NEW TROUBLES AT RURAL FACTORIES:
NEW IMPLICATIONS FOR RURAL DEVELOPMENT
Rural development strategies have long focused
on attracting factories to bolster rural economies. Recent trends,
however, suggest rural manufacturers are struggling to emerge from the
recession and now rural communities may be facing the additional pressure
of globalization with manufacturers lured away by lower costs abroad. Last
year rural factories slashed payrolls 4.6 percent and nearly 140 plants
closed their doors.
Mark Drabenstott, vice president and director
at the Center for the Study of Rural America, examines recent trends in
rural manufacturing and explores what the trends mean for rural
development strategies in March’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.
Enticing factories to the edge of town has
been the top rural development strategy for a half century, Drabenstott
writes, but it now may be time for rural places to revisit this singular
focus.
In light of recent trends, he offers three
shifts in rural development strategy worth considering:
Targeting recruitment incentives more carefully to address
individual situations and achieve specific goals;
Encouraging rural clusters of small but similar factories that can
form synergies, especially in adopting new technologies;
Putting new emphasis on business starts and retentions on Main
Street.
This article and past issues of the Main Street Economist are available
on the Bank’s Web site at www.kansascityfed.org.
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