Community development: an entrepreneurial approach

Robert Tosterud

Published July 1, 1995  | July 1995 issue

This is the third in a series of guest columns that address the problems and solutions facing Ninth District rural communities. We welcome contributions to this series.

Others columns in the series:
Main Street USA's economic slide isn't just a rural problem
fedgazette, January 1995

A banker's perspective on economic development
fedgazette, April 1995

Due in large part to limited resources, the federal government role in rural and small community economic development has declined dramatically during the last 15 years. A U.S. Department of Agriculture report, "Rural Economic Development in the 1980s," sent the clear message that rural communities and people would shoulder the major responsibilities for local economic development. In response, many land-grant universities designed empowerment or self-help extension programs focusing on assisting small communities to strengthen their ability to recognize opportunities and thereby aid citizens in controlling their own and their towns' destinies.

Opportunity recognition and creation and taking control of one's own destiny is the "stuff" of entrepreneurship. As a business competitive strategy, entrepreneurship is typically defined as a learned, conscious, systematic and planned process of continuous opportunity awareness, creation and exploitation—to establish and maintain a habit of innovation and proactivity.

Led by Peter Drucker, perhaps the most influential writer and thinker in the area of entrepreneurship and innovation, and now popularized by the national bestseller, Reinventing Government (Osborne and Gaebler), interest and attention are drawn to the application of traditionally private sector entrepreneurial theory, practices, methods, principles and incentives to public sector decision-making.

In the fall of 1994, the School of Business at the University of South Dakota partnered with the Sioux Falls Argus Leader to design and implement an entrepreneurial approach to small community economic development. The mission of the program, termed Community and Family Enterprises (CAFE), is to assist communities in becoming successful by expanding and strengthening citizen participation and establishing an "entrepreneurial mindset" and leadership structure that will consciously and continuously be creating and discovering economic opportunities, or legacies, for the next generation of citizens. As the future of any small town (or large one for that matter) is tied directly to the attitudes and ambitions of its youth, CAFE emphasizes youth involvement and activities. In addition, as the family form of business organization is by far the dominant business ownership type in small communities, the CAFE program emphasizes the strengthening, expansion and creation of family businesses. Another special aspect of this program is that Karen Tosterud, a woman with rural roots, a mother and my wife, is a volunteer and invaluable partner in this effort, lending a family- helping-family dimension to the project.

Following a competition sponsored by the Argus, during which 56 communities, including four from Iowa, nominated themselves to be the experimental "Community on the Rise," the town of Tyndall, population 1,200, was selected for the further development and first application of CAFE. Entrepreneurship principles and methods are now being introduced into the community through a year-long series of events, workshops and surveys.

The project began in December 1994, and through the spring it was already apparent that the inherent entrepreneurial nature and traditions of rural citizens are serving as an excellent foundation for this highly tailored, extension-type continuing education community economic development model. Following are some of the activities of the first few months:

  • Two University of South Dakota (USD) business students prepared a comprehensive economic and business assessment of Tyndall.

  • USD students, who are also Tyndall residents, formed an Advisory Board to serve as a liaison with the community's youth. Special activities are planned; Tyndall youth form a special CAFE committee.

  • Along with my wife, I began writing a weekly column in the local paper to keep residents aware of CAFE activities and to discuss "community entrepreneurship."

  • USD business school students became "consultants" for particular Tyndall businesses.

  • With the cooperation of the Small Business Development Center, an "Entrepreneur Night" workshop was held, attended by about 50 local residents interested in starting their own business.

  • About 70 people attended a town "brainstorming session," during which most signed up for committee assignments, a list of "quick fix" projects was drafted (such as establishing 911 emergency phone service), as well as longer-term projects.

  • I spoke to a gathering of area farmers about their role in CAFE. The South Dakota Family Business Initiative helped conduct a family business and opportunities workshop.

Throughout the year many other events are planned, including a series of workshops on recreation and tourism, conservation, historical preservation, value-added agriculture and health care.

Surveys are an integral part of the CAFE program including "before" and "after" surveys of Tyndall residents measuring citizen attitudes, community involvement and entrepreneurial "leanings," and, of course, the impact of CAFE. The "before" survey is now being processed. "Before" and "after" measurements will also be taken of the town's assets and liabilities; two surveys are also planned, one of residents' shopping patterns and one of former Tyndall residents.

I've been involved in agriculture and rural development for almost 25 years. Hit-and-run, one-size-fits-all community development models have little lasting effect. This project represents a major, professional and personal long-term commitment. But one would expect that with a class of 1,200 students.