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Penny exposes development myths

Fri, Apr 20th, 2001
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By Mike McGrathMonday, April 23, 2001

Former First District Congressman, Tim Penny, was the keynote speaker at the annual meeting of the Southeast Minnesota Development Corporation (SEMDC) last week in Hayfield.

Mr. Penny, who now serves as a Senior Fellow and Co-Director of the Humphrey Institute Policy Forum at the University of Minnesota, focused his talk on the Myths of Economic Development.

While Penny was willing to admit that parts of Southeastern Minnesota have moved beyond some of the myths, he also acknowledged that economic development might be hampered by the four myths, which he believes rural communities fall victim to.

Myth #1: Im from D.C. and Im here to help you.

The first myth of economic development is plainly, "Im from D.C. and Im here to help you." According to Penny, federal funding for rural economic development is static, not growing. If rural communities expect that the federal government will bail them out they are living a "pipe dream."

As examples, Penny cites the immense spending by the federal government on agriculture subsidies, yet the farmer is not being saved. Communities lack vitality tied to agriculture that they formerly enjoyed, as evidenced by the loss of so many small businesses in small towns.

Penny predicts there will be no extra federal dollars for rural areas from the projected $6 trillion surplus, as proposed tax cuts will offset any potential funds for growth in rural development spending, resulting in a status quo on federal funding to rural economic development.

Myth #2: "Build it and they will come."

According to Penny, many communities have built projects in anticipation of booms: Industrial parks sit empty; sports arenas that were predicted to boost development in slumping neighborhoods failed to do so, state prisons built without contracts for prisoners bring a high price in taxes.

"Dreams have to have some basis in reality," noted Penny. "Who you are, what you got, what you can build on" is how Penny believes communities must approach economic development.

"We all cant have an ethanol plant. Lanesboro can be a tourist town, Laverne is not likely to be a tourist attraction," explained Penny.

"We also cant build more big co-ops that compete with Cargill. We need to think about new co-ops, small co-ops that serve niche markets."

Myth #3: "I, me, mine."

Tim Penny believes that not much progress has been made with this myth. There is a limited amount of local resources available in every community. He believes that small, rural communities need to partner together to create synergy.

"Synergy can sometimes bring more activity," Penny explained. Using tourism as an example, Penny noted how 3 or 4 small towns in Southeast Minnesotas Bluff Country have separate "Western Days" celebrations. He encourages communities to look beyond the "I, me, mine" attitude and think about working together to be more effective.

Myth #4: "Rural America is going to continue to decline."

Tim Penny says he is not worried about this so much, anymore. He does, however, see work force development as the number one issue facing economic development in Minnesota. He emphasized that it will be important to retain those who grow up here to build a workforce for the future.

Mr. Penny also pointed out that retirees are a "built-in asset" for many communities. "Senior citizens are excellent assets for local economic development authorities (EDAs). Every EDA should have new eyes," he explained. "Senior citizens want to work," he added, noting that the elderly can be good part-time employees.

Minnesota has also seen growth in the number of immigrants moving to rural areas. Penny believes communities focus too much on what services they will have to provide to immigrants, but might instead focus on what assets immigrants can bring to a community.

In summary, Tim Penny says he sees tremendous potential for growth in this area. "Im convinced we are positioned for a renaissance in rural Minnesota. I do not see that we are dying on the vine," he concluded.

Mr. Penny served the First District in Congress from 1982 to 1994.

By Mike McGrath

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