Characteristics of New or Expanding, Export-Oriented Firms in the Upper Great Plains

The development of rational policy aimed at revitalizing rural America must recognize the changing economic structure of the country as a whole and how these changes influence potential sources of economic growth for rural areas. Recent analyses clearly indicate that the industries that have traditionally been the mainstays of the rural economy (e.g., agriculture, forestry, mining, and manufacturing) may not be major sources of future employment growth (Pulver 1988; Ekstrom and Leistritz 1988). Indeed, if the United States is to be competitive in an increasingly international economy, these industries will feel *The authors are, respectively, professor and research Economics, North Dakota State University, Fargo. pressure to become even more efficient, which is likely to lead to even less employment in these sectors in the future. Rural areas seeking economic growth or revitalization will have to consider a wider range of export-oriented activities than the manufacturing branch plants that have been the focus of most previous economic development programs. The need for economic revitalization is evident in many parts of rural America, but perhaps nowhere is that need more apparent than in the Upper Midwestern states. Because their economies are heavily dependent on agriculture and natural resources (e.g., mining), these states have experienced a severe economic downturn in the 1980s. Although the need for economic development is broadly accepted, state policymakers and local leaders often lack a clear understanding of which factors are most important in influencing firms ' decisions to locate in one area rather than another. Indeed, information available to these decision makers is often contradictory and confusing. While some observers indicate that the key factors in location decisions are such traditional items as low state and local tax rates, low wage rates, and availability of nonunion labor (see for example, Grant Thornton and Company 1988), others contend that a "new economy " has emerged in the 1980s and that the conditions important t