagined cultural futures were the luxury of another day, one in which ‘now’ was of some great duration. For us, of course, things can change so abruptly, so violently, so profoundly, that futures like our grandparents’ have insufficient ‘now’ to stand on. We have no future because our present is too volatile. We have only risk management. The spinning of the given moment’s scenarios. Pattern recognition.” <br />from Pattern Recognition<br />William Gibsonauthor, coined term cyberspace<br />
  35. 35. Network Society<br />Global<br />Information Society<br />Multinational<br />Industrial Society<br />International<br />Agricultural Society<br />National<br />
  36. 36. Flows of the Network-Centric Economy<br />work flows to nodes of technology and talent in the global information and logistics infrastructure<br />trade flows between value-added regional and global enterprise networks<br />financial and human capital flows to where it’s wanted and stays where it’s treated well<br />
  37. 37. Spatial Consequences of Network-Centric Economy<br /><ul><li>Robust sectors of cities and regions become integrated globally
  38. 38. Hinterlands become increasingly disconnected from their own metro centers & often the global economy
  39. 39. -> metro areas connect to hinterworlds
  40. 40. Declustering is enabling some types of economic activity to move to the periphery
  41. 41. Fewer, smarter firms drive regional economies</li></li></ul><li>Global Population Reaches 9 BillionMega-cities of 10 million + by 2050<br />More mouths to feed<br />More energy users<br />More demand for goods and services<br />
  42. 42. US Population Exceeds 400 million by 2050<br />Source: Bureau of the Census, CensusScope<br />
  43. 43. Most of the nation’s rapid population growth, and an even larger share of its economic expansion, is expected to occur in 10 or more emerging megaregions: large networks of metropolitan regions, each megaregion covering thousands of square miles and located in every partof the country.<br />
  44. 44. Minnesota<br />
  45. 45. 21st Mid-Century Diversity<br /> Minorities, now roughly one-third of the nation&apos;s population, will become the majority by 2042, and grow to 54 percent by 2050. <br />Hispanics are projected to nearly triple their numbers -- rising from an estimated 46.7 million today to just under 133 million by 2050, out of a projected total U.S. population of 439 million. <br />The black population is expected to rise from 41.1 million, or 14 percent of the nation&apos;s population today, to 65.7 million, or 15 percent by 2050. <br />The Asian population is projected to rise from 15.5 million people now, or 5.1 percent of the U.S. population, to 40.6 million, or 9.2 percent, by 2050. <br />The American Indian and Alaska Native population will grow from 3.4 million in 2010 to 5.5 million in 2050, or 1.2 percent<br />
  46. 46. Minority Prevalence 2000<br />
  47. 47. Agriculture’s Grand Challenges:A Cornucopia of Opportunity<br /><ul><li>Double food production to meet food demands of 9 billion people on the planet by 2050 -- 400 million in the US by 2050
  48. 48. Increase production of food to meet growing demand for high-quality food experiences
  49. 49. Decrease impacts on the environment
  50. 50. Improve human health
  51. 51. Improve the social and economic well-being of agricultural communities
  52. 52. Increase power of productive economy</li></li></ul><li>Organic Farming<br />Organic farming became one of the fastest growing segments of U.S. agriculture during the 1990&apos;s. <br />Growth in retail sales has equaled 20 percent or more annually since 1990. Organic products are now available in nearly 20,000 natural foods stores, and are sold in 73 percent of all conventional grocery stores.<br />Certified organic cropland doubled between 1992 and 1997, to 1.3 million acres<br />
  53. 53. Other Future Growth Areas<br />Specialty Crops – nuts, wine, cheese, etc.<br />Direct to consumer marketing (internet)<br />Food processed near farms<br />Consumer supported agriculture: revival of truck farming and farmers markets & new subscription farming business models<br />Turning ag into energy<br />
  54. 54. Projected U.S. Agricultural Trade Balance Imports and Exports: 2004-2015<br />
  55. 55. Precision <br />Agriculture<br />Information<br />Technology<br />Electronics<br />THE UNIVERSITY OF SYDNEY 2008 - Australian Centre for Precision Agriculture<br />Agriculture<br />Production<br /><ul><li>Scaling up sustainable agriculture to meet growing demand for food in the world will depend greatly on precision agriculture’s widespread adoption.
  56. 56. Precision agriculture holds potential for higher-value economic opportunities in agriculture and for rural communities.</li></ul>Machinery<br />& Equipment<br />
  57. 57. A Consumption Boom in Emerging Economies<br /><ul><li>Rising incomes and demand in Asian, Indian and African economies would in turn make it possible for other developing economies to increase wages and demand in their economies
  58. 58. They would also expand demand for American-made goods and services, allowing the United States to reduce its current account deficit.</li></li></ul><li>Success Factors of Heartland Manufacturing<br /><ul><li>Performance first mindset
  59. 59. Outward-oriented from the start and have learned to overcome spatial barriers and the challenges of distance
  60. 60. Internalized functions often outsourced
  61. 61. Benefit from relatively newer infrastructure compared to east coast and rust belt; less stifling regulation than the west coast
  62. 62. High productivity and work ethic in the workforce - mechanical savvy
  63. 63. Community commitment is high</li></li></ul><li>US Energy Consumption Grows<br /><ul><li>Primary energy consumption in the end-use sectors grows by 0.5 percent per year from 2007 to 2030
  64. 64. Annual demand for renewable fuels increases the fastest—including E85 and biodiesel fuels for light-duty vehicles, biomass for co-firing at coal-fired electric power plants, and byproduct streams in the paper industry captured for energy production.
  65. 65. Biomass consumption increases by 4.4 percent per year on average from 2007 to 2030 and makes up 22 percent of total marketed renewable energy consumption in 2030, compared with 10 percent in 2007. </li></ul>Source: Energy Information Administration. Quadrillion BTUs<br />
  66. 66. Energy: The Next Frontier<br /> “Today on any given day there are two groups of buyers in commodity markets: one representing food processors and another representing biofuel producers”<br />--Lester Brown, 2/1/06 in the Globalist<br />
  67. 67. Global Biofuels<br /><ul><li>Worldwide ethanol production reached 20 billion gallons in 2008.
  68. 68. Worldwide production of cellulosic ethanol will amount to at least 16.5 billion gallons in 2020. </li></li></ul><li>Agriculture’s Potential Role in U.S. Energy Independence<br />Biofuels already account for 2.2 percent of global fuel supplies and about half of all growth in fuel production outside the Organization of the Petroleum Exporting Countries. U.S. renewable fuel production should almost triple by 2020 to meet blending targets. By 2050, according to projections by the International Energy Agency in Paris, 26 percent of the world’s transport fuel will be renewable.<br />
  69. 69. Wind could generate as much as 11 trillion kilowatt-hours of electricity each year on the Great Plains, Great Lakes, Rocky and Appalachian Mountains. <br />50,000 megawatts in Canada <br />
  70. 70. Federal 20% Renewables Mandate for Large Electric Utilities<br />$22.6 billion to $37.7 billion savings by lowering electric and natural gas bills<br />Creates 91,220 new jobs , many high skilled in rural areas<br />$41.5 billion in new capital investment, including $5.7 billion in income to farmers and rural land owners, and finally, $2.8 billion in new local tax revenue.<br />Pollution reduction equivalent to taking 25 million to 32 million cars off the road.<br />U.S. Jobs Created by Renewable Energy vs. Fossil Fuels, 2020<br />
  71. 71. Distributed Community-Based Regional Energy Systems<br />Most renewable energy sources are abundant on a regional, oftentimes sub-regional level – e.g. hydro, solar, biomass, geothermal, wind<br />An alternative to the national grid is a distributed system<br />Wenatchee Valley, Washington<br />
  72. 72. Building On the Robust Pillars of the Heartland Economy Foresight Exercise<br />Food, energy and manufacturing hold significant future opportunities for rural communities. Describe an opportunity for your community that you feel could get traction in the next 20 years.<br />What opportunities beyond food, energy and manufacturing hold promise for your community?<br />
  73. 73. “The difficulty lies, not in the new ideas, but in escaping from the old ones.”<br />John Maynard Keynes, The General Theory (1936)<br />
  74. 74. Challenge #1creating opportunities for upward mobility and middle class jobs <br />
  75. 75. Challenge #2 Finding Our Way in the Emerging Sustainable Development Paradigm<br />settlements<br />lifestyle<br />mobility<br />Social<br />food<br />Economy<br />Environment<br />health<br />energy<br />production<br />consumption<br />technology<br />Sustainability is becoming an umbrella term for health, wellness, organics, <br />environmental consciousness, fair trade, simple living, buying local, etc.<br />
  76. 76. High PerformanceCommunities<br />High performance communities are communities and regions that are capable of realizing their full potential – they are competitive and livable.<br />The goal is to create and sustain economic opportunities that produce as much value as possible given available resources, capabilities and the reachable market – whether it is local, regional, national or global.<br />NETWORKS<br />
  77. 77. A High Performance Community or Region<br />Is connected via telecom & transport & transit<br />Nourishes entrepreneurs<br />Grows from within focusing on higher-skill, higher- value opportunities<br />Focuses on industry sectors/clusters that build on local competitive advantages<br />Networks vigorously locally and with business and government from outside the region <br />Has a global outlook<br />Mobilizes local leadership & collaborates regionally<br />
  78. 78. HPC Operating Principles<br /><ul><li>A community like an individual has a work to do.
  79. 79. Communities don’t act, the parts do – so empower the parts
  80. 80. Success comes from seizing momentum and aligning actions with trends that work in your favor
  81. 81. Prosperity is determined by the power of your connections – increasingly those outside the community
  82. 82. A compelling story commits people to the possibilities </li></li></ul><li>Invest in<br />Infrastructure<br />Broadband telecom infrastructure<br />Specialized facilities<br />Transportation facilitating mobility of people and products<br />Water and energy<br />
  83. 83. Infrastructure is a Driver of Economic Growth and Prosperity<br />Infrastructure ………………………………………………………… Infrasystems<br />
  84. 84. Build and cultivate the skills and energies of people, both as entrepreneurs and workers.The growth of a region now depends onthe decisionsof individual entrepreneurs, investors, creative workers to locate there. To them the world is a vast smorgasbord in which various locales compete for their affections and attention.Quality of life and lifestyle factors can attract new people to an area - but opportunity is the prime ingredient.<br />Joel Kotkin<br />
  85. 85. Entrepreneur<br />Community<br />Business <br />Interests & Relationships<br />Business<br />Opportunities & Access<br />Geographical Preferences<br />Quality of<br />Life<br />Quality of Life<br />Preferences<br />Resources<br />& Infrastructure<br />Entrepreneurial<br />Capabilities & Resources<br />
  86. 86. Entrepreneur DevelopmentApproaches<br /><ul><li>Fertile soil policy
  87. 87. Business environment that facilitates any kind of growth
  88. 88. Small business development
  89. 89. Management, technical and financial support
  90. 90. Incubation support and facilities
  91. 91. Focus on one or more growth-oriented businesses
  92. 92. Business ecosystem
  93. 93. Build specialized services, resources and infrastructure for target industry</li></li></ul><li>Downshifting Boomers Start Companies% of age group that started company in 2005<br />Source: Kauffman Index of Entrepreneurial Activity<br />
  94. 94. Networks<br />Reinvention of:<br /><ul><li> business models
  95. 95. skills
  96. 96. workflow
  97. 97. planning
  98. 98. procurement</li></li></ul><li> In a network economy competitiveness and prosperity are increasingly determined by the power of your connections.<br />“Networks are possibility factories.”<br /> Kevin Kelly, WIRED<br />
  99. 99. Local <br />Economy<br />Outside<br />Economies<br />Leveraging Flows in the Network Economy<br />
  100. 100. Powering Up Networks in Your Region<br />High Performance Action SummitsSM<br />“Temporary economic agglomerations”<br /><ul><li>Accelerate your development strategy by showcasing your best capabilities and strongest resources
  101. 101. Engage regional universities and colleges
  102. 102. Build connections with outside collaborators, funders and investors in business and government
  103. 103. Engage key players in defining a strategy and action plan for building promising trade and technology opportunities</li></li></ul><li>Focus on opportunities that <br />build on local competitive advantages<br />What our community makes and does<br />Current<br />Skills Mix<br />Current<br />Industry Mix<br />Emerging<br />Know-How<br />Emerging<br />Technology<br />Future Forms<br />Of Work<br />Future Forms<br />Of Enterprise<br />What our community could make & do<br />
  104. 104. Rural HPCs Requires Extra Steps<br /><ul><li>Establish connections with metro markets/capabilities
  105. 105. Build on linkages to traditional rural industries, e.g. M&E
  106. 106. Repurpose assets and resources, e.g. agri-energy
  107. 107. Create collaborative networks of companies, colleges, universities & government
  108. 108. Focus support on outward-oriented, tech-savvy firms</li></li></ul><li>Greenwood, MississippiViking Conquers the Kitchen Landscape<br /><ul><li>Fred & Margaret Carl and small group of friends
  109. 109. Built a global brand – superior product quality processes
  110. 110. Aligned strategy with cooking and food trends
  111. 111. Boutique downtown --> part of Fred Carl’s dream
  112. 112. Restoration of historic buildings
  113. 113. Focus on southern hospitality and cuisine
  114. 114. Use history & tradition. i.e. the power of locale  Cotton Capital of the World
  115. 115. Community, state, federal leaders support  WE</li></li></ul><li>High PerformanceCommunitiesof Aspiration………………<br />
  116. 116. Resolve<br />Resourcefulness<br />Relationships<br />Terroir<br />
  117. 117. Seize opportunity now<br />Not houses finely roofed<br />Nor the stones of walls well built<br />Nor canals nor dockyards<br />make the city<br />But men able to use their opportunity<br />Alcaeus 600 BC Greece<br />
  118. 118. “Good things come to those who wait, but only the things left over by those who hustle.”<br /> Abraham Lincoln<br />
  119. 119. Become a possibility factory!<br />High Throughput – Combinatorial<br />“If you want to have good ideas you must have many ideas.”<br />Linus Pauling<br />Quantum chemist & biochemist<br /> Nobel Prize Winner (2 times)<br />
  120. 120. Find Opportunities at the <br />Crossroads of Industries<br />Information<br />Technology<br />Electronics<br />For Example<br />Precision Agriculture<br /><ul><li> Instrumentation
  121. 121. Data Services
  122. 122. Application Services</li></ul>Agriculture<br />Production<br />Machinery<br />& Equipment<br />
  123. 123. Mobilize strategic leadership coalitions on multiple fronts<br />Community<br />Forum<br />Technical<br />Analysis<br />Capacity<br />Risk Capital<br />For<br />Innovation<br />
  124. 124. Emulate The Success of Others<br />“ The future is already here. It’s just not widely distributed yet.”<br />William Gibsonauthor, coined term cyberspace<br />
  125. 125. Make people a priority<br />People are sophisticated, decision-makers about place today<br />Quality jobs<br />Amenities & aesthetics<br />Recreation and leisure<br />Affordability <br />Safety<br />Quality schools and health care<br />
  126. 126. Leverage<br />#1 Asset<br />balance<br />FAMILY<br />
  127. 127. Tell a compelling story that commits people to the possibilities<br />“I’ll believe it when I see it. I’ll see it when I believe it.”<br />
  128. 128. Your Community’s Compelling Story Foresight Exercise<br />Write one or two newspaper headlines that describe a winning future scenario or aspirational outcome for your community. <br />For Example:<br /><ul><li>Local Windfarm Now Powers 30% of City
  129. 129. Area Farmers Supply Organic Produce to East Coast Restaurants
  130. 130. School District Inks English Language Deal with Chinese Partners</li></li></ul><li>Catch the wind and bend it to your will<br />
  131. 131. Thank Youdelore@praxissg.com<br />