Appalachian Small Business Series: Industries of the Future

With the third installment in our series of ideas and tips for small businesses in Appalachia, we discuss the industries essential to the region's future growth.

Appalachia is, unfortunately, not well-known as the home of growth-oriented industries. People living inside the region often speak of how the economy was once stronger, typically due to a booming local extractive industry such as mining or logging. Interestingly, Appalachia's tremendous blessings of coal and timber also lead to what economists often term the "natural resource curse." This "curse" occurs in a region (or even an entire nation) where the prevalence of valuable natural resources actually deters economic diversification/long-term growth. When Appalachia's resources were in great demand, there was little incentive for communities and citizens to develop alternative employment opportunities because jobs were so plentiful. As good timber became less available and coal prices crashed, though, Appalachia's economic pillars crumbled with nothing to replace them. The more recent boom in natural gas was also short-lived as over-production crashed the market and many drillers in Appalachia underwent layoffs.

Appalachia can no longer afford to rely on boom-or-bust natural resource industries. We're not saying that communities in Appalachia should turn their backs on successful mining/logging/gas drilling businesses. Quite the opposite. Stable energy and timber companies should be encouraged to stay and grow! Forward View is not anti-coal/gas/oil/logging/etc. as long as the industry is responsible and economically viable. (For example, America still needs coal for over 30% of our electricity production and for almost all new steel.) We do, however, believe that Appalachia should diversify its economy so that communities aren't reliant upon a single cyclical industry for survival.

Our readers probably expect us to encourage leaders in Appalachia to pursue major manufacturing employers for job creation. Manufacturing, it seems, is this election season's #1 economic topic. Forward View, however, is absolutely certain that 21st century manufacturing will not be Appalachia's new economic engine. Why? It's very simple: Infrastructure.

Appalachia's transportation infrastructure was designed to deliver commodities such as coal and wood by rail to a few select locations. In a college Urban & Regional Economics course, our founder studied the highway infrastructure in Southwest Virginia. His research showed that billions of dollars would be needed in just this one corner of the state to satisfy the demands of large-scale manufacturing. Needless to say, we sincerely doubt that Appalachian communities will receive enough infrastructure investments to make manufacturers suddenly flock to the region in the foreseeable future. Forward View has an alternative solution, though, and it's perfect for small businesses.

In American Nations: A History of the Eleven Rival Regional Cultures of North America, Colin Woodard (2011) informs us that Appalachia is the most "Americanized" region of the nation. In fact, people living in Appalachia are more likely to describe their ancestry/heritage as simply "American" than anywhere else in the nation. Thus, anybody seeking a taste of Americana should begin their travels in Appalachia. The same lack of infrastructure that keeps Appalachia from developing a major manufacturing economy also ensures that the region maintains its unique culture, rural atmosphere and quiet communities. Instead of lamenting the lack of super-highways in Appalachia, communities and small businesses related to tourism should promote Appalachia as America's new tourism center. The region's lakes, rivers, mountains, farms and small towns are under-appreciated across the country. If you read almost any travel website or magazine, you realize that activities such as adventure tourism, eco-tourism and dining at farm-to-table restaurants are extremely popular. Appalachia has the natural resources necessary for all of these tourism-related opportunities, but communities need to harness them. (Farmers can provide the fresh ingredients used by local restaurants to feed the tourists who visit to shop/hike/bike/fish and explore in Appalachia.)

Our November newsletter will delve into the details of how small businesses across Appalachia can collaborate to ensure joint prosperity. We'll give special attention to strategies that business owners can implement during the upcoming holiday season. The 2016 holiday season should be the launch point for small businesses in Appalachia to make 2017 their best year ever!

Reference: Woodard, C. (2011). American Nations: A History of the Eleven Rival Regional Cultures of North America. New York, NY: Penguin Group.

Nathan Yates

Nathan Yates has been fascinated by technology and finance since he was young. He was the kid devouring the business section of the newspaper (remember those?) while others read everything else. Nathan believes that the American economy is built from the bottom-up, meaning that small businesses and local nonprofits are the foundation of our nation's success. These organizations are the lifeblood of towns and cities across the U.S. Unfortunately, most consulting firms overlook companies or organizations that don't have eight-figure budgets. Nathan thought Forward View Consulting should be different. And we are. As Lead Consultant, Nathan works with each client to deliver only the best financial and/or website development services. Nathan's years of web design experience and his business degrees ensure that professional expertise is brought to each project. Our network of contacts can offer additional specialized guidance if needed. Before creating Forward View Consulting, Nathan worked for an independent equity research firm as a Research Associate covering the industrial and energy sectors. This work involved preparing quarterly 15-40 page reports on multi-billion dollar corporations along with timely analysis of M&A activity and industry-wide news. He also managed research distribution and the company's online presence. Nathan also spent a summer serving as a local financial adviser's Research Intern. Nathan earned a Bachelor's degree in Economics and Finance from Southern New Hampshire University, graduating summa cum laude. He then earned a Master's degree in Finance from Southern New Hampshire University, where he was named the Outstanding Student in his particular concentration. Now, Nathan is an adjunct professor teaching economics and finance for his alma mater. In his spare time, Nathan enjoys fishing, reading, time with family and serving as a volunteer webmaster for the Clintwood United Methodist Church.