Economic Development Strategies to Improve Stability

Community-driven economic development is essential to enhancing economic stability, a key social determinant of health (SDOH) in rural communities. Economic development projects in rural communities typically focus on increasing employment opportunities and improving financial well-being of residents, which in turn can positively influence health and well-being. One approach to economic development involves a holistic perspective that focuses on other SDOH contributing to economic stability, including housing affordability and educational opportunities.

Several strategies can support economic development:

Building and supporting a culture of entrepreneurialism
Strengthening small businesses
Strengthening arts and culture within communities
Engaging the community in the development process

Strengthening the workforce and building human capital, as well as asset-based community approaches can also support economic development in rural communities. For more information about programs that use these strategies, see the sections on Workforce Development and Human Capital and Asset-Based Community Development.

Strengthening Entrepreneurship and Small Business Growth

Many rural communities incentivize business growth by providing financial assistance to new small, local businesses. Research suggests that building and supporting a culture of entrepreneurialism is an effective economic development strategy for rural communities. Small, local businesses are often more likely to invest in their communities and donate to local causes. They also provide employment and can serve as an incentive for young graduates to return to rural areas to work. Some programs that support entrepreneurship in rural areas provide funding in the form of loans to help new businesses get started. Other programs may provide training and business planning support.

Community Development Financial Institutions and Economic Development

Community Development Financial Institutions (CDFIs) support rural economic development by improving community access to financial services and products. They provide loans to support small, local businesses, directly contributing to economic growth and addressing SDOH. As community banks continue to close in rural areas, CDFIs fill this gap by providing necessary capital. For example, CDFIs can help fund improvements to local food systems, support the development of transportation systems, and offer loans to strengthen local businesses, enabling communities to implement various economic development strategies.

Place-Based Economic Development to Improve Economic Stability

Place-based economic development strategies highlighting rural communities' distinct strengths and assets offer a promising approach to achieving economic stability. One innovative method is creative placemaking, which involves community planning and development efforts emphasizing the importance of arts, local values, and culture for improving well-being. Increasingly, the arts are recognized as a catalyst for improving community life across the country, especially in rural places.

In some rural communities, residents are using arts, local history, and traditions to drive changes in their social and economic environment. Communities can explore their unique local characteristics and focus efforts on building these assets. For example, communities may organize festivals, art shows, or other events that bring in local talent and, as a result, can increase tourism while also providing short-term employment opportunities. Other examples include initiatives for renovating abandoned buildings, outdoor spaces, natural landmarks, or monuments to serve as venues for local art exhibitions, community events, or gathering places. These renovations not only provide spaces for artists to sell their work but also help restore and improve the physical environment.

Examples of Rural Programs Focusing on Economic Development to Address SDOH

The Allendale Broadband Pilot Project brought together a cross-sector collaborative with partners from state and local government, school districts, and corporate entities. The pilot helped increase access to broadband infrastructure in rural Allendale County, South Carolina. Key projects included establishing public Wi-Fi hubs at community locations and residential Wi-Fi access in approximately 1,000 homes. The broadband access will help rural students access distance learning opportunities.
The MAY Coalition is a nonprofit organization that provides capital and low-interest loans for businesses to help improve employment rates in rural North Carolina. By providing loans to local businesses in rural counties, the MAY Coalition aims to support the ability of these businesses to employ more workers and improve the economic outlook of the area. The MAY Coalition loan program has helped support the growth of entrepreneurialism in rural North Carolina.
The Southern Rural Development Center is expanding economic development opportunities and focusing on strategies that have been shown to work in rural Southern regions. Their work emphasizes supporting and sustaining entrepreneurship, business expansion, and business retention.
The Small Towns Partnership managed by the Hope Enterprise Corporation (HOPE) provides community and economic development training and technical assistance to rural towns in Mississippi. The Partnership aims to improve economic development and stability for residents in these towns.

Implementation Considerations

Community-driven economic development emphasizes community involvement and leadership, ensuring that the process is community-led. Programs that focus on rural community economic development should consider implementing several important strategies:

Developing a strategic plan to identify community goals and vision
Assessing quality of life of residents
Assessing the capabilities of community leaders to drive change
Creating ways to promote entrepreneurialism and economic growth
Involving everyone in the process to build a sense of community

Fostering community involvement also involves building cross-sector partnerships. Partnerships across multiple services, such as business, housing, and planning, can be essential to successful community economic development. Rural program leaders should consider developing relationships during the beginning stages of program creation and initiation. Engaging partners throughout the implementation and evaluation process can help increase buy-in and demonstrate that all parties are working towards the same mission.

In addition to partnerships, best practices for economic development in rural Appalachian communities include leadership development, support for entrepreneurship, community engagement, and investment in education, technology, infrastructure, and broadband.

Specific strategies may include, for example, improving tourism, expanding transportation services, and small business development. While these strategies can create positive change, they also can present several challenges for implementation. For example, transportation improvements often require coordination with other sectors, such as education and community planning. It is also important to engage residents and secure buy-in for these efforts.