New Strategies for New OK Economies

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New Strategies for New OK Economies
Mark Drabenstott Director RUPRI Center for
Regional Competitiveness University of
Missouri mark_at_rupri.org
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What role for regional development groups?
Globalization has made regions the new athletes
in the global economic race.
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What role for regional development groups?
Every region on the planet is asking how best to
run this race.
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What role for regional development groups?
OK regions need new strategies to win and you
can help supply the essential ingredients they
need to win.
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New Strategies for New OK Economies

• Why is regional development critical?
• Whats the new paradigm for development?
• How can you be a catalyst?
• How to move forward in OK?

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Rural America Losing Ground

• Rural regions are lagging far behind in the
  race for jobs and income.
• The main hurdles are lack of critical mass and
  heavy reliance on commodity engines.
• Meanwhile, transformative innovation appears
  scant.

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Rural areas have lagged metro areas in adding
jobs for most of the past decade.
US Employment Growth
Percent change
Metro
Nonmetro
Source BEA, REIS
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Globalization handicaps most rural regions.
Critical mass is more important than ever most
rural areas lack it.
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Top 10 Counties for Job Growth 1995 to 2005
Denotes rural county
Source BEA, REIS
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Top 10 Counties for Job Creation 1995 to 2005
Denotes rural county
Source BEA, REIS
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Top 10 Counties for Income Growth 1995 to 2005
Denotes rural county
Source BEA, REIS
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Top 10 Counties for Income Creation 1995 to 2005
Denotes rural county
Source BEA, REIS
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Many OK counties are losing ground in the
nations job roll.
Change in share of U.S. employment 1980-2005
Change in share
Small decrease Large decrease
Large increase Small increase
Source BEA, REIS
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And most get a shrinking slice of national
income.
Change in share of U.S. income 1980-2005
Change in share
Small decrease Large decrease
Large increase Small increase
Source BEA, REIS
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Globalization handicaps most rural regions.

• 2. The global economy rewards innovation.
• Most rural areas are still wedded to
  commoditieswhether agricultural or industrial.
• Competition will drive consolidation
• or take business elsewhere.

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More entrepreneursmore growth!
State Entrepreneurial Growth and Employment Growth
Employment Growth (Wage and Salary 1990-2004)
OK
UT
South Dakota
MS
ND
MS
Iowa
State Non-farm Proprietor Growth (1970-1990)
Calculations based on BEA, Regional Economic
Information System data
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New Strategies for a New Regional Economy

• Why is regional development critical?
• Whats the new paradigm for development?
• How can you be a catalyst?
• How to move forward in OK?

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To prosper, rural regions must

• Craft a regional strategy.
• Build robust regional governance.
• Deliberately pursue innovation.
• Grow a lot of entrepreneurs.

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A New System for Regional Development
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• Sound regional strategy
• your compass for the future

• Regions must...
• Identify their unique competitive advantage
  founded on their distinct economic assets.
• Chart a course to seize it.
• Prioritize public investments to leverage it.
• Without a strategy, you will not know the ask
  in OKC or DC.

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• Robust regional governance
• Thinking acting as a region

• A regional roundtable is crucial to crafting
  sound regional strategies the region must own
  it!
• This roundtable must engage public, private,
  nonprofit, and education leadersdiversity and
  inclusion are critical to success.
• Who will supply the Round Table?
• Who plays King Arthur?

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• Deliberate investment in regional innovation.

• Much of rural America rests on the laurels of
  assembly mfg commodity agriculture.
• While these industries will remain important,
  the time has come to look much further onto the
  horizon.
• The key will be deliberately connecting
  public research with what each region does best.
  

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4. World-class entrepreneurial climate.

• Creating this climate will require
• A change in culturefrom we work for them to we
  work for us.
• Regional e-ship support systems.
• Systematic in approach and regional in scope.
• Recycling the wealth in new equity instruments.
• Dont bury your talent in the dirt.

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New Strategies for a New Regional Economy

• Why is regional development critical?
• Whats the new paradigm for development?
• How can you be a catalyst?
• How to move forward in OK?

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How can regionaldevelopment groups be a catalyst?

• Help rural regions to form. You already have a
  regional foot print. Not many organizations
  do.
• 2. Build regional governanceplay King Arthur.

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How to form an organic, sustainable region?

• What region makes sense?
• Who can play King Arthur?
• How to build regional governance where none
  exists?

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• Who supplies the round table?
• Today, mostly non-profits regionally based
  higher education

The case of NEO. To region.
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How can you be a catalyst?
3. Develop tools to diagnose competitive
advantage.
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A new approach demands better tools.

• How to diagnose competitive advantage?
• Must be built on a regions distinct assets
• Not recruitingthe case of Newton, IA.
• We must get much more adept at asset mapping and
  cluster analysis.

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How can you be a catalyst?
4. Build regional e-ship support systems.
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Regional E-ship Support System

• Entrepreneurial development system
• Entrepreneurs are like minor league baseball
  players
• Raw skills and in need of great coaching.
• The best system is
• Systematic in approach and regional in scope.

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The Entrepreneurial League System

• Trials underway in
• Advantage Valley (KY, OH, WV)
• Central LA
• Asheville, NC

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New Strategies for a New Regional Economy

• Why is regional development critical?
• Whats the new paradigm for development?
• How can you be a catalyst?
• How to move forward in OK?

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Competitive advantage can be built in one of
three ways
1. Do what youre doing now, but do it better.
The stay and fight strategy. 2. Move up
the value ladder. The middle-road
strategy. 3. Do better things. The
pioneer discovery strategy.
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Branded Regional Food Products

• Consider OKs access to major metro areas
• Dallas
• OK City
• Tulsa
• Kansas City
• Wichita

Combined 9.5 million people. 3.6
million households.
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Branding brings much higher profit margins!
Net Margins Before Tax
Type of dairy cooperative
Source http//www.rurdev.usda.gov/rbs/pub/RR203.p
df
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The organic market is still barely tapped.
US total organic acreage
Million acres
0.5 of US total acreage
Source USDA, NASS
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Providing hundreds of varieties of Wisconsins
best seasonal produce grow with organic and
sustainable practices
Selling to over 60 fine restaurants in Chicago,
Madison and Milwaukee
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The largest farmer-owned coop in North
America representing over 900 family
farms servicing market across the country
Sales
Million
http//organicvalley.coop/
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Branded Regional Food Products

• In every case.
• Build critical mass regionally.
• Quality first.
• Grow what will sell, not sell what you grow!

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A Regional Strategy Process for OK
Public Investment Priorities
Identify a region
Build a governance group
Private Investment Priorities
Diagnose the regions competitive advantage
Map regions assets and potential ground-level
view.
Select best economic directioncraft strategy
to seize it.
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Who does what?
Public Investment Priorities
Identify a region
Build a governance group
Private Investment Priorities
Diagnose the regions competitive advantage
Map regions assets and potentialground level
view.
Select best economic directioncraft strategy
to seize it.
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RUPRI Center for Regional Competitiveness
Public Investment Priorities
Identify a region
Build a governance group
Private Investment Priorities
Diagnose the regions competitive advantage
Map regions assets and potentialground level
view.
Select best economic directioncraft strategy
to seize it.
Regional Group
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RUPRI Center for Regional Competitiveness
World-class regional strategies for the global
economic race

• A competitiveness dashboard for regions.
• A tool to diagnose competitive advantage.
• Connecting university innovation with regions
  that can use it.
• Assess impacts of policies on competitiveness of
  regions.
• Support effective models of regional governance.