Leveraging Universities, Technology, and Education to Drive Rural Economic Growth
SouthsideVirginia[i] is a stretch of five rural counties along the North Carolina border on the eastern side of the Blue Ridge Mountains clustered around the aging industrial cities of Danville and Martinsville. The implementation of an innovative technology-based economic-development strategy in the region over the past few years offers valuable lessons for those who are trying to solve the paradox of rural economic development in a global, knowledge-based economy. Simply put, the paradox is that in a U.S. economy that prides itself on developing and exploiting technology and talent, we have not figured out how to use technology and public investment to spread the wealth to rural areas.
Like many rural areas, the decline in tobacco growth and the closing of textile mills and furniture factories in Southside left the region with a diminished economic base and a largely semiskilled and unskilled workforce. Danville is typical of micropolitan areas[ii] in the United States, many of which have been deteriorating since the 1950s. The combination of depopulation, agricultural mechanization and consolidation, and the decline of low-skilled manufacturing jobs due to increasing productivity and global labor market arbitrage have left rural areas bereft of sources of wealth creation and gainful employment. The effect of these economic trends on Danville was a population loss of 25 percent between 1980 and 2010.
The loss of jobs also signaled the loss of a low wage economic development strategy for the Southside region. In the new economic arena, Mexico, China, Sri Lanka, Vietnam, and many other developing nations provide significantly lower living and working standards and therefore lower payroll costs. Competing on cost plunges regions into a domestic downward spiral and, as a result, rural areas in the United States have become way stations in the movement of unskilled jobs to low-wage countries.
Clearly, strategies that had worked in the past for rural areas hold little promise for the future. Rural regions that have conceived of modernization as a T1 line and a call center are learning that it takes more than plain English to compete for newly insourced call centers. Employers today need employees who know how to speak and analyze technology in plain English. In that sense, rural regions are no different from the rest of our country, struggling to compete in a global marketplace where the products and powers of the mind add the highest value and talent and brainpower become the coin of the realm for middle-class incomes and family-sustaining jobs.
If we cannot compete successfully on cost, what is our competitive advantage? That question was answered in Southside Virginia in a strategic plan called “Learning. Working. Winning: Bringing the New Economy to the Dan River Region” by MDC Inc., a Chapel Hill, N.C.-based think tank engaged by the Future of the Piedmont Foundation, a group of self-appointed, local business leaders. The report summed up succinctly:
The Dan River Region must shift from a traditional manufacturing/agriculture base to an information/high technology base to create jobs and increase wages. The area is facing an economic crisis and must take bold action. [emphasis added][iii]
The bold action that followed led to the creation of an $80 million innovation and talent hub: The new Institute for Advanced Research and Learning used state-of-the art technology, a multidimensional partnership with a research university 125 miles away—Virginia Polytechnic Institute and State University, more commonly known as Virginia Tech—and a distinctive, holistic program model to serve as a catalyst for regional economic and community transformation. Its mission focused on applied research, technology commercialization, and academic and outreach programs that attracted and developed the technology and talent upon which to restart the region’s economic and civic base.
Unlike traditional higher education centers or extended university or college sites that focus solely on expanding access to educational opportunities to citizens in their service areas, the Institute for Advanced Learning and Research—for which investments were made between 2001 and 2007—leveraged research and technology from Virginia Tech to create the preconditions for a new economic base in the region. Its educational and outreach programs were designed to prepare people for the kinds of jobs associated with the traded sectors driven by the applied research and technology commercialization efforts.
Unlike traditional research-extension stations whose missions typically focus solely on agriculture-related research, this model established unique research centers in motorsports engineering, plant biology, robotics, and polymers processing, all of which built upon existing community assets and leveraged university research expertise. This new innovation and talent hub offered a systemic, transformative solution for a region that faced very different challenges than metropolitan areas.
Metropolitan areas benefit from long histories of public and private investment in research universities, civic amenities, and technology and transportation infrastructure, all of which support innovation while attracting and retaining educated workers. For rural areas, this cycle is reversed. Market conditions work against self-correction because:
- Research universities are mostly located in other places
- Quality education mostly happens in other places
- Critical infrastructure is more often found in other places
- Talent definitely migrates to other places
- High-tech jobs are almost always created in other places
- Modern lifestyle amenities usually develop in other places
- Economic growth mostly happens in other places
- Wealth is almost always created in other places
Ultimately, rural areas, like any other regions, need to develop traded sectors, entrepreneurship, and small businesses that produce the jobs that allow their populations to live and work in the region. But because economic growth and wealth creation are ever more tightly coupled with innovation, talent, and brainpower, the question with rural development remains: How can rural areas develop the kind of innovation and talent ecosystem that creates the preconditions for successful development?
The answer rests on the kind of civic economy[iv] that best supports a stable, growing private-market economy in the rural United States.
Strategies that focus exclusively or separately on talent development, entrepreneurship, community development, or infrastructure enhancements have not generally proven to be sufficient. Because talent and brainpower concentrations are fundamental to modern prosperity, economic-, workforce-, and community-development strategies need to become interdependent and co-related.
In other words, the talent ecosystem—attracting, developing, and retaining highly skilled workers, all of which rely on a quality, connected place—must be developed in parallel with the innovation ecosystem. Without a good job and an appealing place to live, workers with marketable skills migrate to places that can offer opportunity and quality of life—usually a metropolitan region. This migration has the effect of undermining the talent base, a critical prerequisite for success. For rural regions to reverse this brain drain, the development of a multifaceted, interconnected, place-based innovation and talent ecosystem is necessary to establish a robust 21st century economy.
In the case of Southside Virginia, there were two necessary preconditions for a technology-based, economic-development strategy. Without effective, private-sector local leadership committed to initiating and staying the course on an unprecedented rural-development strategy, there would have been no hope for an enduring new economy in the region. The leadership to make the human and institutional connections necessary for a transformational approach was provided by a band of local business leaders through the Future of the Piedmont Foundation.
In 1999 a group of private business leaders began earnest conversations among themselves about what could be done to reverse the declining economic fortunes the region faced. They traveled to places like Tupelo, Mississippi—where education, community development, and leadership-premised renewal had been chronicled in a book by Vaughn Grisham, Hand in Hand: Community and Economic Development in Tupelo. Another trip took them to Georgia, where they heard the turnaround stories of other economically devastated communities engaging university assets—Atlanta, Columbus, and other Georgia communities that leveraged university research, technology commercialization, and workforce-education programs as economic and workforce-development strategies.
The Southside Virginia business leaders determined that two critical things needed to happen. First, they needed to commit themselves to leading an economic reinvention of Southside. Ultimately, they were to play a key role in winning the support of the governor, the region’s state and federal legislative representatives, and the Virginia Tobacco Foundation to fund this ambitious project.
Second, hearing the success stories of other places, they came to believe that engaging a major research university was critical. Just an hour away from North Carolina’s Research Triangle Park, the Future of the Piedmont Foundation members had seen the incredible transformation of that area during the second half of the 20th century.[v] The group approached Virginia Tech and asked for the university’s help in reinventing Southside. In early 2000 incoming President Charles Steger agreed and commissioned a handful of key staff to begin drafting a game plan.
The second precondition seems almost too obvious to mention. Without a modern technology infrastructure, it is pointless to pursue technology-based development. That is why the story of Southside really began with Virginia Tech’s design of eDan—a publicly financed, open-access broadband technology infrastructure. The $2 million eDan project provided the initial deployment of fiber-optic cable along a 40-mile route extending from the northern part of Pittsylvania County, which surrounds Danville and extends north along the U.S. Route 29 corridor, south to Danville on the North Carolina border.
Three community access hubs, with multimedia services access points were developed along the route to house the gigabit speed electronics that “light” the fiber and allow for connectivity of services and users in the communities. Wi-Fi hotspots were deployed in the distressed downtowns of the three towns along the eDan route: Gretna, Chatham, and Danville. This original backbone infrastructure was subsequently expanded throughout Southside into numerous counties along the southern tier of Virginia, stretching from the Blue Ridge Mountains in the west to Tidewater, Virginia in the east.[vi]
Currently managed by Mid-Atlantic Broadband Cooperative, this modern, 400-gigabit-per-second backbone now constitutes an advanced 800-plus-mile fiber-optic broadband network. It provides access to multiple major fiber-optic and telecom service providers throughout the region. In doing so, it links the region to the rest of the world, including Virginia Tech and other research universities located nearby. This network is credited with creating more than 2,200 jobs and helping to contribute $300 million of investment to the region in the past three years.[vii]
With a transformational, effective leadership group formed and a modern information technology infrastructure coming online, work began in earnest on what was to become the cornerstone of the Institute for Advanced Learning and Research, the partnership between Virginia Tech’s academic core and the region. What emerged from the Southside strategy was an entirely new role for higher education. Through the selective linkage of regional assets with university nodes of expertise, the Southside region was able to seed an innovation-based economy by establishing local centers of applied research and offering highly targeted educational programs.
Virginia Tech scientists and engineers recognized the value of capitalizing on the distinctive assets of Southside to establish new and unique research facilities and partnerships in the Southside region. By developing local industry partnerships associated with polymers manufacturing, empty tobacco fields, and three race tracks (including a high performance road track, Virginia International Raceway), researchers helped to set the stage for the development of new, high-tech industry niches.
While distance and blended learning have become a growing force emanating from many universities, the Southside strategy turned this educational push strategy on its head, both by pulling into the region the academic programs specifically tied to the economic development strategy and by originating graduate courses at the new innovation and talent hub in Danville for students on Virginia Tech’s Blacksburg campus about 125 miles away.
As a result the Institute for Advanced Learning and Research’s facilities and faculty provided critical prerequisites required for on-site graduate education and set the stage for an infusion of talent. This model created an interdependent relationship between Danville and Blacksburg within Virginia Tech’s primary missions of teaching and research and brought dozens of scientists, engineers, and talented graduate students into Southside in priority economic sectors. By fusing targeted, university-led distance/blended learning and distributed research with economic and community development, an innovation and talent ecosystem was established in Southside Virginia.
This essay is the first of a short series linking the lessons learned in Southside Virginia to the challenges of strategy in rural-economic development. In the case of Southside, it was not only the technology in technology-based rural economic development that mattered. It was everything else as well. Future sections will deal with:
- The innovative role universities need to play
- The brain drain and talent attraction and retention issues
- The critical role of culture change
- The resources and sustainability strategies needed for success
- The policy challenges for transformative regional engagement in the rural United States
Our next essay will look in detail at the complexities of this new role for the universities as they move beyond distributed education and satellite campuses into a unique innovation Virginia Tech and Institute for Advanced Learning and Research leaders called transformative regional engagement: a holistic, multidimensional, transdisciplinary[viii] program model that delivered distributed research, education, and outreach programs 125 miles from its Blacksburg campus. We believe there is much for universities, economic-development policymakers, and rural business leaders to learn from the Virginia Tech experience, neatly summed up in this blueprint of what would become the Southside Virginia success story:
With the concurrence of the region’s leadership, Virginia Tech proposes to serve as partner and change agent in the region’s transformation. Because of its leadership in technology, from broadband wireless and wireline communications technologies to the biotechnologies related to plants and animals, the university stands uniquely prepared to form an immediate, working partnership for technology-assisted change in the region. … Virginia Tech and Southside Virginia can be uniquely positioned to leverage various biotechnology initiatives underway in the Commonwealth.[ix]
About the authoring team: Nancy E. Franklin is the former (founding) senior director of the Institute for Advanced Learning and Research and the current director of sustainability outreach and engagement at Penn State University. Timothy V. Franklin is the former (founding) executive director of the Institute for Advanced Learning and Research and the current chief operating officer and secretary of the board for TRE Networks, Inc., a nonprofit focused on advancing the role of universities in transformative regional development. Sam Leiken is a former vice president of the Council on Competitiveness and the principal of Prosperity Projects, a consultancy focused on linking growth and opportunity. Image Credit: Jan Diehm/Science Progress.
[ii] Micropolitan Statistical Area—A Core Based Statistical Area associated with at least one urban cluster that has a population of at least 10,000, but less than 50,000. See: Fed Register, “2010 OMB Standards,” June 28, 2010.
[iv] Civic economy is a term referring to the public and private assets and investments that define education, innovation, health care, recreation, safety, infrastructure, lifestyle amenities, and other public and civic qualities supporting place-based advantages in community, workforce, or economic realms and assisting the development and performance of the market economy.
[v] Research Triangle Park emerged as an economic development strategy in the Raleigh-Durham region of North Carolina in the 1950s. It leveraged the assets of the University of North Carolina-Chapel Hill, North Carolina State University, and Duke University, and a large tract of land in the triangle between the three campuses, to create a leading example of technology-based economic development.
[vi] For coverage maps, see “Mid-Atlantic Broadband Cooperative,” available at http://www.mbc-va.com.
[viii] Transdisciplinary is a similar term to interdisciplinary and generally refers to an an area of research and education addressing contemporary issues better solved by one or even a few points-of-view. It becomes problem-oriented and transectoral in its nature by bringing together academic experts, field practitioners, community members, research scientists, political leaders, and business owners among others to solve some of the pressing problems facing the world, from the local to the global. Transdisciplinary studies emphasize engagement, investigation, and participation to address present-day issues and problems in a manner that challenges disciplinary boundaries while respecting disciplinary expertise. See: Julie T. Klein, “Evaluation of interdisciplinary and transdisciplinary research: A literature review,” American Journal of Preventative Medicine 35 (2) (2008): S116-S123.
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