Often left behind by traditional economic development strategies, rural markets present their own challenges for economic sustainability, innovation, and resilience. These communities bring their own strengths to the table as well as their own context. However, to make them successful, it is important to apply strategies that are going to work within a rural context, rather than trying to graft a suburban or urban tactic onto a rural environment.
Take Nunavut, for example. No really, take it.
Iqaluit is the capital city of Nunavut Territory in the Canadian Arctic. Located at the head of Frobisher Bay, on Baffin Island, the city has a population of just under 8,000 people. With no roads leading in or out, it is only accessible by air (1,300 nautical miles north of Ottawa) or by ship during the short summer months. Whence the pun-inducing name? In the Inuit language of Inuktitut, Nunavut means “our land.” Nunavut became Canada’s third territory when it was officially separated from the Northwest Territories in 1999.
Given the community’s remote location, not to mention lack of infrastructure and connectivity to a major population center, a traditional strategy for attracting investment was simply unrealistic. Yet the community was able to identify opportunities within their unique context, mobilize available resources, and successfully attract the attention of global companies that resulted in economic growth for the community.
Community leaders understood the assets (and obstacles) that they had available. As an old U.S. Air Force Base used during World War II and the Cold War as a refueling stop for transatlantic flights, the community had an 8,600-ft. runway, capable of accommodating large aircraft. The location of course provided consistently cold temperatures in excess of -20 F for long periods of time. And, as a remote arctic community with no direct access to urban centers, it provided a degree of privacy, away from prying eyes of potential competitors.
These attributes provide a perfect location for aircraft manufacturers such as Boeing and Airbus to conduct cold-weather testing. Before new aircraft can be put into commercial use, they first must be subjected to extreme environmental conditions to ensure they will operate safely and as designed. Airbus has been using Iqaluit since the 1990s, testing models such as the A380 and the A350.
Each time a new aircraft touches down, it brings with it 20-plus engineers, technicians, and crew, who stay at a local hotel, eat at local restaurants and contract with a local caterer, rent equipment and vehicles, and contract with the local fixed-base operator (FBO) to look after logistics for them. Local leaders quickly realized the economic impact these testing missions had on the economy, and banded together with businesses, the territorial and federal government, as well as other stakeholders, to actively market themselves to other aircraft manufacturers and OEMs such as Dassault and Embraer. The site continues to be a world-class cold-weather testing center, and local leaders have begun to explore expanding opportunities in this field to look at component testing as well as the construction of related research facilities.
Companies can find some truly unique opportunities by investing in these remote and rural areas. However, they will likely face some challenges in finding the EDO support they would find in more urbanized areas. These challenges may come in addition to a lack of available workforce or access to market, aging or insufficient infrastructure, or simply identifying the market in an ever-crowded market place. While these may seem obvious, they are not insurmountable. What many rural EDOs lack — and it is by far one of the largest obstacles they face — is the resources and capacity to pursue a strategic investment attraction agenda. This often manifests in two distinct scenarios:
Scenario 1: Rural EDOs are tasked by those overseeing their operations with a business retention and expansion (BRE) focus. Shifting focus away from BRE can be a challenge as local businesses can interpret investment attraction as an attempt by the EDO to lure in competition. They often do not take kindly to any attempt to shift resources and attention away from them, or to use “their tax dollars” on anything other than local issues. Further compounding this problem is that in rural areas these local companies, particularly established employers, often have the ear of senior managers and elected officials.
Scenario 2: Rural EDOs who do place a focus on attracting investment are trying to adapt an urban strategy to a rural context. They spend time and resources on unrealistic targets, or skip over the important foundational steps in understanding their community and value proposition, by going straight to a shotgun approach to investment attraction and targeting everything and anyone that crosses their path.
Often this situation is driven by elected officials who want to be seen as championing their municipality, but who lack a broader understanding of the site selection process and the intricacies of investment attraction. The term “unicorn list” has started to appear in the lexicons of rural EDOs, referring to unrealistic targets that elected officials and senior managers are pushing EDOs to pursue.
The greatest challenges for the economic development professional in these settings are to create awareness of opportunities and then to increase both public- and private-sector readiness to make the most of them. Rather than focusing on a unicorn list of things that are aspirational but well beyond realistic capacity, a thorough assessment of weaknesses/obstacles helps partners on both the public and private side focus their efforts on making real progress toward economic sustainability and advancement.
Some rural areas are attempting to combat brain drain and aging populations by promoting low cost and high quality of life and community. Atlantic Canada has posted some success in this area. Maine has taken a similar approach statewide by offering to assist in repaying student loans for those young workers who choose to come settle throughout the state. Similar approaches are happening in Vermont and in Michigan’s Upper Peninsula.
Rural communities pose unique challenges to economic development and investment attraction. However, their size and idiosyncratic nature also allow them to act as testbeds for new and flexible strategies.
Christopher Steele is Vice President, Advisory, at Conway Advisory, has more than 25 years’ experience in corporate location and facilities consulting.
Mark Morrissey is the Director of Economic Development for the City of Fort Saskatchewan in Alberta, and has over 10 years’ experience in economic development and investment attraction, including six years working in Arctic communities