Think Globally, Act Locally

By Peter Schirmer and Melissa Taylor

The slogan that originated with environmentalists is also applicable for those concerned about the economic future of rural Kentucky. Acting locally is imperative, for rural Kentucky continues to shoulder many of the problems which have traditionally burdened it—poverty, low educational achievement, joblessness, inadequate access, and the list goes on. The fact that these are continuing legacies in many parts of the state is reason enough to dramatically change our approach to development. As the saying goes, "If you keep doing what you're doing, you'll keep getting what you've got." But if our dreams and aspirations for rural Kentucky are to become reality, we must now contend with another set of forces far beyond our control: trade liberalization, growing economic interdependence, rising standards for quality and increased international competition. In short, we must think globally.

Unfortunately, not everybody will be treated kindly by the forces of globalization, at least in the short-run. With expanding world markets and rising international investment will come increased competition for market shares abroad and here at home. The United States imports tobacco, clothing, food, automobiles, oil, furniture and many other products which compete with Kentucky industries. At the same time, growing populations and rising incomes in the developing world, combined with a climate of more liberalized trade, are creating huge export opportunities for agriculture and manufacturing. Our challenge is to avoid the dangers of globalization and to tap the opportunities it yields.

Who wins and who loses as a result of international trade will partly depend on the jobs people have and the products they make. The skills and products of the past, associated with mass production and specialization of labor, are giving way to new skills and products—those based on flexibility, quality and customization. The U.S. role in the global economy will be to supply high-quality, customized products and services; firms with a low-skill, low-wage workforce may be hurt by increased imports. The mix of industries in the different rural counties means that some counties may suffer job loss or stagnant wages, while other counties may enjoy a much brighter future.

Low interest in exporting and unfamiliarity with opportunities and quality requirements will hinder export growth in rural Kentucky. Programs offering technical assistance will no doubt be essential for increasing Kentucky's exports, but it would appear that for now the most pressing need is to generate more interest in, and understanding of, the export process. Once this is accomplished, small and rural firms will have a list of needs, including knowledge of foreign markets, special cultural and language skills, regulation expertise and financing. Dr. R.E. Burnett, assistant director of the Patterson School of Diplomacy and International Commerce, recommends "grass roots" assistance to give rural firms hands-on learning about the export process and to demonstrate the positive results from trade.

Globalization will have a direct impact on rural Kentucky. The needs and obstacles producers face will create new responsibilities for Kentucky's rural communities. Industrial best practices, across the nation and around the world, engage all members of a community in efforts to create internationally competitive agricultural and manufacturing networks. Through these networks, firms can address common problems and opportunities and at the same time train disadvantaged citizens and provide equipment and curricula for educational institutions. Communities, in turn, can decide which industries are critical to the survival of their region and use their resources to strengthen those industries.

Kentucky state government has begun an initiative to encourage the formation of networks, but a much more ambitious program is possible. Some states and nations have focused many more resources on networks and use them as a key element of development policy. The Kentucky Wood Products Competitiveness Corporation offers a model of how the state might enable firms in other industries to form competitive networks, which would be supported by regional organizations and state agencies. In the end, though, success lies in the hands of businesspeople, community leaders, schools and other civic institutions. Only they can act locally.

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