First National Conference on the
Future of Australia's Country Towns
The Regional Institute

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The Importance Of Rural Development In The 21st Century - Persistence, Sustainability, And Futures

John W Keller

Professor, Kansas State University


The purpose of this presentation is to define the role rural areas and country towns play in the persistence of, or often times regrettably, the dissolution of local character and place. The observations contained in this presentation apply to most types of rural areas in many different locales. The central argument of this work is that wherever viable rural settlements exist, the government, professional planners, and inhabitants within must focus their energies on the immediate place - they must make the word "local" mean something if we are ever to be successful in the retention and sustenance of "local community." A rural development doctrine must, if it is to be effective, give deeper and more concentrated thought to the role of local rural place as we seek to find solutions to the ongoing problems of population imbalance and the dissolution of the countryside.

Because these two assumptions are decidedly "counter cultural," they will appear to many as impractical [Theobold, 1997]. "All of us know," for example, that people prefer to live in cities because there are more opportunities, services, and great personal fulfillment. "Everyone knows" that successful business and economic development must stay focused on metropolitan locations to maximize transportation and labor costs. "Everyone knows" that many of our small towns and villages are in distress and that even though the unsettling of the countryside may be a national tragedy, it amounts to no more than a natural process that will continue to occur over the next century.

Defining Rural

There are many ways to define areas that are "rural." Although the general idea of specifically conceptualizing "rural" areas came into use in the 1920s with its basis in sociology, many, if not most, of the current explanatory frameworks evolved to provide guidance for the distribution of government monies or to perform a census of places and people. As a corollary to these classification systems, there persists the traditional assumptions that tend to go along with the word "rural," assumptions that are often ungrounded and at best belie the diversity inherent in areas typically grouped together as "rural" or "nonmetropolitan." For instance, it is a commonly held belief that farming is a mainstay of most rural economies. In fact, fewer than one-fifth of rural counties in North America now have a significant economic dependence on farming, and the 20% of nonmetro counties that have farming as their principal economic base contain less than 10% of the nonmetro population (Deavers, 1992). Moreover, the geopolitical boundaries that usually serve as the basis for these classifications often are not optimal.

The Urban - Rural Imbalance

Since 1950 it should be clear that metropolitan settlement structure leading to urban conglomerations is the dominant growth form of the world. Metropolitan areas will account for 70 percent of the net growth in world population during the 1990s - an additional 67 million people every year. Other than natural increase, the prime engine of metropolitan growth is rural-to-urban migration. It is, however, important to note that rural - to - metropolitan trends have changed directions several times in the latter part of the 20th Century. It would appear that change, rather than stability, is the typical demographic and economic situation for most of the world's rural and nonmetropolitan areas at the end of the 20th Century.

The United Nations reports that 43 percent of the world's population lived in urban areas in 1990; a 34 percent increase since 1960. In the next several years (2005), the world will pass a historic milestone: more than half of its population -- or more than three billion people -- will live in cities. At the turn of the century, only 14 percent of the Earth's population called cities home -- and just 11 centers on the planet had more than one million inhabitants. Now there are 400 cities with populations of at least one million, and 20 megacities with populations exceeding 10 million, with a half dozen of them approaching or exceeding the 20 million level. While the developing world still flocks to core cities, much of Europe, North America, the Russian Federation, and Australia are reversing the process: emptiness at the center and growth on the edges - or the new "Edge City" metropolitan areas. At the halfway mark of the 21st Century, more than 70 percent of the world's population will live within the metropolitan framework (an area now loosely defined up to 40 - 100 kilometers from the older urban cores). In most more developed nations, especially in North America and Europe, the urban-rural distribution now stands at 75 - 80 percent metropolitan to 20 - 25 percent rural.

The most common factor contributing to rural-to-urban migration is rural unemployment resulting in part from rural areas having higher fertility levels than urban areas, according to Lori S. Ashford, a senior policy analyst with the Population Reference Bureau (PRB). A shortage of basic technology in rural areas also promotes out-migration and environmental degradation; it has led to a serious shortage of arable land in many communities throughout the developing world. While the growth of cities can contribute to economic progress, the study notes that problems arise when urbanization "occurs so rapidly that it strains the ability of urban governments to provide housing, sanitation, public safety, and other necessary services --- and when there are not enough jobs."

The New Paradigm

The relationship between government and economic development began to change marked during the late 1970's and early 1980's. The beginning of the 1980's saw many less developed countries heavily borrowed and unable to service their debt. The physical plant and infrastructure fashioned in the 1950s and 1960s - often of exceptionally poor quality - created high levels of service costs that even the most developed nations could not bear. Hardest hit were the rural economies and regional settlement patterns resulting in a virtually unabated flow of resources to the metropolitan areas. The final result was the beginning of the demise of the centrally-planned economy and the ushering of the "Age of Austerity." The concept of integrated population and development planning had to be adjusted in light of the changes brought about by this austerity.

Many planners and development analysts regarded the goals of development under austerity as self-evident and non-problematic, seeing the only problems as concerning how to attain them. [Nussbaum and Sen, 1989]. The new paradigm recognized that both the environment and human settlement where open systems and regulated by things happening beyond local and national boundaries - the Global Economy - and greatly affected by natural and human imbalances. In short, the urbancentric view of the world was called into question, especially the prevalent notion that the purpose of rural areas was to provide food, fuel, and cheap workers. The new paradigm not only recognizes the connectivity of the urban - rural spheres, but also addresses the issue of rural vitality. For, unless rural areas are revitalized, the metropolitan centers must ultimately provide the rescue funds and resources to support the countryside. The solution is what we typically call economic development. In principle, the new paradigm called for self-sustaining economic growth and social policy designed to provide the requisites of existence and citizenship. While the former can help provide the fuel for the latter, we must be under no illusion that growth itself will fulfill basic needs.

The New Century Approach To Rural Planning

The most important question to be asked is "are rural areas and country towns sustainable as working and living communities?" Many rural areas have proven to be persistent - they have sustained while both inner city and suburban area have declined in the face of metropolitan spread. The only reasonable conclusion that can be reached concerning this persistence is their diversity. Less than a century ago the rural economy depended almost entirely on resource extraction, agriculture (and support service to agriculture), and fishing.

Economic Diversity

The rural areas that show the most favorable growth and economic strength have their economies based on recreation and tourism. Throughout most of North and South America, Western Europe, Australia, and New Zealand the lure of the natural environment and tourism (place and historicity) are significant parts of their economies. Firms and industries built around the exploitation of amenities show exceptionally strong growth and are a world leader in providing new jobs.

Are rural economies built around tourism and amenities sustainable? Thought on this question is decidedly mixed and generally negative. Tourism, in one form or another is the world's second largest industry. As a whole, this activity mines and extracts wealth in the form of money and exports the final resources to metropolitan areas where the corporations and trusts reside. Tourism is dependent on wealth and increasing affluence - it is not an activity within reach of the world's poor. Thus, there is a closed cycle of events whereby tourism and amenity based economies demand ever increasing affluence and affluence itself is associated with migration to metropolitan areas. Tourism and amenity jobs are among the lowest paying service industries in the world - or what is termed minimum or subsistence wage in most countries. The firms that service the local industries are labor intensive and built around employment in food service, lodging and accommodation, information assistance, maintenance, and service sales to the traveling public. Since most tourism is seasonal, the industry depends on high migration rates based on boom and bust seasons that in turn demand the cheapest labor available. Factors such as poor seasonal weather, higher transportation costs due to both profit taking and increasing costs for fuels can send a local economy into shambles within a short period of time - causing some of the highest unemployment rates in any industry.

Finally, there is the long term (and often conflicting) goal of greater economic sustainability in local areas based on tourism and amenities. The goal is to extend visiting seasons by creating greater opportunity to capture market share of tourism monies. Since 1980 the most popular methods in the western world are gaming or gambling, conventions/meetings, and multiple use recreation (golfing, theme parks, and similar facilities). The controversy over gaming/gambling as a supplement to economic diversity continues in a worldwide debate. Regardless, it has achieved phenomenal rates of return and now appears to be reaching saturation as larger scale enterprises are developed. Wage and salary incomes paid to industry employees are among the highest in rural areas.


Remoteness is the one characteristic that all true rural areas share in common. It is viewed as both an asset and a major liability. Many development specialists and rural sociologists take the stance that remoteness and isolation is an asset. They argue that small structure, vertical leadership, and cooperation are important strengths that contribute to ethic and social identity. Although they acknowledge that interlocal cooperation with regional towns is important, they also counter that individual community ties are the most important process in local development. They imply that to dismiss the importance of local pride, concern, and problem solving capabilities would ignore much of the community's true resource base [Allen, pg. 219].

On the other hand, current economic development practice now strongly encouraged in rural areas promotes inter-community cooperation, assimilation with other communities, and common work towards development. This is based on the theory that small size and remoteness is the major inhibitor of development efforts. Thus, the other side of the problem is how to overcome distance factors in rural areas. In general, remoteness factors are related to four major policy choices in central planning: transportation, critical service deliver, communications, and jobs skills/training.

Communications, more specifically telecommunications amounting to both advanced systems of current technologies, and emerging forms of real time delivery, are predicted by many to be the total planning solution for rural areas. Unlike transportation outcomes, which must overcome place to place remoteness, telecommunications offers the hope of in-place service and need delivery. It is attractive, if for no other reason, because it offers quick and incremental upgrade paths - often at a decreasing marginal costs - rather than enormous sunk costs experienced in transportation and regional development.

The final factor to be discussed, because it serves to impact the cost of remoteness, is job skills/ training. No society or societal sector in the global world can afford to concentrate its educational and development resources solely in metropolitan areas. Yet, decentralization of educational resources and development ranks exceptionally high on the list of major expenditures of any nation aspiring to greater sustainability and vitality. Both public and private systems have responded throughout this century to deliver education, jobs skills, and general training to remote areas - both in-place and through regional centers coordinating with outlying communities. But, it would appear that, even with local self-help and capacity building programs, the delivery of these vital services is reaching maximum effort under present funding and technology.

Lack Of Resources

A lack of basic resources to meet rural residences' needs is repeatedly shown as a major factor in a community's inability to sustain and maintain community identity and commitment. Resources are understood to mean both fiscal (material) and human and therefore most planning solutions employ a two-pronged set of policies designed to increase resource capacity.

Efforts to redirect material resources to rural areas have been ongoing throughout the 20th Century and far out number programs targeted towards urban areas. Worldwide, major efforts include wide-ranging programs such as education (extension), farm and price supports, direct grants-in-aid, revenue sharing, new towns, and health care - to mentioned but a few. No comprehensive assessment of the effectiveness of these programs exists, but few will venture to say that trillions of dollars poured into rural development has not made a difference in the shape of the nonmetropolitan sectors of our countries.

Many rural sociologists argue that it is the scarceness of resources, the need for austerity, and the concomitant appreciation for the assets that do exist that creates the unique blend of community and sustainability thought to be prevalent in the world's nonmetropolitan areas. On the other hand, it is also widely argued that it is the dependence of small communities on others for aid that creates a limited perspective or community vision and a clearly articulated path into the future. Whatever blend of perspective, it is abundantly clear that the request for resources is an all-consuming factor in the life of small communities.

Work Diversity And New Rural Industries

Much of the local economic development (L.E.D.) literature promotes the development of new rural industries (RIs) as one path to a sustainable countryside [Chuta & Liedholm, 1989]. There is little argument that one of the keys to attaining a vital, living countryside is increased job opportunity and quality employment. Although RIs lag behind new service enterprises as the fastest growing component of the rural economy, nevertheless, they play a critically important role in rural economic diversification. However, a minority of rural researchers point to the rise of RIs, specifically in developing regions, as a sign of distress rather than positive rural development.

Tambunan [1995] and others argue that there are two quite different conditions under which rural labor might shift from traditional agriculture, fishing, forestry and extractive pursuits: (a) when labor is pulled or "attracted" out of agriculture into better non-agricultural opportunities; or, (2) when labor is "pushed" or forced out of agriculture by declining employment opportunities into relatively worse RIs (marginal occupations) whose capacity to absorb large quantities is achieved at the cost of extremely low, and possibly declining incomes. The first type of RIs (attracted) are typically run on a more or less stable basis with a business goal of surplus generation and growth using hired labor and a certain degree of technical sophistication. This is in contrast to the second type of RIs which are often seasonal, run with the help of unpaid family labor, using rather primitive technology catering mainly to local markets.

The argument against sustainability and a total planning solution is that a heavy presence of the second type of RIs denotes increasing poverty in the region. Some researchers note, therefore, that the presence of the second type of RIs can only be justified on the basis of their labor intensity and not productivity or income gains.

Building Local Capacity As A Route To Sustainability

Throughout North America, much of Western Europe, Australia, and New Zealand, community generated rural revitalization (generally termed Local Economic Development - or LED) is currently a matter of considerable profile. A prominent feature of this activity is what is termed the process related dimensions of rural LED -meaning that the capacity of individual communities to bring about a better future for themselves depends in no small measure on how well they are equipped in terms of leadership and team related skills.

The root challenge of all rural communities must be the shaping of new strategies responsive to the enduring realities of rural economies and cultural life - high unemployment; persistent poverty; deteriorated social well-being; lower earnings; and diminished health care - as well as changing national and global circumstances. Revitalizing "rural" must include the participation of small communities in search of positive change, whereby local people are encouraged to think more about their futures and to put into practice their ideas for securing those futures. Capacity building, therefore, deals mostly with the ability of local people to solve problems. These process dimension programs seek to bring about change by forging new skills within rural communities related to leadership, mediation and conflict resolution, group processes, understanding the business of government, and the articulation of a shared vision. In the simplest terms, capacity building can be defined as increasing the ability of people and institutions to do what is required of them [Newlands, 1981].

Counterurbanizing The Countryside - Evidence Of Change?

Throughout this century migration flows worldwide follow a recognizable pattern: from rural to urban, from mountains to plains, from undeveloped countries to developed countries. These population flows are marked by diversity, complexity, and change leaving many of the small, remote rural areas in a final stage of disintegration. Thus, population reversal (counterurbanization) has become one of the hallmarks of a sustainable, living rural countryside.

On a worldwide scale, recent literature assesses counterurbanism as occurring throughout much of the world - albeit at very diverse rates [Campsion, 1989; Coppack et al., 1989; Lessinger, 1991]. In truth, the evidence for urban population dispersal is strong while the proof for rural rejuvenation is weak. As noted, the reasons for this phenomena are diverse and complex, and should not be confused with temporary labor migration, but from an overall standpoint there are three controlling factors.

First, it is important to understand that the predominant growth form in the world today - metropolitanism - is undergoing considerable change. Traditional rural communities lying within 65 to 120 kilometers of the metropolitan fringe show a strong propensity to expand in population size and economic diversity. This large sphere of distance influencing surrounding fringe areas, sometimes called penturbia or the component economic area, is quite possible the final wave of spatial development of large urban centers before urban agglomeration occurs. Forces associated with this change are many, but predictable. In the U.S., it is often associated with the quest for more affordable housing, less computing to work, educational opportunities for children, lifestyle and amenities. Since most - if not nearly all - of the communities within the 65 - 120 k growth ring are classified as rural or small town (ranging from 15,000 to 5,000 and under), it is not surprising that demographers report new rural growth and counterurbanism.

Second, not all of the more remote rural areas have experienced depopulation. Fully 25 - 30 percent of communities in the more developed countries report that small towns have gained in population during the past 30 years. Again, the factors associated with this growth are complex, but can be said to center around several major causes. The presence of tertiary (university) education systems is important, as is the location near major transportation links. The main factor, however, at least in North America and Western Europe, are amenity rich areas attracting lifestyles, tourism, recreation, elderly retirement, and land investment opportunities.

Third, although the most remote rural communities show considerable aggregate population loss, some (but not many) seem to have beat the odds and sustained or even exhibit growth while their neighboring communities have perished. The evidence for this counterurbanism is sketchy at best and relies mainly on individual case studies rather than aggregate data, and for every success story there appears to be dozens of declining towns. There is solid evidence that renewed local leadership from in migrant entrepreneurs (especially retirements) plays a role in some counter-urbanization. Governmental and private economic development programs must surely account for a portion of this reversal - although the evidence is not clear. The economic phenomena of clustering of related economic activities may, in fact, play a greater role. Governmental direction of capital expenditures, often using triage concepts, seems to have an impact in larger remote rural communities when prisons, hospitals, and related facilities are constructed.

Regional Country Towns And Rural Stabilization

Certainly one of the bright spots among rural researchers is the role played by the Country Towns in remote, rural areas. Called "growth poles" or "regional centers" in the 1960s, these large towns - or small cities, as some prefer - appear to provide a major stabilizing force in all nonmetropolitan areas.

Regional country towns display a wide population variance, depending on the degree of remoteness and economic function. In North America, regional towns rarely display a population base less than 10,000 persons, but the median size is 25,000 and will range upwards to 50,000 persons. Diverse dependency will typically begin to appear around the 10,000 person level and becomes statistically significant at 25,000 persons. Diverse dependency is a term coined by the United States Bureau of Economic Research and rests on the concept of local economic function [E.R.S. County Typology, 1995].

Economic Dependency Types include:

  1. Farming-dependent--Farming contributes a weighted annual average of 35 percent or more of total labor and proprietor income.
  2. Mining-dependent--Mining contributes a weighted annual average of 25 percent or more of total labor and proprietor income.
  3. Manufacturing-dependent--Manufacturing contributes a weighted annual average of 35percent or more of total labor and proprietor income.
  4. Government-dependent--Government contributes a weighted annual average of 25 percent or more of total labor and proprietor income.
  5. Services-dependent--Service activities (private and personal services, agricultural services, wholesale and retail trade, finance and insurance, transportation and public utilities) contribute a weighted annual average of 50 percent or more of total labor and proprietor income.
  6. Non-specialized-- Not classified as a specialized economic type.

There is worldwide evidence that the larger regional country towns are rapidly approaching non-specialized economies, although employment tends to be heavily weighted in favor of services and manufacturing, as they assume the leading provider roles in their spheres of influence. It also appears that they have or will soon gain the necessary concentration of capital, population mass, and economies of scale to provide the essential development functions, health care services, manufacturing and employment opportunities, and cultural assets to sustain large and remote rural hinterlands.

The concept of rural triage is especially important for centralized decision makers considering policies on regional towns. Triage is, of course, an emergency medical technique for concentrating on those patients that show the best promise of recovery rather than those in critical condition or those that will probably stabilize. Given the assumption that small, remote rural centers have little hope of a sustainable future unless they are linked to unique resources, and that rural communities tied to metropolitan influence will be sustainable in the future, the best policy may be to concentrate on all but the most critical resources on those communities which, given immediate attention, demonstrate great promise.

Regional country towns fit this classification nicely. First, they are survivors in their spheres of influence - they have managed to gain supremacy over their economic hinterlands. Second, they are sustainable from the standpoint that they have the capacity to provide both employment, food, and shelter at some of the most reasonable costs in the world today, Third, they can provide a partial solution to the exit roads syndrome from smaller rural areas by providing retirement opportunities for the elderly and educational chances for youth who would otherwise naturally migrate to metropolitan areas. Finally, they provide an excellent occasion for government to decentralize their social and service functions in the more remote areas of a nation. If the concept of local economic redevelopment holds promise, then it must decentralized empowerment to the local place.

The Impact Of Telecommunications

"While we weren't looking, the future arrived" [Cong. Office, 1997]! Since the middle 1980s, futurists such as Alvin Toffler [Toffler, 1985] have said that "it is certainly no secret that our society is moving away from a manufacturing focus and becoming an information driven machine . . . The nascent markets of the next century are based on value-added service which are typically the result of adept information management." [page 43]. The heart of this new information Third Wave technology is the digital network and digital communications via the computer modem, faxes, and wireless telephones.

The true, large scale impact of telecommunications on rural areas lies some distance in the future; some would say between the year 2030 and 2050 before global wireless is a truly dependable and integrated source of doing business. Even now in 1997, digital communications through the Internet are reforming some selected market relationships between rural and metro locations. Without a doubt, telecommunications will have a marked impact on the two overriding factors that affect non-metropolitan performance: remoteness and labor pools.

Reliable, real time telecommunications cannot solve, but will certainly diminish the impact of distance between more remote rural locations and their major markets and suppliers in metro areas. The bourgeoning service sector worldwide that is essentially responsible for the assimilation, interpretation, and management of information will no longer be place bound - location will be irrelevant assuming that global communications will be the same everywhere. Telecommunications will be a major factor in transforming, rather than reforming, the way rural communities do business and live their lives. No amount of digital information can reform the basic distinction between the urbanized and the small place given the massive imbalance of resources. It cannot be a total planning solution, but it can help to create a greater competitiveness in the way rural people receive their education, medical and social care, market their goods, acquire their supplies, and conduct their affairs. It is assumed that rural areas already showing signs of great vitality will be best positioned to benefit from the new technologies and more remote centers already in decline the least.

There is, however, a counter hypothesis to this argument. Telecommuting may contribute to further suburbanization and urban sprawl by releasing households from location constraints related to maximum acceptable commute time and distance (Mokhtarian, 1991b). Because the practical use of modern digital telecommunications is such a relatively new activity, no studies have been able to confirm or deny this hypothesis (Handy, 1994). If this indeed occurs, the environmental costs of further sprawl could far outweigh benefits received by reduced automobile and office use. It is difficult to estimate the likelihood of this scenario because there are so many factors contributing to housing location decisions.

The second overriding factor related to rural - metro imbalance likely to be impacted by telecommunications is the labor pool itself. Remote, rural areas may (at least according to some studies and many common perceptions in local economic development) be good places to start both services and new start-up firms, but they cannot sustain the need for increased capital and labor due to lack of available resources and worker pools. The concept of telecommuting - large groups of workers who are place bound throughout a nation, but who work for a remote and centralized firm via digital communications - will diminish the need for regional labor. The argument that telecommunications can never supplant the need for specific site, skilled labor in manufacturing and fabrication will always remain valid, however it is necessary to realize that most now agree that the distinction between value-added activities and services is becoming less important.

Conclusions - Century's End And A New Millennium

Throughout this paper I have suggested that change is the price of the rejuvenation of the countryside and the survival of small towns. In most cases, adequate levels of employment and income cannot be expected from traditional sectors - especially if rural areas are expected to decouple from metros. The real choice, as Galston suggests, will be between decline and forms of innovation that will leave neither individual lives nor the structure of social relations unchanged. Some, perhaps many, rural residents will both resent and regret these changes, but they cannot be avoided. Every way of life requires some economic basis, but a commitment to preserving a total way of life in the face of profound economic and social change cannot hope to succeed. Individuals who are devoted to continuity of place, who want a sustainable base for the generations who follow, must therefore accept some degree of discontinuities of economic and social life.

"To be successful, efforts to rejuvenate the rural countryside must rest on genuine local preferences. Underlying these preferences is some understanding of what rural individuals, considered simply as citizens of a country, are thought to deserve. Since the 1940s many countries have made the political determination that all citizens, regardless of place, were entitled to electricity, decent roads, schools, and adequate water/wastewater facilities. The question in the next century is whether access to information management through digitalization and fiber optics will be similarly defined as elements of social citizenship. The question is on the table, and the viability of most of our rural areas hangs in the balance." [Galston, p. 266]


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