Economic Development Initiatives In Rural North Dakota Communities: Socioeconomic Impacts

The purpose of this study was to examine the local socioeconomic impacts of new economic development initiatives in North Dakota's rural (nonmetropolitan) communities. This report is the second to present findings from this project; an earlier report analyzed the effects of four new agricultural processing plants on their host communities. This report examines the effects of manufacturing and/or exported services facilities in three communities and presents comparison data drawn from two control communities (i.e., towns that had not experienced the advent of a major new employer during the 1990s). The information from the two groups of development communities and the control communities is compared and contrasted to discern similarities and differences in the effects of the different types of development initiatives and to develop a set of general principles and recommended actions for community leaders to follow when planning for a new employer. The agricultural processing projects were sited in rural counties, developed during the 1990s, and employed at least 40 workers. The communities with other types of economic development initiatives were rural communities where a new nonagricultural employer or an expansion of an existing facility had created at least 40 new jobs during the 1990s. The two control communities were located in rural counties, had not experienced a new nonagricultural employer or expansion with more than 20 new jobs since 1990, and were characterized by economic and demographic trends prior to 1990 that were similar to those of the development counties. In each of the study communities, the authors conducted in-depth interviews with a cross-section of community leaders, with the aim of gaining an understanding of the community (e.g., its population, economic base), the effects of project development, other socioeconomic changes that might have either exacerbated or offset the project's effects, and the community's response to the situation. Representatives of each of the development projects also were interviewed. Subsequently, a short survey was completed by a random sample of residents in each community. Improved job opportunities and enhanced incomes were generally seen as major positive effects of each of the new economic development initiatives. Further, aside from some management and engineering positions, most of the plant jobs appeared to represent employment opportunities for area workers, rather than being taken primarily by in-migrants. Residents' incomes were enhanced both by the plants' jobs and payroll (which often represented second incomes for area households) and by increased incomes for area farmers (in the case of agricultural processing facilities). Because most of the plant jobs were taken by persons already living in the area, the new plants did not lead to substantial in-migration or major population growth in the host communities. Rather, a reoccurring comment by local leaders was that the plant in their community had stabilized the local economy and population. Comparison of population trends in the development and control communities supports the perception of local informants that the economic development initiatives served to stabilize local populations.