The Next Frontier for Kansas Rural Development

1. The Next Frontier for Kansas Rural Development Mark Drabenstott Director RUPRI Center for Regional Competitiveness University of Missouri-Columbia mark@rupri.org

2. A New Approach for A New Race Globalization has made regions the new “athletes” in the global economic race.

3. A 21st Century Race Demands A 21st Century Strategy Overland Park has a new strategy. You need one, too.

4. You are not alone on this frontier. Every region on the planet is asking how best to run this race.

5. The Next Frontier for Kansas • Why is a regional approach critical? • What does it take to win? • What can you do?

6. Rural America Losing Ground • Rural regions lag far behind in the race for jobs and income. • The main hurdles are lack of critical mass and heavy reliance on assembly manufacturing. • Meanwhile, transformative innovation appears scant.

7. Globalization handicaps most rural regions. Critical mass is more important than ever — most rural areas lack it.

8. Top 10% Counties for Job Creation 1995 to 2005 Denotes rural county Source: BEA, REIS

9. Top 10% Counties for Income Creation 1995 to 2005 Denotes rural county Source: BEA, REIS

10. Globalization handicaps most rural regions. 2. The global economy rewards innovation. Most rural areas are still wedded to commodities…whether agricultural or industrial. Competition will drive consolidation… or take business elsewhere.

11. More entrepreneurs…more growth! State Entrepreneurial Growth and Employment Growth Employment Growth (Wage and Salary: 1990-2004) KS UT MS ND MS Iowa State Non-farm Proprietor Growth (1970-1990) Calculations based on BEA, Regional Economic Information System data Source: Drabenstott & Henderson, 2006

12. Rural KS adding jobs much slower than Metro KS … Index: 1990 = 100 Kansas Employment Index Source: Bureau of Economic Analysis, Regional Economic Information System

13. A tough jobs picture over past quarter century…

14. But things appear somewhat better more recently.

15. KS lagging further behind in income…

16. Though things look a little better more recently.

17. An exodus from most of KS…

18. With little turn around recently.

19. The Next Frontier for KS • Why is a regional approach critical? • What does it take to win? • How to move forward?

20. What does it take to win? • Craft a regional strategy. • Build robust regional governance. • Deliberately pursue innovation. • Grow a lot of entrepreneurs.

21. A New System for Regional Development

22. Sound regional strategy • your compass for the future Regions must... • Identify their unique competitive advantage — founded on their distinct economic assets. • Chart a course to seize it. • Prioritize public investments to leverage it. Without a strategy, you will not know the “ask” in Topeka or DC.

23. Two Key Strategy Principles • Must be founded on the region’s economic strengths (assets). The era of smokestack chasing is over. • Must target industries where the region can build synergies around established or potential business clusters.

24. Robust regional governance • Thinking & acting as a region A regional roundtable is crucial to crafting sound regional strategies — the region must own it! This roundtable must engage public, private, nonprofit leaders. Who will supply the Round Table? Who plays King Arthur?

25. Deliberate investment in regional innovation. Much of rural America rests on the laurels of assembly mfg & commodity agriculture. • We must look much further onto the horizon. • The key will be deliberately connecting public research with what each region does best.

26. 4. World-class entrepreneurial climate. Creating this climate will require… • A change in culture…from we work for “them” to we work for “us.” • Regional e-ship support systems. Systematic in approach and regional in scope. • Recycling the wealth in new equity instruments. Don’t bury your talent in the dirt.

27. The Next Frontier for KS • Why is regional development critical? • What’s the new paradigm for development? • What can you do?

28. A Regional Strategy Process Public Investment Priorities Identify a “region” Build a “governance” group Private Investment Priorities Diagnose the region’s competitive advantage Map region’s assets and potential— ground-level view. Select “best” economic direction—craft strategy to seize it.

29. Who does what? Public Investment Priorities Identify a “region” Build a “governance” group Private Investment Priorities Diagnose the region’s competitive advantage Map region’s assets and potential—ground level view. Select “best” economic direction—craft strategy to seize it.

30. RUPRI Center for Regional Competitiveness Public Investment Priorities Identify a “region” Build a “governance” group Private Investment Priorities Diagnose the region’s competitive advantage Map region’s assets and potential—ground level view. Select “best” economic direction—craft strategy to seize it. KS Region Team

31. Step 1: Identify the Region • What is the most logical economic region? • What is the “commuter shed”? “Retail shed”? • Is there compelling geography? • Who plays well together in the same sand box? • Are there historical/cultural factors to consider? • Is there a business cluster to unite the region?

32. Step 2: Build Regional Governance • Who are the regional “champions”? • Who can provide aegis for the roundtable? • Which public officials will engage? • Which private sector leaders will engage? • Which foundations or non-profits can supply glue? • Can a university/college bolster the effort?

33. Step 3: Diagnose Competitive Advantage • What are the key economic trends in the region? • How’s the region doing against its peers? • What is learned from leaders/laggards in the region? • What are the region’s existing & emerging clusters? • What are the various impacts of economic options?

34. RUPRI Center for Regional Competitiveness World-class regional strategies for the global economic race • Five world-class analytics: • Baseline trends in the region — economic & demographic critical trends. • Benchmark against other regions — how is the region under/over performing. • Economic linkages — where the region has the strongest economic ties. • Business cluster analysis — existing and emerging business clusters on which to build. • Economic impact analysis — which development options have the biggest bang for the buck?

35. Step 4: Map the Region’s Economic Assets • What are the region’s distinct assets? • Are there “unexploited” assets? • What would it take to unlock their potential? • What are the region’s biggest economic barriers?

36. Step 5: Craft the Region’s Strategy • Present menu of “near-term” & “long-term” economic options. • Identify consensus options. • Prioritize public investments and leverage the “ask” with the governance group. • Prioritize near-term development steps. • Prioritize long-term development steps. • Launch action steps. • Monitor progress against plan and evaluate progress.

37. Two Case Studies on Regional Strategy

38. Western Alabama-Eastern MississippiWIRED Region 1st generation WIRED grant Mostly rural Driven by 8 community colleges No prior regional initiatives The state line was huge

39. What is the WAEM Region? • 37 counties. • 1.028 million people. • Most people (88%) work in the Region … 368,000 jobs.

40. What are the Region’s economic strengths? Roundtable results Forest The best pine forest east of the Mississippi. Agriculture A strong history of commodity production. Manufacturing A diverse legacy of industrial activity. Quality of lifeExcellent water, clean air, and connection to outdoors. History & cultureThe cradle of Civil Rights and a rich history of the region. Location & logisticsGreat highway/railway/waterway network in the heart of the South. Faith communityA vibrant faith community woven into the fabric of the region. Outdoor recreationAbundant outdoor recreation opportunities.

41. A Timeline for Development Today 5 Years Future 10 Years Future • Rests mainly on current • mix of industries. • Key is making firms in • each key industry more • competitive… • And exploiting market • trends in every industry.

42. A Timeline for Development Today 5 Years Future 10 Years Future • Advanced mfg • Wood products • Tourism & culture • Warehousing & distribution • Health care • Entrepreneurship

43. Option 1 Advanced Mfg • The region has a big mfg presence, but it is highly vulnerable to global competition. • Key is moving to higher value segments through advanced mfg techniques. • Workforce training, business support, and cluster development will be critical tactics.

44. Option 1 Advanced Mfg Motor vehicles • The WAEM region is surrounded by a “crescent” of large auto assembly plants. • The region has not taken full advantage of its location—to be home to other parts of the value chain. • Keys are infrastructure, workforce skills, and rapid adoption of advanced mfg techniques.

46. Defining the Southern MN Region

47. KEY PARTNERS • AgStar Financial • Southern Minnesota Foundation • MN Dept. of Employment & Economic Development (DEED) • Workforce Investments Boards • Bio Business Alliance • Expected support from agribusinesses, regional foundations and others

48. The Minnesota Initiative Foundations Northwest Minnesota Foundation Northland Foundation West Central Initiative East Central Initiative Foundation Southwest Initiative Foundation Southern MN Foundation http://www.mcknight.org/greatermn/index.aspx

49. RUPRI Center for Regional Competitiveness World-class regional strategies for the global economic race • A “competitiveness dashboard” for regions. • A tool to diagnose competitive advantage. • Connecting university innovation with regions that can use it. • Assess impacts of policies on competitiveness of regions. • Support effective models of regional governance.