Dean Barber

For Rural America to Win, Part 2

In Corporate Site Selection and Economic Development on December 22, 2016 at 3:16 pm

In my Dec. 11 blog entry – For Rural America to Win – I emphasized how rural communities must embrace digital technologies in order to compete and remain relevant in a fast-changing if not confusing world.

I expounded upon that theme last week in frozen rural Iowa, where I gave a speech at the annual meeting of the Clinton Regional Development Corporation.

More than 100 stakeholders attended the event, which was covered by the local newspaper and a television station. I gave my written remarks to the Clinton Herald, which published a story with the headline, “Barber Stresses Adapting to Change.”

It was an accurate nutshell of what I said, but, of course, I said a whole lot more.

Initial Impressions

I rewrote my speech after Mike Kirchhoff, president and CEO of the CRDC, gave me a tour of the region, which extends across the Mississippi River into Fulton, Ill.

My initial impressions, Clinton and the surrounding area, like most of rural America has taken its share of hits (the city’s population of about 26,000 is lower than it was in 1950 and has been on a decline for the past four decades) but unlike many rural communities, I saw some things that made me believe that it is poised for growth.

For starters, it would appear that the Clinton Community School District is embracing the idea of introducing digital technologies and critical thinking to its students in a big way.

Children, Teach Your Parents Well

In both the middle school and the high school, there are these “Innovation Rooms,” where students gather in teams around a circular tables with computers to essentially learn collaboration in solving problems.

(In my speech, I joked that the children in Clinton should teach their parents well about this.)

Twenty miles to the west, in DeWitt, Iowa, with a population of about 5,500, I learned that laptops are given to students free of charge from fourth to 12th grade, while PreK through third graders can check them out.

Truly this is greasing the skids, so that young people can be better prepared to enter a new digital machine age, more profound than the industrial revolution, and one that transcends virtually all industry groups and affects everyday life.

Blue-Chippers

I also saw that Clinton had some blue-chip manufacturing companies, including Archer Daniels Midland Company (ADM), one of the world’s largest agricultural processors and food ingredient providers; LyondellBasell, one of the world’s largest plastics, chemicals and refining companies; PCM RAIL.ONE AG, a German manufacturer of concrete sleepers and track systems for railroads, and Custom-Pak, one of the world’s largest industrial blow molded parts manufacturers.

When I see a concentration of world-class manufacturers in a particular community, that indicates to me a track record of successful manufacturing, which always peaks my interest. In short, they wouldn’t be operating there for long if they were not profitable.

And there is room for more as the 345-acre Lincolnway Industrial Rail & Air Park located adjacent to U.S. 30 and the Clinton Regional Airport has been designated a certified site, meaning the skids are greased for immediate development. Rail service to the park is provided by the Union Pacific Railroad.

I was also gratified to see that the CRDC had initiated a business retention and expansion program (BR&E should be a primary focus for most economic development groups in my opinion), and that it was part of a larger regional approach, being a member of the six-county, bi-state Quad Cities Chamber, with offices in Davenport, Iowa, and Moline, Illinois.

A Tough Row, Indeed

Seeing the creative use of digital technologies in the schools, the existing blue-chip manufacturers, the efforts at BR&E and regionalism, and the professionalism of Mike and his staff, I have to believe that the Clinton region is poised for winning a prospective company that is looking for a place to set up operations.

And if a STEM academy project that he is working on becomes a reality, Clinton will be transformed and made all the more competitive.

I only wish I could say that about every rural community that I visit. Some simply do not have the tools to compete, much less win. See my Sept. 18 blog, A Tough Row to Hoe.

But even for a community that has all (or most) of the pieces in place, it is harder for economic development organizations based in rural America to compete. Most projects, whether they are industrial or not, land in metropolitan areas, because that is where most of the people, the companies, and the jobs are. It that sense, it’s a numbers game.

Where There is Hope

Technically, rural communities are those outside of metropolitan areas, but in fact there are many communities within metropolitan areas that look and feel rural.

(I could easily take you to ranches, farms and agricultural equipment dealers within the huge Dallas-Fort Worth Metroplex where I live. In some of these places, you might guess that you were outside the boundaries of a metropolitan area.)

Back in 2009, President Obama made said “urban and rural communities are not independent, they are interdependent.” It was an adroit statement, which should give economic developers in rural communities hope.

I mentioned in last week’s blog that the cost of labor, indeed the cost of living, is typically lower in rural America than in metropolitan areas, providing companies a potential cost savings.

The local regulatory and tax climates in rural places are often more amenable, less restrictive, for companies than within metropolitan areas, a broad-brush statement to be sure.

Fixing the Digital Divide

Again, repeating myself from last week, the challenge for rural America is in providing a pipeline of talent in a new digital machine age, and, what I failed to mention, the proper infrastructure to support those digital technologies.

Truly there is a digital divide. Rural areas have significantly slower internet access, with 39 percent lacking access to broadband of 25/4 megabits per second, compared to only 4 percent for urban areas. This impedes not only students in underserved rural areas but businesses that operate are there as well.

When we think of infrastructure, we think of roads, bridges, water lines, our electrical grid, all very important, but broadband is now, in the words of U.S. Sen. Shelley Moore Capito, R-W.Va., “a pillar of our 21st century infrastructure.”

Sen. Capito, along with U.S. Sen. Kristen Gillibrand, D-N.Y., introduced the Broadband Connections for Rural Opportunities Program Act in September. The bill would authorize federal grants for up to 50 percent of a broadband project’s cost, increasing to 75 percent for rural areas.

Half Measures

What gets my goat, and we all need a good goat, is the lack of real commitment to workforce training. I continue to see only half-measures in rural communities and urban communities alike, with little or no collaboration between community colleges and local employers, particularly with manufacturers.

Certainly these are different tribes speaking different languages but that is no excuse. Both are guilty of either not reaching out to one other or not listening to one another. Of course, there are great success stories exemplifying collaboration and unison of thought, but I do not see that as the norm in most places, particularly in rural America.

I have been in too many rural communities where the absence of any meaningful vocational training programs would essentially result in them being scratched off our list during a corporate site selection project.

As one exasperated plant manager once told me, “I mean, come on, how many cosmetologists does this small town really need?”

New Approaches Needed

Earlier this month, and I mentioned this in my talk in Clinton, IBM Chief Executive Officer Ginni Rometty said her company plans to hire about 25,000 people in the U.S. and invest $1 billion over the next four years.

That is all very good, but it was her comments in an op-ed piece in USA Today that really caught my eye. Rometty said many technology jobs don’t require an advanced degree and she encouraged government investment in vocational education and training.

“We are hiring because the nature of work is evolving,” Rometty wrote. That’s also why many of the jobs are hard to fill, she said. “What matters most is that these employees – with jobs such as cloud computing technicians and services delivery specialists – have relevant skills, often obtained through vocational training.”

There are large numbers of unfilled tech-related jobs in this country, because of a shortage of workers with the requisite skills.

“As industries from manufacturing to agriculture are reshaped by data science and cloud computing, jobs are being created that demand new skills – which in turn requires new approaches to education, training and recruiting,” she wrote.

All places, rural and urban alike, should take her words to heart.

In the meantime … Peace on Earth, Good Will Toward All.

I’ll see you down the road. (Next year.)

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. He can be reached at dbarber@barberadvisors.com or at 972-890-3733. Mr. Barber is available as a keynote speaker.

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  1. Excellent Dean- well said. I hope you have a very Merry Christmas and I hope we ALL have a great New Year!

    Charles L. Smith, CEcD
    Executive Director
    Main Line: 903-572-6602
    http://www.mpedc.org

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