Rural Knowledge Clusters

Project Concept

Context: The challenge of rural community vitality in a global economy

Rural communities face tremendous challenges in adapting to a knowledge-based global economy. The "knowledge economy" is characterized by an increasing reliance on human capital, and competitiveness is based on the ability to innovate. Traditional rural economic staples are under growing pressure due to globalization of markets, and diseconomies of scale and outmigration hinder adjustment in the rural economy. Consequently a growing gap between urban and rural economic performance has emerged.

Rural knowledge clusters as a model of rural innovation
Yet examples of prosperous rural economies can be found in Minnesota and elsewhere. Can a model of "rural knowledge clusters" help explain these examples? Rural knowledge clusters are innovative, interrelated groups of firms located outside metropolitan areas that derive competitive advantages through accumulated, embedded, and imported knowledge among local actors and institutions. The dynamism of rural knowledge clusters can be explained in terms of three factors:

Competitive advantage: current factors related to supply or demand conditions, related industries, or local rivalry that give local firms a market advantage.

History: an historical base of knowledge about an industry or technology that has given rise to current sources of competitive advantage.

Institutions: formal and informal institutions that develop around clusters to support the creation, diffusion, and import of knowledge.

Project Descriptions

Globalization and Knowledge Clusters for Rural America
SLPP and the Freeman Center for International Economic Policy received a grant from the USDA Fund for Rural America for a project titled Globalization and Knowledge Clusters for Rural America. As part of this project, SLPP has undertaken a series of studies on how rural knowledge clusters operate in Minnesota. The Year One report is also available to read.

On September 13 and 14, 2002, SLPP and Freeman Center hosted the conference Rural Community Vitality in a Global Economy where research from the Fund for Rural America project, as well as related research and perspectives from around the country, were presented.

On September 13-14, 2004, SLPP brought together leading academics, policymakers, practitioners, and financiers at the Conference on Knowledge Clusters and Entrepreneurship in Regional Economic Development. The agenda, papers, and speaker bios from the conference also are available.

Snapshots of Rural Innovation: A Compendium of Rural Industry Cluster Vignettes
—to locate near other similar or complementary companies to achieve external economies of scale. Business clusters in the United States are often associated with population centers. In rural areas, however, clusters can be just as effective in promoting the economic health of an area, but never appear on the radar screen formed by common measures. This study draws on other measures of knowledge to produce a sample of rural clusters. The vignettes in this compendium are collected by Regional Technology Strategies, Inc. with support from the Hubert H. Humphrey School of Public Affairs at the University of Minnesota under a grant from the U.S. Department of Agriculture.

Developing Rural Knowledge Indicators

Exploring the Role of institutions in Northwestern Minnesota's Recreational Vehicles Cluster
“exhibit a path of historical development and evolution to the local knowledge base.” The second is that both formal and informal institutions may foster “the creation, diffusion and renewal of the local knowledge base.” The purpose of this report is to extend the State and Local Policy Program's preliminary examination of northwest Minnesota and the recreational vehicles industry cluster first identified back in 1998. In particular, the study seeks to explore the relationship between the specialized knowledge base associated with the cluster and regional institutions.

Rural Knowledge Clusters: Implications for Minnesota State Colleges and Universities
This project, completed for the MnSCU NetWORK for Customized Training, Education, and Development, examined three rural knowledge clusters in Minnesota (Mankato, Thief River Falls/NW Minnesota, and Alexandria), with particular emphasis on the role of community and technical colleges, and broader policy implications for the MnSCU system.

Rural Knowledge Clusters: The Challenge of Rural Economic Prosperity
SLPP received a grant from the EDA to complete a literature review on rural knowledge clusters as part of its "Review of Economic Development Literature and Practice" series.