Degrees Designed for Rural Business

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A handful of business school deans are hoping they can initiate change. At Edgewood College's B-school dean, Chuck Taylor, has followed the career paths of students for the past few years and has noticed a pattern. Although at least 70% of the study body hail from rural parts of the state, virtually none had plans to return to their hometowns. Instead, most took jobs in cities such as Chicago or Milwaukee or stayed in the Madison area, he said. "Students believe there are no jobs and limited opportunities for them to earn a living," he said. "When I asked them if there was a program that would equip them to go back, set up a business, and be an entrepreneur and have the information you need, then would you reconsider? Many of them said that would exactly be what was needed."

Rural Business Retention

Their response inspired him to develop the master's program in urban and rural economic development, which begins in the fall of 2009. Students will identify an area of concentration, such as community development planning or rural business retention and expansion, and take classes with titles such as "Introduction to Urban and Rural Economic Development." They will also be required to do a capstone project and write a major paper on a topic such as how to attract seed capital for rural businesses or the best use of community block development funds. "Based on the feedback we've received so far and the interest expressed from those areas, we think this is something that is badly needed," Taylor said. "We've already had at least 10 students who have said: 'Where can I sign up?'"

One potential student is Daric Smith, 33, executive director of the Rural & Industrial Development Commission for Adams County in Wisconsin, which has a population of 20,500. His job is to help bring new businesses into the county and help existing businesses expand. It's a slow and frustrating process; he has brought three new businesses into the area in the past few years, but wants that number to grow faster, he said. "I have extensive marketing experience, but not necessarily development experience," Smith said. "Back when I was in college, there weren't any programs like this out there. It is just a chance for me and other people who have similar jobs to get a better handle on different types of economic development."

Officials in small towns such as Juneau, Wis., (population 2,800) said they are glad business schools are finally starting to get involved in rural entrepreneurship training. Over the past few years, Juneau's downtown area has seen more and more empty storefronts, said Bob Buhr, director of the town's Community Development Authority. A pharmacy, flower shop, several bars, and a medical clinic are just some of the businesses that have recently left the town. Compounding the problem, students who grow up in Juneau rarely come back after they leave for to college. The people who stay often want to start a small business, such as a restaurant, but don't have the necessary business skills, he said. He is hoping graduates from the Edgewood program will come to his community and provide training, mentorship, and consulting help to aspiring entrepreneurs.

Rural flight is a problem that extends beyond the large Midwestern and prairie states. On the East Coast, many rural towns in New Hampshire and upstate New York are facing similar problems, said Anthony Poore, assistant dean of Southern New Hampshire's School for Community Economic Development, which has been in existence for 26 years. The school plans to launch an MBA program this fall and hopes to attract people who want to work in small towns and stimulate economic development. But there are hurdles in getting the typical business student to settle down in a small town, where the salary and job may not be comparable to one they could obtain in a larger city such as New York or Chicago "How many MBAs say: 'I want to go out there and work with those rural folks'?" Poore said. "They're like: 'I want to work for Google (GOOG), that's what I want do.' But regardless of whether you work in a rural or urban environment, you still need good management and business skills."

Aging Demographics

Indeed, the steps business schools take in the next decade will be essential to ensuring the survival of many rural towns, especially in areas with aging demographics, said William Walstad, professor of economics at University of Nebraska-Lincoln and a co-author of the book Entrepreneurship in Nebraska: Attitudes, Conditions and Actions, published in March by Gallup Press. In a recent Gallup survey of small business owners in Nebraska, more than half said they planned to exit their business in the next 10 years. Some planned to transfer the businesses to family or employees, but 25% said they planned to liquidate, a troubling statistic in a state with such a large rural population. "That means you don't have a grocery store, you don't have the different services in the community that you need," Walstad said. "Obviously, this is where business schools can come into play. We need to fill that void and whet people's appetite for starting their own business as well as giving them the education skills to go along with it."

The University of Nebraska-Lincoln's Center for Entrepreneurship is taking several "high-level, strategic actions" to encourage students to stay in the state, said Glenn Friendt, director of the school's Nebraska Center for Entrepreneurship. The school is organizing its second Nebraska Summit on Entrepreneurship this spring, pairing students with successful business mentors and encouraging students to start businesses in their hometowns. "We teach about 300 young aspiring entrepreneurs in our program each year and send them out, and we know that only a portion of them will take that big leap and only a portion of those will be in Nebraska," Friendt said.

Asparagus farmer Ely is one of a handful in his class who has taken the leap. It's a decision he doesn't regret, and he looks forward to eventually marrying and raising his family in the town he grew up in. "I always knew that I wanted to come home and operate a business, but the average business major is probably not looking to be an entrepreneur in small town Nebraska," he said. "I think a lot of kids go to college and look back at small towns and see that the job opportunities just aren't there. That's where the main challenge lies."

Damast is a reporter for BusinessWeek.com.