The Seeds Of Rural Economic Growth

I’ll be speaking at the Rural Summit for Europe to be held in Eindhoven, Netherlands tomorrow — I’ll be writing more about that later.  Coincidentally, last Friday, the Aspen Institute’s Community Strategies Group and Rural Development Innovation Group hosted a very good panel on rural entrepreneurship in the US.  

In addition to the Aspen folks, the panel consisted of:
• Lupe Ruiz, Co-Owner, Wing Champs
• Ines Polonius, CEO, Communities Unlimited
• Dennis West, CEO, Northern Initiatives
• Jeffrey Lusk, Executive Director, Hatfield McCoy Regional Recreation Authority

There are many potential entrepreneurs in the countryside.  If you think about it, the family farm is an example of entrepreneurship.

Even more so today, entrepreneurship is essential for the economic viability of rural areas in the face of the relatively shrinking rural population in the US because the traditional approaches aren’t working well.  

Two or three decades ago, some manufacturing plants moved to rural areas to save costs, but then manufacturing shifted further to low cost countries.  And now, with the increasing use of robotic devices, factories aren’t big employment generators.

Moreover, the use of incentives to get big companies to move to rural areas has been shown to be of limited and ever decreasing value in helping long term economic development.  Unlike multinational businesses that rural areas have tried to attract, local entrepreneurs are committed to their communities.  

Ms. Polonius noted that every dollar of sales that go to local entrepreneurs is spent several times over before it leaves the area, whereas sales at multi-national companies in rural areas leave much more quickly.  As a case in point, Mr. Ruiz noted that when it came time to build his restaurant, he felt an obligation to buy lumber from another local entrepreneur rather than make the drive to Home Depot or Lowe’s where he might have saved a few bucks.

The panel went on for than an hour, so I can only highlight what struck me as the most critical points.

First, without any prompting from me or anyone else, the panelists stressed the importance of broadband for both local business success and also being able to reach markets beyond the local area.  Mr. Ruiz was especially proud of the fact that his small town of Raymondville in the Rio Grande Valley of Texas had better broadband than the state capital of Austin did.  The service is provided by the Valley Telephone Cooperative – in yet another example of how cooperatives have moved broadband forward in rural areas as the big telecoms companies abandon those areas.

Second, creativity and counter-intuitive thinking are necessary to turn around rural areas.  Mr. Lusk pointed out how his area of southern Virginia had a concentration of some of the longest lasting poverty-stricken counties in the US.  Where once extraction industries, like coal mining of the mountains, provide some boost to the local economy, that had been on a downturn since the 1950s.  Local people wanted to have factories come there, but highway transportation wasn’t great and the land wasn’t flat – it was the Appalachian Mountains after all, very pretty, but not great industrial territory.

They finally turned things on their head and realized that the thing that was preventing industrial development – the mountains – was the basis for future growth of rural tourism.  Mr. Lust described the ingenious ways that the Hatfield McCoy Regional Recreation Authority went from ATV off-road trails to encourage other economic development.

Third is the need for risk capital.  Although local business folks often think first of going to the bank for funds, there are many fewer local banks around and banks of any kind aren’t generally in the business of helping startups.  So, other sources of funds are needed.  That’s where non-profits like Northern Initiatives come in.  The non-profit organization proclaims that it

“provides loans to small business owners and entrepreneurs in Northern Michigan that might not qualify for loans from traditional banks for a variety of reasons.”

Fourth, the development of rural entrepreneurship cannot end with the money, also needs training and coaching.  Communities Unlimited offers a cash flow tool to keep entrepreneurs on an even keel.  And, as with Wing Champs, they provide a variety of other services to help new business get over the inevitable rough spots.  

Similarly, Northern Initiatives puts it this way:

“Each one of our loans comes with access to business services which includes a suite of practical trainings, tools, and resources on topics that matter to every business owner.”  

And they even provide a coach to each company they give money to.

Mr. West also noted that some coaching comes from modeling – seeing other local people making money by starting businesses provides both encouragement and education to potential entrepreneurs.

Although these efforts don’t have quite the focus on gazelle second-stage growth companies that the Economic Gardening movement does, they share in common the idea that long term economic growth comes from entrepreneurship and entrepreneurs need help.

Here’s the overall lesson of this panel:  

The seeds of entrepreneurship are in the countryside already.  For economic growth, those seeds need to be fertilized by the combination of broadband, creativity/counter-intuitive thinking, risk capital and training/coaching.

[You can see a recording of the event at  ]

© 2017 Norman Jacknis, All Rights Reserved

Interactive Books™: How can you be right and still be wrong?

There was an interesting article in the New York Times Sunday Magazine about the history of electric cars ( ).  While the specific focus was the electric car, the general theme of the article was the interplay of markets, infrastructure and technology in the deployment of new products.  

It brought to mind one of my own entrepreneurial experiences, this one with a technology product that was – and apparently still is – too much ahead of its time.  More than twenty years ago, it was clear that eventually books would become digital.  And, even in the early days of the Internet and before the World Wide Web, it was also clear that people could easily become overwhelmed by the amount of information at their fingertips.

With the artificial intelligence boom (yes there was one once) still sort of alive and practical uses of expert systems (even if they weren’t call that) coming into existence, I co-founded Interactive Books™.  The company would be dedicated to converting the knowledge found in non-fiction books into expert systems that would make that knowledge quickly and easily available.  (Glossing over a lot of technical detail, expert systems not only provide appropriate knowledge given a set of circumstances, but can also explain why it asks for information and how those questions lead to the answers it provides.)

We did ship our first interactive book, one of many we hoped to provide, but talk about the absence of a supportive ecosystem.  Almost all publishers, who also worried about digital books, looked on the company “as the enemy” in the words of one executive.  It also didn’t help that technology was not as widely deployed among the general public as it is now or that we had to also invent our own windowing system 😉 Ah, the mistakes of a young entrepreneur.

The funny thing is that the concept makes increasing sense.  I get too much information, and too little knowledge, each time I ask a question of Google and get back 2,000,000 search results, none of which quite answers my question or helps me understand something that I need to understand.  We now have all this stuff to read and no possible way to read it all.  Even if we could, we’d end up not necessarily mastering the knowledge we hoped to. 

To a degree, Wikipedia helps by having others condense knowledge.  But it’s still a lot of reading and not necessarily to the point.

So wouldn’t it be wonderful to have truly Interactive Books™?  Yes, but even though the ecosystem is better now, it is not sufficient, so it is likely still too early to bring such a thing to market.  But we’re still ready at the first sign of light!

And that’s how you can be right about a product, and still be wrong about a business.

© 2012 Norman Jacknis


Diversity And Innovation

There’s an interesting post on the Harvard Business Review blog site by the founder of the Startup Genome project, which analyzes success/failure in new enterprises.  He titles it: “Reversing the Decline in Big Ideas”.  (See

He notes that there seems to be a lack of big new ideas in the tech industry and suggests that this is because there is not enough diversity in the founding teams of new enterprises.

In a recent presentation, I noted that we’ve learned about the importance of cross-pollination among disciplines for true innovation.  And then I made the point that many of the “innovation clusters” planned by governments instead aim to drill down into one very focused domain of knowledge – which might mean they won’t get the innovation they expect.  

The author’s argument about the homogenous nature of Silicon Valley startups is perhaps another example of this pattern.  All of those public officials who have dreams of duplicating the past success of Silicon Valley should take note.

© 2012 Norman Jacknis on July 31, 2012