WesternRegional Competitiveness

Forum

Denver - April 4 & 5, 2002

National Governor’sNational Governor’sAssociationAssociation

Clusters in Rural America

Don Macke

U.S.Forest Service

ILLINOIS

IDAHO

NORTH CAROLINA

OHIO

ARKANSAS

NEW HAMPSHIRE

WEST VIRGINIA

MISSOURI

MONTANA

MINNESOTAMAINE

NEBRASKA

NEVADA

TEXAS

NEW MEXICO

ARIZONA

COLORADO

WYOMING

UTAH

IOWA

OKLAHOMA

KANSAS KENTUCKY

WASHINGTON

NORTH DAKOTA

LOUISIANA

MISSISSIPPI

OREGON

MICHIGAN

MARYLAND

National Learning Sites$

$

$ $

$

$

$

$

$

$

$

$$

AcademiesRUPRI Capital Case Study SitesTNC SitesUSFS SitesNGA Academy SitesOther Learning Sites

$

Entrepreneurship & Rural America

Importance of Entrepreneurs

Pursues Opportunity Lives Proactively Leverages Resources Builds Networks Creates Value

Global Entrepreneurship Monitor

KCEL & Others 3rd Year Comparative International Study 1999 - 10 Counties 2000 - 21 Counties 2001 - 29 Counties

GEM 2000: Entrepreneurship is strongly associated

with economic growth!

The level of entrepreneurial activity explains 70 percent of the difference in economic growth among nations.

All nations with high levels of entrepreneurial activity have above average rates of economic growth.

Only a few nations that have above average rates of economic growth have low levels of entrepreneurship.

National Commission on Entrepreneurship

High-Growth Companies: Mapping America’s Entrepreneurial Landscape.

July 2001

Major Findings:

High-growth companies are truly extraordinary in the economy; fewer than one in twenty U.S. businesses achieve high-growth rates.

High-growth companies are found in all regions of the country, often concentrated in the most surprising areas.

Most fast-growing, entrepreneurial companies are not in “high-tech” industries.

Each one of the 394 regions in the country contains some high-growth companies.

Most regions’ high-growth companies concentrate in certain specific industry sectors.

28North Platte, NE

69Pueblo, CO

128Fort Collins, CO127

Laramie, WY

80Rock Springs,

WY

125Grand

Junction, CO

161Flagstaff,

AZ

198Farmington,

NM

112Sante Fe, NM

173Denver, CO

126Colorado Springs, CO

Entrepreneurial Growth Company Index

MICHIGAN

NORTH CAROLINA

OREGON

MISSISSIPPI

KENTUCKY

NEBRASKA

MAINE

WEST VIRGINIA

High Performing ESOs

Mini-Wrapup:

Entrepreneurs are Important EGCs are Critical ESOs make the Difference

Our Position. . ..

Weaker Rural Economic Performance is Due in Part to Lower Levels of

Entrepreneurial Activity?

Rural Challenges:

People are Entrepreneurial Fewer Entrepreneurs Far Fewer EGCs Inconsistent ESOs Dominance of Extractive Industries

NCOE -

Sector

Number of High-Growth

Companies in Sector

Number of All Start-Ups Growing

to 20 or More Employees in

Sector

Manufacturing 25,273 4,566

Business Services 28,254 5,663

Distributive 38,452 4,488

Extractive 5,798 513

Local Market 113,001 15,656

Retail 48,619 11,055

GEM-Trends Entrepreneurs are Powerful Economic Drivers

Entrepreneurship Rates by Industry Grouping. . .

Extractive 4%

Transforming 30%

Business 21%

Consumer 45%

Opportunity:

Energizing

Rural Entrepreneurs

How?

Clusters & Energizing Rural Entrepreneurs

Why Clusters?

Many reasons It is a remarkably convenient way to organize

the rural landscape. Matches state’s sectoral approaches.

Rural Reality:

SectorPlace

Rural America’s Economy

Support

Activities

Natural

Resource

Industries

Processing

Industries

Elderly

& Retirees

America’s Playground

Corridor Industries

Government

Prisons Military Bases Federal Lands Indian Reservations Waste Sites

Health Care Housing Services Retail

Telecom

Highways Railroads

Second Homes Tourism Recreation

Forestry Mining Energy Agriculture Fisheries Waste

Resource Processing

Manufacturing

Retirement Homes

Rural Reality:

Increase in Primary Industry Output Decrease in Massive Restructuring Decrease in Secondary Industry Output

Central Nevada Story

U.S. Forest Service Center for Economic Development,

University of Nevada at Reno KCEL RUPRI Area Develop Interests

Central Nevada

EurekaLander

Layered Analysis:

1. Area’s Economic Clusters

2. Entrepreneurs within Clusters

3. GAP Analysis

4. Opportunity Identification

OpportunityKnowledge

Energizes Area

Entrepreneurs

Increased DealFlow

Cycle of Development

Central Nevada Clusters

M in in g

A lfa lfa H a y T ra n sp .

S erv ices

A rtisa n C ra fts L o ca l

S erv ices

G o v ern m en t O th er R etirem en t

Entrepreneurs:

Identify Them Focus on Them Customized Support Connect Them

Entrepreneurs within Rural America

Active

Aspiring

Potential

Survival Lifestyle

Grow

th

Hobby

EGCs

Supporting Entrepreneurs & an Entrepreneurial Climate

Market Awareness

Perceived Real

Opportunities

Motivation to Growth

Enterprises

Business Capacity

Future Work:

U.S. Forest Service– Four Corners Area

Nature Conservancy– Sustainable Practices

Northern Great Plains– Agriculture

State Academies Targeted Research

For More Information. . . .

Center for Rural Entrepreneurship – http://www.ruraleship.org

Kauffman Center – http://www.entreworld.org

RUPRI - http://www.rupri.org