Building the Capacity to Invest in Rural Prosperity
Building the Capacity to Invest in Rural Prosperity
While rural America is in no way a monolith, many rural communities have in recent years been confronted by challenging economic, demographic, and climatic trends that have limited their ability to achieve durable, inclusive economic prosperity. And yet, those same rural communities contain valuable assets that, if properly leveraged, could be a foundation on which to build equitable future prosperity and community vitality. But, doing so effectively requires robust local capacity connected to and supported by regional and national partners.
This webinar discussed the ongoing dialogue around these issues by outlining recent trends affecting rural communities, the assets they have at their disposal, and the capacities they have and need to promote shared economic prosperity over the long-term.
This webinar discussed the ongoing dialogue around these issues by outlining recent trends affecting rural communities, the assets they have at their disposal, and the capacities they have and need to promote shared economic prosperity over the long-term.
The webinar opened with introductory remarks given by Andrew Dumont, Senior Community Development Analyst at the Federal Reserve Board, discussing the key demographic, economic, and climatic trends related to rural communities. Dumont began his presentation with the three key demographic trends in rural areas:
Population declines in many rural areas, with gains in some others, resulting in the first absolute decline in the overall rural population over the last decade
Many rural areas are experiencing a large decline in their prime working-age population
Racial and ethnic diversity is increasing across most rural communities
Rural areas have experienced a sizeable decline in the prime working-age population (24-54) in the past decade. While some rural areas have seen population growth, nearly all recent growth has come from people of color. The increase in the Hispanic population in particular has helped offset non-Hispanic population losses in many rural communities.
The economic trends affecting rural areas that Dumont highlighted are as follows:
The rise of the “care economy”
The decline of coal mining employment over the past two decades
Automation has eroded agricultural employment over the last few generations
The globalization and automation of manufacturing has undercut rural manufacturing employment in recent years
Rural areas were not as well prepared for the shift to the knowledge-based economy as urban areas
Given the aging of the rural population, the health care and social assistance industry was the most significant driver of employment growth in nonmetro areas between 2001 and 2020. Coal and other forms of mining saw a 20% decline in employment over this period, a trend that shows no signs of reversing. The ongoing automation of the agricultural sector has impacted agricultural employment, which has declined by 35 percent over the last 50 years, representing nearly 2.4 million jobs. Automation has also affected the manufacturing sector in recent decades. For example, the U.S. share of global manufacturing declined from 24% to 16% between 2000 and 2020, a period during which US manufacturing output increased by 38%, while manufacturing employment decreased by nearly 20%. Lastly, low density areas had a disproportionately large share of their employment in low-skill occupations relative to denser areas, which had a much higher share of employment in high-skill occupations. This disparity became more pronounced between 1980 and 2015.
Dumont closed his presentation with a discussion of long-term climate-related changes that threaten rural areas:
Projected increases in annual average temperatures threaten the health and wellbeing of humans and livestock
Some regions are and are expected to continue experiencing increased precipitation, including an increase in the incidence of heavy precipitation events, while others are experiencing increased drought. Both will present challenges to rural areas.
Increasing wildfire risk disproportionately threatens rural communities of color
Flood risk disproportionately affects low-income areas. Increases in these risks due to climate change are projected to affect black communities the most.
The effects of efforts to mitigate climate change are likely to be concentrated in certain primarily rural regions
Annual average temperature over the contiguous U.S. is expected to increase by 3-12°F by 2099. Heavy precipitation events have and are projected to continue increasing in frequency and intensity. The southwest U.S. has experienced increasing drought conditions over the last century. Communities of color, especially Native Americans, are disproportionately vulnerable to wildfire. Current flood risk affects impoverished, primarily white communities the most, while the communities that will face the greatest increase in their flood risk over the next 30 years have disproportionately large Black populations, including virtually all communities along the Gulf and East Coasts. Efforts to mitigate climate change will have an outsized effect on certain industries that are concentrated in rural regions, including oil and gas extraction, coal-powered energy generation, and other related industries.
The webinar continued with a question-and-answer panel moderated by Stephan Goetz, Director of the Northeast Regional Center for Rural Development, featuring three speakers:
Karen Diver, Senior Advisor to the University of Minnesota President for Native American Affairs
Corianne Payton Scally, a senior fellow in the Metropolitan Housing and Communities Policy Center
Jason S. Entsminger, Associate Director of the Northeast Regional Center for Rural Development
In the context of the communities you work with, what does rural well-being look like, and what are the unique opportunities available in those communities that our audience should know about?
Karen Diver: I am coming to you today from my homelands on Fond du Lac reservation located in Northern Minnesota. A lot of my comments focus on the intersection between rural and tribal communities. While we have many assets, one of the deficits we consistently face is the lack of data. When anything is broken down, especially by race and/or political status you’ll often see gaps in understanding because we are not statistically significant enough to show up. Across the country there are 270+ plus tribes, many of them rural, and are among the largest rural employers especially in hospitality. The hospitality funding is invested into the commonwealth of the tribe through government and services.
Right now, in the Biden administration, equity for tribal communities is high on the list of priorities. There has been huge investment in broadband deployment into these rural communities so that tribes can participate in the knowledge economy and access education. Tribes are also looking at food security and supply chain issues as tribes were vulnerable in these areas during the COVID-19 pandemic. Tribal communities are evolving and trying to make their economy resilient by exploring other ventures that are less prone to spikes in the economy. Value-based decision making, whether its natural resources or community development, gives a different set of answers for tribal communities compared to surrounding jurisdictions.
What assets do rural communities have that they can use to convert these emerging trends into rural prosperity and well-being?
Corianne Scally: While the changes and statistics Andrew presented earlier are important to know, they tend to describe problems rather than pointing to solutions. They don’t highlight assets within rural places and the people who live there that can be leveraged and strengthened through strategic investments and supports. We wanted to highlight the tremendous diversity of rural people and places using an asset-based framework to help funders and practitioners take action. We searched through over 200 national datasets looking for both standard and more unique measures of rural assets using the Community Capitals framework.
The Community Capitals framework was developed by rural sociologists, Flora and Flora. This framework posits 7 types of community capitals, or categories assets that are critical for community well-being and thriving.
Built capital focuses on infrastructure which we measured as housing, transportation, emergency response, and communication systems
Human capital focuses on supports for an educated, healthy, skilled labor force
Financial capital looks at individual and community wealth and access to financial institutions and resources
Cultural capital includes the people who live in a region, the languages they speak, and the institutions they support.
Natural capital takes into account environmental amenities and resources that support economic activity and health and well-being
Political capital measures influence and power over public priorities and policies
Social capital is about the interconnectedness of communities and how relationships and trust are leveraged for community thriving
Human capital focuses on assets related to health, education and employment. In addition to more common measures of labor force participation, educational attainment, and access to healthcare and health insurance. In terms of natural capitals, high-quality environmental conditions and low levels of pollution often set rural places apart from urban ones. Social capital is one of the hardest types of assets to measure quantitatively, and especially via national datasets.
What did you learn from the RRDCs’ recent work on the state of rural capacity to utilize the types of assets we just discussed?
Jason Entsminger: I am really struck in listening to Andrew highlight the trends, Karen speaks about well-being from the perspective of tribal communities, and Corianne’s work on assets. In our recent work, rural development stakeholders are seeing these trends in their communities as top priorities and capacity needs are bringing all of this together. Capacity is really taking the assets that Corianne discussed to address the trends that Andrew discussed but in the context like the one Karen discussed. Capacity is both contextual, therefore not monolithic, and there are a lot of really core issues and challenges rural communities are facing in terms of how to leverage the assets they have to address their context.
Broadband and being able to invest in digital skills, human capital asset was just ubiquitous across any topic we talked about such as health, education, work force development, or remote work. Broadband poses this underlying challenge. Physical infrastructure and public services needs, despite being this top priority, were areas where rural communities had the lower capacity to engage in investments. This is an on-going trend we see where rural community stakeholders engaged in developing their communities identified top priorities but their capacity in these areas was the lowest. So if we think of capacity, we can’t just talk about technical assistance for this immediate ability to access funding, but how we build out these long-term structures that can bring resilience in those contexts.
Additional Q&A
As communities and corporations are making carbon neutrality pledges, has anyone been looking at how rural upstream communities can attract these carbon sequestration investments by showing all the co-benefits that the urban areas downstream will receive when their watershed is healthier?
Other C-FARE webinars, one on carbon sequestration and another on soil carbon, touched on questions 1 & 2. There is much potential, and both research and regulatory agencies are currently researching this topic.
The issue of the capacity of rural or tribal communities to respond to development opportunities and challenges seems to be critical. In my mind, such capacity involves multiple types of community capitals, including human capital, social capital, political capital, financial capital, etc. Any thoughts from the panelists (especially Corianne since the Urban Institute has tried to measure different types of capital) on how best to conceptualize and measure this capacity?
I think you are correct that the capacity to capitalize on development opportunities may potentially be thought of as a subset of the community capitals measures. For example, the existence of social capital in the form of social service organizations is certainly an element of capacity, as is financial capital in the form of the availability of government, philanthropic, or household financial resources. Human capital is also likely part of capacity as far as having greater levels of education make it more likely that individual is able to strategically plan development activities and then access the resources needed to make those plans a reality. There are numerous measures of various kinds of capital that would be key to fully understanding available capacity in an area that are not currently or universally available to my knowledge. I am also not sure how you would weigh those and bring them together into a meaningful measure of capacity. It is a worthwhile goal that I think is deserving of greater attention, and is the focus of the organizers of this webinar’s second in this series, which took place on June 16, 2022.
When speaking of capacity, what would you say limits rural communities’ capacities?
I think many factors limit the capacity of rural communities, including things like limited resources within local governments or philanthropies to match federal grant requirements or directly fund key activities, and limited staffing to plan and then execute development activities, among others. I encourage the questioner to access the recording of the second webinar in this series, which took place on June 16, 2022, for a deeper exploration of this topic.
How would you suggest state and local officials assist in addressing these trends to build our communities capacities?
We discussed some strategies addressing capacity-building in rural regions in the second webinar of the series. An important theme raised during the second webinar was the benefits of fostering and incentivizing entrepreneurship and innovation from within the community instead of trying to bring new industries -- it is much more promising to develop communities from within.
This program is supported in part by the Agricultural and Applied Economics Association and the US Department of Agriculture’s Economic Research Service, and the National Agricultural Statistics Service.
Those who register but cannot attend our webinar can always view a recording of it later at the council’s YouTube channel.