How Smaller Communities Can Survive in an Age of Disruption

As one Georgia city has shown, it's about getting the right people to address the right issues.
March 1, 2017
Jerry Mechlin
By Jerry Mechling  |  Contributor
A consultant and former research vice president at Gartner

The dual and related disruptions of technology and globalization have for the most part been good news for business productivity and for the large cities and metro areas that are well positioned to take advantage of them. Cities like Houston, Los Angeles and New York can readily offer a diverse and skilled workforce along with communications and transportation for global connections.

But as so many of our smaller cities and metro regions have so painfully learned, these forces are distributing their benefits in ways that are bad for middle-income jobs. Local producers are threatened as never before by competitors from a distance, mobilizing a protectionist populism that endangers the future for all.

In response, many communities have been relying on traditional planning and economic-development approaches. But these typically don't give enough attention to assembling the range of people needed to work out what's needed to prepare regions and their institutions to take advantage of digital progress and other aspects of the evolving economy. What's needed is leadership for community-wide agility.

One smaller city that has been effectively working these issues for a long time is LaGrange, Ga., a community of 30,000 about 60 miles south of Atlanta. Over the years, LaGrange has assembled its leaders to address strategic developments, seeking to harvest its upside potential while minimizing downside risks.

The squeeze from foreign competition began decades ago for LaGrange. By the mid-1960s, alert business and community leaders were worried about the town's historic dependency on cotton and textiles. Worry turned to discussion and analysis and then to support for diversifying the local economy. But while early efforts were initially successful in attracting smaller firms, by the end of the century LaGrange's leaders were seeing the Information Age as a major threat. New jobs were being created in Atlanta and other bigger cities, not in smaller communities.

In response, LaGrange addressed its economic future not only as a problem of government or commerce or technology alone but rather as one requiring an integrated, community-wide strategy. Leaders analyzed their community's strengths, weaknesses, opportunities and threats, and then used that analysis to mobilize specific initiatives.

They began by identifying and harvesting upside potential. What could LaGrange offer? Its advantages included zero property taxes (city revenues come largely from municipally operated electrical and water utilities), small-town life and safety, and exceptional health care, recreational and cultural offerings. For firms, LaGrange offered low-cost workers and easy access to airports and major highways. Over the years, there were some demonstrable successes: a Wal-Mart distribution center, Caterpillar's forestry products division, and Interface, the world's largest producer of carpet tile. Their offer and image was effective: "Where comfortable and affordable come home."

But LaGrange's leaders were also quick to identify downside risks. By the 1990s, they worried about broadband. The local telecommunications supplier was unwilling to upgrade, so the city invested in fiber infrastructure to supply fast Internet and telecommunications to local firms. The city also bought the local cable company's network, leasing it back in a deal that offered cable customers free Internet access (the TV was the screen, with a remote keyboard for data entry). A sales and education program was implemented, since few small firms and low-income homes had computers when the program started in 2000.

That was the same year LaGrange's broadband foresight earned it recognition by an international technology association as the Intelligent City of the Year -- a year after Singapore received the same recognition. But LaGrange's foresight has also paid off in more substantial ways. Existing firms took advantage of the broadband services, and new firms came into the region. In 2009, for example, the Korean automaker Kia opened its first U.S. plant in nearby West Point. LaGrange began attracting digital start-ups, such as a TV production firm needing fast Internet connections that had previously looked only at Atlanta. Universities offered job-related education on the Internet. Overall, LaGrange has attracted more Fortune 500 firms than any other city its size.

In the years since LaGrange first assembled a community-wide set of leaders to leverage its assets and work on digital-era development, plenty of other cities have stepped up to similar challenges. These days, much attention is on Columbus, Ohio, which in 2015 was recognized by the Intelligent Community Forum as the Intelligent Community of the Year and then last year bested 77 competitors to win the U.S. Department of Transportation's $40 million Smart City Challenge.

What the stories of cities like LaGrange and Columbus illustrate is that addressing the challenges of digital disruption and a globalizing economy may be difficult, but it's not impossible. The key to success is getting the right people together to address the right issues.