overview
The
manufacturing industry, and increasingly, the leisure and recreation
industries, have become mainstays of the U.S. rural economy in the 2000s.
The growth in the service and retail industry in rural areas since the
1980s has received considerable attention, but manufacturing has now
moved to the forefront, directly accounting for nearly a quarter of rural
private-sector earnings in 2001. In some areas of the United States,
the more traditional sectors—agriculture, forestry, and mining—remain
important parts of the economy.
During the 1990s, globalization and the
spread of new information technologies transformed what and how industries
produced, and where they were located.
Would rural manufacturers be able to remain competitive with their
suburban and urban counterparts as this transformation occurred? More overview...
contents
features
Understanding Rural Population
LossOne in four rural counties lost population between 1990
and 2000. Declining farm employment is often cited as the reason. But
ERS research suggests that the drawback for such counties is less
their agriculture than their remoteness and thin settlement, coupled
with
their lack of natural amenities. Labor pools are too small for manufacturers
to find the type of labor they need and areas without varied topography,
lakes or ponds, and a pleasant climate attract few retirees or outdoor
recreation enthusiasts.
Local
Context and Advanced Technology Use by Small, Independent Manufacturers
in Rural Areas—Research
and policy literature suggests that small manufacturing plants that are
imbedded in local clusters of similar and closely related firms are more
competitive than more isolated plants. This study, based on
the ERS Rural Manufacturing Survey, finds that the adoption of new technologies
and management practices by small rural plants is associated with workforce
education, location in the West, and location in counties high in manufacturing
diversity. However, adoption is not associated with the presence of local
supplier and customer linkages. The results may reflect the relative
attractiveness of areas to skillful entrepreneurs as much as the influence
of location on adoption of advanced technologies and practices.
Skills, Fexible Manufacturing Technology, and Work Organization—The
modernization of manufacturing has included much greater use of computers;
increased interaction among and between production workers, professional staff
and management; and greater reliance on the problem-solving ability
of all workers at a plant. An analysis using the Rural Manufacturing
Survey
confirms that rural manufacturing plants using advanced technology
and high-performance management practices have greater demand for workers
with computer, problem-solving and interpersonal communication skills.
The analysis also identified increased demand for traditional academic
skills (e.g., math and reading). Developing this complement of “new
basic skills” in the rural workforce will likely be a requirement
for retaining modern manufacturing jobs.
recommended readings
Issues in Rural Manufacturing (Includes
summary report as well as reports on various related issues)This
series of reports based on the ERS Rural Manufacturing Survey examines
the adoption of new computer technologies and management practices, increases
in skill requirements, barriers to competitiveness and use of business
assistance. Access to skilled labor is the primary problem reported by
rural (and urban) manufacturers, far outranking problems of access
to
technological knowledge, capital, or customers and suppliers.
Value-Added IndustriesThis
collection of articles from Rural Conditions and Trends covers
trends in employment, earnings, local linkages, capital investment, and
exports of industries that add value to farm and forest products beyond
the farm gate by processing, refining, manufacturing, transporting, grading,
assembling, packaging, and delivering products in a form that satisfies
consumers' wants.
See all recommended readings...
recent research developments
New Economy Manufacturing
Meets Old Economy Education Policies in the Rural SouthHistorically,
manufacturers shifting to the rural South have sought low cost labor
and
low taxes. Labor skills have not been an issue. Rural manufacturers in
located in Southern counties with substantial manufacturing are less
likely
than other manufacturers to cite State and local taxes as a major problem.
But taxes help pay for schools, and expenditures per pupil are much lower
in these manufacturing counties. New manufacturing technologies are tending
to raise labor skill requirements, which may make these same counties
less attractive to manufacturers in the years ahead.
questions and answers
related briefing rooms
related
links
American FactfinderStatistical
information from the 1997 Economic Census about businesses in all nonfarm
industries.
USDA Rural
Business and Industry ProgramsLearn about USDA loans and grants
for rural business development.
See all related links...
for more information, contact:
David McGranahan
web administration: webadmin@ers.usda.gov
page updated: December 18,
2003
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