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LEADERSHIP

Karl StauberBy Karl Stauber
President, Danville Regional Foundation

 

 

Different types of rural require different approaches

Note: Karl Stauber, president of the Danville Regional Foundation, addressed the N.C. Rural Center Board of Directors at its most recent meeting. These are excerpts from his remarks.

I grew up in Statesville, in Iredell County. It was a small town back then, but it is part of a metropolitan region now. I am old enough to remember when they built the interstates. I mentioned this yesterday to a new intern at the Danville Regional Foundation, and she asked “they built the interstates?” For younger people they have always seemed to be there. But in fact, they were built and much change resulted.

Much else has also changed in the past 25 years. Consider this:

  • In 1990, 50 percent of Americans lived in metro areas of over 1 million.
  • In 1992, the majority of the votes nationally were cast in suburban districts.
  • In 2000, the majority of Americans lived in suburban districts.
  • In 2013, for the first time in history, the majority of citizens in the world probably lived in metro areas.

We are no longer a rural/urban nation. Our challenge is that rural America is becoming less important to the majority of citizens in our country. You may not like it, but it is a fundamental reality.  But we have to first acknowledge that we have a problem, before we can move on in this new reality.

I want to use the evolution of computer software as a metaphor to talk about the diversity of rural America. One of our big challenges is that there are four different rural conditions, and all four are with us still:

Rural 1.0 This is rural from the beginning of United States, which includes a dependence on agriculture, forestry and making a living from our natural resources.

Rural 2.0 We know this one quite well in North Carolina: starting in the 1950s, low- skill, low-wage manufacturing became important in many rural communities. As farming got more efficient, people left farms to work in the plants — we all have examples. This happened largely in the South through business recruitment, though some indigenous companies grew up here.

Rural 3.0 This is one of the new rural conditions that represent rural communities within 50 miles of a metro area, such as Charlotte or the Research Triangle region.  Rural communities and businesses can utilize a supply chain strategy to connect to a metropolitan regional economy.

Rural 4.0 These are the rural counties of the state that are more than 50 miles (and sometimes a lot more) from a metropolitan region, with residents who can’t easily commute. These counties have a different set of challenges than the 3.0 rural counties.

Each type of rural requires a different set of approaches, policies and tools.

All rural counties are different, but they confront the same core challenge: how do they build new competitive advantages? If rural places are not building on existing or creating new competitive advantages, they will die.

When I visit rural communities I ask, “what is your competitive advantage and what will it be in five years?” I hear a lot of “used to be” stories, or “well, we’re cheap!” Are you cheaper than Korea or Malaysia? The global competitive reality still does resonate with many of our communities. We can’t "cheap" ourselves into economic prosperity.

Competitive advantages are based on assets. The area served by the Danville Regional Foundation, which includes Caswell County, is 45 miles from the FEDEX hub in Greensboro and 75 miles from the Research Triangle Park. In part for this reason, we don’t recruit companies, we recruit entrepreneurs.

In rural communities people and leaders generally fit into one of two categories: there are Floaters who don’t know competitive advantage or assets, and there are New Pioneers who are willing to try something new. At the Danville Regional Foundation, one of our goals is to encourage new thinking and willingness to try something new. We sponsor a speakers series to help our region help see the possible.

Last year we invited a geography professor from the University of Virginia, Herman Schwartz, to speak to us. He noted five factors affecting our region that I want to share; it may resonate with you, too:

1) Permanent higher oil prices.

2) The revolution in manufacturing — in our area we have the only IKEA plant in the United States. About 400 people work there, and in the not-too-distant past it would have taken many more people to equal their output.

3) Corporate outsourcing and its implications for workforce — Kelly Services, a temp agency, is the second largest employer in the U.S.

4) The demographic reality of an aging population.

5) Rising income inequality — 20% will see return on investment, but 80% will not.

Recently, Ted Abernathy of Economic Leadership presented an analysis he did of the Danville Regional Foundation area. He noted that “no community’s future is already written,” and that “doing what we are doing in the DRF Region, or doing what we are doing better, will not lead to prosperity.” So we have to push to create new competitive advantages for our rural communities. It is harder now to do this. We live in a time of angry politics, of Fox News and MSNBC. The things we used to be able to do without conflict are now a lot harder to do.

I will close with a few realities I see, and suggest some general recommendations.

Realities

1) The North Carolina Rural Center does not have enough resources to alone change any rural North Carolina county. Nor does the Danville Regional Foundation for the communities it serves, and we’ve got a $200 million endowment.

2) We are creating new models of rural life and community. We cannot romanticize old ones.

3) Some will succeed, some will not.

4) This is a 15-to-30 year process, so one of the big challenges we face is how to help people keep their hope and faith.

5) How do we know we are on the right path?

Recommendations

1) Reinforce that leadership is absolutely critical — the Danville Regional Foundation's biggest deficit is leadership. Too many rural leaders confuse management with leadership. Leaders set goals, monitor accountability, and know how to say no.

2) We have to help people see the possible.

3) In many rural communities, if you fail one time you are punished for the rest of your life. We don’t support risk taking and are too quick to say, "we tried it 30 years ago.” So how do we support calculated and thoughtful — not foolish — risk-taking?

4) Regionalism is one of the keys, especially in Rural 4.0 counties. But we don’t like our neighbors. Community rivalries can be difficult to overcome. We are going to make it as regions in 4.0, or we are not going to make it.

Examples of strong regionalism include Dubuque Iowa, where I took my entire board for a visit. IBM chose Dubuque because of a combined regional workforce program: universities in Iowa, Wisconsin and Illinois worked together.

Another great example is Lewiston/Auburn Maine — communities combined a significant level of resources and programming throughout a five-county area and created a regional economic development council.  

5) Look for new partners in unusual places. It is easy to work with the folks you know and what to expect from them. But often the answer will be in new spaces and relationships.

LEADERSHIP

Karl StauberBy Karl Stauber
President, Danville Regional Foundation

 

 

Different types of rural require different approaches

Note: Karl Stauber, president of the Danville Regional Foundation, addressed the N.C. Rural Center Board of Directors at its most recent meeting. These are excerpts from his remarks.

I grew up in Statesville, in Iredell County. It was a small town back then, but it is part of a metropolitan region now. I am old enough to remember when they built the interstates. I mentioned this yesterday to a new intern at the Danville Regional Foundation, and she asked “they built the interstates?” For younger people they have always seemed to be there. But in fact, they were built and much change resulted.

Much else has also changed in the past 25 years. Consider this:

  • In 1990, 50 percent of Americans lived in metro areas of over 1 million.
  • In 1992, the majority of the votes nationally were cast in suburban districts.
  • In 2000, the majority of Americans lived in suburban districts.
  • In 2013, for the first time in history, the majority of citizens in the world probably lived in metro areas.

We are no longer a rural/urban nation. Our challenge is that rural America is becoming less important to the majority of citizens in our country. You may not like it, but it is a fundamental reality.  But we have to first acknowledge that we have a problem, before we can move on in this new reality.

I want to use the evolution of computer software as a metaphor to talk about the diversity of rural America. One of our big challenges is that there are four different rural conditions, and all four are with us still:

Rural 1.0 This is rural from the beginning of United States, which includes a dependence on agriculture, forestry and making a living from our natural resources.

Rural 2.0 We know this one quite well in North Carolina: starting in the 1950s, low- skill, low-wage manufacturing became important in many rural communities. As farming got more efficient, people left farms to work in the plants — we all have examples. This happened largely in the South through business recruitment, though some indigenous companies grew up here.

Rural 3.0 This is one of the new rural conditions that represent rural communities within 50 miles of a metro area, such as Charlotte or the Research Triangle region.  Rural communities and businesses can utilize a supply chain strategy to connect to a metropolitan regional economy.

Rural 4.0 These are the rural counties of the state that are more than 50 miles (and sometimes a lot more) from a metropolitan region, with residents who can’t easily commute. These counties have a different set of challenges than the 3.0 rural counties.

Each type of rural requires a different set of approaches, policies and tools.

All rural counties are different, but they confront the same core challenge: how do they build new competitive advantages? If rural places are not building on existing or creating new competitive advantages, they will die.

When I visit rural communities I ask, “what is your competitive advantage and what will it be in five years?” I hear a lot of “used to be” stories, or “well, we’re cheap!” Are you cheaper than Korea or Malaysia? The global competitive reality still does resonate with many of our communities. We can’t "cheap" ourselves into economic prosperity.

Competitive advantages are based on assets. The area served by the Danville Regional Foundation, which includes Caswell County, is 45 miles from the FEDEX hub in Greensboro and 75 miles from the Research Triangle Park. In part for this reason, we don’t recruit companies, we recruit entrepreneurs.

In rural communities people and leaders generally fit into one of two categories: there are Floaters who don’t know competitive advantage or assets, and there are New Pioneers who are willing to try something new. At the Danville Regional Foundation, one of our goals is to encourage new thinking and willingness to try something new. We sponsor a speakers series to help our region help see the possible.

Last year we invited a geography professor from the University of Virginia, Herman Schwartz, to speak to us. He noted five factors affecting our region that I want to share; it may resonate with you, too:

1) Permanent higher oil prices.

2) The revolution in manufacturing — in our area we have the only IKEA plant in the United States. About 400 people work there, and in the not-too-distant past it would have taken many more people to equal their output.

3) Corporate outsourcing and its implications for workforce — Kelly Services, a temp agency, is the second largest employer in the U.S.

4) The demographic reality of an aging population.

5) Rising income inequality — 20% will see return on investment, but 80% will not.

Recently, Ted Abernathy of Economic Leadership presented an analysis he did of the Danville Regional Foundation area. He noted that “no community’s future is already written,” and that “doing what we are doing in the DRF Region, or doing what we are doing better, will not lead to prosperity.” So we have to push to create new competitive advantages for our rural communities. It is harder now to do this. We live in a time of angry politics, of Fox News and MSNBC. The things we used to be able to do without conflict are now a lot harder to do.

I will close with a few realities I see, and suggest some general recommendations.

Realities

1) The North Carolina Rural Center does not have enough resources to alone change any rural North Carolina county. Nor does the Danville Regional Foundation for the communities it serves, and we’ve got a $200 million endowment.

2) We are creating new models of rural life and community. We cannot romanticize old ones.

3) Some will succeed, some will not.

4) This is a 15-to-30 year process, so one of the big challenges we face is how to help people keep their hope and faith.

5) How do we know we are on the right path?

Recommendations

1) Reinforce that leadership is absolutely critical — the Danville Regional Foundation's biggest deficit is leadership. Too many rural leaders confuse management with leadership. Leaders set goals, monitor accountability, and know how to say no.

2) We have to help people see the possible.

3) In many rural communities, if you fail one time you are punished for the rest of your life. We don’t support risk taking and are too quick to say, "we tried it 30 years ago.” So how do we support calculated and thoughtful — not foolish — risk-taking?

4) Regionalism is one of the keys, especially in Rural 4.0 counties. But we don’t like our neighbors. Community rivalries can be difficult to overcome. We are going to make it as regions in 4.0, or we are not going to make it.

Examples of strong regionalism include Dubuque Iowa, where I took my entire board for a visit. IBM chose Dubuque because of a combined regional workforce program: universities in Iowa, Wisconsin and Illinois worked together.

Another great example is Lewiston/Auburn Maine — communities combined a significant level of resources and programming throughout a five-county area and created a regional economic development council.  

5) Look for new partners in unusual places. It is easy to work with the folks you know and what to expect from them. But often the answer will be in new spaces and relationships.