Underestimate No Longer: Small and Midsized Cities Chart New Inclusive Economic Futures
Written by NGIN Senior Advisor, Betsey Suchanic
The United States has 700 Small and Midsized Cities, home to over 79 million residents, or over a quarter of the US population. For context, 79 million residents are over twice the number of residents living in the 25 largest cities in the US combined, including New York, Los Angeles, Chicago, Houston, Phoenix, and beyond. These small and midsized cities, with populations ranging from 50,000 to 500,000, represent a tremendous economic force both collectively and individually.
Many of these Small and Midsized Cities are positioning themselves as economic leaders by challenging the norms that have long hindered equal economic participation due to income, race, gender, or geography. These are new models that go beyond traditional economic development metrics and “growth at any cost” approaches. Leaders from these cities are actively confronting, reflecting, and seeking to repair historical and local economic disparities that past economic strategies have created and exacerbated. As I wrote last year, SMCs are leading the charge and represent most of the cities piloting reparations strategies and guaranteed income programs, alongside developing new models to reform municipal operations like budgeting equity and procurement.
What makes these Small and Midsized Cities uniquely positioned to build these equitable economic approaches, and what is working?
We have been exploring this question at New Growth Innovation Network (NGIN), a national non-profit advancing inclusive economies in US cities and regions, since 2021. Through our Small and Midsized City Hub, we have engaged with economic and community leaders and deepened our understanding of the unique capacities and structures to build more equitable local economies in these cities. The characteristics and assets of these small and midsized cities can best be described through the comments that NGIN CEO and President M. Yasmina McCarty made at the opening of our Cityscapes Summit, as recently featured in an article by the Brookings Institution.
In her comments, she spotlighted that SMCs have demonstrated civic capacities to engage with communities and across sectors, can be uniquely nimble compared to large cities and their public and private institutions, and tend to have a stronger sense of pride in their cities and communities.
We have identified several areas that small and midsized cities are implementing to address economic disparities:
Cross-Sector Partnerships: Solutions to address systemic economic disparities will not be found within silos. In particular, the sector delineations between the responsibilities of “economic development” and “community development” impede progress and holistic approaches to problems and challenges that don’t clearly live within the purview of either of these sectors. We cannot write off entrenched economic issues as the responsibility of “community development” or “economic development” but rather we must have cross-sector collaboration to bring a wider net of partners to the table.
Data and Metrics: We have the tools to measure economic growth, and we have used them for decades. Small and Midsized Cities are creatively building new methods to measure economic disparities and opportunity areas by disaggregating data by race, geography, income, and beyond. The traditional yardstick of economic progress, such as jobs created only demonstrates a sliver of the complete economic picture of a community.
Access to Capital: Inclusive economic development cannot happen without investment, and as defined broadly by the cities we have worked with. However, SMCs varied in how they defined investment and understood their capital capacity. As such, we are narrowing our research to clearly define some of these core actions, both in the programmatic funding for community engagement and scaling, but also in unlocking capital to drive investments in historically overlooked markets compared to their larger metro counterparts.
Inclusive Procurement: One lever that uniquely emerged from our engagements was the enormous potential of inclusive procurement for community wealth creation. Increasingly, city governments and anchor institutions are identifying ways to spread the staggering amount of funds they spend on contracts and services toward local and diverse small businesses. At scale, these investments in diverse businesses at a community level or across small and midsized cities can represent a truly transformative investment in diverse business ownership and growth.
As we have seen firsthand, Small and Midsized Cities are actively creating solutions and models for us to forge ahead. NGIN is delighted to announce that the Small and Midsized City Hub program has received renewed and expanded funding from the Robert Wood Johnson Foundation through 2027 to deepen our learning alongside inclusive economic development leaders and craft models for economic inclusion in these cities.