Third Annual 21st Century Rural Development Conference
April 1-2, 1998


Held April 1-2, 1998 at the Tennessee Technological University in Cookeville, Tennessee, the conference provided a forum for discussing the relative merits of the two economic strategies used most often by small communities: industrial recruitment and local business stimulation. Too often the two are seen as competing and mutually exclusive approaches. Consequently, advocates of one disparage the other. For example recruitment is criticized as attracting "loser firms" that are no longer competitive and are looking for tax breaks that will buy them a few more years of existence. Business stimulation approaches, on the other hand, are criticized as creating only service jobs that never amount to much in the way of employment and never establish markets beyond the local community.

While each of the arguments contain some degree of truth, critics often go too far and fail to see that the two approaches can be compatible. The conference's objective was to show that the two are, in fact, complementary approaches that can actually reinforce each other. To that end, the conference featured a panel discussion on the relative merits of each and the ways in which they can work together. Fred Harris, Vice President for Economic Development of the Greater Nashville Chamber of Commerce presented the case for industrial recruitment. Meriwether Jones, Director of the Rural Economic Policy Program at the Aspen Institute made the case for local business stimulation and capacity building. George McDowell, Professor of Agricultural Economics at Virginia Polytechnic University, moderated the discussion.

Several key points came out of the discussion:

  • Recruitment is typically about expansion, not relocation.
  • The firms you want to consider locating in your community should value the same sort of quality of life as do local residents.
  • The future of both approaches depends upon broad-based local support. For either to be successful, the same set of investments in infrastructure, education and housing are required.
  • Efforts to retain and expand existing businesses are the foundation for both strategies, because if existing businesses are unhappy your chances of recruiting new businesses are hampered. Furthermore, existing businesses are the best training ground for new local start-ups.
  • Finally, no community can succeed at economic development without first developing a consensus for the direction it wants to go. Without broad-based local support, it is unlikely that sufficient resources will be brought to bear long enough to generate significant results.

The Conference was sponsored by USDA's Rural Development Division, Tennessee Technological University College of Business Administration, and Tennessee Valley Authority. For more information about the conference please contact the TVA Rural Studies program at (606) 257-1872 or by e-mail tvars@rural.org.


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