John D. Welty

English

Research Papers in Economics

T
his article is a synthesis of some of the 
findings of this conference. Together with
our experiences in central California, I
believe we have provided some rich and enlightened
thinking about how key institutions can work
together to build a new economy in rural regions.
As we begin to think about this daunting issue, it
is important to recognize Seth Godin’s statement:
“The first 100 years of our country’s history were
about whom could build the biggest, most efficient
farm. The second 100 years were about the race to
build efficient factories, and the third 100 years are
about ideas” (Godin, 2000).
OPPORTUNITIES FOR RURAL REGIONS
Based upon what has been presented at this 
conference, and my experience, I would like to 
suggest that the following seven key components are
important to seize the opportunities, which are 
available to rural regions: the importance of place,
involvement in the rural region, building an 
entrepreneurial culture, spirit of collaboration and
cooperation, financial investment, strengthening
infrastructure, and alignment with regional goals.
The Importance of Place. Place does matter. How-
ever, more importantly, as Doug Henton points out,
it’s the “quality of place that matters.” Places need to
be distinctive and characterized by quality of life,
innovation, and an entrepreneurial culture. It also
pays to be hip and able to move fast (Henton, 2003).
Certainly, the presentations on northeast Minnesota
and Austin, Texas, reaffirm the importance of place.
Involvement in the Rural Region. It is essential to
have an institution of higher education involved in
the rural region. The actual existence of a college or
university is not sufficient alone. It is essential that
the college or university is fully engaged as Jischke
points out. As described by Jischke, engaged means
that there is a two-way flow of ideas and informa-
tion between the college or university and the region
(Jischke, 2004). It is also important to recognize
that a community college, regional university, or
research university can play a unique role. 
If a region does not have a research university, the
regional university can play a significant a role, but it
does require the regional university to access research
and ideas, which can play a key role in the region.
Obviously, we have seen the northeast Minnesota
example to demonstrate that community colleges can
play a major role. As the Milliken Institute points out:
“The single factor with the greatest power to explain
differences in per capita income between states is the
percentage of college graduates” (DeVol, 2002). This
is also true of regions.
Building an Entrepreneurial Culture. Building an
entrepreneurial culture in the region is essential.
This culture must exist in the private and the 
public sector. The local institution of higher 
education should play a major role in teaching
entrepreneurial principles and in encouraging
entrepreneurial behavior. The entrepreneurial
Overview Panel Comments
John D. Welty
137138 John D. Welty
approach taken in Austin, Texas, by the public 
sector included the use of bonding authority, tax
abatement, special agreements, and tax policies. 
Building a Spirit of Collaboration and Cooperation.
A spirit of collaboration and cooperation is 
essential. The importance of collaborative efforts
needs to be recognized and embraced by a region.
This approach may seem self-evident, but it is often
lacking, especially in rural areas where rugged 
individualism is often a strong value.
Financial Investment.A financial investment must
be made in the region if efforts to transform the
region are to be successful. These investments can
come from government, foundations, private 
support, or from a combination of sources. A region
must be creative as it seeks the support it needs to
launch a transformational effort. Without sufficient
investment, almost all efforts will fail. 
A key ingredient in obtaining an investment is the
willingness of government to modify existing pro-
grams or waive certain requirements. For example,
workforce investment funds should support training
of entrepreneurs. Finally, investments must be made
in the nonprofit sector. This investment is essential
in poor communities.
Strengthening Infrastructure. The leadership, 
organizational, and economic infrastructures of a
region must be strengthened. Leadership in rural
communities is often unstable, unskilled, and in
short supply. Steps must be taken to develop and
identify leadership. While key leaders may be college
or university presidents, chamber executives, and
CEOs, it is also important to identify other talent in
the region. Positional leadership is important, but 
talented leadership is more important.
Organizational infrastructure is very important.
In almost all of the examples we learned about there
was one or more organization that was capable of
supporting or initiating efforts. The strength of the
nonprofit sector is also important.
Finally, attention must be paid to the economic
infrastructure. This infrastructure includes informa-
tion technology, industrial space, water capacity, and
other support mechanisms, such as workforce devel-
opment, financial capital, and small business support.
Alignment with Goals. The region’s educational
and training system must be aligned in support of
the region’s goals. Often there is not curricular align-
ment within the educational and training systems,
much less alignment with the region’s goals and
aspirations. Alignment is not an easy task because
of the myriad of districts and the overabundance of
state regulations in place.
As we address new mechanisms and policies for
supporting the development of rural regions, it is
essential that the above components be in place in
order to begin the transformation of a region.
TRANSFORMATION OF CENTRAL CALIFORNIA
The following is a brief summary of the transfor-
mation, which has begun in central California. This
region is home to more than three million people,
is the world’s most productive agricultural region,
and has some of the highest unemployment rates
and lowest educational attainment rates of any state
in the nation.
In the early 1990s, Fresno State consciously
adopted a vision to become known as one of the pre-
mier interactive universities in the country. The uni-
versity community also set a goal to work with the
region to transform the entire area. The initial task
was to get the region to begin thinking of itself as a
region. Through the Central California Futures
Institute in Fresno, Calif., and later the Great Val-
ley Center, in Modesto, Calif., efforts were under-
taken to gather the data necessary to describe the
region. This description was followed by efforts tobegin visioning for the future and encouraging
awareness about the region’s future.
Simultaneously, work was under way within the
university to build a program in entrepreneurial
studies, launch a business incubator, and develop
key centers and institutes around problems in the
region. In addition, work began to link the univer-
sity much more closely with the school districts
within the region. More importantly, the university
culture began to change as faculty sought ways to
get involved with the region and efforts were made
to reward faculty behavior for such involvement.
After several years of effort, the region’s business
leadership began to understand the importance of
regional thinking and behavior, and efforts began to
flourish within the business community. The most
significant effort was the development of the Fresno
Business Council, which is an organization of 125
chief executive officers. Among the initial efforts of
the council was the adoption of a set of community
values. These values included:
• Stewardship;
• Boundary crossing and collaboration;
• Commitment to outcomes;
• “Art of the Possible” thinking;
• Fact-based decisionmaking;
• Truth telling;
• Power parity;
• Commitment to resolving conflict; and
• Asset-based approach.
The next step was the development of a partner-
ship between the Fresno Business Council and
Fresno State to create the Collaborative Regional 
Initiative (CRI). The CRI was designed to bring
together the best talent available to craft a compre-
hensive plan for the region. Several task forces were
created to address particular issues, which included
technology infrastructure, innovation, economic
development, education, and nonprofit sector, to
name a few. The work of the CRI was financially
supported by the university, the Fresno Business
Council, and the Irvine Foundation.
As the CRI was unfolding, the newly elected
Fresno mayor sought the help of business leaders to
examine how local government could be trans-
formed. The work of this group concluded that if
the city continued on its present course, it would
only be able to fund police services and nothing else
by 2008. Clearly, the cycle of unemployment and
poverty had to be broken.
Discussions between CRI leaders and the local
government led to the conceptualization of the
Regional Jobs Initiative. The Regional Jobs Initia-
tive seeks to create 30,000 jobs over the next five
years by consciously building clusters of economic
growth around the assets of the region that can be
further developed.
The university is convening leaders from nine sec-
tors and seeking to determine how these sectors can
grow and expand. The most advanced sector to date
is the water technology cluster. The region includes
approximately 70 to 80 firms, employing 6,000 peo-
ple in this sector. As industry leaders came together,
they identified the need for help in certifying their
products, with research and development, and train-
ing of prospective employees. This group of water
technology leaders has agreed to create an Interna-
tional Center for Water Technology, which will be
located on the Fresno State campus. More than $10
million dollars has been raised through federal gov-
ernment, earmarks, state government, and the 
private sector. The first initiative to create a certifica-
tion facility will be completed by next year. In the
Overview Panel Comments 139meantime, the university is building its faculty
strength in this area, as we plan to launch a research
and development effort in water technology.
Other clusters are under way, but they are not yet
as advanced. The university has recently partnered
with the National Institute for Strategic Technology
Acquisitions and Commercialization (NISTAC),
located at Kansas State University in Manhattan,
Kan., to access patents. The patents may be avail-
able to link with these clusters and help them to
advance new technology transfer.
The next major task of the region is to align the 
educational and training systems. This alignment
project is a huge task because the region serves diverse
students who speak more than 100 languages or
dialects. Already, an innovative high school has been
launched as a cooperative effort between the Fresno
and Clovis districts, which offers a project-based cur-
riculum. The school—which is known as the Center
for Advanced Research and Technology (CART)—
has been enormously successful to date and has
become a national model.
POLICY IMPLICATIONS
As business and education leaders and public 
officials consider these components, there are some
key public policy issues, which should be addressed
to help support the transformation of regions.
These issues are:
1.  State governments should encourage regional
universities to conduct applied research and
technical assistance for the regions they serve.
This is especially true in cases where a region is
not served by a land-grant university. The Mid-
south Partnership for Rural Community Col-
leges (Mississippi State University) is a good
example of what can be accomplished by land-
grant universities who seek to address the needs
of the region they serve.
2.  State and federal governments must be willing
to address regions as regions. It is imperative
that state and federal agencies work together to
determine how programs can be assimilated
and integrated to help address regional 
problems. Existing programs may need to 
provide waivers to some regulations in order for
a program to help the region.
3.  Public policy must encourage private-sector
investment in regions of need. For example,
there should be inducements for private 
enterprise to expand broadband width in rural
regions. Public policy must support innovation.
Methods for providing incentives to regions to
promote innovation and related activities
should be examined.
CONCLUDING DISCUSSION
Several steps are necessary for building a new
economy in rural regions. Recognizing and seizing
opportunities in a systematic and deliberate way,
looking at current models in place, and under-
standing and pursuing policy initiatives are all
essential in the transformation process. This process
is not easy or without complications. However, with
collaboration and cooperation of education and
business sector leaders, enlightened thinking may
be the pathway to realizing success
140 John D. WeltyDeVol, Ross. 2002. The Milliken Institute Review. 
Fresno Business Council. 2001. Community Values of the Fresno
Region. 
Godin, Seth. 2000. Fast Company. 
Henton, Doug. 2003. “Collaborative Economics.” Speech
delivered to the Coalition of Urban and Metropolitan 
Universities, Ypsilanti, Mich., September 2003.
Jischke, Martin. 2004. “Discovering a New Indiana Economy:
The Role of Higher Education.” Paper presented to the New
Governance for a New Rural Economy conference, hosted
by the Federal Reserve Bank of Kansas City, Kansas City,
Mo., May 2004. 
Overview Panel Comments 141
REFERENCES

Overview panel comments : new governance for a new rural economy : reinventing public and private institutions

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Overview panel comments : new governance for a new rural economy : reinventing public and private institutions

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