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The 1990s saw rural communities in the United States lose many manufacturing jobs. Rural areas were losing manufacturing jobs well before the 2001 recession started in March of that year (Henderson). Overall employment growth in rural areas has lagged that of metropolitan areas since 1995. The majority of the growth that has occurred has been in the service and trade sectors. However, the trade sector had even begun to decline in the last quarter of 2001 (Henderson). Much of the losses in the trade sector were due to the economic slow down across the country. However, the decline in manufacturing activity is likely the result of other forces that rural leaders need to address before they can change the direction of their local economies.
Changes in production technologies and management strategies in the past 10 to 20 years have changed such that companies no longer produce many of their intermediate goods internally. Instead production of intermediate components has been outsourced to companies with a comparative advantage in producing those components. The comparative advantage could arise due to specialized technologies owned or patented by the contracting company.
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