Western Regional Competitiveness Forum Denver - April 4 & 5, 2002 National Governor’s Association

Clusters in Rural America Don Macke U.S. Forest Service

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Entrepreneurship & Rural America

Importance of Entrepreneurs Pursues Opportunity Lives Proactively Leverages Resources Builds Networks Creates Value

Global Entrepreneurship Monitor KCEL & Others 3rd Year Comparative International Study Counties Counties Counties

GEM 2000: Entrepreneurship is strongly associated with economic growth! The level of entrepreneurial activity explains 70 percent of the difference in economic growth among nations. All nations with high levels of entrepreneurial activity have above average rates of economic growth. Only a few nations that have above average rates of economic growth have low levels of entrepreneurship.

National Commission on Entrepreneurship High-Growth Companies: Mapping America’s Entrepreneurial Landscape. July 2001

Major Findings: High-growth companies are truly extraordinary in the economy; fewer than one in twenty U.S. businesses achieve high-growth rates. High-growth companies are found in all regions of the country, often concentrated in the most surprising areas. Most fast-growing, entrepreneurial companies are not in “high-tech” industries. Each one of the 394 regions in the country contains some high-growth companies. Most regions’ high-growth companies concentrate in certain specific industry sectors.

28 North Platte, NE 69 Pueblo, CO 128 Fort Collins, CO 127 Laramie, WY 80 Rock Springs, WY 125 Grand Junction, CO 161 Flagstaff, AZ 198 Farmington, NM 112 Sante Fe, NM 173 Denver, CO 126 Colorado Springs, CO Entrepreneurial Growth Company Index

High Performing ESOs

Mini-Wrapup: Entrepreneurs are Important EGCs are Critical ESOs make the Difference

Our Position.... Weaker Rural Economic Performance is Due in Part to Lower Levels of Entrepreneurial Activity?

Rural Challenges: People are Entrepreneurial Fewer Entrepreneurs Far Fewer EGCs Inconsistent ESOs Dominance of Extractive Industries

NCOE - Sector Number of High- Growth Companies in Sector Number of All Start-Ups Growing to 20 or More Employees in Sector Manufacturing25,2734,566 Business Services28,2545,663 Distributive38,4524,488 Extractive5, Local Market113,00115,656 Retail48,61911,055

GEM-Trends Entrepreneurs are Powerful Economic Drivers Entrepreneurship Rates by Industry Grouping... Extractive4% Transforming30% Business21% Consumer45%

Opportunity: Energizing Rural Entrepreneurs How?

Clusters & Energizing Rural Entrepreneurs

Why Clusters? Many reasons It is a remarkably convenient way to organize the rural landscape. Matches state’s sectoral approaches.

Rural Reality: SectorPlace

Rural America’s Economy Support Activities Natura l Resource Industries Processing Industries Elderly & Retirees America’s Playground Corridor Industries Government  Prisons  Military Bases  Federal Lands  Indian Reservations  Waste Sites  Health Care  Housing  Services  Retail   Telecom   Highways   Railroads  Second Homes  Tourism  Recreation  Forestry  Mining  Energy  Agriculture  Fisheries  Waste   Resource Processing   Manufacturing  Retirement Homes

Rural Reality: Increase in Primary Industry Output Decrease in Massive Restructuring Decrease in Secondary Industry Output

Central Nevada Story U.S. Forest Service Center for Economic Development, University of Nevada at Reno KCEL RUPRI Area Develop Interests

Central Nevada EurekaLander

Layered Analysis: 1.Area’s Economic Clusters 2.Entrepreneurs within Clusters 3.GAP Analysis 4.Opportunity Identification

Opportunity Knowledge Energizes Area Entrepreneurs Increased Deal Flow Cycle of Development

Central Nevada Clusters

Entrepreneurs: Identify Them Focus on Them Customized Support Connect Them

Entrepreneurs within Rural America Active Aspiring Potential SurvivalLifestyle Growth Hobby EGCs

Supporting Entrepreneurs & an Entrepreneurial Climate Market Awareness Perceived Real Opportunitie s Motivation to Growth Enterprises Business Capacity

Future Work: U.S. Forest Service – Four Corners Area Nature Conservancy – Sustainable Practices Northern Great Plains – Agriculture State Academies Targeted Research

For More Information.... Center for Rural Entrepreneurship – Kauffman Center – RUPRI -