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Rural Population Trends: Drivers for population and economics within rural communities
by Casey Woods, Executive Director | October 16, 2023
| I don’t think it’s a secret that there are differences in community types throughout the nation. Huge cities, metropolitan areas, rural cities, small towns, and country living all have their plusses and minuses. Much of what drives population is a desire to live a certain lifestyle and a connection with the place you live. However, the underlying economics of different community types has a profound impact on the long term growth, stagnation, or population loss of an area. New data suggests that how we construct our economies has a lot to do with how they grow. Some of what I’m about to write will get a little technical, but it’s REALLY important to understand the foundation of growth and sustainability if we want to understand population change over time. Here are a few things to consider: Automation (the use of computers, robotics, or other types of machinery to do work once done by humans), has a significant impact on rural communities. Many rural areas are dependent on sectors like agriculture, line manufacturing, mining, and service support jobs of those industries to drive their economies. Anyone that looked at a tractor thirty years ago, versus one today will notice that equipment has gotten larger, more powerful, and more precise allowing fewer people to do more work. Banking systems that were once high-touch human endeavors now are highly computerized with fewer people required to do the same (or more) work. Self checkout stations, radio frequency identification tags, online inventory systems connected to automated ordering/shipping/receiving, mean fewer people per square foot in retail operations. Automated manufacturing and quality control techniques require a smaller workforce to produce, warehouse, and transport items.Economic diversification (the sectors of the economy where people work) is often different for smaller communities than larger metro areas.Strategic focus points (planning to intersect with emerging trends as opposed to attempting to replicate the past).Ecosystem building (the community components typically needed to build out economic diversification, entrepreneurial support, and growth potential) requires a density based future focus. Working with the Center on Rural Innovation, we are exposed to national studies which highlight what is going right in rural areas, and areas for improvement. One recent study conducted by two members of the Center on Rural Innovation team (Lead Data Scientist Drew Rosebush, and Software Developer Camden Blatchly) highlighted how differences in economic sector growth likely impact population and wealth in rural communities. Some of the findings are listed below.  |
| The gap in rural and nonrural employment in the “knowledge economy” (which is another name for the tech economy) can help us explain why rural and nonrural areas see shifting trends in population and income. Economic growth sectors often generate higher incomes for those employed within the sector, they have a more pronounced “multiplier effect” which result in more “quality of life” businesses (retail, restaurants, entertainment), and they attract/retain residents within a region. |
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| Tradable services (tech jobs) disparity between rural and nonrural areas is significant and increasing. Tradable goods (think real physical items) and local services have declined or stagnated in rural communities. In nonrural areas, the employment mix is more diverse. |
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| When we look at the overall composition of rural industries, we see a decline in some sectors over time due (mainly) to automation. The inability to engage diverse sectors of the economy leads to less defined/lower wage support sectors. |
 Tradable services (tech jobs) clearly show higher earnings potential. Ironically, those higher earning jobs tend to support more diverse art, entertainment, retail and restaurant offerings because of the improved disposable income for an area. |
 The graph above emphasizes the nature of employment in areas without the benefit of tech/higher wage jobs. The natural result is a concentration of lower incomes. The lack of disposable income and wealth creation eventually results in outward migration. |
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| Some communities are working to diversify their rural economies by making a targeted effort towards growth in technology based economic sectors. Most of what we think of as “rural” traditional midwestern communities would fall into the “micropolitan” or “non-core” community sectors. |
 Although non/rural/metro areas have seen an increase in employment over time at a faster pace than rural, you can see an “RIN” group that has split the difference. “RIN” is an abbreviation for “Rural Innovation Network”; a group of communities (including Emporia through Emporia Main Street) that are working to create tech sectors through entrepreneurial programs. |
| So, what does that mean for rural communities? What can we do to improve? Focus on economic diversification through entrepreneurship- We will need to work hard to create resources necessary to generate tech based businesses, or enhance existing businesses with tech based offshoots. Although we educate local citizens in tech fields, we have not converted those human resources into freestanding tech businesses in sufficient numbers.Build smarter- The built environment for tech based businesses is extremely important. Exposure to other entrepreneurs, dense live/work areas with opportunities for socialization, and access to high speed internet services/research pipelines are critical to start, grow, and retain tech entrepreneurs. Creating an urban feel in a rural area isn’t easy, and it takes a dedicated approach that values density based building patterns.Encourage and empower transitions to support emerging growth sectors- Have you ever wondered why young children watch the same movies over and over again? It’s comfortable. They understand what’s happening. There are no stressful surprises. The same can be said of community leadership. We incentivize, build, and value the same way often because it’s comfortable. That comfort can lead to regional stagnation. We need to support those making changes to modernize.Educate citizens on the impacts of choices and values- Successful communities have engaged citizens that understand what they are building towards. How people spend, the types of businesses they support, and the advocacy efforts/volunteer efforts that citizens engage in have a tremendous impact on a region. Without community conversations, misconceptions can lead communities down stagnant paths that attempt to recreate the past instead of intersecting with future opportunities.Understand that what we did in the past was potentially good for those past time periods, but the future may require different strategies- Initiatives that worked in the past typically worked because they were innovative, intersected with a market need, and had people willing to put in the work and investment to make them happen. That won’t change. But the initiatives needed to inspire growth may look different, require different organizations to take the lead, and need new types of resources to support successful outcomes. What is Emporia Main Street doing to support a shift that enhances what we currently have while building towards new opportunities? We are working with a network of rural communities throughout the nation that are in various stages of tech based economic diversification through the Center on Rural Innovation.The Emporia Main Street Fabrication Lab currently serves as a spot for entrepreneurs to build out products (some technical in nature) to inspire sector growth.The Lyon County E-Community (housed at Emporia Main Street) works with Network Kansas to provide new funding types for tech or product based entrepreneurs.Emporia Main Street teaches a tech/product entrepreneur class in the spring, with access to regional and national tech startup experts.The Emporia Main Street organization is working with local educational institutions and regional support agencies to facilitate a focus on economic diversification through the training and retention of entrepreneurs.We are working with Kansas Main Street and the Kansas Department of Commerce to generate resources for the built environment, and additional assets to promote economic diversification.Our focus will include an increase in regional collaboration to support sustainable regional growth.The Emporia Main Street incubator currently houses a fantastic tech adjacent business (Imaginarium does a wonderful job introducing youth to technology), and we will continue to focus resources on tech integration with emerging businesses. That doesn’t mean that we are taking our focus off of local entrepreneurs or the things that all of you have supported over the years to make a huge difference in our area. The initiatives we are referring to are required to better support your local businesses and the region as a whole through the creation of higher paying jobs, population retention, and economic diversification. We are putting in the extra work (with a lot of volunteer help), because you, your business, and this region deserve an organization that consistently gets results and works to make things better. Adding more to a full plate hasn’t exactly been easy on staff and leadership, but as the graphs above clearly show, we need to pivot to take advantage of opportunities. |