Neal Ely's passion for farming has taken him from the business school classroom straight to the prairie. After graduating from University of Nebraska-Lincoln in December with a degree in agribusiness, Ely decided to return to his family's farm in in Grafton, Neb. Grafton has a population of 167, and there are corn and soybean fields as far as the eye can see.
Ely, 23, planted more than four-and-a-half acres of asparagus and recently launched his own specialty gourmet food business, Ely Farms, using his mother's "secret recipe" for pickled asparagus spears. While his ambition is no smaller than that of the business grads who head for the money centers of Manhattan or the entrepreneurial halls of Silicon Valley, his return to his rural roots is an anomaly for most business programs—a situation he'd like to see change. "We need to challenge people to think outside the box," said Ely, who spends his mornings packaging his farm's fresh asparagus and delivering it to supermarkets in local towns. "We have to figure out what we can do to keep rural areas alive and bring kids like me back home."
The problem of getting business grads to apply their skills to the farms and businesses of rural America is a pressing one in states such as Nebraska, Wisconsin, and Illinois. Dwindling populations, empty storefronts, and the shutdown of manufacturing plants have made the economic problems facing rural towns even more acute in recent years. Business school administrators are starting to realize they can play a role in helping to reverse—or at least slow down—the economic slide of some of these areas by creating innovative courses and extension programs that will encourage people to move back to these areas and start or work for local businesses.
Master's Programs in Rural Development
Some schools, such as Edgewood College in Madison, Wis., are creating master's degree programs in urban and rural economic development. Other large land-grant state universities, such as the University of Nebraska-Lincoln, are encouraging the growth of rural businesses through entrepreneurship centers, research grants to study rural entrepreneurship, and rural business mentorship programs. One school, Southern New Hampshire University in Manchester, is launching an MBA in community economic development for the first time this fall.
Indeed, business schools can play a key role in helping to rejuvenate the nation's rural areas, said John Fernandes, president of the Association to Advance Collegiate Schools of Business, the accrediting agency for business schools. The problem is that most haven't begun to think about developing programs or curricula in this area, he said. Of the AACSB's 671 member schools, only about 40 have programs that mention a focus on rural or local economic development and collaboration in their mission statements. "I think it is one of those things that has kind of flown below the radar of most business schools," he said. "It might be sort of a natural extension of schools in rural areas, but maybe the rest of the world hasn't been paying attention."
Critics contend that not nearly enough is being done by business schools to make a dent in the problem. More programs need to be focused on rural entrepreneurship, to equip people with the skills to start small businesses, said Chuck Hassebrook, director of the Center for Rural Affairs, a national rural advocacy and development organization in Lyons, Neb. "Business schools have not even come close to living up to their potential in this regard," he adds.
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."
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."