Traditional methods of rural economic development in the United States have often relied on attracting large employers through tax breaks and incentives. However, emerging research suggests a shift toward more sustainable models that emphasize locally driven initiatives, community governance, and improvements in daily living conditions. Rather than depending on outside investment, successful regions are increasingly building resilience through homegrown entrepreneurship, civic engagement, and strategic investments in infrastructure such as broadband, education, and healthcare.
A recent symposium highlighted case studies where rural communities achieved measurable gains in population, employment, and startup formation by prioritizing resident-centered strategies. Central to these successes was the development of what experts call an ‘entrepreneurial social infrastructure’—a network of trust, leadership, and collaboration that enables communities to tackle challenges collectively. While difficult to measure, this social capital plays a vital role in long-term economic sustainability.
Participants stressed that quality-of-life enhancements—such as access to grocery stores, safe housing, childcare, parks, and public safety—should not be viewed as secondary benefits but as foundational drivers of growth. These improvements correlate strongly with increased economic activity, particularly when tailored to local needs and preferences. Moreover, development efforts are most effective when they treat rural areas as equal partners rather than peripheral recipients of urban-led initiatives.
Experts also warned against top-down programs that risk undermining local capacity by creating dependency on short-term external funding. Instead, federal and state support should strengthen local leadership and decision-making authority. Regional commissions established by federal mandate were cited as promising models for ensuring rural voices shape policy and benefit from investment.
Despite broad agreement on these principles, open questions remain. For instance, can quality-of-life projects alone generate sustained economic momentum, or is external capital still necessary? How can governance structures ensure equitable power-sharing between rural and urban regions? Additionally, researchers are exploring how best to convert temporary assistance into lasting institutional strength and which diagnostic tools can identify viable tradeable sectors in under-resourced areas.
Further study is needed on how communities balance generational differences in priorities, implement plans in low-capacity settings, and design accountability systems that lead to action. The discussion underscores that while physical and financial assets matter, outcomes depend heavily on local control, institutional quality, and the ability to execute projects effectively.
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New approaches to economic development in rural America
Executive summary
Traditional economic development strategies in rural America have historically focused on the recruitment of large-scale employers and new industrial development, often through tax incentives or other attraction strategies. Yet new research and case studies are highlighting an evolution in approaches to rural development that emphasizes the importance of locally owned business activity, strong local governance, civic collaboration, and investments in quality of life as strategies that enable economic resilience and sustainability.
This symposium examined the success of locally led approaches to rural economic development, which shift from traditional firm-attraction models toward resident-based strategies that prioritize local leadership and capacity, quality of life, entrepreneurship, governance, and equitable regional planning and decisionmaking.
Speakers presented evidence that investment in local business development and quality of life can deliver broad-based gains. A striking consensus emerged that the elements of an entrepreneurial social infrastructure—where leadership, trust, civic relationships, and partnerships converge to leverage social capital to solve local challenges—are among the most critical factors for successful rural development, though the hardest to quantify. Participants also emphasized that focusing on improvements in quality of life as a core strategy—by investing in schools, housing, child and elder care, parks, grocery access, safety, broadband, and third spaces—correlates with population, job, and startup growth.
Discussions underscored that development strategies must center local residents as their primary beneficiaries, and investments or technical support must match local community capacity and context. Regional strategies work most effectively when rural communities are treated as equal partners as their urban counterparts and when investments build—rather than substitute for—local capacity.
Key insights
Symposium participants highlighted the following as foundational elements of rural economic development:
Successful rural development requires genuine local ownership and decisionmaking power.
Civic ties/relationships and economic development are interdependent. Civic engagement should not be seen as instrumental —i.e., as a means for creating an economic plan—but as a fundamental component of a healthy community that will use that capacity to pursue development on its own terms.
Quality of life investments should be seen as a foundation for economic growth rather than an outcome. Those investments should prioritize basic amenities that residents desire and that are distinctive to their place.
Economic strategies must match community capacity and context rather than result from top-down, generically defined development initiatives.
Small businesses can deliver broad gains compared to capital-intensive industrial development. Job creation tied to local, tradeable sectors can build resilience.
Federal and state investments in rural communities should focus on bolstering local capacity and leadership to avoid dependency on project-based, short-term injections of external investment.
Regional development efforts work best when rural communities are true partners and not seen as peripheral. The federally chartered regional commissions offer an interesting policy approach for reaching distressed rural places.
Assets alone don’t guarantee results without local ownership and control, accountable institutions, governance quality, and the capacity to execute projects.
Ongoing debates
While symposium attendees reached a consensus on the insights discussed above, there were several areas of tension that remained unresolved and would benefit from ongoing discussion.
Can quality-of-life projects drive economic growth alone? To what extent are “tradeable sector” strategies or investments from outside capital necessary for catalyzing or sustaining economic activity?
What does effective regionalism among rural and urban areas look like, and how can governance structures—such as regional commissions—exemplify an authentic balance of power between underserved rural communities and urban centers?
Where is the line between short-term assistance and long-term dependence that risks substituting for, rather than building, local capacity?
What approaches have the best results in expanding opportunity and equitable outcomes in rural communities that have experienced historical discrimination, persistent poverty, and other structural forms of disadvantage?
How applicable are quality-of-life strategies—like investing in grocery stores, broadband, and banking—when markets have failed to take root in rural areas?
Opportunities for further research
The moderated discussions of the symposium revealed several critical questions that merit further investigation:
How can communities build decisionmaking processes that reconcile older and younger residents’ differing priorities into a shared path forward?
What program designs and funding opportunities convert outside assistance into sustained gains in local capability?
Which leadership, governance, and execution factors explain why one place succeeds while others—despite similar assets—do not?
Which diagnostic tools and processes best identify place-specific tradable-income opportunities and the binding constraints that prevent communities from capturing them?
What features of planning, accountability, and resourcing reliably move communities from written plans to implementation in low-capacity settings?
Which regional governance models ensure rural communities share power and capture value, and how should policy encourage economically logical boundaries?
Relevant resources
Amanda Weinstein et al. “An aggregate approach to estimating quality of life in micropolitan areas.” The Annals of Regional Science 70, 447–476 (2023).
Messenger, Nick, and Mark Partridge. “A Bigger Bang Approach to Economic Development: An Application to Rural Appalachian Ohio Energy Boomtowns.” The C. William Swank Program in Rural-Urban Policy, The Ohio State University.
Love, Hanna, and Mike Powe. “Building Resilient Rural Places: Strategies from Local Leaders to Strengthen Rural Assets, Diversity, and Dynamism.” Brookings, December 1, 2020.
Peters, David J., Sara Hamideh, Kimberly Elman Zarecor, and Marwan Ghandour. “Using Entrepreneurial Social Infrastructure to Understand Smart Shrinkage in Small Towns.” Journal of Rural Studies 64 (November 2018): 39–49.
Kristin K. Smith et al., “Mapping Rural Local Government Capacity for Climate Resilience Projects in the United States.” Public Administration Review, August 29, 2025.
Dabson, Brian and Christiana K. McFarland. “Collaborative Rural Development and Regional Economic Connectivity.” Federal Reserve Bank of St. Louis, June 21, 2021.
Pipa, Anthony and Heather Stephens, David Nason, and Zoe Swarzenski. “Unlocking Investment in Distressed Rural Places.” Brookings, January 13, 2025.
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