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YOU DECIDE: Where will rural counties find jobs?

February 20, 2009

MEDIA CONTACT: Dr. Mike Walden, 919.515.4671 or michael_walden@ncsu.edu


Dr. Mike Walden
Media representatives:For a black-and-white or color copy of this photo, call 919.513.3127 or e-mail dave_caldwell@ncsu.edu.

Even in the best of economic times, many rural counties in North Carolina have struggled.

Jobs have been lost due to the downsizing of traditional rural industries like textiles, apparel and furniture, as well as from restructuring in agriculture. Urban areas like the Research Triangle, Charlotte, Wilmington and Asheville have garnered the big economic headlines and job announcements.

Indeed, the disparity between urban and rural regions in the job market can be seen clearly in the current unemployment numbers. Many rural counties now have unemployment rates above 10 percent, while several urban counties have rates a little more than half that level.

These differences aren't new.

Economic trends of the past 30 years, like the move to a knowledge-based economy, free trade agreements and the growth of the service sector in which face-to-face contact is important, have seemed to favor urban areas over rural communities.

So what are rural counties to do? What's their economic future, and where will their jobs come from once the recession is over?

Any economic assessment begins with an identification of a region's pluses and minuses. Rural regions have many good factors going for them. Top among them are space, lower land costs, available labor and beautiful natural amenities.

But we also have to recognize that rural counties in general have some disadvantages. Educational attainment of the workforce in rural areas is usually lower than in urban counties. The distance to large markets also is greater. And due to space and less dense development, infrastructure (such as roads and airports) is not as readily available.

A natural strategy for rural counties is to emphasize their positive features while trying to improve their negative factors. This means focusing on businesses that are attracted to rural areas' openness, lower costs, available and eager workers and beautiful countryside, while at the same time working to improve the training and skills of workers and travel access to nearby markets.

What industries might find location in a rural county beneficial?

Fortunately, there are plenty. First and foremost is agriculture, which is still the major industry in many rural counties. Agriculture and its related sectors already contribute $70 billion annually to our state's economy, and many experts see this growing in the future. People will always have to eat, and as the world grows in both population and income, there should be a growing market - both domestically and internationally - for the products from North Carolina's very efficient farmers.

In addition, some see a big role for farming in providing some of our nation's fuel needs in the future. How much of a role will depend on both the technology for developing alternative fuels and their costs compared to the costs of traditional energy sources.

Manufacturing should not be dismissed as a source of income and jobs for rural North Carolina.

Manufacturing is still an important component of the state economy, with output almost 20 percent higher today than a decade ago. Many manufacturers find the open spaces and lower costs of rural locations an advantage. In fact, a recent national study found manufacturing activity outside of textiles and apparel actually increasing in rural areas. However, a key requirement for manufacturers is the availability of adequate transportation services to move finished products to urban markets.

The "call center" model is another tactic rural economic developers can pursue. The idea is to attract services (like call centers) that can be provided electronically to the customer. Again, rural areas may be attractive for such businesses due to their lower labor costs.

Finally, several industries can be targeted that may be attracted to the natural amenities rural regions offer.

These include second home and retirement developments, tourism service and "footloose" professional services. The latter are companies offering professional services - like engineering and architecture - whose workers give up everyday access to clients for the beauty and peacefulness of a rural location.

Is there an easy path to rural prosperity and economic equality with urban counties? No.

But is there a way for rural areas to compete and attract jobs? Definitely.

The answer lies not in rural areas trying to be just like their urban cousins, but in rural regions using their unique features and advantages to find matching companies.

This, I think you'll decide, is a win-win for all!

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Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University's College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The Department of Communication Services provides his You Decide column every two weeks. Earlier You Decide columns are at http://www.cals.ncsu.edu/agcomm/writing/walden/decide.htm

Related audio files are at http://www.ncsu.edu/waldenradio/

Posted by Dave at February 20, 2009 08:52 AM