ACHIEVING TARGETED, SUSTAINABLE ECONOMIC DEVELOPMENT THROUGH THE AREA SECTOR ANALYSIS PROCESS (ASAP)

by Dr. Don E. Albrecht, Logan, Utah

Historically, the residents of rural areas have been economically disadvantaged relative to their urban counterparts. In rural areas, incomes have been lower, poverty rates higher, and unemployment more extensive. These economic concerns have become even more pronounced in recent decades as the number of jobs in agriculture, the natural resource industries, and manufacturing, traditionally the primary employers of rural workers, have declined (Albrecht 2014).

Despite these concerns, opportunities abound for rural residents and communities. However, a vibrant 21st century economy is very different from the successful economies of previous eras. Characteristics of a vibrant and resilient 21st century rural community may include (Albrecht et al. 2016):

  • A Technological Economy – Employment in resource-based industries and manufacturing have declined, primarily because technology has resulted in machines replacing human labor in the production process. Consequently, efforts to develop these industries are likely to yield relatively few new jobs. At the same time, service-sector employment has increased substantially. Furthermore, opportunities exist in rural areas that were simply unavailable in the past. Thanks to improved information and communication technology, many high-quality jobs have a much greater degree of geographic flexibility than in the past. Many individuals, families, and firms can establish their homes and businesses where they wish and still be connected to the necessary markets and consumers with the use of the internet. Thus, to have a vibrant 21st century economy, the utilization of modern information and communication technology is essential.
  • A Diversified Economy – Communities heavily dependent on a single industry are greatly impacted by the unique quirks of that industry. While amenities, energy, or the resource industries can provide an economic base, a vibrant and resilient community must have significant employment in other sectors that provide stability and offset the problems associated with any particular industry. Rural economic stability and growth are positively associated with economic diversity (Wagner and Deller 1998). Furthermore, beyond the diversity of one’s own community, the economic diversity of the surrounding region has been shown to confer stability and reduce unemployment; providing further evidence for the need for communities to work together to create diversified regions (Deller and Watson 2016).
  • Local Ownership and Control – Many communities are dependent on jobs provided by large corporations with headquarters outside of the community. Under these circumstances, profits are immediately transferred to corporate headquarters, and decisions about whether to close the business or move to another community are based on profitability without consideration of local impacts. In contrast, profits from locally-owned businesses stay in the community and the owners are committed to the local community and are more willing to ride out economic highs and lows (Rupasingha and Goetz 2013).
  • Value Added – The most fundamental aspect of economic growth involves taking resources and rearranging them in ways that make them more valuable. For example, raw materials such as wheat and trees are transformed into bread and furniture. Traditionally, rural communities have produced the raw materials that were then exported and the value added provided in other communities. These other communities then received the major economic gains. By developing value-added industries, jobs are created and a much higher proportion of economic benefits remain local. Increasing value added takes entrepreneurship and investments in human capital and technology to convert commodities into creating value-added products.

There is much that communities can do to address their economies and to achieve the goals described above.  Specifically, many rural communities have initiated or strengthened their economic development activities through a strategic planning process. To assist communities to achieve targeted, sustainable economic development, a team of community development specialists from throughout the Western United States created the Area Sector Analysis Process (ASAP) as a strategic planning process. ASAP consists of three major inputs:

  1. The preferences and goals of community residents obtained by a survey of local residents.
  2. The quality and quantity of local assets obtained from an assessment of the presence or absence of critical assets.
  3. The needs and requirements of industries and businesses obtained by surveys of a wide range of industries and businesses from throughout the nation.

Utilizing these three sets of inputs, the ASAP model (run at the University of Nevada-Reno) produces outputs that identify industries that are both desirable to community residents (as determined by the goals survey) and compatible with industry needs (as measured by the relationship between community assets and industry needs). ASAP can aid communities in both short-term and long-term planning. For the short-term, by identifying industries that are both desirable and compatible, the ASAP model provides a list of industries where development efforts can begin immediately. ASAP can also guide long-term planning by providing a type of “gap analysis,” making it apparent which missing assets are responsible for the community’s incompatibility with certain otherwise desirable industries. This information can then guide officials in planning, targeted capital investments, and infrastructure development. As important as ASAP is in helping identify desirable and compatible industries, it is equally vital in helping communities understand which industries will not work and why. This knowledge can save considerable time and resources by helping the community avoid pursuit of industries that don’t fit in their community or that bring only limited benefits.

The ASAP model has been used or is currently underway in a number of communities throughout the Western United States. In some communities, the process has been completed with enough time to allow results to become evident. In other communities, the process has been recently completed and plans developed, but results are not yet apparent. In still other places, the process is currently underway or planned.

ASAP Plans Implemented

Butte/Anaconda, Montana

At one time, this area of Montana was among the major mining regions of the world. With mine closures, the region entered an era of sharp economic and demographic decline. In an attempt to reverse these declines, the communities embarked on the ASAP process led by Barbara Andreozzi of Montana State University Extension. The ASAP process revealed the region had significant transportation advantages due to their location at the intersection of Interstates 15 and 90. The development of industries to support trucking and other transportation sectors was both desirable for community residents and compatible with industry needs. Development efforts resulted in a number of new transportation-related businesses being established and jobs created. Additionally, while working on economic development plans, the community made substantial progress in cleaning and upgrading their downtown.

Colorado River Region, Arizona, and Nevada

South of Las Vegas, where the Colorado River forms the border of Arizona and Nevada, an ASAP process was undertaken. This area includes the cities of Laughlin, Nevada and Bullhead City, Arizona. The communities were struggling partly because of the closure of a major coal-fired power plant. The ASAP process led by Buddy Borden of the University of Nevada-Reno Extension revealed significant opportunities for solar power development. The amount of sunshine in this desert region is extensive, and power lines already exist because of the power plant. Great success has been achieved in both generation of solar power and the manufacture of products used in solar power generation.

ASAP Analysis Completed

Wayne County, Utah

Wayne County is a remote county with a small population. Like other small counties in similar circumstances, the county has experienced problems associated with the loss of their primary employment base, an aging population, wages well below the state average, and an inability to keep significant proportions of young people at home. The county does have significant assets including fast Internet and high-quality amenity resources as the county is home to Capitol Reef National Park and portions of Canyonlands National Park. Utilizing ASAP model results (all ASAP programs in Utah are directed by Marion Bentley of Utah State University Extension and Don Albrecht of the Western Rural Development Center), the county’s economic development plan focuses on three sectors that take advantage of their assets while being desirable to community resident. The targeted sectors include (1) Internet-based industries, (2) tourism and outdoor recreation, and (3) niche agriculture. Efforts are currently underway to develop these sectors.

Grand County (Moab), Utah

As the gateway to Arches and Canyonlands National Parks, Moab has become internationally recognized as a recreational mecca. The community, however, is concerned because many of the jobs that have been created in the booming tourism sector are low pay and seasonal. The community desires more high-paying year round jobs to supplement the tourism economy. The recently completed ASAP analysis reveals extensive opportunities in the manufacturing sector, especially the provision of supplies for the local recreation economy. The community is currently finalizing plans and then will proceed with efforts to implement these plans.

ASAP Process Underway

Valley County, Idaho

This area in the mountains of Idaho has experienced declines in logging and mining, traditionally the most significant economic endeavors in the area. The area does have substantial amenity resources, but residents are concerned that over-dependence on tourism will generate an overabundance of low paying, seasonal jobs. Seeking a needed economic boost, ASAP is being implemented under the direction of Melissa Hamilton and Paul Lewin of the University of Idaho Extension.

Cibola County, New Mexico

Located in Northwest New Mexico, Cibola County was part of a multi-county region that implemented the Stronger Economies Together (SET) program. SET is a partnership between USDA Rural Development, the Regional Rural Development Centers and Extension. In this case, ASAP is being utilized by Michael Patrick of New Mexico State University Extension to supplement the results generated by SET.

Escalante, Utah

Located just over the mountain from Wayne County, Escalante (in Garfield County) faces similar issues. Of special concern in this extremely isolated community is the seriously declining school enrollments. ASAP is currently being implemented to seek to address these issues.

Lewiston, Utah

Lewiston is a farming community in metropolitan Cache County, Utah, about 25 miles from the county seat of Logan. Lewiston has implemented ASAP in an effort to attain economic stability while maintaining their identity as a farm community.

ASAP Process Planned

Sevier, Sanpete, Juab, Millard and Piute Counties, Utah

These five counties are part of the Six County Association of Governments that also includes Wayne County. The ASAP analysis will be conducted in each county independently, and then an overall regional analysis for all six counties combined will be provided.

Conclusions

The ASAP regional team continues to seek ways to improve the model so that it becomes even more useful for the communities involved in the process. Future improvements include practical guidance on targeted capital investments tailored to a specific community and analysis of current unexploited competitive advantages and well as potentials to cultivate new competitive advantages. The ASAP team seeks financial partners to cover the costs of implementation and to make the process more affordable. For example, implementation of ASAP in multiple counties in Utah has been made possible by financial support from the Utah Governor’s Office of Economic Development, the Economic Development Administration of the Department of Commerce, and Southern Utah University.

Online Resources

Dr. Don Albrecht began his role as the Director of the Western Rural Development Center in July 2008. He received a B.S in Forestry, an M.S. in Sociology from Utah State University and a Ph.D. in Rural Sociology from Iowa State University. He then served as a member of the faculty at Texas A&M University for 27 years where he worked in the Departments of Rural Sociology and Recreation, Parks, and Tourism Sciences. He has researched and written extensively on the issues confronting the communities and residents of rural America. Among the issues explored are natural resource concerns, economic restructuring, demographic trends, poverty, inequality, and education. His most recent book publications include Our Energy Future: Socioeconomic Implications and Policy Options for Rural America (2014) and Rethinking Rural: Global Community and Economic Development in the Small Town West (2014). 

References

  • Albrecht, Don E. 2014. Rethinking Rural. Pullman, WA: Washington State University Press.
  • Albrecht, Don E., Marion Bentley, Roger Coupal, Wes Curtis, Ashley Kerna, Malieka Landis, Julie Suhr Pierce, and Duane Williams. 2016. Building a Vibrant and Resilient 21st Century Rural Economy. Western Policy Brief (3), Western Rural Development Center.
  • Deller, S. and P. Watson. 2016. Did Regional Economic Diversity Influence Effects of the Great Recession? Economic Inquiry 54(4): 1824–1838.
  • Rupasingha, A. and S. Goetz. 2013. “Self-Employment and Local Economic Performance: Evidence from U.S. Counties.” Papers in Regional Science 92: 141-161.
  • Wagner, J. and S. Deller. 1998. “Measuring the Effects of Economic Diversity on Growth and Stability.” Land Economics 74(4): 541-556.

Published March 2017

Paul Moberly