CHANGING TIMES CHANGING VALUES

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Bozeman on the Move   By Dr. Larry Swanson
OConnor Center for the Rocky Mountain West, U.
of Montana Widely varying economic conditions
and circumstances from place to place .. the need
for more effective strategies for economic
improvement that reflect area strengths,
weaknesses, and values .. and fundamental changes
in the economy itself .. are shifting
responsibility for economic development planning
and programming from federal and state
governments to sub-state regional and local
levels.   Local leaders and decision makers
cannot remake their local economy. But, what
you can do is better position yourself your
businesses, work force, governments, schools,
families, etc. for anticipated future growth
and change in the economy.
Area Sponsors The Bozeman Area Chamber of
Commerce Montana State University TechRanch The
City of Bozeman
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MontanaOn the Move

• Area Sponsoring and Participating Organizations

Billings Celebrate Billings Billings
Gazette Montana State University Billings
City of Billings Mayors Office St. Vincent
Healthcare Deaconess Billings Clinic
Missoula City of Missoula Mayors Office
Missoula County Montana Community Development
Corp. (MCDC) Missoula Area Economic
Development Corp. (MAEDC) The University of
Montana Bitterroot Economic Development
District
Flathead Valley City of Kalispell Mayors
Office City of Whitefish Mayors Office
Jobs Now, Inc.Flathead County EBA Flathead
County Flathead Valley Community College
Bigfork Area Chamber of Commerce Columbia
Falls Chamber of Commerce Kalispell Area
Chamber of Commerce Whitefish Chamber of
Commerce Lakeside-Somers Chamber of Commerce
Montanans for Multiple Use National Parks
Conservation Association
Butte Montana Standard Butte Chamber of
Commerce Butte Local Development Corporation
Mainstream Uptown Butte NorthWestern Energy
MERDI and MSE Technology Town Pump St.
James Hospital
Great Falls City of Great Falls Great
Falls Regional Growth Alliance Great Falls
Development Corp. Great Falls Chamber of
Commerce MSU/Great Falls
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Most Montanans Live in or nearby one of the
States Seven Major Cities The map at the right
shows the number of people living within 20-mile
and 35-mile zones of Montanas seven principal
urban centers. About 60 of all Montanans live
within 20 miles of these cities and nearly 70
live within 35 miles. Much of the states recent
population growth is concentrating in and around
these cities. 
The lower map shows where Montanas 2005 state
legislators live by 5-digit zip code. 98 of the
150 legislators reside in zip code areas that are
wholly or partially within the 20-mile zones, 65
of the total. This expands to 117 legislators
within the 35-mile zones, 78 of the total.
2000 Population mapped at the Census Block level.
Each dot represents 15 people.
Red dots are MT senators. The blue dots are MT
state house members in 2005.
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Common Needs and Opportunities for Montanas
Cities   Quality Infrastructure Growing cities
require quality infrastructure and funding for
infrastructure of nearly all types in Montanas
cities has lagged behind their growth. New
sources of funding for local infrastructure are
needed if Montanas cities are to grow and
prosper and remain competitive with other cities
as quality places for people to live and
work.   Quality Workforces The changing economy
is placing a premium on highly educated and
highly trained workers. Virtually every facet of
the economy where growth is concentrating
requires a quality work force. People are
Montanas key asset. A centerpiece of any
strategy for economic improvement must be
well-designed and well-funded programs for
workforce development and a quality system of
education more generally.   Quality Planning and
Growth Management Nearly all of Montanas
cities are facing growth pressures that are
straining their capacity to manage and plan for
growth. If they are to become better places as
they become bigger places, they must have the
necessary tools and authorities to successfully
plan for growth.   Pursuing Economic Prosperity
Montana is a diverse state with economic
conditions and trends varying widely across the
state. There is no single Montana economy. And
because of this, there can be no single strategy
to advance Montana economically. There must be
several strategies, carefully tailored for the
particular needs and opportunities of Montanas
different regions.   Urban-Rural Partnerships
for Progress Just as it is increasingly
important to recognize the emerging economic
development opportunities of Montanas cities, it
is increasingly important for Montanas cities
and their rural neighbors to develop healthy
partnerships for progress. The economic
development and educational resources of
Montanas growing cities must be increasingly
applied to the rural economic development needs
of their closely-linked surrounding areas.
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The North American Rocky Mountain West   Growth
and change in the regions economy   Prepared by
Dr. Larry Swanson OConnor Center for the Rocky
Mountain West, U. of Montana   The Rocky
Mountains are the spine of North America, and
extend from western Alberta and eastern British
Columbia in Canada south through western Montana
and Idaho and further south into portions of
western Wyoming, Utah, Colorado, and New Mexico.
The Rocky Mountains themselves define the region.
And the Rocky Mountain West region expands out
from these mountain ranges, with the regions
bounds largely ending at points in all directions
where the mountains themselves fade and disappear
from the horizon.   The American Rockies The
American Rockies are largely contained within the
five states of Colorado, Utah, Wyoming, Idaho,
and Montana. The Census Bureau includes New
Mexico, Arizona, and Nevada in its Mountain
Region along with these five states. However,
Arizona and New Mexico, while having mountains,
are much different places culturally, racially,
climactically, demographically, and economically.
Most people residing in Nevada live next to the
California border (Las Vegas and Reno) and it is
much different that the Rockies.
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The Rocky Mountain West is one of the U.S.s
fastest growing regions   During the last decade,
the Rocky Mountain West emerged one of the
fastest-growing regions in the U.S. with one of
the fastest growing regional economies. The
Rockies also had one of the highest percentage
increases in per capita income up 23 in
inflation-adjusted dollars. More recent
estimates through 2003 show the Rockies continue
to be fast-growing (5 population growth between
2000 and 2003 vs. 3.3 nationally personal
income growth of 5.5 vs. 3.9 nationally and
continuing rapid employment growth).
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The Fast-growing Canadian Rocky Mountain
Region   The Rockies provide a border region for
the western provinces of Alberta and British
Columbia. These provinces had the fastest
population growth in the last decade (1991
2001), 16.9 and 19.1, respectively. Family
income growth in inflation-adjusted dollars was
highest in Alberta over 30 growth adjusted for
inflation compared to 18.8 nationally. And
Alberta and British Columbia were numbers 1 and 2
among provinces in labour force growth . In
Alberta, this population, income and employment
growth is concentrated in the two cities of
Calgary and Edmonton. And these two cities and
their surrounding areas are projected to continue
to be fast-growing.
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A More Footloose Economy both People and
Jobs.   Tremendous advances in information
technology, combined with radical advances in
communications and communications infrastructure,
emergence of a services-based economy, further
combined with a steady aging of the U.S.
population and rapid increases in non-labor and
more mobile sources of income .. have re-designed
the modern workplace and re-organized the
geography of economic activity.   In short,
todays economy is much more footloose than
yesterdays economy. Both people and jobs are
moving around more freely and new patterns of
migration are emerging. The old economy
encouraged urbanization and sub-urbanization.
The new economy increasingly encourages growth
to occur mostly in places where people want to
live.   Many mid-size cities and outlying
non-metro areas particularly ones with
attractive communities in areas with high quality
environmental amenities have become very fast
growing.   In the old economy, people followed
jobs. In this newly emerging economy, jobs
increasingly follow people.
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Population Growth among Rocky Mountain States
The chart below shows population levels over time
of states in the region since 1980. Colorado has
the largest population by far, followed by Utah,
then Idaho. Montana and Wyoming have the
smallest populations. The population of the
five-state region grew from 6.6 million in 1980
to 7.3 million in 1990 and 9.3 million in 2000.
The most recent estimates (2004) show continued
growth to over 9.8 million. Annual growth is
shown in the two charts at the right.
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Personal Income Growth among Rocky Mountain States
Income in the region is growing faster than
population with growth accelerating in the early
90s before falling back in 2001. The collapse
in 2001 may have been triggered by the fall in
the stock market and collapse of many previously
fast-growing technology and IT businesses. More
recently, income growth is picking back up.
Between 2000 and 2004, income grew by 8.7 in the
Rockies and 6.5 nationwide. In Montana, income
grew by 11.4.
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Shifting Age Composition in the Rocky Mountain
West   The relatively fast-growing Rocky Mountain
West region population is growing fastest among
certain ages of the population most notably,
persons between the ages of 40 and 60 classic
baby boomers, or persons born after W.W.II
between 1947 and 1964. The other fast-growing
age segment is teenagers and young adults, or
persons in their early teens and mid-to-late 30s
the children of baby boomers or the echo
generation.
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Population Change by Age in the 4-State Rockies
90 to 00   The chart below shows population
change between 1990 and 2000 by single age.
Growth is focused in two major age groupings
baby boomers or persons now between the ages of
40 and 60, and the echo generation or children
of the baby boomers. These two large age
groupings will shift into older ages and at the
time of the 2010 Census, growth between 2000 and
2010 will be largely focused among persons
between 50 and 70, which is the aging baby
boomers, and persons between 20 and 40, children
of baby boomers who are moving into ages of
family formation, child-rearing, and work force
entry and early career development.
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Migration Patterns in the Rocky Mountain
West   The sea change in migration patterns so
heavily impacting the 5-state Rockies began in
the early 90s and continued. In the 2000
Census, estimates were made of residence changes
(moving) by states of origin during the five-year
period from 1995 to 2000. During this five-year
period, of the 8.3 million residents of the
region in 2000, about 4.25 million (51) had been
in the same residence in 1995 as they were in
2000 (non-movers). For the others who had
moved, nearly 3.2 million (38) had moved within
the 5-state region. The other 1.1 million (13)
moved to the region from other states.   The
states of origin of these new residents of the
Rockies are shown in the lower chart. Many came
from California about 21 of the total. The
next two most frequent origin states are Texas
(8.3) and Washington (7.3), followed by Arizona
(5.5).
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The Regions Struggling Ag Sector Farmers and
ranchers each year produce and sell around 30
billion in livestock and crops in the 8-state
region. However, their expenses oftentimes
exceed their cash marketings. And any reductions
in expenditures over time have been off-set by
reductions in receipts, as shown in the chart
below. The split between cash marketing receipts
from crops versus livestock is shown in the top
right chart, with crop receipts exceeding those
from livestock. And, from one year to the next,
without the benefit of income other than these
marketing receipts, the regions farmers and
ranchers would oftentimes lose money, as shown in
the bottom right chart. Government farm program
payments to producers have been just under 5
billion annually in recent years. These plus
other income (off-farm earnings primarily) in
many years provide the margin of difference in
overall net farm earnings.
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Montanas Struggling Ag Sector Agricultural
producers in Montana have produced and sold just
under 1.9 billion in crops and livestock
annually in recent years, with receipts from
livestock sales of over 1.1 billion and receipts
from crop sales of 600 to 800 million. Their
production expenditures, however, have hovered at
2.3 to 2.4 billion a year. Ag profitability
hangs in the balance almost each year depending
upon the level of farm program payments and
other farm income, primarily off-farm earnings.
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Areas Nearby National Parks In the West
There are 80 western counties whose geographic
center is within 40 miles of a major national
park in the West. The majority of these (51) are
non-metropolitan in character. The map shows
major national parks in the 22 contiguous states
west of the Mississippi River. Other federal
lands adjacent to these parks are also shown.
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Major Population Centers or Region Cores and
Closely-Linked Counties in the West
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Dramatic Shifts in Net Migration Patterns   In
going from the 1980s to the 1990s, there was a
sea change in migration patterns in the United
States and this shift led to dramatically higher
levels of net in-migration to the Rocky Mountain
West. Nearly half of the regions population
growth in the 90s can be attributed to net
in-migration, or more people moving to the area
than the number moving away (and changing their
permanent residence in the process).   In city
core counties, net migration went from
out-migration of over 10,000 in the 80s to
in-migration of over 400,000 between 1990 and
1999 (the period in which migration data were
compiled). In closely-linked areas surrounding
core counties, net migration climbed from a loss
of over 50,000 people in the 80s to over 380,000
in the 90s. And in isolated and more rural
areas of the region, net migration went from
negative territory (a loss of nearly 43,000
people) to positive (gain of nearly 88,000) from
one decade to the next.   This migration shift
have made the Rocky Mountain West one of the
United States fastest growing regions.
The most current county-level population
estimates those for 2003 indicate that the
pattern of migration that took shape in the 90s
is largely continuing. However, this most recent
pattern shows the greatest migration to the
closely-linked surrounding counties of the
regions regional population centers. The pace
of net migration to city core counties has
dropped off some from the previous decade
(although there is only three years of estimates
and these patterns could shift). Emerging
patterns of migration will largely drive
population growth trends over the next ten to
fifteen years, largely because of the undue
influence of the very large baby boom
population in the United States, an age group
heavily participating in western U.S. migration
shifts.
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Population Growth Trends in the Rockies by Type
of Area   Population growth in the Rocky
Mountain West region is examined for three
general area types 1) city cores or county
areas where one of the regions 22 major
population centers are located 2) city
linked counties or county areas located next to
or nearby city core counties and 3) outside
city region counties or counties that dont have
major population centers that also are not
located nearby such centers these can largely
be considered isolated, rural counties.   During
the 80s, the overall population of the Rocky
Mountain West region increased by 810,000 people,
up 11. During the 90s, the regions population
grew by 2.1 million, an increase of 26. Nearly
1.2 million of the 2.1 million increase occurred
in city cores. The rate of growth in these cores
increased from 13 in the 80s to 24 in the
90s. Growth in city-linked areas in the 90s
was nearly 710,000, and growth in these areas
increased from 9 to 35 in going from the 80s
to the 90s. Growth also expanded in areas
outside of these city regions, but these areas
still only accounted for only 10 of all
population growth. 90 of all growth occurred in
the regions 22 city regions.
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City Regions of the Rocky Mountain West   The 22
Rocky Mountain West city regions are rank-ordered
by size of the region-wide population, which
includes the population of each region core
area (one or several counties where a primary
regional population center is located) and the
closely-linked surrounding counties. The chart
shows region core and region-wide populations for
both 1980 and 2003.   The most populated city
region in the Rockies in 2003 is Denver with
nearly 2.6 million people, followed by Salt Lake
City at 2.1 million. The third ranked city
region drops off considerably from the second,
with Colorado Springs/Pueblo at 820,000, followed
by Spokane at 690,000. Boise ranks fifth at
580,000, followed by Fort Collins at 507,000.
There is another large drop off in population in
going to the seventh ranked region Grand
Junction at 246,000. The next 11 city regions
are modest in size ranging from Billings, MT, at
185,000 (8th) to Bozeman, MT, at 96,000 (18th).
The last four have region-wide populations under
90,000.
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Relative Population Growth among Rockies City
Regions   The chart at the right shows the
Rockies city regions rank-ordered by relative
rates of population growth during the 1990s.
Growth rates for the 1980s also are shown for
purposes of comparison.   The St. George, UT,
region is growing faster than any other city
region in the Rockies, up 72 during the 90s.
Next in order are Boise (43 in the 90s vs. 12
in the 80s), Fort Collins (35 vs. 15), Grand
Junction (31 vs. 11), Denver (31 vs. 15),
Salt Lake City (28 vs. 18), Bozeman (27 vs.
16), Colorado Springs/Pueblo (27 vs. 17),
Missoula (26 vs. 5), Spokane (23 vs. 5), and
Kalispell (22 vs. 10). The remaining 11 city
regions all grew by less than 20 in the 90s.
  Across the entire gamut of city regions,
growth rates in the 90s were significantly
higher than in the previous decade.
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Relative Personal Income Growth among Rockies
City Regions   The chart rank-orders city
regions in the U.S. Rockies by the rate of
personal income growth during the 90s. Just as
with population growth, St. George had the
highest percentage increase in its area income
base among all of the regions with growth of 102
- a doubling of its income base over the ten-year
period in inflation-adjusted dollars. Rates of
growth in income also were high for Denver and
Boise (81 growth in both cases) and for Fort
Collins (71).   Total personal income growth
nationwide during the 90s was 37. Personal
income growth was equivalent to or exceeded this
nationwide norm for all but 8 of the city
regions. The income growth norm for all 22 city
regions combined was 64. Income growth in the
rest of the region outside of these city region
areas was 48 in the 90s.
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Employment Shifts in the Nations Fastest-growing
Regional Economy   Over the period of time when
the Rocky Mountain West first sank into and then
emerged from its slumber, employment growth has
been heavily focused in the services sector.
There are 13 major sectors of the economy and
services is clearly where most employment growth
in the region has been concentrated.
The pattern of employment growth in the Rockies
heavily reflects what has been occurring
nationally. The chart above shows the relative
shares of total employment accounted for by each
major sector for three points in time 1980,
1990, and 2000. Services share of total
employment in the region has risen from 21
percent to 31 percent during the period and this
trend is continuing. Most of the regions
service sector expansion is concentrated in the
regions cities and population centers.
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Region Economic Restructuring Greatest Growth
and Greatest Decline
There are more than 70 different sub-sectors of
the economy and the ways in which the economy is
restructuring can be viewed by identifying
where the biggest gains and biggest losses
are occurring.   In the fast-growing Rocky
Mountain West region, labor income growth has
been focused in business services (including
such areas as accounting, advertising, computer,
management services, etc.), F.I.R.E.
non-depositories (insurance, real estate,
brokers, etc.), health care services (doctors and
hospitals), special trade contractors
(carpenters, plumbers, electricians, etc.),
communications (telephone, radio and television,
etc.), and engineering and management services
all with gains in excess of 2 billion.
  Declines were focused in U.S. military,
transportation equipment manufacturing other than
autos, agriculture, railroads, and mining.
SUB-SECTOR CHANGE IN ROCKIES, 87
97   Fast-Growing Sub-Sectors (2000 dollars) 1
Business services 5.8 bil. 130 2
F.I.R.E., other than depos. 4.5 bil. 108 3
Health care services 4.4 bil. 64 4
Special trade contractors 3.4 bil. 88 5
Communications 2.8 bil. 103 6
Engineering managmt serv. 2.6 bil. 78 7
Eating drinking places 1.4 bil. 57 8
Electric, gas sanitary serv. 1.0 bil.
60 9 Auto dealers service stations 1.0
bi. 51 27.0 (53) Declining Sub-Sectors
Oil gas expl. extract. - 38 mil. - 2
Coal Mining - 116 mil. - 13 Railroads -
136 mil. - 13 Net farm income - 216
mil. - 10 Transpt. Equip. mfg., not autos -
439 mil. - 25 U.S. Military - 570 mil. -
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Many Montanas   By Dr. Larry Swanson Montana is
a single state. But, in reality, there are many
Montanas some defined by variations in terrain
and vegetation, climate, land use, and population
density. Others defined, importantly, by
variations in area economies. Some differences
split the state, east and west two vastly
different regions, one mountainous and forested
and the other rolling grass-covered plains. And
while many Montanans think of the state as being
almost entirely rural in character a region
without cities - most Montanans live in or
nearby one of the states seven largest cities.
Montana is a single state. But in many more
meaningful ways, there are many Montanas.
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Lop-Sided Population Change in Montana The
recent sea change in U.S. population migration
patterns played out very differently in Montanas
three regions. The 21 Western Mountain counties
saw almost all of the increase with net migration
shooting to nearly 58,000 in the 90s. The
Central Front saw some of the increase. The 21
Eastern Plains counties continue to lose
population. Population counts through 2003
indicate these trends are continuing.
Montanas population grew by almost 120,000
people between 1990 and 2003, after very little
growth in the 80s. Over 85 percent of this
population growth was the result of net
migration. Most of this growth is in the Western
Mountain region (green bars), mainly in Gallatin,
Flathead, Missoula, Ravalli, Lewis Clark, and
Lake Counties. Some of the growth is in the
Central Front (purple bars), mainly in
Yellowstone County. In the Eastern Plains
(yellow bars), every county except one lost
population.
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Shifting Age Composition in Montana   The chart
below shows Montanas population by single age in
1990 and ten years later in 2000. As in the
larger Rocky Mountain West region, growth is
focused among baby boomers (persons 40 to 60) and
their children (echo). There are actually
fewer people in the state in their mid 20s and
30s, and this reflects itself further in fewer
young children under 10 years of age.
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Population Change by Age in Montana 1990
2000   Just as in the larger Rocky Mountain West,
population growth in Montana is heavily focused
among persons 40 to 60 (baby boomers) and, to a
lesser degree, among children of baby boomers in
their teens and early 20s. The state has
significantly fewer persons in their mid-20s to
late 30s. The period between 2000 and 2010 is a
critical period in Montana for the replenishment
of the early adult population and the population
of young children.
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Movement in and Migration to Montana   Of the
840,478 persons residing in Montana in 2000 that
were five years of age and older, 453,995 (54)
lived in the same residence is 1995 as 2000. Of
the 46 who had moved, 33 had moved within
Montana, oftentimes simply within the same
community and the other 13 had moved to Montana
from other states.   Two states contributed the
most new residents of Montana by far in this
five-year period Washington state provided
15,448 new residents to Montana, 14 of the total
number of movers from other states, followed by
California with 14,849 (13.3 of the total). Far
behind these were the third, fourth, and fifth
states of Colorado, Idaho, and Oregon all
contributing more than 6,000 new residents each,
5 to 6 of the total in each case. Next comes
Wyoming with over 5,000, followed by Arizona.
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Regional Trade and Service Areas of Montanas
Largest Cities
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Regional Trade and Service Areas of Montanas
Largest Cities
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Most Montanans Live in or nearby one of the
States Seven Major Cities The map at the right
shows the number of people living within 20-mile
and 35-mile zones of Montanas seven principal
urban centers. About 60 of all Montanans live
within 20 miles of these cities and nearly 70
live within 35 miles. Much of the states recent
population growth is concentrating in and around
these cities. 
The lower map shows where Montanas 2005 state
legislators live by 5-digit zip code. 98 of the
150 legislators reside in zip code areas that are
wholly or partially within the 20-mile zones, 65
of the total. This expands to 117 legislators
within the 35-mile zones, 78 of the total.
2000 Population mapped at the Census Block level.
Each dot represents 15 people.
Red dots are MT senators. The blue dots are MT
state house members in 2005.
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City-Centered Growth in Montana Most Montanans
live in or nearby the states seven largest
population centers. In fact, today, more than 60
percent of the states population lives in the
seven counties where its major population centers
are located. Another quarter of the population
live in counties surrounding these regional
centers and are closely-linked to these centers
economically and socially. Less than 14 percent
of the states population lives in relatively
isolated areas with small populations.
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Economic Change Urban-to-Rural in Montana As
the economy has changed and shifted, its has
increasingly focused income growth and employment
growth in the states largest cities and their
surrounding areas. Personal income in the seven
regional center counties, which grew by less than
1.2 billion during the 80s, expanded by over
3.8 billion in the 90s a more than three-fold
increase in growth. The pace of income growth in
closely-linked counties surrounding these centers
more than doubled. Around 96 of all income
growth and employment growth in Montana during
the last decade occurred in and around its seven
regional centers.
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Recent Employment Change in the Fast-growing
Rockies and in Montana  In the last decade when
the economy of the Rocky Mountain West became one
of the fastest-growing regional economies in the
nation, employment growth in the broad services
sector accounted for 37 percent of all new jobs
in the region. The top chart shows employment
change in the five-state region by major sector
over the course of the last twenty years. There
are 13 major sectors of the economy and two of
these, services and retail trade, now account for
nearly half of all employment. The sector with
the third highest employment is Finance,
Insurance, and Real Estate, or the F.I.R.E.
sector, which is followed by manufacturing,
construction, and local government (which
includes public education).   There is a common
perception in Montana that the states economy is
deteriorating, with many citing the growth in
service and retail trade jobs and the loss of
other good jobs in the economy. In actuality,
the changing mix of jobs in Montana closely
parallels the changing mix of jobs in the larger
Rocky Mountain West region which has seen
significant gains in economic performance in
recent years. In the last decade while service
jobs grew by 37 percent in the fast-growing
Rockies, they grew by 42 percent in Montana.
And, while services and retail trade now account
for nearly half of all jobs in the Rockies, they
accounted for 49 percent of jobs in Montana in
2000.   When you compare employment trends in
Montana with the larger Rocky Mountain region,
there are differences. F.I.R.E. is also the
fourth highest major sector of employment rather
than third as in the Rockies. Manufacturing is
seventh, rather than fourth. And farm and ranch
employment is sixth in Montana rather than
twelfth.
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Fast-Growing and Declining Sub-Sectors in Montana
The one constant in the economy is change. And
change in the economy seems to be accelerating.
Different segments of the economy are affected
differently by these changes. Some are expanding
rapidly, while others decline. There are over
75 individual sub-sectors of the economy. The
chart above shows which of these are fast-growing
or declining during the decade of the 90s a
period of accelerated growth and fairly dramatic
economic restructuring. Growth is most heavily
focused in a wide range of service sub-sectors
particularly health care, business services,
engineering and management services, and social
services. Areas of finance, insurance, and real
estate, as well as construction also are
fast-growing. Only sixteen of the more than 75
sub-sectors of the economy, listed in the top
portion of the chart above, accounted for
two-thirds of all growth in labor earnings in
Montana during the 90s. Conversely, decline in
the economy is concentrated in an even smaller
number of sub-sectors and most are longstanding
industries. These include the natural resource
industries of mining, logging and wood products,
and agriculture.
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Shifts in the Economy and Restructuring
Changes in Montana and in the larger economy
are favoring growth in health care business,
engineering, and management services finance,
insurance, and real estate and construction.
Their share of all labor earnings in Montana rose
from 12 in the early 80s to over 23 by 2000.
Industry decline or consolidation is occurring in
mining, logging and wood products, and
agriculture. These natural resource industries
share of statewide labor earnings fell from over
13 in the early 80s to 6 by 2000.
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Consolidation and Decline in Montanas Natural
Resource Industries   For much of the states
history, Montana has depended on these pillars of
the economy agriculture, mining, and wood
products. Year-by-year net earnings in
agriculture are erratic, and wood products
earnings are flat or declining, as are earnings
in mining. In spite of this decline or
stagnation in the states natural resource
industries, the larger economy has continued to
grow, with growth in fact accelerating during the
last decade. Resource industries share of all
labor earnings has fallen from 16 in the early
80s to 8 by 2000 and continues to fall.
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Regional Distribution of the Fast-growing
Services Sector   With service sector growth
dominating all other sectors in employment growth
in Montana and the larger region, it alone is
having a major impact on the distribution of the
larger economy of the state. The chart at the
right shows major sub-sectors of the services
sector and their labor earnings growth since the
last 80s. Health care services are the single
largest component and dwarf all other service
sub-sectors. Far behind in second place within
this sector is business services, followed by
engineering and management services.   There is
little doubt that growth in these areas would
favor urban areas and city-region size population
and market areas. The lower chart shows the
distribution and growth of service sector labor
earnings for the states regional center
counties, counties closely-linked to these urban
areas, and the rest of the state. Service sector
activity has been steadily expanding in the
regional centers, doubling in size between 1980
and the mid-1990s and continuing to grow.
Services activity in counties closely-linked to
these regional centers grew beyond activity in
the rest of the state in 1989. This gap has
steadily widened since then. Together, the seven
regional centers and their closely-linked
counties accounted for 95 percent of all service
sector growth in Montana during the last decade.

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Cities as Employment Centers While
employment growth is focusing in cities, those
working in these jobs live both in the cities and
outside of them in surrounding communities. In
2001 222 million in labor income, earned by
persons residing outside of regional center
counties but working at jobs located in them, was
transferred into the personal income bases of
surrounding, closely-linked counties in Montana.
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Urban-Rural Differences in Economic Well-being
While Montana ranks very low in comparisons of
state per capita incomes, income levels for
most of Montanas regional population centers
compare favorably to levels of other comparable
size cities throughout the West. The average per
capita income for the seven regional center
counties has risen steadily from less than
20,000 in the late 80s to just under 26,000.
Levels in outlying and isolated rural areas lag
behind. However, these gaps between urban and
rural income levels are common throughout the
West.
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Montana Counties Rank-Ordered by Per Capita
Income The chart shows how per capita income in
2003 varied across Montana from the county with
the highest p.c.i. Yellowstone at 27,390 (2000
dollars) to the county with the lowest p.c.i.
Petroleum at 15,160.   Of the 13 counties with
per capita incomes greater than 24,000, seven
are regional center counties or counties in
Montana where one of the states seven major
population centers is located.   Of the 16
counties with per capita incomes less than
19,000, five are reservation counties (Big Horn,
Blaine, Glacier, Roosevelt, and Lake).
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Per Capita Incomes for Very Metro to Very Rural
Places   The chart below shows how area per
capita income varies from the most urban places
in the West counties with very large
metropolitan population and their surrounding
counties to the most rural places areas with
small populations that are increasingly isolated.
The bars in the chart are color-coded according
to the READ Urban-to-Rural Hierarchy, with the
most urban places at the left and most rural
places at the right. Per capita incomes for
counties of each type in 2001 are shown.
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Lessons to Learn from Emerging Economic
Patterns   Look Forward Promising strategies
for economic improvement must reflect where the
economy is going, not where it has
been.   Customize Strategies Needs and
opportunities vary widely from place to place.
Goals and strategies must likewise vary.   Cities
Matter Recognizing that most growth is focusing
in and around city regions, more attention
needs to be focused on the needs of cities as the
settings if not the engines of economic
growth, diversification, and advancement. In
Montana, we need to assist cities, not deny that
we have any.   Urban-Rural Relations Matter
Pursuing economic development town-by-town or
county-by-county is difficult. Influencing local
economies sub-region by sub-region with healthy
urban-rural partnerships has potential.   Become
Learning Communities Successful businesses
are adaptive businesses. Successful communities
are adaptive communities. Adaptive communities
must be learning communities, keeping abreast
of change.   Think about Regional Positioning
Local economies cant be remade by local leaders.
What they can do is find ways of better
positioning themselves businesses, schools,
work forces, governments, families for future
change. Anticipate future change and position
yourself for it.   Human-Resource Based Economy
The economy is less and less natural resource
based, and more and more human resource based.
Do we know how to invest in human resource
development? Well-designed, well-funded,
adaptive systems for education and work force
development are essential for economic
prosperity.   Environment as a Key Economic
Asset In the new economy, a quality
environment is a key economic asset. Protecting
and enhancing environmental qualities is not the
enemy of economic development. It is essential
for economic prosperity.
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What increasingly really counts in local area
economic development in this new economy?  The
Quality of your community .. infrastructure,
schools, neighborhoods, commercial development,
streets, parks, arts and cultural amenities,
identity, energy, vitality, multi-dimensionality,
visual appeal, surrounding environs,     The
Quality of your work force .. diverse,
appropriately educated, and adaptive with
training and education opportunities at all
levels and nearby multi-faceted, well-delivered
programs in workforce development     The
Quality of your surrounding environment .. not
just parks and attractive, well-planned
neighborhoods, downtowns, and commercial
districts, but landscapes and natural amenities
like streams, lakes, mountains, forests, open
spaces, etc.     Even though most forces driving
larger patterns of change in the economy are
supra-community in nature technological change,
transportation developments, new products, major
demographic shifts, etc. - so much of what really
counts in area economic vitality .. is within the
reach of community leaders and decision makers.
.. they can help create and sustain the types of
positive attributes that attract, nurture, and
stimulate economic energy and vitality and the
conditions for economic improvement over time.
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Continuing Lop-Sided Population Change in
Montana, 2000 2004
The most recent county population estimates are
for 2004 (released April, 2005). Growth remains
heavily focused in the Western Mountain region,
with growth in every county except Silver Bow and
its surrounding counties. In the Central Front,
growth remains concentrated in Yellowstone.
Every counties in the Eastern Plains except one
(Roosevelt) lost population.
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Continuing City-Centered Growth in Montana, 2000
- 2004
Five of the seven regional population center
counties in Montana had fairly high or moderate
population growth in recent years. Cascade had a
modest decline, while Silver Bow population
decline continued. The seven regional center
counties together accounted for over 23,000 of
the statewide increase of just under 25,000
between 2000 and 2004. Closely linked counties
as a whole grew by 5,700. Every isolated rural
county in the state except two (Glacier and
Roosevelt) continues to decline.