Local Business - Core Insights

Building Economic Resilience: The Power of Many Small Bets

The Strong Towns Strength Test challenges communities with a simple but powerful question: "If your largest employer left town, would your city survive?" This question highlights a common economic vulnerability: dependence on a single employer or industry. When communities place all their economic eggs in one basket, they risk significant distress if that employer downsizes, relocates, or closes.

Jane Jacobs warned against the dangers of what she called "cataclysmic money"—large, centralized investments that distort local economies and leave them brittle and dependent. This type of economic development often prioritizes short-term gains while ignoring the long-term adaptability and resilience that diverse, community-driven growth can offer.

Instead of relying on cataclysmic money, communities can thrive by embracing a model of incremental, diversified growth. The concept of "many small bets"—investing in a variety of smaller-scale, community-rooted businesses—spreads risk, fosters innovation, and builds local economic resilience. This approach not only aligns with the Strong Towns philosophy but also echoes strategies like economic gardening, which Chris Gibbons has discussed on The Strong Towns Podcast. By nurturing existing businesses and encouraging small-scale entrepreneurs, communities can grow from within, creating jobs and wealth organically rather than chasing large, external investments.

For example, small-scale manufacturing is one such "small bet" that is gaining traction. As explored on the Bottom-Up Revolution podcast, these businesses—such as local artisans, food producers, or makers of specialty goods—can create meaningful economic opportunities while revitalizing neighborhoods. Unlike large-scale factories, small-scale manufacturers integrate seamlessly into communities, fostering both economic and social connections.

To support these efforts, communities can take practical steps to encourage diverse, small-scale economic growth:

1. Regulatory Flexibility: Removing barriers like parking minimums and restrictive zoning allows for incremental development, enabling organic growth rather than top-down mandates.

2. Accessibility: Improving walkability and bike-friendliness supports existing businesses and attracts new ones by creating vibrant, accessible neighborhoods.

3. Neighborhood Commerce: Allowing accessory commercial units (e.g., home-based businesses or neighborhood retail spaces) integrates commerce into everyday life, supporting local entrepreneurs.

4. Innovative Business Models: Encouraging pop-up shops, shared markets, and mobile businesses provides entrepreneurs with low-risk opportunities to test and refine their ideas.

5. Streamlined Processes: Simplifying permitting and licensing removes unnecessary hurdles, making it easier for small businesses to start and grow.

The article “Breaking Out of the Resource Trap” on the Strong Towns website further explores how communities can escape dependence on external investments by focusing on these incremental, sustainable strategies.

Ultimately, a strong local economy is not built overnight or by one major investment. It grows through the many small bets made by individuals, families, and small businesses working together. By fostering a culture of entrepreneurship and adaptability, communities can build a resilient economic foundation that thrives through change and uncertainty, ensuring a stronger future for everyone.