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Small Cities Weekly | 09.15.2023
Lighthouses, Floods, & Definitions
As part of the work we are doing on the Small City Segment, we send out a brief weekly post of thoughts, links, and research in progress that reflect the week’s work. I’d love to hear from you if you have any thoughts, questions, disagreements, or things to add. Please forward this on to people you think might enjoy reading it.
I came across a paper this week from the 1970s in Bryne Hobart’s newsletter on how lighthouses are commonly used in economics research as an example of a good that the government has to pay for, even though specific private parties greatly benefit from it. The author dug into the history and turns out that this isn’t exactly true and that while there was some involvement from government in lighthouse development, there were both private owners and private payers at the center of the story.
The paper reminded me of the issue of “Problem Buckets” that I’ve touched on in the past:
Problem buckets: For some reason, when you mention the issue areas named above, people default to seeing them as the purview of non-profits, policy, and programs, not businesses. I’m not sure why - and will be continuing to try to understand this dynamic - but I can tell you that the outcome is less people exploring these problems as potential markets than is warranted.
That so many economists assumed the “must-be-a-government-problem” dynamic even post-facto is fascinating to me and goes to show how deeply-held assumptions get in the way of thinking about important, societal problems in a more entrepreneurial way.
Collateral is critical in the banking system. It has been used against communities as often as it has been used for them. While communities can take steps to create new collateral, financial institutions may also need to change their understanding of the structure. Certainly, financial institutions cannot have unilateral ability to define, verify, and service collateral. In this vein, it’s compelling that cooperative and community-led structures were once (if briefly) a major topic of conversation in American politics. They may be again.
This piece is hopefully one of many to come by my good friend John Garry on behalf of his investment firm Garry Elevator. John is spending a lot of time looking at the intersection of natural disasters, resilience and response, and communities and cooperatives. I’m learning a lot from him. I think this exploration can be really beneficial in understanding how small cities will respond to climate change challenges. I’d urge you to follow his writing if you’re interested in these topics!
Defining Rural America, Center on Rural Innovation
There is a phrase often used in the world of rural development: “If you’ve seen one rural community, you’ve seen one rural community.”
It reflects the fact that the parts of our country referred to as rural America are a vast geography — stretching from coast to coast — made up of varied places with unique histories, landscapes, and peoples. This reality makes it extremely difficult to settle on a single set of characteristics that encapsulate rural America. Even the people who live in areas referred to as rural often disagree on what makes a place rural.
I alluded to a similar dynamic with small cities in this post. While we aren’t focusing on rural areas, there is a lot of overlap in problems and perceptions. One of the most interesting parts of this piece is their discussion of how differing federal definitions of “rural” affect the resources communities end up getting. Legibility is a common cause.
A Hidden Reason Cities Fall Apart, Thomas B. Edsall
Robert D. Atkinson, the president of the Information Technology and Innovation Foundation, described the long-term secular trends in an email to me: “Big ‘anchor’ corporations played a key role in civic life in metro areas, not just in terms of corporate donations to nonprofits but also in bringing to bear leadership to revitalize cities. This used to happen all the time in Detroit, Cleveland, St. Louis, the Twin Cities, etc.”
These locally based companies, Atkinson continued, “played an important role of helping the various municipalities in a region work more closely together. Banks and utilities were especially critical to this, in large part because their sales base depended on a healthy regional economy.”
This op-ed has a lot going on, and it isn’t always clear exactly what the author is arguing, but I do think there are some interesting points in here. The relationship between business and geography has been an evolving one and will continue to be in the era of the internet and remote work. Much more to come on the topic of “anchor” institutions in future posts.
What I’m Working On
Small City Industry Niches: I wrote my first exploration of this topic a few weeks ago, sharing origin stories of speciality insurance in Fort Wayne, orthopedics in Warsaw, and RVs in Elkhart. I’ve got a few more on the docket, but if you have any suggestions, I’d love to hear them.
Small City Climate Change & Resilience Data: I’m interested in learning more behind the data being used to define and determine mitigation for climate change and resiliency and how that shows up in smaller cities.
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