Rural Development: the Conventional Wisdom Won’t Cut It

Shenandoah Valley: Not all rural areas are created equal

by James A. Bacon

Virginia’s rural communities face a hard slog maintaining their local economies in a globalizing world in which their traditional advantages, cheap land and labor, are no longer competitive. That slog looks even harder when leading thinkers are so bereft of fresh ideas. The utter failure to think beyond the conventional wisdom was on full display, as can be gleaned from this report by Virginia Business, at a conference hosted by the Federal Reserve Bank of Richmond about rural economic development in the Fifth District, which includes Virginia, West Virginia, Maryland and the Carolinas, 

There’s nothing wrong with the conventional wisdom as far as it goes. Yes, rural areas need to fine tune their workforce training programs. Yes, rural communities need better broadband access. Yes, rural areas need to retain local anchor institutions like hospitals, banks and colleges. Yes, above all, rural communities need to do a better job of retaining their college-educated youth. 

“Changing the prospects of a town, it seems to me, starts with aligning the mindsets of the people in that town,” said Richmond Fed President Thomas I. Barkin. “And a great metric is whether the kids who grow up and go to school there choose to come back.”

Yes, yes, yes — but how?

Any analysis of “rural” economic development starts by acknowledging that rural areas vary widely in their potential. Some have resources (timber, coal, gas, oil, minerals, agriculture), and some do not. Some are located near major metropolitan areas, and some are remote. Some have recreational potential (waterfront, sailing, mountains, hiking, biking, kayaking, etc.), and some do not. Some are blessed with cultural and historical resources, and some are not. Some have interstate highway access, other are off the beaten track. Some have attractive communities for urban refugees to live in (think Abingdon, Lexington or Staunton), others have small towns in desperate need of revitalization.

Each community needs to conduct a SWOT analysis of itself and develop its economic development strategy accordingly.

The model is Virginia’s northern piedmont where groups like the Piedmont Environmental Council and the Journey Through Hallowed Ground have identified the region’s strengths, formulated a rural/small-town vision for the future, and mobilized resources to advance that vision. Every rural community leader in Virginia needs to visit those two organizations to see what they have done.

In a similar vein, the Shenandoah Valley should build a strategy around (1) its close proximity to the Washington and Richmond metropolitan areas, (2) its rich historical and cultural heritage, (3) its interstate access, (4) its vibrant small cities and towns, (5) its vibrant agricultural industry, (5) and its abundance of small colleges. The Valley is perfectly positioned to lure urban refugees from the Washington rat race who would find the communities there to be inexpensive, slower-placed places to live while still supporting a lively cultural scene. A goodly percentage of these refugees would start lifestyle businesses that would add welcome diversity to the economy.

Communities bordering the Chesapeake Bay can play on their access to the water and sailing. The region can build an economic base around water-based recreation and retirement.

The New River Valley is unique among rural (or formerly rural) regions in having a national-class research university at Virginia Tech. Needless to say, the economic development strategy of fast-urbanizing Montgomery County will be very different from, say, neighboring Floyd County.

There’s not much left of the extraction-based economy of far Southwest Virginia, although there may be a lingering future for metallurgical coal mines (serving the steel market, not the electric utility market) and gas drilling. The good times for those industries will never return, and local leaders are wise to look to other models for development. The sad reality is that the paucity of interstate access, flat land to develop, and the lack of a manufacturing-oriented workforce will make diversification issues a challenge. Local leaders need to acknowledge this reality and think about how to shrink gracefully. Meanwhile, they are right to develop the recreational potential of the region’s rivers, streams, mountains, and gorges, which are spectacular.

Southside communities, which have seen their mill-town economies hollowed out, face similar challenges as the Southwest — without the advantage of the mountains’ natural beauty. But they do have an advantage in being less remote. Some may look to North Carolina’s Research Triangle and Tri-Cities metros for collaboration and partnerships.

Many rural “industries” of the future are likely to be non-traditional — solar farms, hemp cultivation, supplying fresh produce to urban markets, or ideas no one has conceived of yet. Each community needs to find its own mix — and the process of discovery will likely be improved if it is led by private-sector entrepreneurs dipping their toes into many markets rather than by public bodies making big bet-the-farm bets on mega-projects.

Local governments can do two things: They can strive to serve a stagnant or shrinking population base more efficiently with limited tax revenues, and they can marshal their limited resources to foster islands of urbanism — compact small towns with vibrant main streets — where professionals and young people can see themselves building a life. Above all they need to avoid the temptation of “betting the farm” on risky schemes.

Update: Stephen Moret has provided me with a link to Barkin’s speech, which you can read here. It is meatier than conveyed in the Virginia Business article that inspired this post, and I’ll try to blog about his observations tomorrow.

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20 responses to “Rural Development: the Conventional Wisdom Won’t Cut It

  1. Overall, I agree with you about what we need to do.

    Without real broadband, very little is going to happen in any community. That is a necessary utility before there’s going to be any hope for rural areas. No one wants to wait for slow internet every day as they try to run their business. The lost hours alone are unbelievable.

    I know that because I live in a small area, not remote but just unlucky that someone talked Comcast into taking a side road for the last 3 miles of fiber it laid from town. Ten miles were laid and three miles farther and they’d have connected everyone along that road from Blacksburg to the interstate at Ironto. Population in the Hall’s Church community has grown and even includes a subdivision now – but none of us has real internet. The system our government is using does not incentivize serving complete areas. At the time, I was begging for service, and expected it, only to be disappointed when they left the main road they’d followed 10 miles to take off on a tangent and then insist they had no more money to put into our area. We’re too small for anyone to want to serve – but those selling property in our area have to deal with the fact that real internet is available 3 miles from the interstate but not in those 3 miles. Sometimes I try to use my slow and super expensive over the air system for big tasks instead of driving 13 miles to the office. I did it last weekend. A task I tried to do overnight timed out before completion after more than 3 hours. In my office, I did it in a couple of minutes, pointing out the differences once again.

    There are some initiatives for broadband. We’re on the tail end of the electric cooperative and they have a program started to get broadband – but for our area, that’s more than 5 years away. The cooperative serving the area I grew up in is also starting to offer broadband, but it will be more than 5 years before it reaches our property.

    It is too easy for those who live and work in areas with adequate broadband to accept that it will be years before all rural areas are served by broadband in some way. College graduates will not stay in or return to communities without adequate and affordable broadband. The timelines for providing it need to be significantly cut because every day rural areas lack broadband is a lost opportunity for economic sustainability.

  2. I have a hard time accepting the idea that forestry and agriculture are extractive industries. Both can actually enhance the environment and result in further improvement of the land. They absorb carbon dioxide and many owners carefully manage them to ensure they enhance rather than harm water, air and land.

    Forestry and agriculture are not the same as mining, oil, or gas, which always leave behind a mess and are accustomed to not leaving land in usable condition. Too often, non-resident extractive companies take bankruptcy to avoid having to clean up after they have taken all they can from a community.

    Forestry and agriculture have some negatives, and can lead to environmental harm when done wrong, but in general, owners of forestry and agriculture land view it as heritage to pass on in better condition than we received it, not a resource to use up in our lifetimes.

    Please reconsider your categorization of rural land.

  3. Good and timely post, Jim.

    I have read the Virginia Business report on the Federal Reserve Bank of Richmond’s “inaugural Investing in Rural America Conference Rural America Conference, held Wednesday at the Hotel Madison & Shenandoah Convention Center in Harrisonburg. The conference focused on better outcomes for rural America, examining issues ranging from education and workforce development to community investment opportunities and broadband expansion.

    I’ve encountered arguments that the challenges of distressed rural communities are too difficult to solve. They’re not,” (Bank Chairman) Barkin said, speaking to an audience of about 100 attendees, including local economic development officials. “From my perspective, the first step in thinking about the problems of these areas is to approach them as solvable — by good policymaking, by markets, by local leaders and by small-town residents themselves.”

    In his opening address, Barkin said there are four major issues that need to be addressed to overcome the disparities between urban and rural communities: education, workforce development, geographic and informational isolation, and labor force participation.” End Quote from Virginia Business Article.

    I am not sure much useful was said at this conference. I suspect that the conferees would have gotten far more useful information and learning if they had gotten out of their seats and walked around the town of Harrisburg. This would have given them a great opportunity to see how much has gone chronically wrong in Harrisburg for so many years, and see for themselves all the wasted golden opportunities in and around Harrisburg. Seeing all that incompetence in town planning, zoning, and building, they then could have asked themselves honestly and candor why so much as gone wrong in Harrison, and why the town is such a blight on the entire Shenandoah Valley, and how do we fix Harrisburg?

    Thus, once the conferees learned how to fix Harrisburg, they would be armed with the knowledge, means and skills to lead the Shenandoah Valley into the bright, vibrant, healthy, and wealthy future that all the valley’s citizens deserve from their leaders.

    • Here are only a few of the problems Harrisonburg presents to itself and Shenandoah Valley generally. The valley is one of the most beautiful and historic valleys in the world. This is for many reasons. For example, the valleys land forms are unique and astound. Its history is also without peer, given its roll in American history in so many ways since the turn into the 18th century. I-81 running through the valley is also important to the entire nation, particularly its east coast, for economic health and connectivity.

      I-81 runs for some 80+ miles through the valley that in some ways is akin to the Ballson – Rosslyn Corridor in Arlington County. The valley is long and linear, and its is linked wondrously together of historic towns, battlefields, orchards, pasturage, grain fields, streams, rivers, mounts, and an array of other natural wonders full of history, commerce and immense promise, given new technologies instant communication, transport and delivery, and quick storage.

      And like with Arlington’s RB corridor, those links within the Shenendoah Valley if developed holistically, will create a synergistic whole far greater than its parts. This is critically important. For, if each one of those linkages are developed without regard for the others then, in that case, these linages within the Valley will war with one another, creating a whole that is far less than its part. This will will ruin the valley exponentially.

      Unfortunately, Harrisonburg as it is now built is at war with itself, at war with its neighbors, and at war with its cousins up and down the Valley. Hence Harrisonburg reminds one of Tyson’s Corner in Fairfax. Except in Harrisonburg, a series of office parks did not steal an interstate. Instead a big sprawling office park like university stole any interstate called I-81, one of the most important Interstates in America. That same university also, and quite literally, turned its back on the historic and formerly vibrant town of Harrisonburg and its nearby towns. The university has devastated its historic neighbors. This is compounded by woefully deficient planning and zoning in the town and in the county. For example, many buildings and other facilities, such as industrial, supply and distribution yards, also turn their backs to drivers going north and and south on I-81. Thus drivers are jolted out of the reverie of one of the most beautiful drives in the world (or what could be), by the ugliness of Harrisonburg that could have so easily been avoided.

      The fact that this zoning and planning and building malpractice has been going on for decades in and around Harrisonburg, Va., without remedy astounds and shocks the conscience, given all the damage it does from one end of Virginia to the other to so many of the states and America’s most precious, and valuable assets.

  4. Rural America has been in decline for the last 100 years. Bringing electricity to rural areas did not stem the decline. Bringing subsidized telephone service to rural areas did not stem the decline. Subsidized rural broadband will not stem the decline. 5G will not stem the decline.

    In a 2019 report on the effects of automation the Brookings Institute found ..

    At the community level, the data reveal
    sharper variation, with smaller, more rural
    communities significantly more exposed
    to automation-driven task replacement—
    and smaller metros more vulnerable than
    larger ones. The average worker in a small
    metro area with a population of less than
    250,000, for example, works in a job where
    48 percent of current tasks are potentially
    automatable. But that can rise or decline. In
    small, industrial metros like Kokomo, Ind.
    and Hickory, N.C. the automatable share
    of work reaches as high as 55 percent on
    average.

    The party is over. The best thing the state can do is issue relocation vouchers to rural residents.

  5. I agree with most all of what Jim says except for this: ” Yes, above all, rural communities need to do a better job of retaining their college-educated youth. ”

    If the college-educated jobs are there then it will attract college-educated workers including kids that grew up there but if they are not, then those kids are going elsewhere and in the modern era – a lack of internet is a big problem – not for fat teens watching porn in their parents basement – but for all manner of modern life – business and education AND economic development – it’s really comparable to electricity and phone service and if you do not have it – your “economic development” is not going to happen.

    The rest of the US helped to pay for telephone and electricity and farm-to-market roads for rural America – and they should have – and they should also for internet.

    The cable companies are like Dominion- they don’t like the ROI but they don’t want others to do it either.

  6. Somehow this sounds decades old familiar and a lot of twaddle. Take inventory!

    • You’re right. This is typical Republican bull****. Republicans claim that Democrats try to keep African-Americans “on the plantation” by making them dependent on the government and then promising more “free stuff’ in return for their votes. This is exactly what the RPV does in Virginia with respect to rural Virginians. They effectively say, “Be good little boys and girls and we’ll subsidize your electricity, your schools, your roads, your police, your telephone, etc. And don’t worry, there will be more goodies like subsidized high bandwidth coming.” But keep voting Republican. That’s very important. Stay on the farm or in the hollows and small towns but keep voting Republican. We’ll bring you another bag full of other people’s money if you do.”

      If Jim were a true libertarian he’d insist that people who make the lifestyle choice of living in rural Virginia accept the consequences of that lifestyle choice. There would be no big government subsidies going from urban and suburban Virginia to rural Virginia to finance lifestyle decisions. It is not the role of government to use compulsory taxation to provide the illusory “right” to live in rural Virginia while being provided urban and suburban levels of government support. The “right” to live in the country on subsidies from elsewhere is an imaginary “right” concocted by Virginia’s Republicans to keep their most faithful voters impoverished and dependent. Sound familiar?

  7. Rural is what sustains the urban whether it’s food , poultry, beef, electricity or garbage.

    If urban areas were REQUIRED to meet their own needs without their own boundaries -they’d fail.

    So Rural – really SUBSIDIZES urban in many respects!

    Virtually anything you buy in an urban area – comes from places outside the urban area.

    The urban areas pretend otherwise but the simple truth is that whether it’s electricity, food or waste – rural areas subsidize urbans areas.

    You walk into a supermarket in NoVa and 99% of what it sells came from rural …

    • Pity you don’t understand the definition of subsidy. Nobody ever claimed that rural places were bad or that rural areas didn’t produce things of value. The claim is that there are too many people living in rural areas relative to the economic opportunity in those areas. The net result of that is an endless flow of money from urban and suburban areas to rural areas to pay for schools, police, jails, etc. As Peter G correctly states, this debate has been going on for decades. There’s always a “magic pill” that will bring prosperity sufficient to support the population of rural areas. The problem is that none of the dozens of “magic pills” have ever worked. Jim Bacon lists a litany of new “magic pills” that he hopes will cure rural Virginia’s ills. None of them will cure those ills.

      What Jim fails to present is the classical economic argument of supply and demand. There is an oversupply of labor in rural areas relative to the demand for the labor. Unemployment, low wages and government mandated subsidies are the result. Jim, like all Republicans, sees increasing the demand for rural labor as the only solution. If broadband internet access doesn’t solve the problem then growing hemp will solve it. Unfortunately, automation and global economic displacement have been leading to urbanization for centuries all over the developed world. Neither Jim nor the plantation class elites in our General Assembly will find the “magic pill” to solve rural decay because that pill doesn’t exist. Previously, I asked for examples of rural renaissance success stories. Commenters came back with examples like Aspen, CO. Fine, I’ll stipulate that there are relatively small areas of natural beauty or geological wonder that can build a successful small rural town (Aspen has a population of 6,658 in the 2010 census). However, the vast majority of rural areas and the vast majority of people economically struggling in those rural areas will not be able to build ski resorts as a solution to their financial problems.

      In reality, there are two possible solutions. The first is to find the “magic pill” that ignites economic growth over large areas of rural Virginia. That’s been the forlorn hope of Virginia’s plantation class elite for the past 50 years. The other is to encourage de-population of rural areas by facilitating relocation to urban and suburban areas. If you can’t increase prices (of labor) by increasing demand then you do the same by decreasing the supply of labor.

      Our Imperial Clown Show in Richmond (especially the Republicans) is taking the most ill-conceived approach to this problem. They are attempting to fight the free market through government subsidized efforts to increase the demand for labor in rural Virginia. No number of failures, no number of decades of failure can push them away from this course of action. This subsidization discourages the very relocation that is needed.

      Relocation in search of economic opportunity has a long and successful history in the United States. The ancestors of the very inhabitants of rural Virginia were pioneers who pushed west away from the established town and cities of eastern Virginia in search of opportunity. The African-American diaspora from the rural south to the urban north was, in part, a search for economic opportunity. Neighborhoods of Baltimore were derisively nicknamed Billytown because so many “hillbillies” came north to work in the shipyards and steel mills of Charm City.

      The best plan for state funding of aid to rural Virginia is a plan to help finance relocation of people from rural to urban and suburban Virginia. Yes, I understand that the people living in rural Virginia like living in rural Virginia. If they were willing to accept the consequences of that lifestyle decision without looking for handouts from others I’d be fine with that. But they aren’t willing to accept the consequences of their lifestyle decisions. While railing at inner city welfare mothers and decrying the socialism of Bernie Sanders they want the same government provided subsidies that come to the inner city and that Bernir Sanders hopes to bring to all of America. Hooterville socialism is alive and well within the Republican Party of Virginia. It will never work.

      • “Previously, I asked for examples of rural renaissance success stories.”

        Little Washingon, Va. Its population was 135 folks at 2010 census, down from 183 in 2000 census; and it’s a roaring success. Life is more than statistics.

      • Don, I’m surprised to find you joining the ranks of those who totally misrepresent other peoples’ arguments. Surely you can do better. You say, “Jim Bacon lists a litany of new ‘magic pills’ that he hopes will cure rural Virginia’s ills. None of them will cure those ills.”

        I NEVER characterized my proposals as “magic pills.” Indeed I have repeatedly said that there are no “silver bullets” (same thing) for rural Virginia. I have repeatedly said that 21st-century economics favor larger urban areas. I have repeatedly said that rural areas need to re-think their economic development policies, which still are predicated on the decades-old strategy of recruiting outside manufacturing and other corporate investment. I have repeatedly said (including in this post) that many rural counties need to figure out how to shrink gracefully — in other words, to manage population decline.

        I guess where I differ from you is that you think Virginia’s rural areas should just shut up, curl up in a ball, and die, while I think some areas have the potential to reinvent themselves. I think some parts of rural Virginia have the potential to adapt — if they think differently.

  8. All of your discussions amaze me, they can’t even build a simple gas pipeline across said “rural community” (valley, ridge).

    • Most Americans, save for dwindling few, have gone from the most competent people in the world to being among the most incompetent people in the world. Especially, American college students and graduates, now these are whining, complaining, neurotic, hysteria driven children lead by the ignoramuses of academia. It all happened over the last 3o years. Now it moves at warp speed.

      Why?

  9. What I see here is an attitude of there is no hope for rural areas, put the things no one wants to live with (landfills, prisons, energy infrastructure…) there and have all reasonable people move to the cities.

    The single largest asset most Americans have is their home/real estate. The businesses some rural people have are based on land. If everyone is going to move to the city, there’s no one to buy the land and that asset has no value. That means you’re asking people to abandon their largest asset and go somewhere else, do something different.

    Our rural business can’t get the dependable workers/skills we need. Other farmers have the problem we have. Many business in all locations have this problem. If more people move away from rural areas, there will be even fewer people to help.

    Farmers consistently get less and less of the food dollars consumers pay. The last data I saw was that farmers get something like 7 cents of every dollar today. Farm costs keep increasing but the percentage of cost that goes to farmers keeps declining. At some point, this is not going to work.

    It strikes me that many people do not value rural areas, rural people, and view us as takers only. We seek to have productive and sustainable businesses and lifestyles. We do have strong ties to the land – our heritage. We seek to use our resources the best way possible and be contributing members of society. We pay taxes and work just like people in urban areas do. Most of us don’t want a handout. We want a fair chance. When every area has to totally support itself, there are problems.

    Bottom line, what we’re doing now isn’t working. Lots of us have ideas about what is needed to turn things around. Too many simply want to throw us away and don’t understand that society needs these areas as more than a trash can.

  10. Posted on behalf of Robin Sullenberger:

    Great to see you focusing on rural issues, especially with comments that are a bit outside the normal data driven chatter. I’ve just been appointed to the state GO Virginia board, and I’m sure those who advocated for me were thinking “outspoken voice for rural VA.” In the past month, I’ve attended 3 conferences on rural issues, including the Fed gathering. Facts are facts, but there are underlying issues that make the best ideas slow to develop or flounder. Many come from academics or economic stalwarts who mean well and present highly creative solutions, but have little or no direct experience with rural realities. I’ve always felt that the downfall begins at implementation, because those who pontificate are not the same ones who must make it happen. These are often multitasking, single department or business proprietors, most dealing with the crisis of the day or how to remain solvent, not critically thinking about how to change the rural paradigm. Throwing the best idea since sliced bread in their lap can just cause panic, not inspiration.

    Assuming we can figure out the funding formula, the Rural Council (also a board member there) hopes to implement a rural leadership program. It’s extremely difficult to make public comments about nativité, lack of foresight and motivation in many rural areas, but there are latent talent pools everywhere. We think we can identify and tap into that. Addressing risk aversion is a critical challenge, because failure in close knit communities may mean a stigma that lasts forever.

    I could go on and on and on….thanks for always being on the leading edge for change! The focus on rural issues is off the charts…broadband deployment and other critical assets are helping set the table…let’s also hope collaboration can outpace redundancy.

    • Great Idea, Robbin Sullenberger!

      These “rural” people need help, but it must be the right kind of help, which is outside the norm, based on real, highly informed, and practical on the ground experience. Plus Virginia is blessed right now with a few public servants who are capable of providing that real, practical, on the ground help. And we know who a few of them are, if only because they have proven it time and again.

      God Speed to your venture!

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