Musings on Entrepreneurship and Innovation
Tuesday, June 08, 2004Boomtown USA
Everybody who has an interest in economic development in rural areas should read Boomtown USA.
The book begins with the following observation:
"The current move to the agurbs is the third great population wave in the United States' history...Technological advances in the last half of the 20th century, especially in the last 20 years or so, have made possible and accelerated the move to agurban areas...Unlike the first wave of migration, which mainly involved unskilled laborers, this third wave is primarily undertaken by skilled and educated people who choose to live not only outside a city but also outside its sprawling suburbs."
It ends with the following assessment:
"Small towns in America are at a crossroads. They have become the land of opportunity for thousands of companies and millions of people - but a rather sharp divide has materialized between the haves and have-nots. The great majority of small towns in this country belong to the latter group: the have-nots. Yet there is no other time in American history when they better stand to prosper, based on external factors that continue to facilitate their growth and flourishing."
In between are roughly 150 pages of often surprising data, anecdotes, and case studies, such as:
- The "top 100 agurbs" saw employment increase by 32.1% in the 1990s, more than twice the employment growth experienced in urban counties in aggregate.
- The total population of the top 100 agurbs in 2000 was approximately equal to the central counties comprising the San Jose, Seattle, and Boston "tech-poles." However, the population and employment growth rates over the 1990s was nearly three times as high in the agurbs.
- Often subtle differences in history and policies can yield significantly different outcomes, as documented in Schultz's comparision of Cape Girardeau, Missouri and Cairo, Illinois.
- The cost of living in the top 100 agurbs, on average, is some 40% to 60% less than the cost of living in New York, Chicago, or San Jose.
- Of the top 100 agurbs, only 16 have a four-year college.
- The top 100 agurbs include communities as small as Berkley Springs, West Virginia (pop. 663) and as "large" as Bend, Oregon (pop. 52,029).
- 52 of the top 100 agurbs are more than 25 miles from the nearest interstate.
As a description of the trends leading to the emergence of the agurb (or micropolis, if you prefer), Boomtown USA is most welcome. Decreased transportation and shipping costs, communications and coordination technologies, deregulation, globalization, lower operating costs, and quality of life alternatives are real factors. To the extent the book has weaknesses, they relate to certain aspects of Schultz's analysis and prescriptions.
Schultz makes no bones that his list of top agurbs are not representative. The top 100 agurbs represent about 10% of the country's rural population and comprise the top 5% of rural counties in terms of growth and economic performance. It's good, and surprising, news that there are this many rural counties that are performing at, or above, the level of many or most of their urban counterparts.
However, I found the author's comparison of the top 100 agurbs to the three tech-poles of San Jose, Seattle, and Boston to be a bit misleading. During the 1990s, the per capita income in the top agurbs increased 51.1%, while the per capita income in these three tech-poles increased 75.2%. (The increase for the U.S., in total, was 50.0%.) Schultz notes, "The per-capita income figures are offset, in most cases, by the higher cost of living in Seattle, Boston, and Silicon Valley." That seems to confuse relative levels of per capita income with the rates of change in per capita income. It would be interesting to see comparative data on the real (cost-adjusted) rates of change in income. I suspect that in terms of real economic wealth creation, the highest-performing urban areas still beat the highest-performing agurban areas. I also suspect the economic performance gap may have narrowed somewhat as the effective connectivity between rural and urban areas increases.
Schulz's prescription for cultivating your own boomtown are: adopt a can-do attitude, shape your vision, leverage your resources, raise up strong leaders, encourage an entrepreneurial spirit, maintain local control, build your brand, and embrace the teeter-totter factor (i.e., recognize that the relationship between case and effect is nonlinear). Hey, I think he's right. But, as policy recommendations, Schultz's prescriptions are a bit vague and, consequently, it isn't clear that they are actionable. After all, how can I measure increases in can-do attitude? How can I know which of my community's resources to leverage?
To be fair, Schultz provides case study examples, illustrations, and data to allow us to come to our own conclusions regarding cause-and-effect; and we can develop our own tests of the policy hypotheses he presents. If Shultz's prescriptions for action can be found wanting, so, too often, are my own. But, I quibble. Schultz's data and case studies and his preference for measurable performance over wished-for outcomes are well worth the price.
Boomtown USA isn't breezy reading. Nor is it particularly well-organized. Nevertheless, I recommend that you buy copies for yourself, your mayor, and your town's economic developer.
