Rural Innovation and Entrepreneurship

In 2022, the Wisconsin Startup Coalition and the University of Wisconsin Agricultural & Applied Economics – powered by Alliant Energy created the Rural Innovation Report. (view full report). One of our own startups, Blue Line Battery, is cited in this report as a non-metro business.

What is Rural?

***Photo taken by Craig Schreiner, UW-Whitewater***

The definition of rural is a matter of perspective and depends on how it is defined. The Rural Innovation Report crafts a working definition between metro and rural:

Metro: A metro county is either a central or outlying county. A central county is where one area has 50,000 or more persons and a population density of at least 500 persons per square mile. An outlying county where there is either 25% of the labor force commuting to a central county for work or has 25% of central county’s labor force commuting into for it for work.
Rural: A rural area refers to both adjacent and remote areas. An adjacent county is a non-metro county that physically adjoins one or more metro areas and has at least 2% of its labor force commuting to central metro counties. A remote county is any county that does not fall under the metro or the adjacent classification.

Innovation can happen anywhere from urban areas to rural areas. As the report explains, “Rural areas too have unique assets that can lead to innovation. Having clusters of farms with complementary agricultural industries, natural amenities, or a concentration of highly skilled workers can all lead to innovation in rural communities.” Rural areas also offer a high quality of life and proximity to urban amenities.

Innovation starts with an idea, but the entrepreneurial process brings the innovation to market. Fortunately, entrepreneurship is common in rural areas where many own their businesses. Rural areas often have natural amenities which attract talented individuals who may start their own business. Rural areas are also popular for telecommuters as well as those near and newly retired who may start a second career as an entrepreneur.

The Rural Innovation Report, states, “Taken together, rural communities have the potential to leverage entrepreneurship to boost innovation.”

Increasing Rural Entrepreneurship

Entrepreneurship is an asset to many rural communities. There is always room to grow and improve! To further develop entrepreneurship, it is important to foster the entrepreneurial ecosystem that includes all the factors that attract, support, and sustain entrepreneurship in the community.

The Community Capitals Framework provides a structured framework and outlines seven key factors for fostering entrepreneurship and vibrant communities:

Cultural Capital refers to the level of collaboration and inclusion in the community to engage in new ideas and celebrate differences.
Social Capital involves the connections and cohesion throughout the community to take collective action. Strong networks can benefit entrepreneurs.
Political Capital refers to the ability to influence local and state statutes and regulations. Collaboration between both public and private entities is important for creating a supportive environment for entrepreneurs.
Financial Capital refers to the presence of banks, community development financial institutions, credit unions, loan funds, investors, and financial resources.
Human Capital refers to the skills and abilities of the community, available resources, and access to education/training.
Built Capital involves the infrastructure that supports transportation, telecommunication, water, parks, and buildings.
Natural Capital encompasses natural amenities that support tourism and recreation.

Community Capitals in Whitewater, Wisconsin

The Rural Innovation Report leverages the Community Capitals Framework to evaluate counties across the state of Wisconsin. For each of the capitals, there is a color-coded map ranking each county along an index from low to high. Whitewater is primarily located in Walworth County but is also part of Jefferson County and near Rock County. Together, Walworth, Jefferson, and Rock Counties are commonly referred to as the “Tri-County Area.”

Cultural Capital Index

The tri-county area ranks higher than average on the cultural capital index. Whitewater, Wisconsin is fortunate to be home to the University of Wisconsin – Whitewater encompassing the Young Auditorium and various art galleries. There are many active community organizations dedicated to preserving history, culture, and art. There is a farmers market on Sundays, a Whitewater City market on Tuesdays in summer or Saturdays in Winter, various festivals and concerts throughout the year, as well as multiple art galleries and historical landmarks.

Social Capital Index

The tri-county area ranks average on the social capital index. Whitewater is a walkable community from the west to east of town. The Whitewater Chamber of Commerce actively promotes businesses as well business resources while Discover Whitewater focuses on bringing individuals and families to town. There are many active member-based and community organizations dedicated to the community. Whitewater is fortunate to have a diverse population, especially with the University in town.

Political Capital Index

The tri-county area ranks average on the political capital index. Local leadership is dedicated to fostering entrepreneurship and innovation. Together, the City of Whitewater, the Whitewater Community Development Authority, and the University of Wisconsin – Whitewater make the Whitewater University Technology Park and Innovation Center possible.

Financial Capital Index

The tri-county area ranks slightly below average on the financial capital index. Overall, the entire state of Wisconsin ranks average to slightly below average on the financial capital index. The report suggests this is because “Wisconsin tends to have lower levels of financial capital compared to the rest of the U.S.” Equity and angel-investing is scarcer in rural areas. For rural areas, financial capital is more likely to come from banks, credit unions, investor groups, and community development organizations.

Human Capital Index

The tri-county area ranks higher than average on the human capital index. The Whitewater region has a higher percentage of residents with a bachelor’s degree or higher than other parts of the state. (U.S. Census data). The University of Wisconsin – Whitewater has one of the best business schools in the state and a strong entrepreneurship program. There is a strong pipeline of healthy skilled individuals in the community. Additionally, there are many business outreach programs to support entrepreneurs and small businesses. Furthermore, the Whitewater University Innovation Center provides office space and incubation services to help start and grow your business.

Built Capital Index

Whitewater, Wisconsin has a strong infrastructure and is a “micropolitan” city providing easy access to nearby major metro cities. Whitewater is served by 4 airports within 50 miles. Interstates can be accessed 11 miles away. Interstates 43, 90, and 94 are located just minutes from US Highway 12 and State Highway 59 and 89.

Natural Capital Index

Whitewater, Wisconsin ranks slightly below average on the natural capital index which takes into account four measures (i.e., average annual temperature, air quality, percent of land covered in forests and percent of land covered in mountains). As the report suggests Wisconsin counties tend to rank low on the Natural Capital Index due to the lower average annual temperatures. However, it has a high concentration of forested lands. Whitewater is located with the Kettle Moraine State Forest – Southern Unit which offers abundant nature, history, culture, and recreation. The southern unit spans 30 miles from Ottawa Lake in Dousman, WI to Whitewater Lake in Whitewater, WI.

Takeaways

Whitewater, Wisconsin is a great example of a rural community working to foster an entrepreneurial ecosystem where innovation and entrepreneurship thrives! To help rural communities, the Rural Innovation Report concludes by calling for successful policy decisions focused on investing in people in both the long and short term. The long-term is focused on early education and continuous learning opportunities, while the short-term involves networking, mentorship, professional development, technical assistance, and financing opportunities. Ultimately, “long-term strategy around ‘place-making’ could make the community attractive to potential innovators and entrepreneurs” (Rural Innovation Report, 2022). The Community Capital framework helps one think through how they can create high amenity and quality of life in their own rural community.

What is Rural?