Title: Rural Entrepreneurship Context, Issues and Trends
1Rural EntrepreneurshipContext, Issues and Trends
2Learning Objectives
- Define rural America
- Understand impact of demographic and economic
changes in rural U.S. - Explain how current trends influence rural
communities - Understand concept of community resilience and
its relevance to entrepreneurship - Recognize challenges and opportunities for retail
entrepreneurs in rural communities
3Geographic definition of rural
- All geographic areas outside metropolitan
areas70-80 of geographic area of the US. - RuralOpen country and places with 2,500 or fewer
residents - UrbanPlaces with more than 2,500 resident
- MetropolitanPlaces with greater than 50,000
residents - Non-metropolitaninverse of metropolitan
- Micro-politan- larger trade center in rural area
4Demographic characteristics of rural communities
- 20 of US population lives in rural area
- Over the last several decades
- People in 20s have left rural areas
- Older people have moved to rural America
- Rural birthrate has declined
- Hispanic population fastest growing racial/ethnic
group - Non-Hispanic white growth rates lowest of any
group - Modest growth in African American population
5Social and cultural profile of rural communities
Value Attribute Rural Urban
Community Interaction Mandatory Voluntary
Roles Ascribed Achieved
Sanctions Particularistic Universalistic
Orientation Group Individual
Leadership Traditional Rational
6Social capital in rural communities
- Social capital (SC) built through interactions,
relationships, networks-unique in rural
communities - Developed through interaction among community
members - Key influence on community business environment
- Economic prosperity associated with social
capital - Signals of SC are civic participation, community
embeddedness and expectations of reciprocity
7Rural economy
- Core economic activities in rural areas rooted
more in old economies than new economies - Diverse economic activity in agriculture, natural
resource industries, processing/ manufacturing,
government, retail/service - Economic vitality dependent on distance to urban
areas, natural amenities, cultural opportunities
8Changes in rural America
- Rural America has experienced significant changes
in the last half century - Decline in reliance on farming and other natural
resource based industries - Low tech manufacturing declined due to global
competition - Population shifts more older, more Hispanic,
fewer young residents
9What is brain drain?
- Many rural communities have lost younger
residents to urban migration - Younger, educated rural residents find
employment, social opportunities in urban centers - Loss of younger residents is associated with
rural community decline
10What is a resilient community?
- Successfully adapts to change by utilizing and
developing resources that mitigate effects of
change - Collective capability to form partnerships, build
social capital, and social cohesion - Demonstrates improvement in well being of
residents - Able to retain younger, skilled and educated
residents
11Trends and Opportunities for Rural Communities
- Suburbanization
- Competitive challenges and economic opportunities
for rural communities - Seasonal residents
- Growth brings challenges and opportunities to
rural places - Elder industries
- Offer recreational/retirement opportunities to
meet older Americans needs - Entrepreneurial growth
- Represents core rural development opportunity
12Trends and Opportunities for Rural Communities
- Lone eagles
- Urban Americans moving to rural settings and
making their livings via the Internet - Next generation of business and community
leaders, community philanthropists, mentors for
future entrepreneurs - Technology
- Rapid advancement makes it easier for rural
entrepreneurs to reach broader markets also
raises the competitive stakes for rural businesses
13Value of local retailers
- Local retail stores enhance rural communities
- Provide convenient access to goods/services
- Source products locally
- Employ local residents
- Pay taxes
- Reinvest profits in the community
14Challenges for rural retailers
- Declining local market
- Competition from chains and Internet
- High operating costs/lack of economy of scale
- Availability of qualified employees
- Narrow profit margins
- Taxes and regulation
- Lack of community support (outshopping)
15Challenges for rural retailers
- Declining local market
- Competition from chains and Internet
- High operating costs/lack of economy of scale
- Availability of qualified employees
- Narrow profit margins
- Taxes and regulation
- Lack of community support (outshopping)