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Can Rural America Support a Knowledge Economy?
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Can Rural America Support a Knowledge Economy?
Nam An
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Real GDP per capita can be decomposed into labour utilisation (the number of hours worked per capita per year) and labour productivity (output per hour worked). Increases in GDP per capita can come from either. Figure 1 depicts how the indicators covered in this report show New Zealand to be performing across a number of key areas, and the recent direction of any change relative to the OECD. New Zealand’s performance relative to other OECD countries is low for a number of the indicators presented, which is to be expected given that New Zealand’s income per capita is below the. | Can Rural America Support a Knowledge Economy By Jason Henderson and Bridget Abraham Knowledge has become the new premium fuel for economic growth in the 21st century. Knowledge fuels new ideas and innovations to boost productivity and to create new products new firms new jobs and new wealth. Some analysts estimate that knowledge-based activity accounts for half of the gross domestic product in Western industrialized countries. In the United States knowledge-based industries paced gross domestic product GDP growth from 1991 to 2001 and their importance has accelerated since 1995. In rural America as elsewhere a variety of factors make knowledgebased growth possible high-skilled labor colleges and universities vibrant business networks and infrastructure. Some rural communities are already leveraging these assets to transform their economy. Many other rural places however have yet to tap this rich economic potential. This article analyzes the factors essential to rural knowledge-based activity in rural America. The first section defines knowledge-based economic activity describes its growing importance in the U.S. economy and identifies the regions of the country where it is concentrated. The Jason Henderson is an economist in the Center for the Study of Rural America at the Federal Reserve Bank of Kansas City. Bridget Abraham is a former research associate in the Center. The article is on the bank s website at www.kansascityfed.org. 71 72 FEDERAL RESERVE BANK OF KANSAS CITY second section uses empirical evidence to identify the factors that are essential to rural knowledge-based activity. The third section describes how some rural communities are leveraging these factors to build their own knowledge economy. I. KNOWLEDGE THE NEW ECONOMIC FUEL Traditionally economic growth was based on the physical resources and the products they produced. Today knowledge powers the U.S. economy by generating new ideas and innovations that boost productivity and create new products.
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