The Rural Role in National Value Chains

Industry clustering is a useful concept for understanding the interdependence among industries and its implications for regional economic development and growth. The paper claims that the fullest understanding of the implications of industrial interdependence for rural economies requires viewing linked industries - or value chains - on a spatial continuum, from those that are national in geographic scope to those that are highly localized in specific places as regional clusters. From that perspective, rural economies may depend on - as well as contribute to - the competitive success of value chains anchored elsewhere. The perspective is operationalized using a new classification of 45 US industry value chains together with a new rural-urban county typology. The results demonstrate that rural America plays an integral part in a great variety of US value chains. Federal, state, or local development agencies must be careful not to view rural cluster strategy strictly as the development of groups of linked and related industries concentrated in specific rural places, as there are real opportunities to identify and leverage the advantages of rural locations for businesses and industries in globally competitive and geographically extensive value chains.