Rural Entrepreneurship Development Program And The National Coalition for Rural Entrepreneurship James J. Zuiches, Professor Dept. of Community & Rural Sociology Washington State University Pullman, WA

2 Proposed Action To establish a national program to fund, strengthen and support the development of rural entrepreneurs and enterprises in nonmetropolitan counties and rural areas of the United States, and create a national coalition of committed organizations to design and support the proposed program.

3 Proposed Action (continued) A research, educational, organizational and community development program Funded by annual federal appropriation, to fill a much needed niche Complement the loan, capital grants and technical assistance programs in Community Development agencies and targeted, often individual-focused support provided by Small Business Administration programs in the states.

4 Goals 1.To spur economic, organizational and community innovation and create jobs in all sectors of the rural economy, from value-added food processing to Internet based-service and technology jobs, and 2.To increase the start-up rate and reduce the failure or turnover rate of small businesses by creating strong partnerships between educational and organizational support systems for entrepreneurship.

5 Definitions Entrepreneurship: the process through which entrepreneurs create and grow enterprises to provide new services or products, or add value to services or products. Entrepreneurship Development: the infrastructure of public and private support that facilitates entrepreneurship.

6 Objectives The objectives of the project are three: 1.Establish the National Coalition for Rural Entrepreneurship as an organizational entity, 2.Hold regional and sub-regional listening sessions to create a national dialogue and a learning experience for networks of stakeholders to learn from one another about the current state of knowledge and programs, and to communicate to USDA their interest and support; and 3.Community-based organizations provide advocacy in support of national program and efforts in rural entrepreneurship.

7 National Interest In response to an RFP from the W. K. Kellogg Foundation and the Corporation for Enterprise Development (CFED) to create Rural Entrepreneurship Development Systems, 182 organizations from 47 states submitted proposals. CFED selected 12 as semifinalists and 6 as finalists for site visits. W.K. Kellogg Foundation is funding these 6 finalists, a success rate of slightly over 3%.

8 Funding Models for Rural Development Charity: individual and organizational Foundations and philanthropy Governmental: local, state, federal Private sector Public/Private sector partnerships

9 Engaging the Land Grant University Regional Rural Development Centers and their capacity for research, extension, and power to convene stakeholders. Presence of Extension in every county Linkages with SBDCs, community colleges, other educational institutions. Business programs and outreach Partnerships with stakeholders such as local governments, tribes, non-profits.

10 National Coalition for Rural Entrepreneurship An organization committed to support of rural entrepreneurs Systems-oriented approach Local, regional and community-based State and multi-state National partnerships

11 Rural Entrepreneurship Development Program Focus on capacity building in communities, counties, and regional groups of communities, by partnering with community-based organizations, and state and local governments, such as county commissioners, and through the use of Cooperative Extension, Small Business Development Centers, and university and community college programs in business schools.

12 Rural Entrepreneurship Development Program To stimulate, provide incentives, and fund collaborations and partnerships among agencies and organizations to increase entrepreneurial literacy, skills, experiences, and success in rural communities. Research on what does and does not work to improve the effectiveness of the program over time. Complement and enhance the efforts of other USDA and Commerce agencies, the SBDCs, county supported EDCs and Community Action Agencies, and community-based nonprofits that work with aspiring and existing entrepreneurs, especially women, Native-American, African-American, Hispanic, and other minorities, and youth.

13 Rural Entrepreneurship Development Program The Program would invite proposals and work with organizations and communities that are prepared to invest in entrepreneurial education and to support the networks and culture that will enhance job creation and retention in these communities. In addition to the for-profit business sector, social entrepreneurial training, literacy, and research evaluation would be valuable for nonprofit and local governmental sectors.

14 Rural Entrepreneurship Development Program Measures of outcomes and impacts: New businesses started, additional jobs created, increased sales and tax revenue, reduced business failure rates, and better rural incomes. Demonstrate to the Congress and citizens the payback of this investment in entrepreneurial development.

15 Program Components 1.Education, training and technical assistance 2.Access to a diversity of capital 3.Networks of support and an enabling culture 4.Supportive public policies

16 Education, Training, and Technical Assistance Human capital development is essential: –4-H, and youth in High Schools with the Future Business Leaders of America or the Rural Enterprise Action Learning (REAL) Programs, in community colleges and universities, through the Small Business Development Centers, by distance education, or on-site training and assistance from nonprofits, state and federal agencies –Provided in languages other than English to adequately serve the needs of the Hispanic/Latino community and other minority populations.

17 Access to Diversity of Capital Access and the training to become qualified for loans are essential components of an entrepreneurial development system. Diverse sources of capital, micro-loans, seed and equity capital, venture and mezzanine funds, revolving loans, facility loans, and bank loans are available from multiple sources. Training in preparing business plans, recordkeeping, tax rules, financial management and business practices would increase the success rates of loan making and subsequent repayment as a result of business growth.

18 Networks of Support and an Enabling Culture Networks within communities help to create a local entrepreneurial culture in which the business community, the nonprofit community and other sectors provide support for aspiring and existing entrepreneurs. The SBDCs, incubators, chambers of commerce, local community action centers, ports, and economic development councils, all help to create an entrepreneurial culture. Other approaches to develop community readiness for entrepreneurship include community asset mapping, leadership training, and the use of industry cluster strategies.

19 Supportive Public Policies Policies and regulations that are barriers to entrepreneurship should be identified and incentives and supportive policies integrated into the program.

20 Management The USDA and the Regional Rural Development Centers would form a partnership for awarding funds through a regional competitive process. A successful model already exists in the Sustainable Agriculture Research and Education program. By using the Regional Rural Development Centers, the program recognizes the differences in needs and opportunities among the regions. Requiring local matching funds, collaborations, and accountability provide an incentive for cooperation among communities and organizations.

21 Tribal Programs A percentage of the funds should be allocated in a separate pool and be dedicated to funding entrepreneurial development programs of Native- American communities. Partnership with American Indian Higher Education Consortium

22 Funding Requests Under Review or in Preparation W.K. Kellogg Foundation Northwest Area Foundation Farm Foundation Appalachian Regional Commission Regional Rural Development Centers USDA