The Disadvantages of Company Towns and Cities

History has many examples of this, during the 1980’s in Britain, Coal Mining Towns became ghost Towns as the mines closed or needed fewer workers. In the 1990’s when the Soviet Union collapsed, huge areas of Eastern Europe became unemployed, as many of the smaller Towns and Citieswere dependent on one type of Industry.

These are old economic lessons but still in 2009, many Towns and Cities across the World are facing the same old effects of basing their economy on one Company or Industry.

Here are two examples of Company Towns and Cities, now in deep trouble.

1. Detroit

One obvious example of a City that failed to diversify whilst its dependence of the big three motor industries declined, after they failed to be competitive. Detroit is an extreme example of when things go wrong, there are no more options because Town and city planners never looked ahead.

2. Wilmington

DHL Town, until DHL decided to pull out of the domestic market of the United States. Leaving behind an empty airport, storage facilities and a population that has seen its unemployment levels quadruple this year. The future of Wilmington remains questionable, until the Town can diversify its economy, and attract investment.

Dependency and the failure to diversify are often two factors that create Towns and Cities that become economic black spots. And the fault may lie in the way these areas choose to develop- by not preparing to diversify rather than sticking to the option of depending on one Industry or Company.

However future Town and City Planners should look ahead and create more diversified local economies, so if one Company fails, then the local economy is still suitably cushioned against that failure.

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