Rural Nevada: Entrepreneurs many, but incomes limited

Rural northern Nevada has a lot of entrepreneurs, but they're not making a lot of money or creating a lot of jobs.

That's not an uncommon situation, says a researcher with the Federal Reserve Bank of Kansas City who's looking at ways that rural areas can generate more jobs.

Across the nation, says researcher Sarah Low, rural areas tend to have a larger percentage of self-employed people than urban areas mostly because there are fewer jobs in the country and folks need to create their own.

But because rural entrepreneurs often are motivated solely by a desire to make a living for themselves in a place they want to live, they are less likely to build companies with significant employment.

Low spoke last week at an economic development conference sponsored by the University of Nevada,Reno.

In most counties of rural Nevada, she said, the percentage of the population that's selfemployed is above the national average of 16 percent.

The average income of those self-employed people, however, is less than the national average of $17,000 in every county of rural Nevada.

Even though those figures are dragged down by self-employed people working parttime, Low said, "There aren't a lot of entrepreneurs making a lot of money." The question in rural areas, she said, is how to encourage the development of more entrepreneurial firms that have the potential to grow beyond one-person outfits.

"There is a seedbed of entrepreneurs in the West," she said."They need help in becoming high-value entrepreneurs."

The Federal Reserve Bank at Kansas City is studying the factors that boost rural economic development.

For instance, Low said, the number of foreign- born or college-educated people in a community appears to be related to the number of substantial new firms the sorts that provide employment that are created.

Scenic beauty around a community mountains or lakes appears related to the number of new firms that are created as people choose to live in beautiful places and create jobs that support them.

But those communities, she said, don't necessarily nurture new companies that are significant employers.

The availability of capital, particularly the willingness of local bankers to back new ventures, seems to be a key element in determining whether rural entrepreneurs will thrive, the Federal Reserve research found.

Low said the Fed's researchers increasingly believe that economically successful rural communities are those that identify their strategic advantages and capitalize on them.

That work, she said, requires both innovative thinkers as well as entrepreneurs to put ideas into action.

"Entrepreneurs market a region's innovations," she said."Not all entrepreneurs are innovators.

Not all innovators are entrepreneurs."