Rural Economics

By PATSY STODDARD Editor

EDITOR’S NOTE: This is the final in a four part series which deals with issues facing rural communities.
The many dimensions of rural Utah were discussed at the recent Rural Summit in Cedar City. Risks and opportunities as they pertain to small communities and cultures were discussed. Event organizers said, “Many social, economic, political and even natural forces are combining to significantly alter the basic fabric of rural life. Utah has always been about values and closeness to the land, but traditional agriculture and family farms are taking a beating. Corporate agriculture is dominant. The majority of those who survive are nearing retirement age and there is little interest among their children to take over the farm.
“In many places, traditional cultures and populations are being displaced by new philosophies and perspectives that aren’t rooted in the soil of the past. Technology is also changing the rural landscape. People can work from these rural settings and these technological advances present new opportunities to those who can recognize and capitalize on them.
“What things do we fight to maintain, and which do we leave behind as obsolete in the march of progress and change?
Mary Jo Waits who is the associate director of the Morrison Institute for public policy, the “think tank” of Arizona State University spoke at the summit and shared her ideas of blending the past with the future in rural Utah.
She stressed the point that many of the new technology related jobs can be done anywhere, especially great rural settings. “If we make great technology, that’s only because we’ve been able to hire great engineers and this technological development can be done in rural as well as urban settings. There is no smooth ride. Progress requires that the old be replaced by the new. Most communities like to protect old jobs and realities. You need to be creative. Dot com companies have seized the power of this global computing and communications infrastructure and used it to transform themselves, that is a real revolution.
“We are in a cappuccino economy, the foam is the high gloss fast moving companies and the coffee layer is the slow moving traditional companies far below. These two distinct layers must see a blending and slowly mixing in and infiltrating the one below. The top layer must learn from the bottom layer that sooner or later you have to make a profit. The competition is relentless, on this front there are global rivals. There is no immunity from competition. It’s like a blur and it’s hard to keep up. One businessman said we’re competing against the clock and ourselves. Economic directors don’t get the opportunity to talk to people about their communities any more. With the Internet people can get on the computer and check out a potential business site without ever talking to anyone or going there.
“One medical advice company said they have five products in development that will totally destroy their current market of products. One way to deal with this is the forming of alliances. These collaborations help a company to concentrate on their core activities and to be great; know your strengths and partner for the rest. One niche that has been there for a long time is to collaborate with universities and share research. You need enduring competitive advantages in a global economy.
“Place still matters, companies will locate where something local can give them an advantage; whether it be people, relationships, customs or motivation. It has to be something that rivals can’t get somewhere else. To create this environment takes a long time. Through research, venture capital, networks, technical spillovers, climate and quality of life all take a long time to acquire. Quality of life is an important factor in a knowledge economy. The quality of place counts big and more and more companies and skilled labor can locate where they want and not where they must.
“Companies have more flexibility now in where they can locate. From the 1940s-80s, there were more reasons to locate in an urban environment. Mass production, low cost, quality, stability, capital equipment and control were all factors. The future deals with knowledge, quality, speed, flexibility and networks,” said Waits.
Waits mentioned companies that have customized their niches. Starbucks competes with the knowledge that people like to meet over coffee and form alliances. It’s a more sophisticated cup of coffee than you would get in Denny’s. But, when Starbucks opened in Taiwan. They found that the people there wanted to sit down and have their coffee and visit. Not grab it and go. So Starbucks adapted and changed the size of their buildings to accommodate this need.
Waits also told of another experience she had when going to Portland to do a presentation there. Two teenage girls had boxes and boxes of Krispy Kreme doughnuts they were taking back to Portland with them. So, one of the first things she told the business community there was that she knew one thing they didn’t have but probably needed and that was Krispy Kreme doughnuts and she went on to tell her experiences with the girls on the plane.
“Find your niche and customize it. In this knowledge based economy there are tangible elements, you need infrastructure. Ideas are no good if they just sit there. You need a skilled workforce. You need a spirit of entrepreneurial culture or quality of life. In the Silicon Valley they will have good jobs for probably 20 more years and then they will be the rust belt and personal computers will be in museums, we will have DNA computers. You need to stay on your toes and know your resources.
“It’s been a bad decade for strategy. Sound strategy starts with the right goal. The most important sources of prosperity are created. Universities, research centers and entrepreneurial are created assets and inherited assets are geography, climate and population. In the new economic development, companies are competing for talent. We are moving from companies being attracted to a location because the labor was cheap to companies locating in places where there are ideas and talents. People want to live in distinctive communities.

“In the future those who will be illiterate won’t be those who can’t read and write, but will be those who can’t learn and relearn and relearn. The prosperity of a region depends on the productivity of all industries. Whatever industry you have make sure they’re competing at their highest level. Innovation is inclusive and all places can be innovative. Use a new recipe, a new idea; the talent issue is important.
“The baby boomers are the biggest part of the work force who could retire in 10 years. We see them as active retirees, at 50 something they will go back to school and at 70 something they will start businesses. Smaller communities are gaining retirees, they want to be in high quality places where they can stay active and that is good news. They are a talent key.
“We need more education, success does not rely on chance we need to understand what’s going on with new economic realities, new faces and new geography. One third of all the engineers in Silicon Valley are from China and India.
“We need to develop inherited assets, get the word out and market our quality of place, climate, geography and all our assets. Be communities that recognize and move,” said Waits.
A panel discussion was also part of the learning process where rural planners and leaders discussed their situations. In the early years of planning and mapping out courses for communities they were basically left on their own to develop plans. Money was not forthcoming from the legislature and small communities lacked funding of their own to lead and guide their communities. Rural communities worked to get money for their planning and were successful. Some small towns did not require building permits and this was one of the things that came out of the process.
Rural leaders also stressed the need to recognize the culture and uniqueness of rural Utah. There are attractions in rural Utah that do not exist anywhere in the world. Whenever there is a willingness to embrace changes from the grass roots and a willingness for a community to embrace and see opportunity there will be growth, these opportunities are not available to communities not willing to change. The Old West as we knew it doesn’t exist the way we would like to remember it. The things that make it attractive are still present, the wide open space and independence. People look forward to getting out of the city, and out into rural Utah.
We need to keep what is beneficial in the old west and embrace a new direction in learning how to develop that uniqueness to our best advantage.
Utah Governor Michael O. Leavitt also spoke in the closing session of the summit. He recognized the Shakespearean Festival and how it has grown over the years and become an economic asset for the Cedar City area. He stressed how that idea started out as a dream and became a reality which involved the whole community. Governor Leavitt teased about his own part in the festival when it was in its second year. He said, “I had to wear tights and come on stage bringing a tray with two goblets on for the actor to fill. We had never practiced this with real liquid until the night of the performance and the actor filled the goblets and they started leaking all over and he said, ‘My man, the goblets are leaking,’ and I had a nonspeaking part and was shocked that he had spoken to me so I said, ‘So it is.’ Needless to say this was my last part in the festival.
Governor Leavitt described the rural Utah brand as being very closely tied to people’s emotions and attached to it are security, safety, dependability. We have tried to build on that. We have planned for growth, finding new ways to make a living in rural Utah which included competing in a global economy. We are proud of our Smart Sites we now have 16-17 sites developed in 15 months which have brought 500 new technical jobs to the state and we are just getting started.
“Deploying technology has also been part of the plan so each community has required band width to deliver high speed connectivity to users,” said Governor Leavitt.
He also described advances in seeing that rural Utah has a well trained work force. He described the CHIP plan which brings health care to children. He talked about 21st Century Communities. He described his desire to minimize differences in socio/political arenas. He described the monument concept process now going on for the San Rafael Swell and how the State, Emery County and the Bureau of Land Management is partnering in this process. “The Grand Staircase Escalante Monument caused a lot of disruption both socially and politically, we have learned from that. GSENM is functional and moving forward, that is time deployed. The Antiquities Act ought not to be used in secret. This is a broad community process from the grass roots up. We are learning in a broad sense to minimize differences.
“One of the goals of our administration has been to bring government on line and let people take care of business on line. They can renew their driver’s license and register their cars, and send their taxes online. We would like to see the creation of jobs exceed the workers. We want wages to continue to exceed the rate of inflation. If we deploy our time wisely we can progress, we can have an educated work force. If we do our best, our best days are yet to come. We need to build on the Olympic success. The whole world saw a state that was capable and efficient. We believe in ourselves and we can compete and win. We not only hosted the Olympics but we did it better than anyone had ever before. The Utah brand went global. People know where Utah is now, we are a great people and have a great culture.
“We are going through some tough economic times, and there is no immediate solution; but we will get through it….we always have and we always will,” said Governor Leavitt
The only sure thing is that change is inevitable and we can resist it and drag our feet or we can find a way to blend the past with future and strive to make things better than they ever have been before.