The Effect of Entrepreneurship in Rural (Northeastern) North Carolina

Introduction

North Carolina has a long and distinguished history as a national model for innovative economic development strategies. Long before technology was “hot,” the state helped create Research Triangle Park. Long before talent was “hot,” the state funded a host of innovative education and training initiatives. The result was a thriving economy that was the envy of other states and that served as a model for economic development programs around the world. (Dabson, 222)

While North Carolina continues to reap the benefits of these early investments, the last few years have not been filled with positive economic news. Several of the state's key economic anchors have faced major downturns. Tobacco production has plummeted due to decreased consumption and increased international competition. More recently, the state's numerous textile, furniture, and other manufacturing facilities have been decimated by foreign competition. Throw in Hurricanes Fran, Floyd, and Isabel and one sees that many communities across the state face a tough economic climate. (Hisrick, 21)

Discussion

In a recent publication, Entrepreneurial Arkansas: Connecting the Dots, the Corporation for Enterprise Development defined entrepreneurs as “people who create and grow enterprises” and entrepreneurship as “the process through which entrepreneurs are created and developed.” In most rural communities, a range of entrepreneurs exists. These entrepreneurs include (Pages, 30)

Aspiring entrepreneurs, who may lack the motivation or capacity to move forward;

Business owners who are seeking to transform their enterprises and become more entrepreneurial;

Growth-oriented entrepreneurs who are actively seeking to grow their enterprises and need assistance to do so;

Entrepreneurial growth companies that are achieving high and consistent rates of growth and innovation.

KEY ENTREPRENEURSHIP FACTORS

Existing research clearly indicates that certain regional characteristics are conducive to entrepreneurial development. While gazelle businesses can arise in any community, more of these firms are created in regions that nurture and support entrepreneurs (OECD; NCOE, July 2000; NCOE, December 2001). This support takes many forms, but four key factors appear to be especially important:

Diverse Capital Sources

An Enabling Culture

Entrepreneurial Networks

Supportive Infrastructure/Effective Public Support

CRITICAL CHALLENGE AREAS

In particular, three pressing challenges emerged as themes in nearly every focus group discussion:

The sense of isolation plaguing rural business owners.

Lack of access to capital.

Difficulties in accessing outside resources/support services

Sense of Isolation

If one were to rank typical emotions for rural entrepreneurs, a sense of isolation would rank near the top of the list. Such feelings are common for entrepreneurs, even those who operate in large cities. While many entrepreneurs prefer to operate as “lone eagles,” these same entrepreneurs want ease of access to services as needed. Feelings of isolation are compounded for rural entrepreneurs who must often travel long distances to markets or to simply handle basic business activities, such as banking. The absence of rural support networks further reinforces this feeling of isolation.(Hisrick,22)

Access to Capital

As noted above, the typical rural entrepreneur expects that his or her business will be built by bootstrapping, i.e. funding growth through sales and internally generated funds. This pattern is both typical, and, in many cases, desirable. However, the demand ...