Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Growthology blog.
This June, these were some of the comments and stray remarks I overheard at the annual meeting of the Wyoming Association of Municipalities (WAM). While mingling with representatives from towns and cities like Greybull, Powell, Bear River, and Ten Sleep, I learned quite a bit about the entrepreneurial challenges and opportunities facing small towns.
The predominant theme in hallways, lunch tables and during meeting sessions was the resource bust that the state of Wyoming is currently enduring. The state has gone through oil and gas booms and busts before. However, the current bust has been exacerbated by a drop in demand for coal. This triple-commodity bust is “unprecedented,” and the ripple effects have been far-reaching.
Those effects, however, have been uneven. Some parts of Wyoming have been hit hard, with massive numbers of layoffs. Some WAM participants told stories of houses being abandoned and pets left behind. Other parts of the state, meanwhile, haven’t felt the full effects yet but were waiting for the inevitable. The biggest anticipated effect, it seems, will be on the state budget, which has been dependent on mineral royalties.
Many WAM attendees fretted in particular about the future of the Wyoming Business Council, a state economic development agency. I’m not familiar enough with WBC’s track record to say anything about its effectiveness, but several municipal representatives at WAM talked about the helpful role that small WBC grants have played in catalyzing entrepreneurial efforts in their communities. Just from the conversations, it sounded like WBC’s approach could be similar to the “small bets” strategy that other places use. Yet if WBC funding gets dramatically cut or even eliminated, it’s unclear how towns and cities will fill the void: it was in this context that someone observed, “everyone has to reinvent themselves.”
Other parts of the state, however, did express higher levels of economic optimism. In Cody, an economic development official told me that they have “zero unemployment” during the summertime because of the city’s proximity to Yellowstone. In the southern part of the state is Laramie, where the University of Wyoming is located—because of that, companies in manufacturing and ag-tech appear to be doing well, and a high quality of life has kept the city vibrant. One local official noted that Laramie has focused on creating a social scene for young people that is focused on outdoor activities, not bars, and this has so far succeeded in retaining talent.
A second theme of the discussions at WAM was the challenge of economic development in small towns and sparsely populated areas. Some attendees expressed frustration with conventional economic development strategies, especially as embodied in federal government grants. The bias, they said, is often in favor of big companies.
Other local representatives said that, in their communities, economic development organizations took an imperial attitude, taking over as much as they could and distorting community priorities. And, as another consequence of a resource-dependent economy, some said the oil and gas boom had radically skewed economic development expectations across the state.
One person said lower interest rates were needed for new businesses, while another said better training was needed for the skilled trades. Restaurants in some towns were complaining about the influx of food trucks, which are a new source of competition and perhaps aren’t always subject to some of the same rules. In some smaller areas, municipal officials saw glimmers of hope in diversified retail shops—combinations of food service, bookstores, and salons, for example. To help their businesses overcome certain challenges, one attendee’s city had given façade grants to help local entrepreneurs with signage, which had helped increase sales.
Finally, as at all conferences, I overheard a number of surprising observations that struck me as lessons that can only be learned through on-ground experience. For example, a few municipal representatives had been surprised by the number of home-based businesses in their community and they were addressing policy challenges such as ordinances that limit the signs that can be displayed by home-based businesses.
Another person observed that it is not a good economic sign for the Main Street of a town to be a state highway because of additional rules and regulations. In one town, an economic need was revealed in a rather morbid way: with an aging population, the town had experienced an increase in funerals. Attending funerals requires dress clothes, but the town had no place to buy them. Thus, an entrepreneurial opportunity was born.
Every state has its own peculiarities and potentialities, but some are common across the country. The local and municipal officials at WAM spoke about the power and importance of relationships when fostering entrepreneurship, which is a frequent refrain everywhere. They spoke about playing to their communities’ strengths and trying to develop entrepreneurial activity to build on those.
But, there is no doubt that smaller cities and towns face serious challenges when it comes to entrepreneurship. One appears to be the slow disappearance of new business creation from these places. Yet there is hope, in large part because of the energy and optimism of people like those at WAM who work hard on behalf of their communities’ entrepreneurial future.
Dane Stangler is vice president of Research & Policy at the Ewing Marion Kauffman Foundation. In this capacity, Stangler leads the Research & Policy department and serves on the senior leadership team. He also provides research and writing on a variety of subjects. He also represents the Foundation by speaking at meetings and conferences around the country.