ABSTRACTThe basic premise of this article is that the historic location determinants literature is unduly pessimistic regarding the economic prospects of rural areas. Most historic location research has treated rural areas as homogeneous regions. This study demonstrates that rural counties should be treated as differentiated sets of economic environments rather than as an aggregate. The locational potential of specific industries differs dramatically among differentiated rural regions. When examined in this way, a number of high‐growth industries surface as having development potential under specified rural conditions. In addition this work raises serious questions about the adequacy of product life‐cycle theory (Erickson 1976) and high‐technology filtering‐down theory (Glasmeier 1991) in identifying the variables critical to industrial location. This work indicates that neither small size nor remoteness is as limiting as suggested by earlier r