Friday, March 25, 2011

Challenges and Benefits of Retiring

…To a Rural Community.
By Matthew G. Soltis

Baby-boomer Retirees Head for the Hills.
By all reports, a continuously growing retired population is in-migrating into rural communities, attracted by many of the amenities for which they have been searching and which many of these communities have planned to offer to attract them. A better quality of life and neighborly spirit, personal safety, local shops, inns and restaurants, business opportunities,  more than adequate healthcare services and a sense of importance to the community are just a few of these sought-after amenities.
The 65 and older population reached 38 million in 2008 and based on Bureau of census recent projections the over 65 age group will expand to 85 million by 2050. Rural communities can enhance their competitive position in recruiting retirees by expanding on their social infrastructure.   In the next five years the number of retired in- migrants will continue to increase and they bring with them multiple sources of retirement income, better education, better health, earlier retirements, and longer lives than the current generation of retirees. Those in-migrating will continue to be a favorable source for economic improvement to rural communities.

A New Industry Emerges in Rural America
A report from the State of Nebraska, one source we covered, states that counties, designated as retirement sites report the largest increase in personal income and employment among all non-metropolitan counties in that state.
The in-migration of the retiree boosts the local economy and increases the tax base. Large investments in infrastructure or tax abatements are not required by host communities. Retirees do not pollute or destroy the environment. They increase the number of volunteers and contributors benefiting many organizations within the community. Obviously then, retirement is a good industry to recruit for economic development.
As a result of understanding the potential benefits of this new, retirement, industry, more communities are beginning to recruit retirees. Some governmental units, universities and non-profit organizations are getting involved with project and job creation. Examples are common in housing and community development in Florida, Arizona, and Arkansas and in entrepreneurship programs such as the one hatched from the Texas Center for Rural Entrepreneurship where in, community planning includes a focus on the local and in-migrating entrepreneurs and retirees for their assistance in the community’s programs for the retention of current local businesses and the development and support of new business. The retirees in particular are sought to mentor, coach and even finance new start-up businesses developed locally to service needs of the retiree, newcomer and the community at large.
Retirement income benefits local economies by increasing the demand for local goods and services, creating a source of investment funds, and generating a deposit base for financing community development projects. Retirement income can lead to job creation in the same way that industrial payrolls generate jobs in the community. Retirees spend their income in the local economy, creating a demand for goods and services. When the demand to supply ratio becomes more favorable for investment and employment, capital and labor follow, stimulating economic growth in areas where current rates of under-employment are critically high.
Rural communities are benefiting from the wave of incoming retiree dollars. That trend is expected to continue and will transform the economic structure of many more communities in the future. The major aspects of these local economies will be food, travel, recreation, entertainment, and health care services.

The Coming Attractions.
Communities, with successful programs to attract and relocate retirees, will benefit. Attracting tourists and retirees are viable economic development options in those communities currently having the necessary infrastructure in place that fit the existing economic situation. But, as part of the plan to attract newcomers additional planning steps are encouraged and being taken. Today, these progressive models of rural economic development programs share the same approach. As examples, the communities place less emphasis on industrial recruitment as was there history. They view entrepreneurs as the foundation for developing a viable economy and are more focused on local assets of the community to attract both the retiree and the entrepreneur. What the newcomer can also discover through their due diligence of a community working to attract them is the community’s commitment to informative communication. It is important to be able to give the community exposure and communicate with the retiree and other prospective newcomers.
It was learned in a review of their communication planning, that the ability to access community web sites, was a key tool used by new residents and retirees in their relocation decision process. It was also clear that retirees, like new real estate buyers typically were challenged in finding the right kind of community information, on community or real estate web sites. Instead of the web sites making it easy for them to find information, they made it difficult and often undersold the community and region.
For those who are completely new to the area, they may have lots of questions about issues that current residents take for granted.
To correct things these communities are looking more introspectively and are preparing more content rich informative websites. In the development of these sites they have been urged to assemble focus groups to extract the necessary types of information needed by prospective visitors.
Being identified as a community being attractive to retirees and other new residents as well as being poised to encourage and provide guidance to the entrepreneur, only eases its ability  to serve and to grow.   

 Retirees and the Entrepreneur 
The regional director for Rural Development at the USDA, Paco Valentin identified to us that, “President Obama’s and Secretary Vilsack’s vision, which I fully endorse is the implementation of initiatives that emphasize expanding exports, linking farm production to local consumption, producing biofuels and renewable energy, capitalizing on broadband, and innovatively using natural resources as wealth building tools for a stronger more prosperous rural America”.  It seems to be clear as to how retirees can help entrepreneurs in rural communities but, is it realistic to expect those entrepreneurs to be planning a business as big as those just mentioned or is it feasible for the retiree and the entrepreneur to take on a business that might service or facilitate those initiatives? The answer lies in the inventory of talents, tools and assets available to them. Certainly some of those larger projects may be overwhelming so a look at the business-to-business (B2B) service group may have to be investigated.

Services to these initiatives 
All of the professional and technical assets available to the entrepreneur should be set against the needs of the bigger projects and soon the idea for a specific B2B enterprise will emerge.
Most often seen to emerge after this assessment are those familiar to all businesses; legal services, accounting, insurance, banking, logistical services, real estate, communication, and computer or information services just to name a few. Our study of the needs of both consumer user and the service providers led us briefly to B2B franchise businesses available to connected communities.
For examples of services, packaged by franchises, we found these to be applicable to these USDA rural initiatives.
Broadband: E-commerce business development, the application that gives a whole array of online services to:
  • Traditional, store-front businesses serving local markets that increased their market ranges and sales through e-commerce.
  • Virtual or online businesses that conduct all of their marketing and sales through e-commerce.
  • Rural businesses that adopted e-commerce primarily to reduce marketing inputs
and costs.
  • Rural businesses that use e-commerce primarily for business-to-business (B2B)
  • Rural businesses that use e-commerce primarily for business-to-consumer (B2C)

Export Business. Developing and using the skills of the entrepreneur in helping  that type of business with their marketing, sales, logistics, legal and accounting functions.
Linking the Farmer to the Consumer.
Setting up a farmers market; Providing logistical support i.e. storing and transport services; Developing a producers cooperative allowing for large quantities of foodstuff can be sold to  supermarkets in the area; Making available real estate for diverse farming and livestock, organic gardening and other smaller parcels of land to meet the needs of the new producer.

This is really the concept of asset-based community development. Through a comprehensive community asset assessment the town can stimulate the creation of an environment for mobilizing local citizens around their current local assets.         
Local assets may include resident individuals, retirees and other newcomers, associations, universities, institutional and from hidden economic assets such as the transfer of personal wealth upon death. Others would be cultural and historic, and natural resource assets.
To maximize the impact of their individual efforts, real estate firms, lenders, public agencies, and the private sector will be more successful creating new business and jobs by working together and leveraging their combined resources, and by focusing on local assets, local innovation, and local uniqueness.

The Team the REALTOR and the Retiree.
A great deal of experience in team-building, networking and marketing the forte of the REALTOR has been one of the first area representatives sought for a position on this Assessment Committee. The rural real estate agent typically can handle relocation whether the need is residential, farm or ranch. Two other assets are needed. To be well connected in the local environment and also has the ability to visit agents working with Retirees in the big cities. So his/her mobility is surly an asset to the community programs to improve its economy and attractiveness.                                                             

As this report illustrates, rural community economic improvement program is taking on new forms. While many state rural improvement programs still focus their available resources on business recruitment, the new models successfully use public and private resources to develop community capacity for fostering and sustaining local entrepreneurial activity.
The communities are seeing the recent in-migration of retirees as opportunities to access outside capital and skill sets not commonly found locally. As opportunities for innovation in rural communities emerge, identifying local assets and reorganizing the social and economic structure around unique products and services including those tapped from the retiree may provide a foundation to support small entrepreneurial efforts as well as fast growing businesses.
Business and community leaders interested in generating a new economy including job creation may find it more effective to work with a community support coalition and use public resources to fill in any of those not found in the private and institutional sector. Local real estate, insurance agencies and public accounting firms, along with banks and other financial businesses have an important role to play in supporting the emergence of rural entrepreneurship.
The roles include participation in local coalitions focused primarily on supporting entrepreneurial activity in their community, identifying potential entrepreneurs, and providing guidance for business plan development and financing options for these future and current business owners. The coalition can also support and help develop local foundations for wealth transfer to provide alternative funding support for entrepreneurial activities. The banks and other lending enterprises through Community Reinvestment Act and other types of motivating loans and investments may be one way to leverage local wealth transfer and capacity building in this particular area. The cooperative efforts of local businesses, support from retirees and the open-mindedness of the community to creative thought and innovation by entrepreneurs will get the job done.

Our thanks go out to long list of folks who contributed to our education.

John C. Allen is the director of the Western Rural
Development Center located at Utah State University,

Dr Greg Clary, director of Texas Center for Rural Entrepreneurship
Texas A&M University

Cheryl Burkhart-Kriesel
Extension Specialist, Community Development
Panhandle Research and Extension Center

Randy Cantrell, University of Nebraska Rural Initiative
University of Nebraska-Lincoln

Paco Valentin, director of Rural Development ,
United States Department of Agriculture

John Kretzmann, co-director Northwestern University
Asset-Based Community Development Institute.

Karen Hamrick,   Amber Waves Magazine
Karen’s team produced a collection of concise brochures highlighting the

And all the folks from Baker, Oregon home of the Enterprise Growth Initiative,
BEGIN, and one of their most creative entrepreneurs, Donna Stone, the coffee roaster.

1 comment:

  1. Hi Matthew,

    This is a very interesting read.

    Elizabeth Del Rio-Henrich
    Glozal Contact