BUILDING NEW
COMPETITIVE ADVANTAGES
FOR THE 21st CENTURY
Rural America has struggled
with a national recession and drought in the 21st century while rural
businesses are challenged by foreign competitors extending their reach in
the global economy. Jason
Henderson, an economist at the Center for the Study of Rural America at
the Federal Reserve Bank of Kansas City, and Nancy Novack, an associate
economist at the Center, examine how rural America can create competitive
advantages for the 21st century in January's edition of The Main Street
Economist. The Main Street is published by the Center, which is based at
the Federal Reserve Bank of Kansas City.
Rural America's success was founded principally on low-cost land and
labor. But now globalization has introduced foreign competitors that have
even lower costs, eroding the competitive advantage rural places once
enjoyed. "To compete in the
21st century, rural industries will need to be innovative in finding
business solutions that go well beyond low-cost land and labor," the
authors write. "Technical innovation and entrepreneurship will be
hallmarks of rural prosperity."
They note two examples of technological innovation in rural America that
have been successful: a furniture manufacturer in Tennessee that was able
to dramatically shorten its order delivery time; and a processing facility
in Nebraska that turns corn into polylactide polymers used in several
products.
"The rural economy appears to
be at another turning point in its history, a point where the most
innovative and entrepreneurial communities are in the best position to
create new opportunities and prosperity in the 21st century," the authors
write. This article is available on the Bank's Web site at
www.kansascityfed.org.
|
