Minnesota officials say state’s rural economy must diversify to thrive

Gov. Tim Pawlenty and other officials told a summit on rural entrepreneurship Tuesday that outstate Minnesota won’t prosper unless its leaders embrace new strategies, new technologies and new incentives, such as his Job Opportunity Building Zones (JOBZ) and the bioscience initiative between the Mayo Clinic and the University of Minnesota.

By:
Larry Werner
Minneapolis Star Tribune

"If our goal is to be what we were, we are doomed to fail in a world of change," Pawlenty told the Minnesota Rural Summit, which attracted 350 people to Minnesota State University, Mankato, Sunday through Tuesday.

Tom Dorr, undersecretary of rural development for the U.S. Department of Agriculture, said, "We need a new American Gothic" — a rural economic development model that relies less on selling agriculture commodities and more on commerce that exploits the Internet to compete nationally and globally from rural areas.

The summit, sponsored by the Minnesota Rural Partners, is an annual gathering that looks at strategies for economic development in outstate Minnesota. This year’s theme was "Entrepreneurship: a winning game plan for rural Minnesota."

The governor suggested that entrepreneurship and innovation are badly needed because the industries that have provided jobs for generations in rural parts of the state — agriculture, timber, tourism and mining — won’t sustain outstate Minnesota’s residents and communities in the future.

He said new products and new industries are the answer, not more government programs that hand out grants to poor areas.

Pawlenty said people in areas with aging and declining populations, which includes most rural parts of the state, are asking, " ‘Governor, what are you going to do for us?’ "

"That is a profound question and one I take very seriously," Pawlenty said.

He said politicians have to be "truth tellers" and be willing to say, "Cash assistance in the face of those macro trends simply slows down the inevitable."

The answer, he said, lies in new ventures that could benefit from his JOBZ program, which will establish up to 10 tax-free industrial zones in rural areas, and new ventures that can result from genetic research that could produce agricultural products that might replace products made from petroleum.

"The economics of agriculture are changing," he said. "It will remain the cornerstone of our Greater Minnesota economy. But when we talk about the Greater Minnesota economy, it’s not just an agriculture economy, but an agriculture-plus economy."

He said rural entrepreneurs must be "vision-casters with respect to what the future holds beyond" agriculture, timber, tourism and mining.

Small companies, which employ most Minnesotans, can bring economic growth in rural Minnesota with entrepreneurial ideas, he said.

Dorr, who oversees rural economic development for the Bush administration at the USDA, said that because the vast majority of rural Americans no longer are involved in agriculture, rural America needs a model to replace the famous Grant Wood painting of a man, a woman and a pitchfork.

Dorr suggested that a new model might be a Montana businessman who conducts a worldwide business via the Internet, with occasional travel from the rural place where he wants to live, rather than from a metropolitan area.

"We can now take the jobs to the people," said Dorr, an Iowa farmer. "There’s no need to take people to the jobs."

In a news conference that preceded those two luncheon addresses, Matt Kramer, Pawlenty’s commissioner of employment and economic development, recognized Midwest Wireless of Mankato as a model for rural economic development for bringing high-speed wireless Internet to residents and companies in small towns.

Kramer paid tribute to Dennis Miller, president and CEO of Midwest Wireless, a cell phone company that has used its technology to provide wireless Internet to many southern Minnesota towns that had no access by other means.

Miller said his company, which was started by small rural telephone companies, has made it possible for companies to stay in rural communities by providing them access to the Internet.

Kramer said Midwest Wireless received a high-tech grant from the state in 2001 to provide high-speed Internet service to communities in southern and western Minnesota with populations of 2,500 or less.

"One of the fundamental criteria for entrepreneurial and small-business success is access to electronic commerce," Kramer said.