Should We All Start Businesses in Small Towns?
Nicole Dieker
3319

This article is an allegory (writ small) of a very American economic phenomenon: the company town. We all know real estate in the city center is expensive. It’s where the people are. It’s where government services are the most concentrated and extensive. In short, there’s no place for things like factories, which take up a lot of land and depresses the value of adjacent and neighboring lots of land.

So where do you place the factory towns? In the places where land is cheap but still accessible to the major city nearby. But your workers don’t want to commute 4 hours a day, so it’s time to build housing close enough to the factory for a short commute but long enough away so that you don’t have to look at those ugly smokestacks. Now that you have all that employee housing, they need other things like stores, entertainment venues, local watering holes, etc. It used to be the company itself would supply all of these, but people now loathe the concept of “company stores”.

At that point, a cottage industry pops up in these company/factory towns to support the needs and wants of the factory employees. If the factory/company town is large enough, many of those cottage industries turn into serious companies in their own right. Example: look at what Anheuser-Busch did for local advertising companies in St. Louis (before its acquisition by InBev, a Belgium beer giant).

If the company/factory continues to do well, the company town kinda/almost becomes a serious city in its own right, with all of its attendant features and trappings (high culture and a thriving non-profit sector). All is well in company/factory/boomtown, USA.

Until the company goes bankrupt and the factory shuts down. It might have been doing well for decades, but all (good) things must come to an end. This really sucks for the employees and cottage industry employees, many of whom have planned their lives around the factory town and have developed a significant emotional and/or financial attachment to the place where they have lived for so long.

This is all a very long way of saying, if you go to a modern day “factory town”, you probably shouldn’t plan a life there. Things can change in an instant, especially in today’s economy.

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