“Today’s program looks at the divergence of economic growth. Mike, it seems as if in the 21st century the big are getting bigger, and the small are getting smaller. I’m referring to cities. If we look around North Carolina, we see the big metropolitan areas have exploded in growth while many smaller cities and towns have been struggling to stay alive. Is this pattern observed nationwide, and if so what can be done about it?”
“Well we have some new research just released by the Federal Reserve of Kansas City, and they confirm this pattern. And it really is a nationwide pattern where during the 21st century we have seen big cities, bit metro areas really growing, really taking off. Whereas many of of smaller towns and cities and rural areas have not. Some of them have actually backslid.”
“Interestingly though, the study found that there are some small towns and cities that have bucked this trend, and I think that this does give some hope. What the Federal Reserve found is that cities that have used their natural amenities, like maybe they have nice weather, are close to outdoor recreational activities, they have a university or maybe they’re close to a metropolitan area that can attract jobs and people.”
“Those small cities, some of them, not all, have been able to buck the trend and actually continue to grow. But barring this, I think a lot of small towns will have to accept smaller growth or hope for new technology; things like what’s called ‘satellite internet’ that some say is going to be able to bring low-cost internet to rural areas, or maybe people ultimately saying, ‘Hey the big cities are too expensive. They’re too congested. We’re going to move out from them.’”
“Unless those things happen unfortunately I do think a lot of small cities are going to struggle, but again if they can latch on to some shining light, a university, outdoor amenities, slower pace of life to attract people. That may be the pattern they want to try.”
Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in
the Department of Agricultural and Resource Economics at North Carolina State University who
teaches and writes on personal finance, economic outlook and public policy.