Hispanics keeping rural towns afloat

IOWA STATE (US) — Small towns in the Midwest are being saved from growing ever smaller in part because of an influx of Hispanics in the last 20 years.

Researchers have identified 12 rural communities (populations of 10,000 or fewer) in Iowa, Kansas, and Nebraska that are “new destination towns” for Hispanics and women interested in being small town entrepreneurs.

“The old-time philosophy would be, ‘If you put jobs there, then people will come,'” says Terry Besser, professor of sociology at Iowa State University. “Now there’s a slight variation on that philosophy, which says, ‘If you have amenities, then you attract the workforce that will bring businesses that will create more jobs.'”

Amenities are defined as “features of a town that make it a good place to live”—such as natural resources, outdoor and indoor recreational infrastructure, and cultural and entertainment opportunities. But amenities alone may not bring jobs to town—the growth and prosperity of local business is still seen as critical to community survival and vitality.

For the study, researchers interviewed approximately 300 business owners and managers in 18 targeted towns, including all the Hispanic business owners through the use of bilingual interviewers.

Small town entrepreneurs have different reasons for going into business than their counterparts in metropolitan areas, Besser says.

“For the nation as a whole, what motivates entrepreneurs is typically making a lot of money, as well as the challenge of coming up with an idea and seeing it come to fruition. But we didn’t find that to be the case with small business owners in small towns.”

Because other income opportunities are often limited, small town entrepreneurs are often “pushed”—rather than “pulled”—into starting their own business to support their family and fill a community need.

Further, there are specific differences in the ways Hispanic entrepreneurs do business, Besser says.

“One is that they’re more motivated by the challenge than the white, male business owner. They also report they’re more willing to take risks. And they want to grow their business; they are planning to expand at far higher numbers than are the white male business owners.

“But they don’t want to work together with other businesses, primarily because they do not have a cultural background that encourages them to trust strangers.”

Those cultural differences sometimes keep Hispanic owners from joining business associations, which have been found to help businesses become more successful within their communities. Only 24 percent of Hispanic-owned businesses interviewed were business association members.

The study also found that a slightly lower percentage of women owned-businesses (59.3 percent) were association members than businesses owned by white men (69.5 percent).

Terry Besser is studying the amenities and key factors to economic vitality in small, rural communities

The researchers cite the importance of having a flexible schedule for family and personal lives as one reason fewer Hispanic and women business owners become business association members. Business association leaders should work to promote greater membership, an important step in the revitalization process, the researchers write.

“We are confident that such an investment in addressing the needs of the increasingly diverse group of business operators in rural communities is an important component of any rural economic development plan.”

Researchers from Kansas State University, the University of Nebraska-Lincoln, and the University of North Carolina-Greensboro contributed to the study.

More news from Iowa State University: http://www.news.iastate.edu/