Entrepreneurship in Rural America
By Nicole Seymour
America's rural communities have long faced significant challenges and disadvantages. They are among the poorest areas in the United States, they often have very low levels of educational attainment, and they tend to have difficulties competing in a business market dominated by corporations from metropolitan areas. However, both rural and national leaders have recognized that entrepreneurship can be a key solution to many of the economic difficulties in rural communities. Currently, numerous resources and programs, from funds to Web sites to classroom simulations, are available to provide assistance and guidance to rural entrepreneurs.
A Stage Set for Entrepreneurship
Though rural areas have historically faced economic upheaval and uncertainty, much of it dating back to the Civil War, they have more recently faced financial difficulties brought on by "structural changes in declining sectors like coal mining, manufacturing and textiles" (Appalachian Regional Commission, 2000, p. 2). Another problem is the closing of local branch plants. According to Jesse White, federal co-chair of the Appalachian Regional Commission, companies open branch plants in rural communities in search of low-wage workers who often "hitch their economic fortunes" (as cited in Daffner, 2001, ¶ 2) to the companies. When tempted by the prospect of even lower cost structures, often in foreign countries, these plants shut down, taking jobs and the community's well-being with them.
Due to the demographics of rural regions, rural entrepreneurs face challenges not usually associated with entrepreneurship in larger population centers. According to the proceedings from the "Tools for Entrepreneurship Conference," enterprising rural citizens are plagued not only by a poverty-stricken
market and their own poverty, but also by the fact that their hometowns usually "suffer from a shortage of equity capital" and have little outside investment (Appalachian Regional Commission, 2000, p. 2). Further, rural areas tend to undergo "brain drain," whereby the best and brightest young people take their ideas, labor and energy to other areas, leaving their native regions devoid of both the talented workers and business leaders needed to launch new ventures (Appalachian Regional Commission, 2000, p. 2).
Though these may seem like wholly unfortunate circumstances for rural communities, they actually represent ripe opportunities for entrepreneurial development. Due to the decline in plant and factory jobs, rural citizens may see it as their best option to create their own economic opportunities through entrepreneurial undertakings. Also, entrepreneurship by rural citizens often creates jobs that will employ and develop the local workforce. As White states, a "'home-grown' business is more likely to stay put and reinvest in the community" (as cited in Daffner, 2001, ¶ 3), without putting control or profits into the hands of outsiders with little stake in the area's economic vitality.
Assisting Rural Entrepreneurs
Programs to assist rural entrepreneurs are sponsored by a host of governmental and private organizations, and tend to focus on skills training and financial support. One example of a financial support program is the concept of the revolving loan. The Puget Sound Business Journal notes that more than 40 revolving-loan funds, created by teams of banks, corporations, foundations, agencies and individuals, operate in rural areas in Washington (as cited in Erb, 2001, ¶ 2). These loans tend to be $30,000 or less and are payable in 3.5 years. According to George Erb (2001), the impressive performance of these funding programs - most report miniscule default rates and the generation of hundreds to thousands of jobs - is due to the fact that they do not simply throw money at rural entrepreneurs. The loans are administered under the auspices of fund managers, many of them rural citizens themselves, who are committed to the goal of generating more jobs in rural areas. Fund managers "carefully [screen] prospective borrowers and closely [advise] them about their business" (¶ 10) to help ensure their success.
The Women's Rural Entrepreneurial Network (WREN), a non-profit New Hampshire-based association, promotes entrepreneurship among rural women. According to their Web site, WREN "encourages women and girls through an exchange of resources, the development of community, the opportunity to gain new skills and the achievement of economic independence" (WREN, 2001). Their resources include an online member business directory, a virtual shopping mall that sells WREN-member products, links to entrepreneurial support and resources, and a message board that includes calls for business partners, employees and donations. WREN offers members the use of their technology center, which houses training workshops and resources like computers, copiers and printers, digital cameras and other technologies that rural entrepreneurs may not be able to access.
Preparing Future Rural Entrepreneurs
A vital aspect of successful rural enterprise is preparing the next generation of citizens (students and children) for the challenges and possibilities of starting businesses in their communities. One reason why this type of training should be concentrated at the school-age level is that it strengthens student achievement and teaches students about citizenship (Boethel, 2000). But perhaps the more pressing concern in terms of rural students' specific environment is the fact that the difficulties faced by rural regions as a whole mean that rural schools "in turn suffer from the drain of dollars and of population" (Boethel, 2000, ¶ 1). Thus, by making entrepreneurship a major curriculum focus, rural schools can begin to rectify this problem on a long-term basis. Students who receive entrepreneurship training are better able to "identify and create business opportunities [rather than receiving vocational training for one specific, often limiting skill or occupation] as well as develop the skills needed to implement them" (Boethel, 2000, ¶ 4).
REAL (Rural Entrepreneurship Through Action Learning) Enterprises is an organization dedicated to providing entrepreneurship training. REAL strives to prepare learners to be "active, self-sufficient, and productive citizens who will contribute to their community's social and economic development" (REAL Enterprises, 2001). The REAL program provides entrepreneurship education in 33 states at 140 elementary and middle schools, 250 high schools, 69 community or technical colleges, 4 universities and 18 community-based organizations. The courses range from Mini-REAL, in which elementary school-aged classes, grades or entire schools hold a variety of jobs within a model community, to REAL 21st Century Business, a high school Internet business planning course that can be taken online. REAL is operated out of 12 member organizations (North Carolina REAL, Washington state REAL, etc.) and through individual instructors who become accredited by attending fee-based institutes and workshops throughout the country (REAL Enterprises, 2001).
Programs such as REAL and the existence of organizations such as the Appalachian Regional Commission indicate that, although rural areas and individual entrepreneurs face unique hardships, they also have unique resources designed to encourage and support their growth. While rural communities may continue to lag behind in terms of national scores, employment rates and earnings, continued entrepreneurial enthusiasm and the formation of more resources can only work to strengthen these regions.
References
Appalachian Regional Commission. (2000, September). Tools for entrepreneurship. Building new economies in rural America
Boethel, M. (2000). Rural student entrepreneurs: Linking commerce and community. Benefits2: The exponential results of linking school improvement and community development, Issue 3. Austin: Southwest Educational Development Laboratory. Retrieved December 2001: http://www.sedl.org/prep/benefits2/issue3/ (c20011873)
Daffner, R. (2001). Entrepreneurship vital to rural America
Erb, G. (2001, August 10). Revolving loans help rural entrepreneurs open doors. Puget Sound Business Journal. Retrieved December 2001: http://seattle.bcentral.com/seattle/ (c20013722)
REAL Enterprises. (2001). REAL Enterprises. Retrieved December 2001: http://www.realenterprises.com (c2002062)
Women's Rural Entrepreneurial Network (WREN). (2001). The Women's Rural Entrepreneurial Network. Retrieved December 2001: http://www.wrencommunity.org (c20012440)
*CELCEE numbers are in parentheses
CELCEE is an adjunct ERIC Clearinghouse funded by the Kauffman Center for Entrepreneurial Leadership.
Products Disclaimer: The Kauffman Center for Entrepreneurial Leadership does not warrant any of the contents in any manner. The information contained is intended only for educational purposes and information contained in the work product is not intended to be legal or professional advice to the user.
CELCEE
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Clearinghouse on Entrepreneurship Education
4801 Rockhill Road
Kansas City, MO 64110-2046
Phone: (888) 423-5233
Website: http://www.celcee.edu
December, 2001. DIGEST Number 01-08
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