"The state is failing rural Minnesota," the report begins. While the state's economic development department chases after Toyota-sized factories for larger towns, "Efforts to aid rural areas are fragmented, unfocused or nonexistent."
A new report on "Rural Minnesota's Crisis" was published by a non-partisan research group (Minnesota 2020) in late June. It aimed to change the way that state looks at rural communities. But this isn't a report for Minnesota only. What's true for rural Minnesota is true for the rural communities in nearly every state. (See Richard Oswald's story on development in Missouri.) Economic development in most states consists of luring factories (or call centers or some other kind of low-wage, low-skill employer) with tax breaks and grants— "smokestack chasing," according to this report.
Smaller businesses are left out — and small businesses in rural areas are ignored altogether. Small town entrepreneurs need capital, training and a skilled workforce — the same kind of help large businesses receive from states. But they aren't big and so they aren't important. "Under these circumstances, prospective small town entrepreneurs face two choices," the Minnesota report continues. "Either they can start a business with limited resources or they can join the exodus from small towns to larger communities that offer more opportunities. Frankly, those options — leaving or doing nothing — are worse than poor choices. They are a shameful blot on our state's rich tradition."
The report provides solid examples of the kind of rural businesses that could thrive, with just a little attention from government. For instance, in Grove City (population 608), the Carlson Meat Processing company has been in business since 1913; the fourth generation of Carlsons is now in charge of the meat-cutter. The company could expand, but it's hard in rural Minnesota to find trained butchers to do Carlson's work custom cutting beef, lamb, buffalo, ostrich and yak. With a bit of training assistance, Carlson could expand. In nearly 100 years of existence, however, Carlson has never received any state assistance.
A park in Grove City, Minnesota
Photo: Ted Sher
The report's solutions are neither magical nor new. Small businesses need capital, training, research and skilled workers — all things most states lavish on larger firms. The Minnesota 2020 report simply asks that this same attention be paid to rural communities.
The report has found favor in both big city and small town newspapers. The Minneapolis Star Tribune found hope in the study:
"(M)ost Minnesota small towns are not economically hopeless. They are home to people of entrepreneurial spirit, possessed of plans to start businesses that employ one to five people, or enlarge ones that already do. With the right help, more of their ideas can take root."
At the Fergus Falls Journal, the newspaper's general manager, Joel Myhre, explained how small towns that once hoped for a "smokestack" of their own are now willing to dig in for a different, more substantive, kind of development:
In my years covering city and state government, everyone is always hoping for the big manufacturing plant to come in, create hundreds of jobs and save the community. And if we put together some great tax incentive package, maybe we'll get them to move their plant here, rather than, say, Kentucky.
One problem with this theory is that those kinds of opportunities just don't come around very often. I can think of only a handful in the 13 years I have been in Fergus Falls. So what are we supposed to do in between big opportunities? Just sit around twiddling our thumbs?
The other problem is that, time and time again, Minnesota just can't compete with places such as Southeast Asia and Mexico for manufacturing jobs. From wages to taxes to the availability of workers, those parts of the world will have a distinct advantage into the distant future.
What our state, and our area, needs to focus on is in creating and developing small businesses. What this really means is that we need to not only convince all of those people who have dreams and ideas to pursue them, but to pursue them in Fergus Falls, and provide them with the tools to do so.
That's pretty good advice.