Mimic Bigness, but Think Small

The difficulty many small towns have in getting advanced telecommunications technology is only the latest example of what one observer calls "the little wheel gets no grease" syndrome. The pros of small town living aside, being small does have its disadvantages.

Overcoming these disadvantages often requires efforts that create analogies to scale - or mimic bigness. For example, by pooling together the telecommunication needs of the school system with those of the hospital and the local government (what economists call aggregating demand), small towns can make it worthwhile for a telecom provider to bring service to town.

The strategy harkens back to the days when rural residents got together to form cooperatives to get electricity and telephones and to market agricultural commodities. Today, cooperative efforts span the range of activities and even include private companies working together with competitors to conduct research and development, to run joint marketing efforts, and even to co-produce goods.

In that same vein, cities and whole regions are discovering the benefits of having industry clusters in their midst. More so than a single firm, these clusters generate spin-off activities, attract other firms up and down the supply chain, and improve their own economic performance (as well as that of the region) by learning and working together.