#679 – Where Small Town America is Thriving – Conclusion

Posted on | The Agurban

This week we wrap up our series from Joel Kotkin’s report Where Small Town America is Thriving. In Part One, Mr. Kotkin revealed the top energy small cities and in Part Two, the top manufacturing and business and professional service hubs were revealed. This week the emerging STEM centers are shared.

Where Small Town America is Thriving – Conclusion

Emerging STEM Centers

It is widely assumed that high-tech employment, for the most part, will cluster either in big cities or their suburbs. But some venture funders, including some from Silicon Valley, are taking a look at smaller cities, notably in the Midwest. Several smaller cities have achieved growth in STEM jobs (science, technology, engineering and math-related) that are far above the national average over the past decade.

Much of this has to do with the location of federal labs or universities. The leader, California-Lexington Park, located on Maryland’s scenic eastern shore, has a strong presence in the aerospace and defense industries, and has seen its STEM employment, already 3.5 times the national average, grow 22.3% since 2007. Other STEM-rich smaller towns include the afore-mentioned Los Alamos, No. 8 Kennewick-Richland, Wash., home to the Hanford federal laboratory, No. 4 Lawrence, Kansas, home of the University of Kansas and No. 9 Bremerton-Silverdale, Wash., home to the Puget Sound naval shipyard.

Less predictable however has been the STEM growth in No. 3 Jackson, Mich., where a large public utility and post-recession growth of automotive and machinery manufacturing may explain a surprising 26.4% growth in STEM. Jackson is a hub for engineering talent, where the engineering job count is up 44% in the last decade and now 3.2 times more concentrated than national average.

The Road Ahead

Smaller communities often suffer from thin talent pools and long distances from major markets, but as our survey tells us, not all are destined to decline. High-end service jobs have been leaving San Francisco and New York for less crowded and expensive cities like Salt Lake and Dallas. This same formula could lead more firms, and skilled individuals, to smaller places, such as Ft. Wayne or Carmel, Indiana which have been refurbishing their central districts in part to attract or retain younger workers.

Politics could play a role. Even some progressives believe federal agencies should be dispersed to places like the Midwest, which would provide stable employment. The newly proposed Trump infrastructure program places considerable emphasis on rural areas, which after all supported him heavily. This is particularly critical for the poorly maintained nation’s internal waterways, the lifeblood of many smaller cities in the interior. And manufacturers have been boosting investment after the passage of tax reform, which could be an opportunity for smaller cities. Some airlines are now boosting local service, something which could connect these places with the broader economy. At the same time, Trump’s attempts to restructure NAFTA, gut the Farm Bill, or cut rural development and small manufacturer assistance programs could pose threats to smaller cities.

Resuscitating small town economies is critical for all Americans. As migration rates have dropped and high housing costs make a shift to big cities increasingly difficult, we can no longer expect residents of small towns to move en masse to San Francisco, New York, Los Angeles or Chicago. Rather than write off the roughly one-fifth of Americans who live in such places, we should look to expand the map of economic opportunity, taking advantage of our continental scale and economic diversity.

We appreciate the work being done by Mr. Kotkin that extols the virtues of small town and small city opportunities. We will continue to monitor the progress of these small cities and others, especially those excelling in the manufacturing sector.