The latest episode of the Reimagining Rural podcast explores the economic evolution of Skowhegan, Maine, a town transitioning from its industrial past to leverage its natural assets for new economic opportunities. The conversation delves into pathways to prosperity for distressed rural areas and the role of federal investment in supporting rural development.
The Economic Development Administration (EDA), a division of the Department of Commerce, plays a crucial role in facilitating economic development, particularly in distressed areas. Historically a small agency, the EDA is known for its flexibility and ability to fund innovative projects. This flexibility makes it an ideal agency for policy innovation. The EDA has been involved in creating and overseeing two significant place-based programs: the Build Back Better Regional Challenge (BBBRC) and the Recompete Pilot Program. These programs aim to drive economic development by transitioning regions from low-wage, low-skilled sectors to medium- and high-skilled industries.
The BBBRC, funded by a $3 billion lump sum from the American Rescue Plan, is the largest economic development competition ever run by the federal government. Its goal is to help regions make significant economic transitions in a shorter timeframe by investing enough money to accomplish a generation’s worth of economic development in just five years. The program has been successful in attracting a diverse range of participants, including rural areas, which were represented among the 21 winners. The initiative emphasizes regional efforts beyond single communities, ensuring that rural places are genuinely integrated into the economic development plans.
The Recompete Pilot Program focuses on providing flexible and large grants to highly distressed areas, defined by low prime-age employment rates. This program is innovative in its exclusive focus on distressed areas and has received a high number of applications, indicating a strong alignment with the priorities of these communities. The program aims to simplify the application process by being transparent about what matters in the decision-making process and providing feedback to applicants. This approach helps rural applicants by reducing the burden of lengthy forms and unnecessary submissions.
Rural places have been significantly involved in applying for the Recompete program, reflecting the high level of economic distress in these areas. The program’s success is evident in the positive outcomes observed in various distressed regions, including examples like the Wind River Reservation. Research has shown that many places that were highly distressed in 2000 have since seen significant economic improvement, indicating a real path to prosperity.
Skowhegan’s recent momentum is driven by strong local institutions, a well-thought-out strategy, and regional growth opportunities. The town’s approach includes a blend of support for small businesses and larger industry players, leveraging assets like the outdoor recreation economy. The success of Skowhegan highlights the importance of local institutions that are accountable to the community and the value of creativity in economic development.
Trust and alignment within coalitions are crucial for the success of economic development initiatives. Federal officials assess these factors through governance structures, virtual site visits, and conversations with various stakeholders. This approach helps ensure that the coalitions are genuine and aligned in their goals.
Quality-of-life investments, such as housing, childcare, and amenities, are effective in rural economic development. These investments create value regardless of immediate economic outcomes and can lead to economic benefits over time. Asset-based community development, as seen in Skowhegan with Maine Grains and the river as an outdoor-recreation asset, is a practical approach to identifying and leveraging local assets for economic growth.
To unlock untapped potential in rural areas, programs should be structured to make participation easier. This includes de-professionalizing grant applications, using two-stage processes, providing high-quality feedback, and absorbing some risk on the agency’s side. These measures help ensure that distressed places have a better chance of success and that the programs are more equitable and accessible.
The federal government plays a crucial role in funding local economic development, especially in distressed areas. With a country-wide view and more combined resources, the federal government can identify high-opportunity places and provide the necessary capital for economic development. This national-scale approach is more efficient than relying solely on state and local governments, which may lack the resources to support distressed areas effectively.
