A small-town economic revitalisation conundrum: Focus on tourism, manufacturing, or both?

Abstract

The decline in small towns is a concern in many countries. The manufacturing and tourism sectors are considered to be important in the revitalisation of towns but could be subject to ‘Dutch disease’. This is a malady in which success in one sector leads to a decline in the other. The importance of, and relationships between, the manufacturing and tourism sectors of more than 500 United States micropolitan statistical areas (micropolitans) were extensively investigated by following settlement scaling theory. Publicly available 2016 datasets were used to test a hypothesis that Dutch disease between the two sectors is important. Both sectors are present and important in virtually all of the micropolitans. Regression analyses, including log–log (power-law) analyses, were used to examine the population-based and enterprise-based orderliness in the micropolitan demographic–socioeconomic–entrepreneurial nexus. There is much orderliness, and non-linear relationships are prevalent. No evidence of the presence of Dutch disease was recorded except in one case. When the strengths of the two sectors (as a percentage of their enterprise numbers in relation to total enterprise numbers) are compared, a weak negative relationship is observed. The hypothesis that Dutch disease is important was rejected. A focus on both sectors is recommended to build resilience and to contribute to the revitalisation/development of small towns.