Covering and guiding rural economic development

By Al Cross

The weekly and small daily newspapers of rural America have long played a role in bringing jobs to their communities, with stories, editorials and civic leadership. Today, they and their communities face new challenges.

Rural areas once attracted industries with low land prices, low taxes and relatively low wages. Today, globalization of the economy has made it more difficult for American communities to attract and retain jobs. That means rural economic- development strategies are changing, or need to.

That calls for more coverage, and for more editorial and civic guidance. Local newspapers can help inform policymakers and build public support for needed changes in policy, and as changes are debated and implemented, it’s all the more important to keep policymakers at arm’s length and hold them accountable.

Economic-development coverage should put local happenings in a global context. If a local plant moves production to another country, your readers might like to know that global competition displaced 1.5 million workers in rural America, almost half of them in manufacturing, between 1997 and 2003, according to the Carsey Institute at the University of New Hampshire.

But your readers and local policymakers alsoneed to know that there are opportunities in globalization, such as small-scale, high-tech manufacturingand niche markets for farm products, according to the Federal Reserve Bank of Kansas City.

To take full advantage of those opportunities, rural areas need full access to technology. When the Internet became public, many rural thinkers saw it as the information superhighway that would help rural areas overcome the isolation that defines rurality. But high-speed Internet service now allows work to be done in real time halfway around the world, and many communities are unable to compete partly because they lack affordable high-speed service, or broadband.

Many state and local officials have awakened to the need for broadband, but they have been slower to re-evaluate the traditional strategy of tax breaks and other incentives, which has put many states and localities on a race to the bottom.

This is not just a state-level issue; communities depend on state help to recruit and retain jobs,and they elect legislators who make or influence state economic-development policy.

Coverage of policy debates holds officials accountable, and can create change. For example, Kentucky seems ready to alter its economic-development approach after a series by the Lexington Herald-Leader found that the state “focused heavily on industrial recruitment, had done little to gauge the effectiveness of its incentives, was more secretive than counterparts in many other states, and sometimes loosely monitored its programs,” as reporter John Stamper put it recently.

But what kinds of change are on the horizon as rural America tries to keep pace? Perhaps surprisingly, there is general agreement among economic development experts on three key strategies for rural areas — think regionally, encourage entrepreneurship, and build on the assets you already have.

REGIONAL COOPERATION: Many communities are too small to compete on their own, but as regions they bring more assets to the table. Thinking and acting regionally is probably the most important strategy, says Mark Drabenstott of the Kansas City Fed. It’s time for rural places to overcome old rivalries and limit them to the athletic fields, and newspapers can encourage a cooperative attitude. That’s all the more important as federal funds for economic development keep shrinking.

Cross County, Ark., has the right attitude. It passed a temporary sales tax to finance its economic-development efforts, then concluded that it would be better off involving eight other counties in the region.

ENTREPRENEURS may often be better targets for recruiting than manufacturing firms. Entrepreneurs account for half of the non-farm gross domestic product, employ more than half of all private-sector employees, and create 75 percent of net new jobs. One estimate is that half of the U.S. workforce in 2025 will be self-employed.

For any community, encouraging entrepreneurship involves lower cost and lower risk than industrial recruitment, by scattering the eggs among many baskets. Recruiting entrepreneurs also makes broader use of civic organizations, as a wider range of individuals bring prospects to the table. Importantly for rural areas, entrepreneurs are innovators, and often grasp new technology faster than others in business. Many can react more swiftly to changes in markets. They also make good stories.

Entrepreneurship in rural areas is already stronger than you might think. Owners of small business are about 10 percent of the workforce in rural areas, about 7 percent nationwide. But more effort needs to be made in rural areas to encourage high-growth entrepreneurs, who tend to operate in larger markets and create the most jobs.

Entrepreneurs often need mentors and coaches. In Appalachian Kentucky, where tobacco is much on the wane, the University of Kentucky is using money from the national tobacco settlement to start an Entrepreneurial Coaches Institute, and graduates of it are succeeding in their own businesses and helping others succeed.

In the western end of the state, Murray State University has a Small Business Development Center to help entrepreneurs. Many other states have similar centers.

BUILDING ON YOUR ASSETS means finding your economic niche by developing a unique source of competitive advantage. In Southern Kentucky, the presence of Lake Cumberland and lots of young people who learned to weld, wire and plumb at local vocational schools have helped create a center of the houseboat industry.

That area, and many others in rural America, have scenic assets that can attract job-creating businesses. As communities recruit new employers, they need to protect such assets and be careful about the environment.

Communities hungry for jobs may think they can’t afford to be selective, in terms of what kind of employers they recruit, how they entice them, and how those employers treat their workers. But all those issues are legitimate items for public debate, and newspapers should facilitate such discussions.

ACCOUNTABILITY: A local newspaper should be an integral part of the local business community, but maintain enough independence to make sure that its handling of economic-development matters reflects the economic, social and environmental interests of the whole community — not just the business interests of local employers, a subset of them, or local government officials.

Where public money and public officials are involved, the newspaper must hold them accountable, and to do that it must be careful about its involvement in economic development.

Prospective employers often like to know that the local newspaper is on board with recruitment efforts, but publishers should be careful not to make or imply any guarantees about coverage.

It’s common for publishers to play a role in job recruitment, but they and their editors should not keep the community in the dark, or let themselves be compromised or misled.

Don’t let rumors rule the roost. If no guarantees of confidentiality have been made, and rumors of a big economic development are circulating, a news story can separate fact from speculation. And if the story is on the street, it should be in the newspaper.

Paul Monsour, right, is now an economic developer in Morganfield, Ky., but for years he was editor of the Union County Advocate, and he recalls how he let local boosters mislead him into not reporting on what they called a high-tech industry coming to town. It turned out to be nothing more than a call center. “I think some officials feel the city gave too much,” he said.

Monsour also tells a story about an airplane manufacturer that was looking at the town of Sturgis for a plant. “Being a good guy, I stayed away from reporting the specifics about what was going on, as asked by the local elected officials and economic developers,” Monsour recalled. “I grew restless and at the annual Sturgis chamber banquet, officials of the firm were in attendance. I told them who I was, asked specific questions, and wrote a front page story.

“I did what I think any good reporter would have done. But when the official came around to make a formal announcement of their plans, I and The Advocate were ignored. I asked why and I was told that I was supposed to ignore the story until ‘It was time.’ Of course I was invited to the open house the firm had when it opened its plant.” But the plant never really finished a plane, because the Federal Aviation Administration would not approve its plans, Monsour said.

“There were rumors that some locals, including a bank, lost money in the deal,” he said. “As I look back, perhaps it would have been a good idea to emphasize in my coverage, if I could have gotten it confirmed, that the firm was dealing with an experimental plane.”

Holding economic developers accountable can also mean fighting freedom-of-information battles, especially if governments create newentities that operate under the radar.

In Iowa, a pay scandal at a regional economic-development agency prompted the legislature to require such agencies to buy legal notices to disclose their expenses and the minutes of their meetings, but local officials tried to get the legislature to gut the law. This is no small thing; Iowa may have more than 1,000 such agencies.

In Georgia, Gov. Sonny Perdue wants a law to ban any public notice of talks about business locations, tax breaks and other incentives until an agreement is final. The House-passed bill died in the state Senate last year, and Perdue and the House speaker have indicated that it could come back, but newly elected Lt. Gov. Casey Cagle said in his campaign that he would fight it. The Georgia Press Association has done a good job of keeping its members apprised of this issue; let’s hope members of the association have not only editorialized about it, but spoken directly to their legislators about it.

Economic-development coverage is more than writing about the direct efforts to recruit and retain jobs. It’s become generally accepted that a highlyeducated work force is a modern key to economic growth, and many states and localities are making progress toward having that kind of workforce.

But many of them are seeing their highly educated young people move away mainlybecause their communities lack the jobs to fit their education, or the major metropolitan amenities that those young people want.

This “brain drain” phenomenon was explored in detail by the TimesDaily of Florence, Ala., which partnered with a doctoral student at the University of Alabama to survey the area’s young people. Reporter Michelle Eubanks’ work on the “GenXodus” series included tracking down young people who had left for larger cities, and putting the issue before local and state policymakers.

Covering and guiding economic development can be one of the greatest public services a news outlet can do for its community. And it can be good business for the newspaper, by building its local market.

Al Cross is director of the Institute for Rural Journalism and Community Issues. This article originally appeared in the February 2007 issue of Publishers’ Auxiliary.