Economic 'hub' suggested
for Eastern Montana

A new survey suggests that Eastern Montana has the untapped human capital and political will to create a new “center of economic commerce,” which could be used to spur development and reverse declining population trends in the area.

“A Workforce and Interest Survey to Establish an Economic ‘Hub’ in Eastern Montana” was produced by The University of Montana. It’s online at http://www.umt.edu/research/ econdev.htm.

The survey was spearheaded by Jon “Tony” Rudbach, UM associate vice president for research and economic development. He argues that competitive economic growth
requires a town or city with infrastructure sufficient to support major industries in order to take off, and that the 21 depressed Eastern Montana counties don’t have cities with sufficient resources and infrastructure to boost economic development on their own.

His solution: Montana should create an “economic hub city” in the east that could attract outside businesses. Economic development activities would be concentrated in this town to improve transportation, information and education infrastructure. However, the workforce would be drawn from wide-spread communities and would commute to the “economic hub” for jobs.

And after intense review of demographic and survey data, Rudbach has the ideal candidate for the new hub: Glendive, a town of 4,700 people along Interstate 90 near the North Dakota border.

“What we need to do is create a city that has a population somewhere between those of Kalispell or Bozeman — about 25,000 people,” he said. “And we assume that most of the workforce derived from existing Montanans would not move to the new hub city, but would continue to live in their rural communities or ranches and then commute to the economic center and then return home with their paychecks.”

Rudbach said Montanans hear constantly that their state underperforms economically. However, he said the western portion of the state — an area that has been referred to by Gov. Brian Schweitzer as “the boot”, because of its shape — actually performs at or better than the national average. The eastern counties, however, drag down state averages.

He said Montana’s prosperous boot is situated around the population centers of Kalispell, Missoula, Great Falls, Helena, Bozeman, Butte and Billings, which except for south-central Billings are all located in the western or central regions. Rudbach said Montana must become proactive in trying to spread its prosperity eastward.

“Maintaining the status quo for Eastern Montana is not an option,” he said. “To do nothing will allow the downward economic slide to continue, with rapid loss of regional community infrastructure and services.”

Rudbach’s computer models actually suggested the ideal epicenter for the hub would be Richey, a town of about 180 people on Highway 200 near Sidney. But the larger town of Glendive is only 40 miles south of Richey, it’s on the interstate and Rudbach said it has room to grow, with lots of unused infrastructure left over from the late-1970s and early-’80s oil boom.

Rudbach and research assistant Julie Dasinger of Sidney surveyed the region to discover residents’ thoughts about the hub proposal. They also wanted to study the quantity and quality of the workforce within effective commuting distance of potential hub sites, as well as estimate the willingness of people to take higher-paying jobs and to commute to the hub city. In addition, the demographic information they collected may be used to entice businesses and government agencies to the proposed economic cluster in the future.

UM collected 1,122 usable surveys regarding the hub proposal in 2005. The survey was administered at 13 sites in 11 eastern counties. No one under 18 was surveyed.

More than 90 percent of respondents supported the creation of an economic cluster, even if they were not interested in taking a job in the hub. If the hub generated better-paying jobs with benefits, 63.5 percent of respondents would be interested in taking such jobs. And if a hub city were created, 65 percent to 73 percent of families would drive up to 60 miles to take advantage of additional retail shopping, health centers, entertainment and higher education.

More than 50 percent of respondents were concerned about the economic future of Eastern Montana for themselves, and more than 73 percent were worried about economic opportunities for their children. In addition, 91.1 percent of respondents saw a need for “outside intervention” to grow the economy of Eastern Montana.

Also, more than 66 percent of survey-takers knew three to five people who had left the region but might return if good jobs became available. The majority of respondents would be willing to commute more than 25 miles for suitable jobs.

“Eastern Montana has a lot to offer,” Rudbach said, “especially its stable, educated and ethical workforce.”

How would one create an economic cluster in Eastern Montana? Rudbach said Montana needs to land an “anchor company or institution” in the area. He said something like an IRS processing facility or Medicare claim center — agencies that rely on storing or processing electronic data — could be operated in Montana as easily as in metropolitan areas.

A regional airport with at least one national passenger carrier also likely would be required, and Rudbach envisions a heavily subsidized regional transportation system to shuttle workers into the hub city from outlying areas.

Rudbach said the hub city would require a high-speed and high-quality communications network. It also would need enhanced educational resources, and a higher level of culture, entertainment and recreation would be necessary to satisfy the needs of a creative workforce and their families.

Rudbach said depressed agricultural regions have been revived by aggressive political intervention in the past. As an example he cites the Øresund region of Denmark and Sweden, which was connected by a bridge in July 2000. The governments of those two countries worked to develop the Øresund Science Region, and building the bridge across the Øresund Strait only enhanced economic development in the area. Rudbach published a 2004 report, “Analogies Between the Economies of Øresund and Montana,” which detailed his study of the region.

“Our survey shows there is support for intervention in Eastern Montana,” Rudbach said. “We need to help the regions of our state that need it the most.”