Rural businesses and industries often specialize in resource based activities such as agriculture, forestry, mining, or natural amenity-based recreation. In addition, manufacturing establishments--some involved in processing food, wood and mining products, but most in "footloose" activities unrelated to local natural resources--have been a key part of many rural economies. Rural areas tend to have significantly fewer financial, professional, scientific and information services activities that concentrate in urban economies. The public sector has been a major source of earned income in rural areas. Trends in these activities shape the job opportunities available to the rural labor force.

ERS research on business and industry focuses on the competitiveness of rural industries and businesses in the increasingly global economy, as well as their impacts on local communities.

• In 2012, ERS in cooperation with Washington State University is launching a large survey of innovativeness in rural (and urban) establishments. A central purpose will be to understand better the business characteristics and local community settings most conducive to effective business practices and success.

Examples of previous ERS research findings include:

• Rural manufacturers do not lag urban manufacturers in the adoption of new methods and processes (see Rural Competitiveness: Results of the 1996 Rural Manufacturing Survey, March 1999) although there has been some lag where local work force education levels are low. Smaller plants are more likely to adopt new methods and practices in industrially diverse rural counties where there are more people in creative occupations, an indication that community context is important for innovation.  

• The footloose nature of much of rural manufacturing made it especially vulnerable to overseas competition. This has been especially marked in the apparel and textile industries (see U.S. Textile and Apparel Industries and Rural America for more on this topic).

• While recreation is often cited as a source of low-paying jobs, counties specializing in recreation fare well (see Recreation, Tourism, and Rural Well-Being, August 2005) on many measures of well-being, including wage levels and income.  A central problem facing residents in these counties is high costs of housing. Manufacturing is particularly important in rural areas that are not favored by mountains, lakes, and climates attractive for recreation and retirement.

Last updated: Saturday, May 26, 2012

For more information contact: Tim Wojan and David McGranahan