Growing Rural Communities in the Coming DecadeUSING CHANGING DEMOGRAPHICS, NEW ENTREPRENEURS AND INNOVATIVE STRATEGIES TO ACHIEVE PROSPERITY

Rural communities are struggling to find their place in the economy.

The challenge facing city management

As city and village managers and administrators, public officials seek your advice when developing public policy that will encourage economic growth, and rely on your expertise to implement that policy.

You face new challenges in creating economic growth.

•Shifts in age groups and ethnic backgrounds

•New business owners

•Changes in the regional economy

•On-line competition

Where does my town fit?

Rural communities want to find their place in the future economy by attracting new residents and businesses.

How can you make it happen?•By understanding the changing age and ethnic groups, their needs, desires and spending patterns

•Updating the infrastructure to meet current needs

•Encouraging the new entrepreneurs

•Pursuing new approaches to economic development

•Reshaping the uses and perceptions of traditional downtowns

Changing Populations

Projected Population TrendsIllinois Non-Metropolitan Counties (2014 to 2025)

Source: Woods & Poole Economics, Inc., 2014.

Perc

en

t C

han

ge,

2014

-2015

Population Age Cohort

0.18%

-8.88%

10.01%

-15.04%

-7.35%

23.68%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Ages under 25 Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Gain: 18,049Gain: 897

Lose: 16,651

Gain: 67,104

Lose: 16,138

Lose: 32,119

Population Changes

•Large growth in older adults (65-84)

•Adults 35-44 also will be significant

•Immigrants and ethnic populations are important economic drivers

•Types of goods and services demanded and provided will change

So who will the new customers be?

Average Consumer Spending by Age and Purpose,Midwest, July 2012- June 2013

$8,969

$10,750$10,089

$9,403

$6,823

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Shelter (mortgage, property tax, rent, repair)

$2,290

$3,753$4,147

$4,841

$5,709

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Health care (insurance, services, medication, supplies)

$2,502

$3,321 $3,242

$2,580

$1,724

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Entertainment, Events, & Hobbies

$2,486

$2,913

$3,307

$2,445

$1,632

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Food away from home

Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey, 2013.

Average Consumer Spending by Age and Purpose Cont.Midwest, July 2012- June 2013

Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey, 2013.

$3,912

$4,822 $4,855

$4,107

$3,119

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Food at Home

$3,904 $3,951 $3,869

$3,391

$2,609

$0

$900

$1,800

$2,700

$3,600

$4,500

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Vehicle Purchases (Net Outlay)

$1,826

$2,068

$1,733

$1,443

$830

$0

$500

$1,000

$1,500

$2,000

$2,500

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Apparel and Services

$1,367$1,522

$955 $907$827

$0

$400

$800

$1,200

$1,600

$2,000

Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65+

Household Operations (e.g. personal services)

The New Entrepreneurs

Age of U.S. Business Owners,2007 vs. 2012

15.2%

38.8%

46.0%

15.9%

33.2%

50.9%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Under 35 Ages 35-49 Ages 50 and Over

2007 2012

Source: U.S. Small Business Administration, Office of Advocacy, from U.S. Census Bureau, Survey of Income and Program Participation (SIPP) 2004 SIPP Wave 12 (2007 data), 2008 SIPP Wave 13 (2012 data).

Who will start businesses?•Early retirees 55-65

•Women age 25-34

•Immigrants

•Farmers with small acreages

•Unemployed

What do you need to know about these owners?•Older existing owners-Retiring soon

•New retiree owners-Often part-time businesses wanting flexible schedules

•Women 25-34 years old- This group may work from home and/or online

•Immigrants-Possible source of full-time owners of more traditional businesses

The Importance Of Immigrants

Source: Fourpercentgrowth.org, George W. Bush Institute

Immigrants as Business Owners•Immigrant share of business owners (18%) is higher than immigrant share

of the population (13 %) and of the labor force (16 %)

•Less educated

•In the US 10+ years

•Higher percentage of women owners than among US born women

•Earn less than US born owners

•Equally Latino, Asian, White Immigrants

Source: FPI analysis of 2010 ACS 5-year estimate

Likely Future•Customers age 35-44, an age group with high expenditures

•Older customers who spend less and on fewer things

•Fewer business owners operating from traditional storefronts

•Part-time store owners with flexible hours

•Immigrants growing in importance as older traditional store owners retire

New Strategies for a New Economy

The public and nonprofit sectors can lead the way.•Recognize opportunities

•Look for partners

•Welcome new residents, entrepreneurs and customers

•Create a supportive environment

Recognizing OpportunitiesTelepharm.com-Bringing a New Business and Needed Service to Rural Towns

Pharmacists provide a critical service to the community, especially the elderly.

A local pharmacy prevents long distance trips, both a convenience and keeping dollars in your community.

Not only does more spending occur locally, a local storefront is occupied, jobs are created and other health care providers benefit.

Looking for PartnersGenoa, IL Population 5,193

Community Supported BusinessesEffingham, IL Population 12,328

Welcoming New Residents, Entrepreneurs and Customers•Encourage participation through elected and appointed positions

•Recognize diversity in streetscapes, events, publications and publicity

•Formally adopt policies and initiate programs that support diversity

•Provide safe places to meet and a means to communicate

Traditional Zoning vs. Form Based Code

Use Operations Form

Form Operations Use

Use available financing tools•TIF

•Special districts

•Low cost loans

So how does your town overcome declining population and businesses?•Understanding who residents will be

•Encouraging the entrepreneurs who will serve them

•Using available tools to provide a supportive environment

If you understand what the future is likely to hold and prepare for it, you can leverage the coming changes to grow your community.

What to do Next?•Learn the future demographics in your area.

•Get to know likely future business owners and determine their needs.

•Look for opportunities to renovate a building or help start a business.

•Develop partnerships with other public agencies, nonprofits and interested private businesses.

•Examine government policies/regulations in light of future opportunities.

•Help make downtown the center of the community.

Illinois Success Stories

Morrison

Carthage

Norman Walzer Mim Evans Senior Research Scholar Research Associate

815-753-0933 815 753-3499

nwalzer@niu.edu mevans@niu.edu

Center for Governmental StudiesNorthern Illinois University

148 North Third StreetDeKalb, IL 60115

illinoismainstreet.niu.educgs.niu.edu