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Entrepreneurship and Communities on the Margin

What are Communities on the Margin?  Across America, despite all our prosperity, too many places continue to struggle – with unemployment, high rates of poverty and too much despair. Often these communities face the associated challenges of crime and drug addiction. These places are truly “communities on the margin” - set apart from their more prosperous neighbors in isolated rural places, struggling urban and suburban neighborhoods and many of our nation’s Tribal Communities.

Why Should We Care?  At a November 2017 gathering of community and entrepreneurship thought leaders hosted by the Kansas City Federal Reserve Bank (with NetWork Kansas, Edward Lowe Foundation, SourceLink, Center for Rural Entrepreneurship and the International Economic Development Council), Dell Gines with the KC Fed and I made the case for these communities. We argued there are five interrelated reasons we should care:

1.       Places Matter – Every community is someone’s hometown. Based on the Center’s 40 plus years of community economic development work, we have come to believe that places or communities matter. Our hometowns are part of our cultural and social DNA. Communities are the prime environment for nurturing residents and growing new generations of Americans. It is an American value that places matter.

2.       Communities on the margin have assets and value. John McKnight and his team’s pioneering work on asset-based development enlightened us that even the poorest and most distressed communities have assets and value. For example, rural communities produce a disproportionate share of America’s military men and women. These communities have massive assets rooted in housing, infrastructure, buildings and the like. Rural communities in the San Luis corridor running from Santa Fe all the way into southern Colorado have been revitalized through the restoration of historic but previously run down and affordable buildings from a century or more ago that now house artisans, their galleries and work spaces, coffee shops, wine bars, cafes and have become new destination tourism spots.

3.       Failing communities come at a cost. From the perspective of fiscal responsibility, failing communities impact more than just the people for must live there. Rural communities in Central Appalachia that have eroded over decades as coal, timber and other natural resource industries have declined now depend more on federal and state government transfer payments. For many economically challenged counties, the single largest source of community income can be attributed to hardship-related government transfer payments (e.g., food support, Medicaid). At a time when government spending at all levels is constrained, there are a significant opportunity costs to declining communities and these impacts are not just current but can last generations. Think of the new investments we could support if more communities had thriving economies.

4.       Successful regions are built on successful communities. Regions are the modern building blocks of a successful economy and society. Regions are created by hub cities and rural hinterlands that fuel and support them. Regions that are healthy and thriving are made up of healthy and thriving neighborhoods and communities. Every failing neighborhood or community undermines regional vitality and opportunity in addition to the negative impacts on the people who live in those places.

5.       Failing communities can begin to threaten our social compact. Living in a community that is short on opportunity and hope is dispiriting. These communities often struggle with civic engagement and having a voice in determining their future. With despair may come unrest which threatens the stability of communities and makes it even harder to find solutions.

The Power of Entrepreneurship. The Center’s work across America, often in communities on the margin, has convinced us that entrepreneur-focused development represents the best and maybe the only way forward to creating stronger communities and enabling economic opportunities for the people who live in these struggling communities. Witness the powerful examples of how entrepreneurship has provided a pathway to prosperity for new immigrants to this country.

Entrepreneurship is not a quick fix. But it can be highly effective, sustainable and socially responsible. Entrepreneurship-based development enables residents to build community, personal economic opportunity and wealth, and ultimately help to create thriving communities that contribute to regional prosperity and American well-being.

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