Using entrepreneurial social infrastructure to understand smart shrinkage in small towns

Population loss in North America is often viewed as a problem best addressed through economic development efforts promoting growth. In Europe, an alternative view sees depopulation as a process needing to be managed properly, by scaling down community services and infrastructure while maintaining social equity. Called smart shrinkage, this approach argues places can lose population yet still possess a high quality of life. We first clarify the concept by distinguishing the outputs of smartness from its inputs using the entrepreneurial social infrastructure framework. Second, we apply the smart shrinkage concept to n = 98 small towns in the Midwestern state of Iowa using longitudinal data collected in 1994 and 2014. Shrinkage is measured by faster than average population loss; and smart outcomes by faster than average quality of life gains. We then examine correlates of smart shrinkage using demographic, economic, social capital, and civic engagement indicators. Demographic and geographic factors have little impact on smart shrinkage. Smart towns have stronger local labor markets, lower poverty and inequality, and job opportunities in goods-producing sectors. Lastly, smart shrinking towns exhibit higher social infrastructure by possessing more bridging social capital across diverse groups, greater quantities of linking social capital such as memberships in local organizations, and frequent civic engagement by participation in local projects. These activities are supported by a community culture of openness, tolerance, and support.