Corporate America knows that small towns often make great plant locations. The question is – why don't more companies locate there?

The answer lies less in boardroom policy than in different approaches to economic development taken by rural communities, argues the author of a new book on the subject.

Boomtown USA: The Seven-and-a-Half Keys to Big Success in Small Towns makes a convincing case for why every corporate site selector should do serious homework before establishing a facility outside a metro area.

But when the research is done properly, writes author Jack Schultz, the payback can be huge.

"The time has never been riper for small communities to prosper," writes Schultz in a book produced by the National Association of Industrial and Office Properties. "Operating costs for businesses and corporations are lower in small-town settings. ... Small communities typify the rural work ethic and provide a ready and willing labor force. The charms of living in a vibrant small town are legendary and real; many people move to small towns for quality-of-life issues, including better education, more affordable housing, less crime, a better environment and a shortened commute to work."

'A Third Migration Movement'
In fact, Schultz contends, America is in the middle of a third migration wave - one that finds citizens fleeing crowded metro areas for the "simpler life" of rural, small-town USA. In the 1990s, more than 18 million Americans fled the cities for small-town life.

But this isn't a story about people and companies fleeing the city for some romantic link to America's past. Rather, the new migration is the result of the opportunity to forge a better life - as well as a better bottom line - for individuals and companies.

Prosperity in a small town "doesn't happen on its own," according to Boomtown. "It happens through solid and visionary leadership, having a 'can do' attitude and exhibiting a willingness to take risks. It happens through knowing what your town's strengths and resources are and how to leverage those strengths and resources. It happens through building a brand for your town - a concept that often prompts quizzical looks, yet one that successful small towns have embraced."

In Schultz's tightly edited book (just 167 pages), he identifies what he considers the top 397 small communities in America and what he thinks sets them apart from their non-prospering counterparts.

Hail the 'Agurbs'
Schultz calls the prospering 397 towns "agurbs," a term he coined to distinguish them from the 15,403 rural communities that don't make the grade. "An agurb is a prospering rural town with a tie to agriculture and a location outside an MSA," writes Schultz. "To be an agurb, a town has to have experienced growth in population or employment from 1990 to 2000 and have per-capita income growing at more than 2 percent per year from 1989 to 1999."

The agurbs have their work cut out for them, judging by Census numbers. From 1990 to 2000, more than half of the 15,800 small towns in America lost population. Small towns as a group also lag considerably behind MSAs in average employment change (14.7 percent for MSAs, 13.1 percent for non-MSAs) and average per-capita income change (50 percent for MSAs, 48.3 percent for non-MSAs).

"These figures do not paint a pretty picture for small-town America," writes Schultz. Yet somehow, nearly 400 of these small towns found a way to defeat the odds and prosper in the 1990s.

While Schultz outlines eight (he calls them seven and a half) keys to success, his message hinges on two primary factors: strong leadership and entrepreneurs.

Wherever you find strong, visionary, civic leadership and a public policy environment that fosters the creation and growth of entrepreneurial businesses, you will find a prospering small town, contends the author.

These two ingredients may not be profound, but they are also the essential building blocks of any company. They may also explain why the marriage of a corporate plant and a small town doesn't always last.

How Mooresville, N.C., Boomed
Companies that don't reward entrepreneurialism often find that they're at odds with forward-thinking civic leaders. This lack of flexibility at the company boardroom level inevitably leads to conflict with civic leaders who want to make their towns grow. As a result, the company stagnates while the community around it pushes ahead.

The classic case of this failed marriage is a small town with no factories but plenty of big-box retailers that can be found in any city in America.

That could have been the case in Mooresville, N.C., but it isn't, says Schultz, because the city's progressive leaders didn't stand still when the community's textile jobs began moving overseas in the late 1990s. Instead, they reinvented the town.

The Auto Research Center, built in 2000, features the most innovative wind-tunnel research facility of its kind in the country. More than 60 NASCAR-related shops now operate in Mooresville, and more are on the way.

The results are amazing. "In less than a decade Mooresville lost every one of its many textile plants yet managed to double in population," Schultz writes, "to 22,000 residents."

Most American companies would settle for that kind of growth.

RON STARNER
Director of Publications, Site Selection and Conway Data, Inc.
January 12, 2004