Will cities survive without a focus industry?

Here's an idea that's caught my attention in a serious way: As automation continues to eat away at jobs in certain sectors of the economy, the more a community depends on jobs that can easily be automated, the greater the risk to the long-term economic health of that community.

Here's why that matters to Iowa: We have a handful of cities that have a really strong presence in a particular industry. Des Moines is a financial and insurance capital, recognizable on a global scale. The Iowa City-Cedar Rapids corridor has a big presence in both food production and high-technology (Ames has that high-tech focus, too). Sioux City has a major food-processing sector, and Waterloo and the Quad Cities have broad manufacturing sectors. There are others, but the point is that we have some places where a person with skills applicable to a specific sector can look around and have lots of options.

We have other communities that are heavily dependent on just one or two huge employers. Iowa already has lots of experience with what happens when that one employer leaves town -- when Newton lost Maytag, or when Dubuque lost its eponymous Packing Company. Being in a town with a huge employer and not a lot of rivals can be nice when times are good for the employer, but awful if things turn south. It's possible to recover after a big loss, but the struggle is very real.

And then we have a whole lot of communities that serve as perfectly nice retail centers for the surrounding area -- they're often county seats, so they also tend to have some decent government jobs, maybe a hospital, and some related professional services or a community college. But here's the problem: Many of these towns depend very heavily on retail, as a source of local income as well as a place for employment. And automation (including Internet retailing) has been brutal on the retail sector. The list of retailers that are struggling right now is long, and there's no turnaround in sight. It's likely only to get worse.

That could spell major trouble for many of Iowa's smaller communities. If retail dries up (and, to some extent, it's guaranteed to do so), then what happens to the employees who are let go? What happens, in turn, to the communities themselves? And the risks aren't limited only to retailing. Other jobs, like trucking (for example), are also going to be pressured by changes in technology. Almost by definition, the larger the number of people who work in a job, the more likely it is that someone will try to automate it somehow. And that spells trouble for communities that don't have some kind of captive local industry.

This is a big issue for the years ahead: Some jobs will be insulated from the effects of changes like automation because they are highly specialized. But those jobs are more likely to be found in larger cities than in smaller ones, because it's hard to get a lot of specialization unless you have multiple employers in the same industry. (Des Moines can sustain a whole lot of different types of actuaries, but Decorah can't.)

We need to devote some big thinking to this issue because it's going to have a huge impact on the future of our state. As the insurance commercial says: Life comes at you fast. The longer we take to lace up our shoes and start running toward some kind of future goal, the harder it's going to be when life gets here.

 
Brian Gongol

Brian Gongol

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