Monday, July 24, 2006

A blueprint for rural economic rebirth

During our recent road trip, my family's van broke down just a short stretch of road from the Idaho-Montana border. We were towed back to Dave Smith Motors in Kellogg, Idaho. This town of 2,400 is where we spent two (long) days selecting a new van and getting it equipped to tow our camper.

During this time (which was an exercise in patience and flexibility), we had ample opportunity to learn about the town. Dave Smith Motors is a ubiquitous presence in Kellogg -- its balloon-festooned car lots and chipper salespeople are all over town. It employs over 200 people, and strangely enough, it's the largest Chrysler dealership in the world.

How did this happen in a small, remote Idaho town?

Like many communities in Montana and Idaho, Kellogg's economy was originally grounded in the mining industry. But the good times didn't last. In the 70s, 91 miners died in a mining accident in Kellogg. And in the 80s, after massive layoffs at one of its mines, Kellogg plunged to an economic nadir, with 95% unemployment. Kellogg wasn't alone; other mines in the region were suffering a similar decline.

Enter Dave Smith Motors. During the early 90s, its managers took a big gamble: they decided to use the Internet (an emerging technology at that time) as a fundamental sales medium. They did this with a sophisticated in-house application that facilitates web marketing and sales. The gamble paid off. Sales have grown from $45 million in 1994 to over $200 million in 2000.

It's a compelling story of a small-town business taking advantage of technology. But much better stories lie ahead for communities that tap into the current alternative energy boom. Biodiesel, ethanol, wind and solar energy: these are the technologies that venture capital firms are currently pouring boatloads of cash into. With an abundance of biofuel resources and untapped wind power, rural communities are in a position to reap tremendous benefits.

For further reading about the current alternative energy boom, see these two excellent articles:


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