According to the U.S. Census Bureau, approximately 20% of Americans live in rural areas. Compared to urban areas, rural areas face unique challenges brought on by lower population density, limited access to markets and services, and often disparate access to education and technology. Rural economic development requires a holistic approach that addresses these challenges by leveraging the strengths and resources of these areas. There is vast opportunity in the 118th Congress for policymakers to support development in rural communities.
The major components of rural economic development can be broadly categorized into three areas:
1. Infrastructure Development: Rural areas too often lack critical infrastructure, like transportation networks, energy systems, broadband infrastructure, and water and sewage systems. The development of this hard infrastructure can help attract businesses and industries to rural areas, creating job opportunities and economic growth. Congress can support rural infrastructure development by continuing to provides appropriations for rural transportation projects, investing in rural broadband access, and funding water and sewage system improvements.
2. Human Capital Development: A skilled and educated workforce is essential for economic growth in rural areas. Rural residents often face challenges in accessing quality education and training programs, which can limit their employment opportunities. Many rural communities don’t have individuals with the expertise necessary to plan and implement infrastructure or development projects. The Economic Development Administration (EDA) provides funding for planning, workforce development, innovation, and technical assistance. Congress should reauthorize the EDA and codify well-funded capacity building programs.
3. Business and Entrepreneurship Assistance: Rural areas often lack a diverse range of industries and businesses. Encouraging entrepreneurship and supporting small businesses can help to diversify rural economies, create job opportunities, and boost economic growth. In addition to the EDA’s grant programs that support innovation and workforce development, the Small Business Administration (SBA) has a series of financing options available to grow rural businesses.
There are also there several more specific areas that can support development in rural areas, including:
1. Agricultural Development: Agriculture is often a critical industry in rural areas. The USDA has an extensive list of programs that support agricultural (as well as non-agricultural) development. This year’s Farm Bill will be a major opportunity for rural America. Congress can bolster agricultural development by providing robust appropriations for the USDA and its agriculture-specific development programs.
2. Tourism Development: Rural areas often have unique natural and cultural resources that can attract tourists to spur economic activity. The American Rescue Plan Act dedicated $750 million in direct and competitive EDA grant money for travel, tourism, and outdoor recreation projects. Demand for additional funding to support rural tourism marketing programs, investment in outdoor recreation infrastructure, and the development of rural tourism clusters remains extremely high.
3. Energy Development and Transition: Rural areas are often better positioned to harness nearby natural resources for energy production. At the same time, reliance on a single resource for growth and prosperity may be ill-advised as industries shift, particularly towards increased use of renewable energy. Congress can support development in rural areas by providing funding for energy projects, offering tax incentives for renewable energy development, and providing resources to upskill workforces and diversify local economies.
Congress and the Administration can play a vital role in supporting rural economic development by providing funding for critical infrastructure projects, investing in capacity building, supporting business development, and implementing strategies to support agricultural, tourism, and energy development. By taking a comprehensive approach to rural economic development, Congress can help create jobs, boost economic growth, and improve the quality of life for rural residents.