Entrepreneurship in Rural America
Brian Dabson, Rural Policy Research Institute
Entrepreneurship & E-Commerce:
Building & Expanding Economic Opportunities
Oklahoma City, OK
May 16, 2005
By the Numbers
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20 million microenterprises (0-4
employees) in the US (Aspen)
Microenterprises represent >86% of
total number of businesses (Aspen)
9% of Americans are entrepreneurs
employing others; 60% of new business
owners offer jobs to others (GEM)
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What is an entrepreneur?
A person who organizes and
manages a business
undertaking, assuming the risk
for the sake of the profit
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What is an entrepreneur?
Visionary entrepreneurs develop
innovations, create jobs, and contribute
to a more vibrant national and global
economy
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What is entrepreneurship?
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Simple Definitions
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Entrepreneurs…people who create and
grow enterprises
Entrepreneurship…the process through
which entrepreneurs create and grow
enterprises.
Entrepreneurship development… the
infrastructure of public and private policies
and practices that foster and support
entrepreneurship.
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Differing Motivations
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Survival entrepreneurs – resort to creating enterprises
because there are few other options
Lifestyle entrepreneurs – choose self-employment to
pursue personal goals
Growth entrepreneurs – motivated to grow their
businesses to create wealth and jobs in their community
Serial entrepreneurs – over their lifetimes will create
several businesses
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Economic Development
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Attraction
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Retention
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Persuading companies to come to your community
Looking after what you already have
Entrepreneurship
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Growing your own jobs and wealth
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Economic Development
Pyramid
Recruitment
Retention
Entrepreneurship
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Strategic Thinking
Attraction 
Competition
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Narrow-mindedness
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Collaboration
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Stewardship
Retention 
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Resistance to
change
Entrepreneurship 
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Unprincipled
individualism
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Creativity &
Innovation
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Connecting the Dots
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Key Concepts
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Pipeline:
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Infrastructure of lifelong learning – never
too early or too late to be an entrepreneur
Creating a large, diverse pool of people
with many motivations – out of which flow
a steady stream of high achievers
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Key Concepts
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Seamless systems:
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Focus on graduating significant numbers of
start-ups into companies that offer quality
jobs
Coordinates multiplicity of programs –
tailors them to meet diverse needs of
entrepreneurs
Comprehensive, flexible, culturally
sensitive, integrated, collaborative
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Key Components
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Pipelines
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Entrepreneurship education
Entrepreneurship networks
Systems
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Access to training and technical assistance
Access to equity and debt capital
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Entrepreneurship Education
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Entre-ed and youth development critical
part of any rural economic development
strategy
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Population retention, leadership
development, economic growth
Elementary through high school and postsecondary
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Entrepreneurship Education
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Elementary through high school
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Vocational tracks – DECA, FFA, BPA
Junior Achievement
NCEE/Economics America
REAL
NFTE
Kauffman Foundation/Mini-Society/4-H
Boys & Girls Clubs
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Entrepreneurship Education
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Community colleges & universities
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National Association of Community College
Entrepreneurship
USDA Regional Rural Development
Centers/RCCI
Lifelong Learning for Entrepreneurship
Professionals
Kauffman Collegiate Entrepreneurship
Network
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Entrepreneurship Networks
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Essential as links to sources of capital,
new employees, strategic alliance
partners, service providers, information
& intelligence on markets and
technology
Initiatives – incubators, business-tobusiness websites, buyers’ groups
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Training & Technical
Assistance
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Wide range of services:
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Small Business Development Centers
SCORE
Business incubators
Regional development organizations
RC&D Councils
Extension services
Microenterprise development organizations
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Access to Capital
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Debt Capital
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Commercial banking system
CDFIs
Equity Capital
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National – SBICs, NMVCCs, NMTC, Angel Capital
Electronics Network
State – KY Rural Innovation Act, IA Capital
Investment Tax Credit
Private – Kentucky Highlands, RAIN (MN)
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The Rural Challenge
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Low population size and density, limited local demand
– economies of scale hard to achieve
Efforts to achieve efficiencies drive consolidation –
schools, banks
Remoteness from markets & infrastructure limits
economic opportunities, poor connections to global,
regional markets
Poorly educated, low-skilled workers, weak
entrepreneurial cultures, entrenched racial
inequalities limit participation in the new economy
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Entrepreneurial Response
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Create climate and culture in which
entrepreneurs and entrepreneurship
can flourish
3 organizing principles:
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Community-driven
Regionally-orientated
Entrepreneur-focused
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#1 Community-driven
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Communities provide immediate
environment – heavily influences
entrepreneurial success
Communities need tools, resources to
identify/build upon assets, make
choices, learn, innovate
All sectors of community should be
invited/expected to contribute
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#2 Regionally-oriented
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Political jurisdictions have no economic
rationale; few have resources to match
opportunity/need; regional cooperative an
imperative
Arbitrary distinctions between urban & rural
interests mask issues of common concern,
prevent regional solutions
Entrepreneurs need access to regional
economic drivers
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#3 Entrepreneur-focused
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Entrepreneurship development efforts
ineffective when programmatic and
uncoordinated
Most programs fail to differentiate
between entrepreneurs with different
education, skills, motivation (L&L)
Requires systems thinking
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Entrepreneurial Response
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3 essentials:
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Anchor institutions – capacity to articulate
vision, advocate for change, build partnerships,
attract & mobilize resources
Supportive public policy – ensure adequate
resources, send positive messages, ensure
programs are flexible to meet different regional
needs
Inclusiveness – provide support, encouragement
to both ‘opportunity’ and ‘necessity’
entrepreneurs, avoid picking winners
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Four Principles
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Focus
Focus
Focus
Focus
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on
on
on
the entrepreneur
the community
the region
continuous learning
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The Kellogg/CFED project
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Entrepreneurship Development Systems for
Rural America
4 goals:
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Reinforce/enhance existing promising ED systems
Gather and share effective practices
Stimulate national and state interest in rural
entrepreneurship
Encourage/reward thinking & action around
systems development & collaboration
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Selection Process
6
Applications Recommended
& Funded
12 Applications
In-depth Site Visits
61 Applications referred to
External Advisory Board
182 US Applications
Assessed for Eligibility and Fit
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Distribution of Submissions
44
48
29
61
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Six Winners
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Hometown Competitiveness, NE
Advantage Valley EDS, WV/OH/KY
North Carolina’s Rural Outreach
Collaborative
Oweesta Collaborative, SD/WY
Connecting Oregon’s Rural
Entrepreneurs (CORE)
Northern New Mexico EDS
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Three EDS Lessons
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Commitment, creativity, and
resourcefulness across rural America
Key principles – systems, customer
focus, regionalism, inclusiveness,
effectiveness – accepted and embraced
Collaboration shows the way for rural
America
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Extension &
Entrepreneurship
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20% of submissions led by universities,
usually Extension or SBDCs; majority
included Extension as partner
Potential as enterprise facilitator
On-ground link to university resources –
markets, market research, technical
assistance, student interns
Local/regional networker & broker
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For more information visit:
Rural Policy Research Center
(RUPRI)
www.rupri.org
RUPRI Center for
Rural Entrepreneurship
www.ruraleship.org
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