Fogo Island, like much of rural Newfoundland, has felt the sting of out-migration and the decline of the fisheries. But renewal is underway, thanks to a native daughter who has returned home with the right connections, seed capital, and ideas to create a sustainable economy for the island

Nick Herder makes his way over tangles of spongy bramble as a brisk Atlantic breeze pulls at his clothing. He dodges around hunks of rock that litter the landscape like a giant's marbles. It's a long way from New York City to wind-whipped Fogo Island, off Newfoundland's northeast coast. But it's a trade Herder was happy to make this summer when he left a job working on residential housing projects to become intern architect for the Shorefast Foundation.

Herder traded the gritty Red Hook neighbourhood of Brooklyn for a quaint little house near a church by the sea in the town of Tilting, population 247. On this day that straddles the cusp of summer and fall, Herder is standing on what will be the site of a five-star hotel, a couple of stone's throws away from the crashing Atlantic Ocean. The native of St. John's says he was drawn to the project as soon as he heard about it. "The question of what's becoming of outport Newfoundland, I think, is on every Newfoundlander's mind," says Herder. "Shorefast addressed that issue directly."

The 29-year-old is just one of a diaspora of Newfoundlanders, and others, who have all descended on remote Fogo Island as part of Shorefast's work. They are all part of the grand vision of a native daughter who struck it big in the IT business, retired young, and returned to her roots. Zita Cobb wants to make Fogo Island an incubator of social entrepreneurship, using business principles to achieve broader goals. Her essential question: "Can we create businesses that sustain communities?"

Cobb ascended to senior vice-president of strategy for then tech darling JDS Uniphase before leaving that world behind in 2001 at the age of 42. During her time as a top financial official at a publicly traded company, she found the focus was firmly set on earnings per share and debt-equity ratios. But Cobb says her purpose in founding Shorefast is broadening the bottom line to include social goals—job creation, and the effect on the local economy, for example. "How about your impact as an organization in the world, in your community?" she says. "That can be measured. It's a bit Pollyanna, but it's good to dream."

Cobb says the concept of social entrepreneurship is not well understood on this side of the pond. By contrast, she notes, the United Kingdom is well ahead on the development of legislation governing enterprises that overlap the for-profit and non-for-profit realms. On Fogo Island, she wants to meld the best of both.

To realize her vision, Cobb formed the Shorefast Foundation to help build a "critical mass" of sustainable businesses. Those businesses will fit hand-in-glove with Fogo Island's culture, history, and ecology, and—hopefully—diversify the local economy beyond the traditional realm of the fishery.

Cobb convinced the federal and provincial governments to each provide $5 million. She is putting up $6 million of her own cash, for an initial pot of $16 million for the capital program. It's ambitious. It's also, by any objective measure, risky. But for Cobb, failure is not an option. "The key thing I tell people is, if this fails, believe me, you will have a bad week, maybe," she says.

"I will have dead people getting out of the graveyard in the form of my family to come around the harbour and wring my neck. I think I have a little more to lose. I'll have a bad life."

Cobb grew up in the town of Joe Batt's Arm. Her entire family eventually moved away to seek better opportunities elsewhere. She was just 16 when she said goodbye to Fogo Island, which is an hour's ferry ride from the mainland of Newfoundland. The island is, in some ways, typical of the challenges facing rural regions everywhere. The population of Fogo Island and nearby Change Islands has plunged to 3,000 from 5,000 decades ago. The demographics are not kind. There are few young people left there. According to the 2006 census, just 85 of the 775 residents of Joe Batt's Arm-Barr'd Islands-Shoal Bay were under the age of 15. That's less than 11%, which is well below the national average.

Fogo Islanders have responded to those challenges. In the 1960s, then premier Joey Smallwood hatched a plan to resettle the island, but the people wanted to stay. Memorial University and the National Film Board got involved. Residents were interviewed, and the resulting films were shown in each of Fogo Island's roughly 10 isolated communities.

The Fogo Process, as it became known, is credited with leading the islanders to band together. They ultimately formed a successful fisheries co-operative that survives today. Cobb is hoping that Shorefast's plans for the island can become a second Fogo Process, this time using philanthropic funds to create sustainable economic activity.

There are several initiatives at the heart of Shorefast's plans. The first is the world-class inn, to be built on a rocky outcrop of land between Joe Batt's Arm and Barr'd Islands. It will have 29 rooms, a small conference centre, a small spa, a European-style steam room, and hot tubs on the roof. There will be a heritage library. An E-cinema. An art gallery. A gourmet restaurant with all local ingredients "except for wine and olive oil—you can't live without those," says Cobb, laughing.

The lead architect is Todd Saunders, a native of Gander in central Newfoundland who now lives and works in Norway. His design for the inn combines Newfoundland sensibility with sleek Scandinavian lines. It will not be a swirling Frank Gehry special. "That's a fantasy," says Cobb. "I don't want to turn this into Fantasy Island. It's real, and the real things are the most beautiful things."

The inn, which is scheduled to open in the fall of 2011, will be aimed at the luxury travel market, with a per-room rate of $400 or higher. The business plan requires roughly 3,000 visitors annually.

"You know who I'm competing with?" says Cobb. "Dubai. And I'm going to win." In her opinion, luxury resorts such as Dubai are fake and feature what she describes as "a manufactured reality." On Fogo Island, she says, Shorefast is trying to put the best face on something authentic.

As part of its efforts to attract wealthy "culturally aware" geo-tourists, Shorefast is working to build a residency program for contemporary artists. Cobb hopes the program will put the island on the international map. Saunders has designed half a dozen studios that will dot the island at some of its most dramatic points. And work is underway to renovate homes to house the artists.

Cobb hired Elisabet Gunnarsdottir away from a top residency in Norway to run the Fogo Island Arts Corporation. Gunnarsdottir had worked as an architect/designer and curator for contemporary art projects in France, her native Iceland, and Scandinavia and is now living in Joe Batt's Arm with her two teenage sons.

On this same gusty day, Gunnarsdottir is checking on the progress of construction at one of the studios. It's a 15-minute walk from the nearest road, on a spectacular stretch of coastline overlooking the ocean. "I found the project extremely interesting, especially the concept, the vision, and all of those things," she says. "I just completely connected with it from the first moment. I saw the potential, and I wanted to be part of it."

There will be two parallel programs: the residency for international visiting artists, which will give them "full freedom" to explore on their own, and another program that will produce workshops, art projects, and seminars. It will be a long process. Gunnarsdottir says real success won't be measurable until the full program has been up and running for at least five years. "Good things take a few years to mature," she says. And that is something Cobb also stresses, pointing out that Shorefast is just getting started with its new business ethos.

One of those ventures not owned by the foundation is located in Joe Batt's Arm. Nicole's Café opened last summer after receiving assistance from the foundation, in the form of a consultant chef employed by Shorefast. The chef "got us off to a good start," says owner Nicole Decker-Torraville.

Newfoundland food critic Karl Wells put Nicole's at No. 2 on his 2008 list of the province's 10 best restaurants. The food is fresh and local, and not your average rural café fare. On one recent occasion, the chef whipped up such amuse-bouches as veal shortbread and bite-size cod tongues that were almost right out of the water.

Decker-Torraville grew up in Joe Batt's Arm while her husband, Dave, is from the nearby town of Fogo. "We never really wanted to leave, but we did," she says. "We went to school. Then you get stuck, working, paying the bills." They lived in the St. John's area for 15 years until Dave was offered a job overseeing construction and renovation work for Shorefast. Decker-Torraville had long dreamed of opening a restaurant, so they took a leap of faith and decided to move home. Summers have been busy, but the winter months are even harder. "We've definitely got to work for it, for sure," she says. But it's worth it when she sees her two children treading the same paths of her own childhood.

"We had 15 on staff this summer," says Decker-Torraville. "For a business on Fogo Island, in Joe Batt's Arm, to be able to sustain that—even if it only was for four months—is amazing. Small steps."

Jonathan Briggs is helping advance those small steps. Briggs administers a $1-million business-assistance fund for the island donated by Jozef Straus, Cobb's former boss at JDS Uniphase. Straus visited Cobb, fell in love with the place, and decided to help. The fund provides seed capital (six loans, so far) with Shorefast mentoring the fledgling operations. "We're not looking to usurp the traditional fishing industry; we're talking about adding another leg onto the economy," says Briggs over Sunday brunch at Nicole's Café.

Briggs and his wife, Karen, are from the Pacific Northwest, where they have a business making decorative light-switch covers and selling them online and through galleries. "That world—how to become sustainable—is our world," he says. They are now working with local craftspeople to build a craft guild on the island. Their ultimate sales target: $2 million.

The ideals of entrepreneurship are manifesting themselves in other interesting ways. When Cobb was growing up, 75% of the produce eaten on Fogo Island was grown locally. Today, she says, it's just 2%. Shorefast has hired an agriculturalist, Winston Osmond, and bought a small tractor to help promote a farmers' co-op. Little community gardens have sprung up. On Saturday mornings, a vibrant farmer's market, held in the parking lot of the local hockey rink, features dozens of varieties of produce. Osmond has even managed to grow melons at his greenhouse.

There are other projects flung around the island. Shorefast has acquired four deconsecrated churches. One of them is housing the creation of a piece of artwork featuring Canada's largest cod, in tribute to the importance of the iconic fish in the island's history.

But perhaps most notably to date, Shorefast has put its muscle behind efforts to build and restore punts, a traditional type of wooden rowboat once used as ubiquitously as cars. Peter Decker, Nicole Decker-Torraville's father, recalls that technological changes led to many of the old punts being covered in fibreglass. Hardly any original ones remained. Four or five years ago, Cobb came to him and said, "We've got to save the old punts."

Punt building had been dormant for decades and was in danger of becoming a lost art. "People laughed at me, and I couldn't blame them," says Decker. "Now they're calling me and asking, 'Need another punt?' " Today, there are dozens of punts on the island. The catalyst is The Great Fogo Island Punt Race to There and Back, a 10-mile, round-trip row on the open ocean (this past summer marked the event's third year).

That's the kind of authentic culture Cobb says is distinctive to the island. She owns a condo near a repository of art and history in Ottawa, but it's not the same. "It doesn't fuel your soul," she says.

And that's why Cobb has come back here, pouring her money and time into finding new ways with old things. "It's complicated and tangly," she says, "but I think we have a good shot at it."