New Study, Online Database Released to Help Rural Communities. "Unlocking Rural Competitiveness: The Role of Regional Clusters"

Which strategies should rural areas employ to encourage future growth? Many states and community leaders are asking themselves this question as they attempt to compete in a global economy. Several regions recently proposed to build ethanol plants in their areas to capitalize on the energy-production market. Other rural areas are promoting their cultural assets and natural resources to attract tourism.

But what works best for each individual county?

Unlocking Rural Competitiveness: The Role of Regional Clusters explores this question, highlighting the complex relationship between rural areas, economic performance, and the different types of industries spread throughout the country. Perhaps the most useful component for practitioners is an online database that contains information for every state and U.S. county such as: the number of establishments and employees in each of the study’s 17 industry clusters and six manufacturing subclusters; educational attainment; average wage per cluster; housing information and building permits; labor force statistics; demographics; and, varying indices of rurality.

The authors, a team from Purdue University’s Center for Regional Development, the Indiana Business Research Center at Indiana University’s Kelley School of Business, and the Strategic Development Group, stress that rural economies are driven by more than just agriculture and that counties should not be classified as either rural or urban, but instead should fall along a continuum between the two extremes. To measure where a county falls on the continuum, the team created an Index of Relative Rurality (IRR) calculated from the population, population density, the extent of urbanized area, and the distance to the nearest metropolitan area. Based on the value of the IRR, each county was then separated into seven distinct categories of relative rurality.

Within each of the seven categories, the team explored further correlative relationships between both the employment size of various industry clusters and selected economic indicators, such as median household income, unemployment rate, poverty rate, and average wages. In all, 17 major industry clusters were used in the study, including business and financial services, energy, advanced materials, and transportation and logistics, among others. Additionally, the manufacturing cluster was broken up into six smaller subclusters in the analysis. The geographic locations of clusters were found to vary dramatically around the country. The tendency of some industries to co-locate, to interrelate with other industries, may allow regions to consider “diverse specialization” strategies instead of choosing one single industry to target.

The report also contains a case study in which the team’s online database was used to help develop a regional economic development strategy. Using an eight-county region in southwestern Indiana that included four metropolitan counties and four non-metropolitan counties, the authors describe the step-by-step process in which they used the database – supplemented with personal interviews and surveys from the business community – to chart out a strategy for future development. They found that the region specializes in the forest and wood products, life sciences, chemical products, and advanced materials industries. The key to future development of the region, they suggest, is the linkage of the interrelated clusters and the region’s proximity to other metropolitan areas.

Unlocking Rural Competitiveness: The Role of Regional Clusters is available at http://www.ibrc.indiana.edu/innovation/reports.html. To view maps illustrating the location of industry clusters across the country, visit http://www.ibrc.indiana.edu/innovation/maps.html.

The online database may be accessed by visiting http://www.ibrc.indiana.edu/innovation/data.html.

Links to the report and more than 4,500 additional TBED-related research reports, strategic plans and other papers also can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.

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Copyright State Science & Technology Institute 2007. Redistribution to all others interested in tech-based economic development is strongly encouraged. Please cite the State Science & Technology Institute whenever portions are reproduced or redirected.