Posts Tagged ‘SDSU’

Rural vs. Urban job growth in SD

May 11th, 2009

A new report highlights a positive trend in Miner County, SD. Between 2002 and 2008, Miner County experienced a growth of 17.61% in the number of private sector jobs created in the county. That is especially good news when one considers that overall, South Dakota’s rural communities experienced a decline of .27% in private sector jobs.

The study, titled “Private Industry Change in South Dakota,” was completed by the Rural Life Census Data Center at South Dakota State University and released in their April 2009 newsletter. Read the full report here.

Overall, the study shows that South Dakota performed pretty well in the job creation arena during this period (2002-2008) with an overall growth rate of 8.6%. But most of that growth occurred in urban areas or counties bordering South Dakota’s largest communities (those with cities of over 10,000 people). (See report for comparison to surrounding states.)

In addition to its analysis, the report offers a couple brief policy implications:

1) First, the report recommends supporting the development of smaller, locally owned businesses. A community with a diversity of small, locally owned businesses allows residents to take greater ownership of the community. These communities also tend to have less inequality. To me, this sounds like a great case for investing in economic gardening practices, where local businesses are the beneficiaries.

2) Second, policy makers need to understand the relationship between poverty and private industry and take action by investing in education, vocational training, and work experience. It is interesting to note that the study emphasizes accomplishing this through grassroots civic organizations where people have an opportunity to develop greater “personal ownership and community pride.” Sounds like they are buying into the Knight Foundation’s Soul of the Community study.

Some final thoughts

Overall, I appreciate the emphasis the report places on the current economic plight of rural communities. I hope that policy makers take note that across the board, current job creation strategies in rural communities are not working well. This does not mean, however, that places experiencing decline are without hope.

There are places beyond Miner County and those next to South Dakota’s largest communities who are experiencing positive job growth. And we need to start asking why? Perhaps that’s coming in a future report by the Rural Life Census Data Center. Or perhaps you know the answer.

Note: I took note of the job growth in Miner County because it is the home to this blog. The work of the Rural Learning Center attempts to build on the economic model being used in Miner County, so highlighting a few elements of its economy provides context to the writing here.

Image Credit: The map is presented as a part of the “Private Industry Change in South Dakota” report, prepared by the Rural Life Census Data Center.

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Posted in Economic Development, In the News, Rural | Comments (0)

First know your threshold — then beat the odds

December 31st, 2008

Does your community have enough residents to support a hardware store, or a restaurant, or grocery store?  There are no easy answers to these questions, but a recent publication from South Dakota State University offers some important insights.

Titled “Threshold Levels for Selected Rural South Dakota Retail and Service Business” the report focuses on the population levels (called thresholds) that are necessary for retail and service oriented businesses to succeed in rural places.  For instance, the report suggests that communities need approximately 952 residents in order for a full-scale restaurant to stay in business.  

The report applies only to South Dakota’s most rural counties, and is intended to help rural community leaders and entrepreneurs figure out what types of businesses will most likely succeed. 

Why’s the information important?

I appreciate this report, prepared by Mike McCurry, Saileza Khatiwada and Trevor Brooks of SDSU’s Rural Life and Census Data Center, because this type of information is typically available only to urban economic development professionals.  Without it community leaders and entrepreneurs are often left to determine these issues by comparison:  “If a flower shop can make it in Community X, then it ought to be able to make it in our town because we’re about the same size,” people will reason.

While threshold analysis is valuable information, the report cautions that other factors including geographic location, access to highways, and other demographic information affect the success and failure rates of businesses.  In other words, threshold analysis is just one tool rural community leaders and entrepreneurs should use in their decision-making process.  I believe there are two additional factors that are critical to this decision-making process.  Let me explain.

The Entrepreneur Factor

In 2002, Howard’s only hardware store closed.  The threshold calculator indicates that 3,636 people are needed to support a successful hardware store. With a town population of around 1,000 people in a county of only 2,800, Howard should not, by this analysis, be able to support such a store. 

The hardware store did reopen a year-and-a-half later, and today it’s doing very well.  Probably better than ever.  This story might just be an anomaly, but I don’t think it is. While population is important, the people who own and operate the store are far more important.  Are they hardworking, creative, good community members? Howard was lucky that the answer to these questions were “yes”.

The Community Support Factor

There is also a second factor that’s very important - how committed is the community to supporting that store?

In 1996, Howard High School students began an effort to raise community awareness about the importance of local spending.  The students sent surveys to each community member, drew conclusions based on the data they collected, and presented their results to the community. Those efforts have helped produce steadily growing sales within the community every year since.  In other words, the residents buy more locally than they once did because they understand its importance to the community’s wellbeing. 

The threshold analysis provided in the report is a great starting point.  Individuals should look at the threshold number, and then adjust it up or down depending on the specifics of the community.  Location and demographic features are important, but if you ask me, the abilities of the entrepreneur and the commitment of the community to support local businesses are even more important.

At the end of the day, wouldn’t it be great if more communities could beat the odds of the threshold analysis!

   

Note:  Before publishing this post, I contacted Mike McCurry at SDSU with several questions, which he graciously answered.  In answering one question, Mike noted that the high percentage of seniors and high levels of “social capital” may enable some businesses to succeed when population levels are lower than the threshold. 

I was very impressed with Mike’s rapid response, and would encourage people with additional questions to contact him at (605) 688-4899 or sdsudata@sdstate.edu.  You can learn more about the “SDSU Rural Life & Census Data Center” at http://sdrurallife.sdstate.edu/

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Posted in Community Development, Leadership, Rural, Rural Life | Comments (1)