A Framework for Developing Rural Entrepreneurship

by Deborah M. Markley, Ph.D., Co-Director, RUPRI Center for Rural Entrepreneurship

The past 10 years have seen increasingly wider acceptance of entrepreneurship as a core rural economic development strategy.While some pioneering organizations have been encouraging enterprise creation as a means of revitalizing rural places for 20 years or more, broader interest in the potential of entrepreneurship in rural communities and regions is relatively new.

Why the recent heightened interest in rural entrepreneurship? Several factors come into play. Traditional economic activities – routine manufacturing, agriculture, and natural resource-based activities – have struggled to remain competitive in the face of increased global competition. As a consequence, the traditional economic development strategies of industrial recruitment and retention/expansion have yielded fewer favorable outcomes in rural places.

Rural economic developers and the communities they serve are struggling to find new sources of competitive advantage. Many of these development practitioners are willing to think outside the box in the face of old tools and strategies that are simply not working. At the same time, models of successful entrepreneurship development now exist, so rural entrepreneurship practitioners are not alone on the innovation frontier. A growing body of research describes the outcomes of entrepreneurship development initiatives and tools that can be used to create a new, sustainable economic future for rural places.¹

Getting to the heart of entrepreneurship development

Entrepreneurship development is about more than building a support system for entrepreneurs; it is a strategy of transformation. It is about creating entrepreneurial communities, about changing the culture of rural places and people so that they embrace the potential of entrepreneurship. It also includes fostering public policy that invests in entrepreneurship development and is embraced by public and civic organizations and leaders.

Embracing entrepreneurship requires looking at economic development in a new way, one that holds the community responsible for creating development from within. In searching for new sources of competitive advantage, communities and regions must identify and build on their unique local assets and take a proactive approach to determining their futures.

This approach suggests that there is no “best”model for entrepreneurship development. In some ways, local communities and regions are akin to entrepreneurial startup enterprises, discovering and testing the products and approaches to entrepreneurship development that fit well with local realities. While there may be a tendency to want to wait until the models have been tested and proven, Karl Stauber, President of the Northwest Area Foundation, argues against this approach:

America is in the middle of a transformation of its rural areas. It does not have time to find perfect or guaranteed solutions. It must take the best ideas where it can find them and begin to adapt and adopt those ideas.²

Drawing on observation and study of entrepreneurship development practices across rural America by the RUPRI Center for Rural Entrepreneurship, the Kellogg Foundation, CFED and others, we have developed a framework for economic development practitioners who are trying to adapt the best ideas about entrepreneurship for their rural places.³

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¹The Appalachian Regional Commission launched its Entrepreneurship Initiative in 1997. The Rural Entrepreneurship Initiative, a partnership among the Kauffman Foundation, the Rural Policy Research Institute (RUPRI), the National Rural Development Partnership, the Nebraska Community Foundation and Partners for Rural America, began in 1999 as a way of advancing our understanding of rural entrepreneurship as a development strategy. In 2001, the RUPRI Center for Rural Entrepreneurship was created and we have traveled throughout rural America, learning from entrepreneurship practitioners and developing a framework for energizing entrepreneurs. In 2003, the Kellogg Foundation and CFED collaborated on “Mapping Rural Entrepreneurship,” a project that ultimately led to Kellogg’s investment in regional collaboratives that are creating innovative entrepreneurship development systems in six unique landscapes across rural America.

²Karl N. Stauber, “Creating New Rural Development Strategies: The Role of Nonprofits,” in New Governance for a New Rural Economy: Reinventing Public and Private Institutions, Proceedings of a conference sponsored by the Center for the Study of Rural America, Federal Reserve Bank of Kansas City, May 2004.

³A more complete discussion of this framework can be found in Deborah Markley, Don Macke and Vicki Luther, Energizing Entrepreneurs: Charting a Course for Rural Communities, Nebraska: Heartland Center for Leadership Development, 2005