With the completion of a thought that began to seed several years ago, Jack Schultz, CEO of Agracel, Inc., a Effingham, IL-based industrial development company, has been touring the country discussing the success of small towns as outlined in his book Boomtown USA, the 7 ½ Keys to Big Success in Small Towns. For the book, published in conjunction with the National Association of Industrial and Office Properties, Schultz and his team examined small stand-alone towns--excluding any within MSAs--and using criteria based on local demographics, quality-of-life factors and a support system for businesses, whittled 15,800 small towns down to 1,200. After examining the communities more closely, the team chose the top 397 successful small towns discussed in the book. So what makes small towns like Columbus, IN; Cape Gerardo, MO; Paragould, AR; and Rocky Mountain, VA so successful? Schultz tells GlobeSt.com the answer lies not only in the quality of life in those communities but the residents themselves.

GlobeSt.com: What small towns are booming?

Schultz: They’re communities that have figured out what it takes to be a successful community, have some good quality of life attributes about them and really set themselves up as a place where people might want to live because of those quality of life issues.

GlobeSt.com: Have small towns been booming over a long period of time or is this a relatively new phenomenon?

Schultz: We see it as a trend that's in the early stages. We did most of our work based on the census from 1990-2000; after the top small towns were chosen we looked at job growth from January 2001 to January 2004 and saw that the US economy added 743,000 jobs and, of those jobs, 279,000 were added in the 397 communities that we chose. That’s one out of three jobs that were added in the last three years.

GlobeSt.com: Do you think that will surprise a lot of people?

Schultz: People are taking a broad brush and saying rural America is an area that is losing population. And a lot of the small towns are. I’m not painting with a broad brush that all of rural America is successful or will continue to be successful, but people are going to chose where they want to live based on quality-of-life issues and, because of technology, the work will follow them and oftentimes that is in smaller communities.

GlobeSt.com: What types of businesses are moving to these towns?

Schultz: The companies that are looking at these areas are some of the industrial companies, some of the high-tech companies, the call centers. For example, Dell Computers just opened an 800-person call center in Twin Falls, ID. The retail is going to follow population growth. We’ve seen that happen in some of the areas that have become regional hubs. Wal-Mart, Home Depot, Staples and the other big boxes are going to places like the Cape Gerardos of the world because people are moving there.

GlobeSt.com: Are there any fears that a big-box store is going to come into town and put the local mom and pops out of business?

Schultz: In the really successful communities it's a non-issue. They welcome everybody and recognize that the mom-and-pop businesses, to succeed, have to figure out a way to compete with the Wal-Marts or the Home Depots; that they are going to have to offer different services and do things that a Wal-Mart or Home Depot can’t do. The communities that do the best are the ones where Wal-Mart is moving into; the communities that are generally doing the worst are the ones next door. All the shoppers go to that town with the Wal-Mart so the downtown of the community that decided to ban it is often the one which ends up suffering the worst It's a long-term strategic error on their part. That economic model of hunkering down is long-term economic disaster for a community. The community that is trying to take chances and move to a higher level doesn’t always succeed but at least you have a chance.

GlobeSt.com: But communities need more than big-box retailers, right?

Schultz: Those centers that have a diversified base probably have more positive attributes as opposed to communities that have one strong engine that's leading it. If that engine dies, it can be catastrophic. It’s possible but it’s a difficult process to go back. I was just in Rochester, NY which was the headquarters of Eastman-Kodak, Bausch & Lomb and Xerox 20 to 30 years ago. Unfortunately, as we saw with all of their businesses, what could be a wonderful business and industry today, 30 years from now might not be as attractive. There were over 60,000 employees of Kodak and that has shrunk to less than 20,000. That's a gut-wrenching thing to go through.

GlobeSt.com: But can they recover?

Schultz: A lot of those don’t ever recover but occasionally you have a community that goes on to do wonderful things. Leavenworth, WA was a saw milling and railroad town of 5,000. The saw mill closed down, the railroad pulled up the tracks and Leavenworth fell to 1,000 people. It looked like it was headed to becoming a ghost town. Fortunately, 11 women literally drew a line in the sand. They brought in a consultant, held a series of town meetings and, after a lot of discussion, decided to reinvent themselves as a Bavarian Village, even though there were no Bavarians living in town. Today, Leavenworth has doubled its population to 2,000 and has 500 members in the Chamber of Commerce. The community brings in 3.5 million tourists a year. The Audubon Society has built a bird sanctuary right outside of town because of all the people coming to visit. Twenty apple orchards have been converted into boutique wineries. They have been so successful in their transformation that 40 families from Bavaria moved to Leavenworth.

GlobeSt.com: Is small-town success always such a grass roots movement?

Schultz: It has to come from within and people have to want to do it. Often, one person with passion in a community is better than 50 people who are just kind of interested. It's that one or two people with passion that can transform a community and create opportunities.

September 29, 2004
By Melissa Kress