This post is part of the Science Tuesday feature series on the USDA blog. Check back each week as we showcase stories and news from the USDA’s rich science and research portfolio.
Economic Research Service (ERS) economists may not wear trench coats and fedoras, but we are investigating significant developments affecting rural America. In a new book, Rural Wealth Creation, which I co-edited with Bruce Weber, Tom Johnson, and Matt Fannin, we examined the role of wealth, which includes physical, financial, human, natural, social and other forms of assets, in achieving sustainable rural prosperity.
Strong communities depend upon strong local and regional economies, and prosperous local and regional economies depend on the creation, retention, and distribution of wealth, broadly defined. Wealth contributes to people’s well-being in many ways beyond increasing income. For example, many forms of wealth can provide resilience in tough economic times or enhance the ability of rural people to pursue innovative new opportunities.
Rural communities across the United States lose wealth due to a variety of factors. For example, when people leave their communities to pursue opportunities in metropolitan regions, they take with them knowledge, skills, and labor resources that might have otherwise been reinvested in the rural setting. Research shows that creating and retaining wealth in rural areas is essential for achieving sustainable and broadly shared rural prosperity; one of USDA’s strategic goals. So how do communities retain and grow their wealth?
We don’t have all the answers yet, but we are working towards solutions. Creating and maintaining a broad portfolio of wealth may be central to sustainable rural prosperity. Physical infrastructure, natural amenities, and human and social capital can attract people and businesses to rural areas. As reported in Amber Waves, communities are developing wealth creation plans to match their own needs and resource requirements.
USDA administers wealth creation strategies such as providing small business loans and housing assistance and managing rural conservation programs to promote rural prosperity. Since wealth is an important gauge of rural economic well-being, understanding how wealth is changing and is distributed helps community leaders and federal policymakers manage and evaluate these programs and their alternatives. We still don’t fully understand how to achieve wealth creation or how to measure it in all rural contexts, but ERS researchers and their university-based colleagues are working to fill the information gaps.
No wealth creation strategy will work in every situation. Rural regions and communities benefit from being able to identify strategies best suited to their own means and priorities. Rural Wealth Creation proposes a new framework for measuring wealth and for understanding and classifying different rural wealth creation strategies, the factors affecting them, and their implications.
Rural Wealth Creation is an outgrowth of the 2011 National Conference on Rural Wealth Creation and Livelihoods, co-convened by ERS and the Ford Foundation, and supported financially by a grant from the National Institute for Food and Agriculture and by the Ford Foundation. The related ERS report, Rural Wealth Creation: Concepts, Strategies, and Measures, was released in March 2012 on the ERS website.