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A rural economic development strategy focused on entrepreneurs

 

If Global Entrepreneurship Week, the annual worldwide celebration of innovators and job creators, had been a competition among nations, states and regions, Washington State could have laid claim to being the hands-down winner. And that would be appropriate recognition for the man who has guided much of this state's effort to advance entrepreneurship, particularly in rural areas and particularly with young people, for 25 years.

 

 

 

 

Maury Forman, senior manager for the Washington State Department of Commerce, is proud of the fact that in this state, GEW 2015 was actually Global Entrepreneurship Month and extended to every corner of the state with activities in all 39 counties. Four years ago, when Forman plugged the state into GEW activities, three counties participated.Forman says "we are changing the way communities look at economic development." That's an outgrowth of his effort, over much of his quarter century overseeing key economic-development sectors, to develop a culture of entrepreneurism in rural areas.

Global Entrepreneurship week was founded in 2008 by the Kauffman Foundation, the Kansas City-based 501c3 that is the nation's pre-eminent entrepreneur-focused organization, to create an annual celebration of innovators and job creators who launch the start-ups that drive economic growth.

 

Forman, who joined what was then the Department of Trade and Economic Development in 1991 in a career transition from healthcare at the age of 40, says "No other state can claim that every part of the state had at least one event that celebrated entrepreneurship."

 

 

"One of the exciting aspects of this year's celebration of entrepreneurship was the number of high school programs being held throughout the state," Forman said. "In many cases, college isn't the natural next step it was once for high school students so these programs expose them to the idea of starting their own business once they graduate. Or if they do go on to college, they can focus their education on skills that will allow them to start a business in the years to come."

 

 

Forman says he has kept his primary focus on rural economies because "they need the assistance much more than urban communities," as well as because he has become convinced that the strategies for growth of many rural areas that has been focused on recruiting companies from out of state is outdated.

 

 

"That has to change if rural communities are to survive," Forman said. "Communities have to be shingle ready and not just shovel ready."  

 

 

In a recent article in Governing, a national magazine covering state and local government news, Forman wrote about Washington's three-year-old program called Startup Washington that focuses on building local economies "organically" by serving the needs of local startups and entrepreneurs.  

 

 

Forman is likely among the national leaders in the conviction that programs to enhance local economic development "must nurture the belief that young people who grow up in rural communities can be guided to start businesses in their own community rather than moving to urban centers."

 

 

"Just as young people are looking at new ways to enter the work force other than working for someone else, so too are communities looking for ways other than recruitment of businesses from elsewhere to grow their economies," Forman said.

 

 

One of the ways he is seeking to do that "is by matching those students that are serious about being entrepreneurs with mentors, especially in rural communities."

 

 

Indeed matching students who hope to be entrepreneurs with mentors is becoming the model for successful communities, particularly rural ones, to pursue.

 

 

Some communities have long been employing that model, as chronicled in the oft-quoted book written by Jack Schultz, founder and CEO of Agracel, a firm based in Effingham, IL, that specializes in industrial development in small towns.

 

 

It was in pondering why some small towns succeed where others fail that Schultz set out on the backroads to rural America to find out as he became the nation's guru of rural economic development and wrote of his travels in Boomtown USA: the 7 ½ keys to Big Success in Small Towns.

 

 

I emailed Schultz about entrepreneurism's role in small town success and a possibly emerging role for mentor programs.

 

 

"Embracing entrepreneurism in communities has been a key factor that differentiated great communities from also-rans," he emailed back. "Increasingly, we are seeing those great communities taking it a step up by tying their local entrepreneurs up with their young people, educating them on both entrepreneurship and also the great things happening in the private sector of their towns."

 

 

Schultz' successes in believing in small-town entrepreneurs and small-business lending is partly responsible for the fact the Effingham-based bank he helped found and now chairs the board, has grown eight fold to $2.9 billion in assets and gone public.

 

 

"At Midland States Bank, we have very much focused on small business lending and it has been a major factor in our growth over the last several years," Schultz said.

 

 

In an unusual and innovative commitment to the dozens of communities it serves, the bank has funded a not-for-profit institute to expand an entrepreneurship class that was started in Effingham eight years ago and has now expanded to 27 other towns.

 

 

Forman seemed intrigued by the details Schultz provided:  The class meets each day during the school year from 7:30 to 9 am; meets in local businesses; is totally funded by local businesses with a maximum contribution of $1,000 per business or individual.  Each class has a business and each student must also start a business.  

 

 

Meanwhile, Forman approaches his 25th anniversary with the department on January 1 having collected numerous regional and national awards for his work and successes. Those include last year winning the international Economic Development Leadership Award and recognitionby the Teens in Public Service Foundation with the Unsung Hero Award for his work with at risk kids.   

 

 

He has authored 14 books related to economic development, and has also designed and developed creative "game show' learning tools, including Economic Development Jeopardy, Economic Development Feud and two board games for the profession.

 

 

Forman credits the directors who have guided the department over his time there for allowing him "to be intrapreneurial," meaning behaving like an entrepreneur while working in a large organization, noting "not many government agencies allow the freedom to take risks in an effort to solve a given problem."

 

 

 

 

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Innovative programs aim to help small-town kids learn they can consider coming home

The rural Illinois town of Effingham, which might legitimately claim the title of mecca of rural economic development, and the farming-rich region of Skagit County in Washington State are nurturing programs that may help small towns send their best and brightest off for a time with the message that Thomas Wolfe was wrong. You can go home again.

 

In fact, a program called Creating Entrepreneurial Opportunities (CEO) a business person-student mentorship match that was born in Effingham as the creation of retired teacher Craig Lindvahl, is aimed at guiding students to the conviction that they want to go home after college, the military or see-the-world urge.

 

"When you successfully engage your business community, encouraging them to share their expertise with your next generation of business owners, connecting them with young people who want to know what your business people know, incredible things happen," says Lindvahl.

 

"You'll create a community that will make your students want to come back and start businesses, work, and raise families," adds Lindvahl, with the rhetorical question: "what's the most effective and cost efficient way to approach long-term economic development?   Grow your own!"

 

The reach of the CEO message is enhanced by the fact that Lindvahl's partner in an effort that is attracting the interest of a broad range of communities is Jack Schultz, widely recognized by development leaders in smaller communities around the country as the guru of rural economic development.

 

Lindvahl and Schultz, whose book Boomtown USA charted the rules for how small towns can become success stories, have been asked to make presentations about CEO over the past six weeks in communities from Montana to Georgia.

 

Meanwhile, in Washington State's Skagit County, which boasts land that is rated in the top 2 percent in the world for agricultural use, the Viva Farms Incubator Program is proving that young people from rural areas can be lured not just back home, but back to the farm.

 

The four-year-old Viva Farms project, aimed at preserving the region's exceptional farmland in the face of intense development pressure, is one of numerous programs that have sprouted to help train and provide financial assistance to a new wave of farmers.

 

While Viva Farms and similar programs that havw sprouted in

other regions are primarily attracting immigrants and young people with non-farming backgrounds, there is a growing interest for children of old farmers who are returning to the family farm with fresh ideas.

 

Spurred by the designation from the American Farmland Trust for Skagit County as the fifth most threatened agricultural region in the nation, creators of the incubator program set out to provide new farmers affordable access to education that includes land and infrastructure, training and technical assistance, start-up loans and distribution support.

 

Whether next-generation farmers, immigrants or non-farm young people, those involved in the incubator farm program being carried out on 33 acres leased from the Port of Skagit are pursuing farm careers as a means to embody their social, cultural, environmental and economic values, according to creators of the program.

 

With the incubator in its first development phase, including completion of the first bilingual courses on sustainable farming and "agricultural entrepreneurship," there are already thoughtsabout expanding the reach of the program.

 

Ethan Schaffer, executive director of Viva Farms and founder of the now-international Growfood.org, whose mission is to train a new generation of sustainable farmers and to reconnect people with farms, says other communities have reached out to get an assist to launch Viva Farm-like programs in regions across Washington State and beyond.

 

Schaffer notes that the back-to-the-farm segment of the "student" farmers "have different values, goals and motivation in their desire to return to farming."

  

Dramatic expansion is precisely what Lindvahl and Schultz have as the vision for their business person-student CEO program.

 

Both men are classic examples of small-town boys make good. Schultz was born and raised in the small communityof Teutopolis a few miles from 14,000-population Effingham, located in south center Illinois, and Lindvahl, although born about 50 miles from Effingham, spent his teaching career primarily in Schultz' home town.

 

Schultz is CEO of Agracel Inc., a growing firm that specializes in industrial development in small towns, and is chairman of Effingham-based Midland States Bank, a one-time small-town bank that has grown five-fold through expansion and acquisition to $2.5 billion during the past five years of financial turmoil. It is now the third largest bank in Illinois based outside Chicago and is about to go public.

 

His role as CEO of Agracel, which he founded more than a quarter century ago, led him to explore the roots of rural prosperity, commencing in 2000 a three-year quest to learn what made America's hometowns tick.

 

The research gleaned during his travels to small towns across the country led to publication of Boomtown USA: The 7 ½ Keys to Big Success in Small Towns, in which he sought to answer the question of why some towns thrive and some struggle. Publication of Boomtown USA made him probably the nation's most sought-after speaker on rural economic development over the past decade.

 

The book is in its fourth printing and since its publication Schultz has traveled to nearly 400 communities to give presentationsdesigned to help America's hometowns realize their greatest potential.

 

But Schultz is careful, as he discusses the CEO speaking tour, not to upstage Lindvahl, whom he takes pains to credit with having conceived and crafted the CEO mentoring concept, then recruiting him.

 

And Lindvahl passion about CEO is evident as he enthuses about what happens when students have opportunities to learn from and interact with "lots of local business people. you change the way kids perceive their home communities. They go from 'There's nothing here for me' to "I had no idea there were so many cool businesses, so many cool people in this town!'"

 

My relationship with Schultz is one that only could have come about in the Internet era as we "met" almost five years ago when I discovered his then-daily Boomtown Blog. I emailed him a Harp I had done and he asked to be added to the list of recipients

 

Since then he has been a source at various times for Harps on banking or rural economic development and, in fact, it was reaching out to him for the column last week on Global Entrepreneurship and rural economic development that led to this week's Harp.

 

And for this Harp, I asked him if, as his bank grows byacquisitions, he still holds the view he shared with me for a column a couple of years ago about his "continuing and growing concern about the concentration of assets in the hands of a handful of bankers."

 

 "I feel that there is an ever growing need for community banks, even as we continue to see a massive consolidation taking place in the industry that has gone from 14,000 banks in the mid-'80s to less than 6,000 today," he replied. .

 

"The local banks are often the only source of capital for startup businesses and having that local understanding of the community is critical to making the capital allocation decisions to help those new entrepreneurs get started," Schultz added.

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