My first vi­sit to ru­ral Ame­ri­ca was in 2005, dri­ving along the main road of a small Te­xas town of rough­ly 7000 re­si­dents cal­led Me­xia, to­wards land that my hus­band’s fa­mi­ly has ranc­hed for ge­ne­ra­ti­ons. Me­xia is a lar­ge town by re­la­ti­ve de­fi­ni­ti­on- fa­mous­ly home to the on­ly Wal­mart in all of Li­mes­to­ne Coun­ty. The next town over is Te­hu­a­ca­na, Te­xas, with a po­pu­la­ti­on of 283 pe­op­le.

Less than 20 per­cent of Ame­ri­cans live in ru­ral are­as, but ru­ral are­as co­ver 97 per­cent of U.S. land mass. Ru­ral are­as are de­fi­ned by the U.S. cen­sus as com­mu­ni­ties with less than 50 000 pe­op­le. Their po­pu­la­ti­ons have ste­a­di­ly shrunk over the last few de­ca­des as (most of­ten) yo­un­ger ge­ne­ra­ti­ons have mo­ved to ur­ban and sub-ur­ban are­as. Ru­ral are­as were slo­wer to re­co­ver af­ter the 2008 fi­nan­ci­al cri­sis and ove­rall see slo­wer growth than their ur­ban coun­ter­parts.

Ac­cor­ding to the U.S. cen­sus on­ly 17 per­cent of bu­si­ness ope­ra­tes in ru­ral are­as, the ma­jo­ri­ty of bu­si­ness is lo­ca­ted in ci­ties. With inc­re­a­ses in inf­rast­ruc­tu­re and bro­ad­band in­vest­ment for ru­ral are­as, this trend might slow­ly be shif­ting. Ru­ral are­as are more eco­no­mi­cal­ly and de­mog­rap­hi­cal­ly di­ver­se than ever.

With a shift away from far­ming and small ma­nu­fac­tu­ring towns, ru­ral com­mu­ni­ties now sup­port a wide ran­ge of jobs, from di­gi­tal ser­vi­ces to ad­van­ced ma­nu­fac­tu­ring to rec­re­a­ti­o­nal tou­rism. Ru­ral Ame­ri­cans have some of the hig­hest ra­tes of up­ward eco­no­mic mo­bi­li­ty in the na­ti­on, with hig­her high school gra­du­a­ti­on ra­tes and hig­her ra­tes of home ow­ners­hip, than their ur­ban coun­ter­parts. Could ‘kee­ping it ru­ral’ be a po­si­ti­ve trend for small bu­si­nes­ses and ru­ral com­mu­ni­ties ali­ke?

Location, Location, Location

Through Amc­ham Fin­land’s Launch­pad USA plat­form we work with many Fin­nish com­pa­nies he­a­ding in­to the U.S. mar­ket, brie­fing them, wor­king with them, and wal­king them through cri­ti­cal de­ci­si­ons like mar­ket ent­ry and ope­ra­ti­o­nal lo­ca­ti­ons. Gone are the days where Ca­li­for­nia and New York were the ob­vi­ous and per­haps on­ly re­a­lis­tic choi­ces, our suc­ces­s­ful mem­bers have en­te­red and ex­pan­ded in many ot­her ci­ties and clus­ters.

Many pe­op­le as­su­me that if you lo­ca­te yo­ur bu­si­ness in an ur­ban area, like New York or L.A. you are bound to be more suc­ces­s­ful than ot­hers lo­ca­ted in more ru­ral are­as. At first glan­ce, this might make sen­se be­cau­se ci­ties have more con­su­mers, more pros­pec­ti­ve emp­lo­yees, ea­sier ac­cess to bu­si­ness as­sis­tan­ce eco­sys­tems, lo­gis­tic and sup­p­ly chain inf­rast­ruc­tu­re, and more ca­pi­tal flows through ur­ban are­as.

Ho­we­ver, lo­ca­ting to an ur­ban en­vi­ron­ment does come with some draw­backs – sig­ni­fi­cant com­pe­ti­ti­on, hig­her ope­ra­ting costs, and hig­her ta­xes. Yo­ur dol­lar re­ve­nue could be hig­her, but yo­ur pro­fi­ta­bi­li­ty might suf­fer. The hig­her yo­ur cost line, the lo­wer yo­ur pro­fits. Ul­ti­ma­te­ly, to be pro­fi­tab­le, you need to run a lean ope­ra­ti­on. The lar­gest ex­pen­ses for ope­ra­ting a bu­si­ness in the Uni­ted Sta­tes are bu­si­ness in­su­ran­ce, ta­xes, la­bor costs, in­ven­to­ry, land/of­fi­ce space, and ad­ver­ti­sing. All of these costs are lo­wer when you ope­ra­te in a ru­ral area.

Lar­ge com­pa­nies like Sa­les­for­ce, Lock­heed Mar­tin, and Ama­zon have all par­ti­al­ly re­lo­ca­ted their ope­ra­ti­ons to smal­ler towns. It’s not just big com­pa­nies that are going ru­ral. Ac­cor­ding to the 2016 Small Bu­si­ness Cre­dit Sur­vey, a study con­duc­ted by twel­ve fe­de­ral re­ser­ve banks that sur­vey­ed 10 303 small bu­si­nes­ses (with less than 500 emp­lo­yees), ru­ral small to me­dium si­zed bu­si­nes­ses ten­ded to be more pro­fi­tab­le, with lon­ger sur­vi­val ra­tes, and an ea­sier time get­ting fi­nan­cing for sca­ling ope­ra­ti­ons. In many ways, ru­ral bu­si­ness out­per­for­med ur­ban com­pa­nies of si­mi­lar size. They were more li­ke­ly to be pro­fi­tab­le and more li­ke­ly to break even than their ur­ban coun­ter­parts.

With the on­set of di­gi­ta­li­za­ti­on and the ra­pid growth of on­li­ne bu­si­nes­ses, la­bor for­ce lo­ca­ti­on seems to be less of a fac­tor than ever. Te­le­com­mu­ting and re­mo­te work al­lows ru­ral wor­kers to pur­sue op­por­tu­ni­ties far out­si­de of their tra­di­ti­o­nal com­mu­ting zone. There is still work being done to en­su­re that all of ru­ral Ame­ri­ca has ac­cess to bro­ad­band in­ter­net, and though chan­ges are being made it is still too slow for some com­mu­ni­ties to be­ne­fit from the shif­ting pat­terns of emp­lo­y­ment and new di­gi­tal in­dust­ries that need emp­lo­yees.

Ho­we­ver, prog­ress is being made, and the rich cul­tu­ral con­nec­ti­on and Ame­ri­can his­to­ry tied to ru­ral are­as me­ans that many pe­op­le are com­mit­ted to kee­ping ru­ral Ame­ri­ca going and hel­ping its bu­si­nes­ses to flou­rish. When it co­mes to thri­ving bu­si­ness and eco­no­mic de­ve­lop­ment, keep yo­ur eye on what’s hap­pe­ning in ru­ral Ame­ri­ca, towns just like Me­xia, Te­xas have a role to play in Ame­ri­ca’s fu­tu­re eco­no­mic pros­pe­ri­ty.

Ar­tik­ke­li on jul­kais­tu SAM Ma­ga­zi­ne 2/2020-nu­me­ros­sa tou­ko­kuus­sa 2020.

Ale­xand­ra Pas­ter­nak-Jack­son, CEO at Amc­ham Fin­land, is wor­king to make Fin­land a more open and in­ter­na­ti­o­nal place to do bu­si­ness and to help Fin­nish com­pa­nies na­vi­ga­te the US mar­ket. She has taught on the im­por­tan­ce of net­wor­king as well as held non-pro­fit bo­ard po­si­ti­ons, both in Fin­land and the US. Ale­xand­ra holds an MBA from Haa­ga He­lia Uni­ver­si­ty of Ap­p­lied Scien­ces and a BA from the El­li­ott School of In­ter­na­ti­o­nal Af­fairs at the Ge­or­ge Was­hing­ton Uni­ver­si­ty. She li­ves in Hel­sin­ki with her Te­xan hus­band and two kids.