Standing Still Has a Cost

By Stacy Davis,

Over the past several weeks, we have been talking about the infrastructure that keeps rural communities going. Not just roads, bridges, and water lines, but housing, childcare, healthcare, small businesses, and the people who make a community feel like home.

Today, I want to talk about the work that helps connect those pieces: economic development itself.

We understand that a road needs maintenance. We know a water system needs investment. But what about a community’s ability to keep businesses open, help employers expand, attract families, and prepare for the next opportunity? That needs investment, too.

Economic development is not simply something a community does after it can afford everything else. It is part of how a community builds the capacity to afford its future.

Rural America has an opportunity, but growth is not automatic. The years since COVID have given us a reason to take rural opportunities seriously.

According to the USDA Economic Research Service, the population of nonmetropolitan America grew each year from 2020 through 2024, following a decade of population loss. Between 2020 and 2024, migration added nearly 974,000 people to these areas, helping offset losses caused by deaths exceeding births. In 2024 alone, the nonmetropolitan population increased by approximately 134,500 people. These figures use nonmetropolitan counties as the measure of rural America.

That does not mean every small town is growing. In fact, 51% of nonmetropolitan counties still lost population between 2020 and 2024. Much of the growth was concentrated near metropolitan areas and in places with recreation-based economies.

To me, that says two things: people are choosing rural places, but no community should assume that choice will happen automatically.

Broadband is part of this story. The Federal Reserve Bank of Richmond identifies expanded remote and hybrid work, broadband investment, and preferences for lower-cost or less densely populated places as likely contributors to the turnaround in some rural communities. Fiber did not single-handedly cause rural population growth, but reliable connectivity helped make new living and working arrangements possible. A front porch and a good internet connection can be an appealing combination.

But promoting rural living should mean more than selling a picture of a peaceful sunset. We should be working toward places where someone can build a career, raise a family, start a business, and participate in community life without feeling that opportunity requires a different ZIP code.

Installing fiber is important. Helping residents and businesses use it effectively is another part of the investment.

A 2024 study by the Center on Rural Innovation examined economic outcomes using data from 2020–2022. Compared with its control group, rural counties with high broadband utilization, combining strong adoption with a greater presence of small broadband providers, had 44% higher economic-output growth rates and 18% higher per-person income growth rates. Those are differences in growth rates, not a claim that every resident received an 18% raise. The study was supported by broadband-industry sponsors.

The researchers also reported that low-broadband-use rural areas were losing an average of three or more businesses annually, while high-utilization communities saw their business numbers increase. That is evidence of an economic divide associated with connectivity and its use, not proof that broadband alone explains every opening or closing.

Think about what three businesses mean in a small community. We are not talking about three dots disappearing from a spreadsheet. Picture three storefronts, the people who worked there, and the customers who now have another reason to shop somewhere else.

That is why I believe economic development must include the businesses we already have, not just the ones we hope to recruit.

What does not investing cost? Here is where we need to be careful with the numbers. The research does not give us a universal price tag for eliminating a local economic development program. A declining population is not proof that local leaders failed to invest. But we can examine the opportunities associated with having, or lacking, organized economic development capacity.

An Urban Institute study of U.S. Economic Development Administration projects from 2010–2021 found $46 per resident in total project investment inside economic development districts, compared with $20 outside them. Those totals included federal funding and matching investment across the study period, not annual amounts. Economic development districts are regional organizations that help communities plan and pursue projects.

Communities outside those districts may still fund local economic development, and the comparison does not prove district membership caused the funding difference. It does show a substantial gap in investment associated with regional participation. For me, that reinforces the importance of planning, partnerships, and having people available to do the work.

A grant opportunity needs someone to evaluate it. A business owner considering expansion needs someone to help connect the resources. A prospective employer needs accurate information, timely responses, and a community prepared to follow through. Those responsibilities do not disappear when we remove a budget line.

The costs of decline can also compound. The Richmond Fed describes how losing working-age adults can make it harder for employers to operate and discourage new businesses from locating themselves in a community, contributing to further population loss.

And the practical math matters. A community that loses households does not automatically lose the same proportion of its water lines, streets, or public buildings. Maintaining those systems can leave fewer people sharing costs that have not fallen nearly as much.

In my view, investing in rural economic development means supporting the people, partnerships, and practical work that turn a community’s assets into opportunity. It means preparing before a major employer needs help, before a business owner retires, and before a family decides there is no future for them here.

I do not want our rural communities to become something they are not. I want them to remain places where people can choose to build a life and have a reasonable opportunity to succeed.

So, when we ask, “What does economic development cost?” we ought to ask another question alongside it: What opportunities might we lose without it, and who will carry that cost?

Investing in rural economic development is not about making our small towns bigger for the sake of being bigger. It is about making sure they remain places worth calling home, with a future we are helping build rather than leaving to chance.