Strategy in Rural Economic Development

STRATEGY is not merely a fancy word. It is a way of doing business that differs from the ordinary.  A strategy is a plan that links together the available resources—organizational, human, financial, and other—in reasoned sequences and combinations to achieve a desired objective.

A real strategy therefore requires at least these elements: a clearly understood objective, a reasoned plan for achieving it, the ability to mobilize and manage resources in accord with the plan, and an understanding of how actions taken in support of the plan can be expected to interact with the context in which action is taken.  A strategy that lacks these elements is more likely to be wishful than effective.
Elements of a National Strategy

What kinds of strategies might we use to address rural problems?  Two appear to have promise:  building new economic strengths and developing effective marketing.
Building new economic strengths.

An obvious strategy to counter rural America’s loss of comparative advantage in low-wage manufacturing and natural resource production and extraction is to develop new competencies. The objective of this strategy is to build comparative economic advantage in a new industry, or in a new product or service line within an existing industry.
Distance from markets remains a major obstacle to rural development. Rural producers are cut off from information about input and product markets and their goods and services are more costly or difficult to trans- port. By producing goods that have an edge over the competition—goods with especially high quality.

By showcasing a uniqueness, or Possessing the materials, products or ability to meet a specialized need—rural America can create a market for its goods that over- comes transportation costs.
One means of achieving this is by applying the Nation’s investment in technology to create new goods and services whose technologically based edge cannot readily be duplicated by the competition. Technology can lead to this result in two ways. It can lead to the development of new products that, because they em- ploy new technologies, have a creative edge.  And it can be applied to develop advanced methods of pro- ducing low-tech products and services, thereby im- proving efficiency and cutting costs.
A focus on new technologies does not substitute for developing and producing competitive products. On the other hand, a focus on existing technologies, with- out thinking beyond the limits they impose, may preclude a wider range of economic possibilities. Technology has the potential to position the rural economy as a producer of goods and services that the world wants to buy, and is willing to pay well to get. How- ever, to be effective, it is essential that we focus squarely on the outcome we desire—a competitive rural economy—and not on certain inputs, such as particular technologies or industrial products for which we would like to find uses.
Developing effective marketing. Producing more competitive goods and services will work only if rural areas also are able to sell what they produce. Rural areas will become better off when they develop the ability to sell to high-value markets. The second strategy, then, is to help rural America position itself to sell to these markets.

Business Strategy Sphere
The essential ingredients to building an effective rural marketing response include understanding marketing strategies and opportunities, and having the ability to create and implement those strategies.

*(J. Norman Reid is Director, Strategy Development Staff, Rural Development Administration, USDA.  This article is based on his speech given at USDA’s Agriculture Outlook Conference).

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