Study shows how rural small businesses' proximity to each other in town helps them weather the pandemic

The pandemic has hurt many small businesses and local economies, especially in rural areas. But relief is slower to reach rural businesses. So the Brookings Institution's Bass Center for Transformative Placemaking and the National Main Street Center studied how small businesses' proximity to each other in a commercial corridor, or shopping district, could help them survive, Michael Powe and Hanna Love report for the Brookings Institution.

"The benefits of urban downtowns are well documented, as density and proximity to people, jobs, and amenities can help fuel population and economic growth. And although NMSC has long touted the similar benefits of revitalizing downtowns in rural communities, the advantages of rural downtowns are not as widely documented," Powe and Love report. "Now, understanding these dynamics is more imperative than ever. The pandemic is putting rural downtowns—many of which are still struggling to recover from the last recession—in an increasingly precarious economic position due to their heavy reliance on retail and restaurants, as well as their limited access to the capital and broadband infrastructure small businesses now need to survive."

The Bass Center and NMSC recently conducted a survey of small businesses that netted more than 2,000 respondents, many in rural areas. They asked about the businesses' physical proximity to other businesses and how the pandemic has affected their bottom lines. "Regardless of location, small business owners reported acute economic hardship, with many drawing on personal savings, retirement accounts, and personal assets to cover their operating costs through the crisis," Powe and Love report. 

But proximity and density made a difference. In nearly every circumstance, small businesses in older commercial corridors and Main Streets—with proximity to other businesses, resources, and amenities—were more likely to leverage their physical location to withstand the crisis than businesses in other locations," Powe and Love report. "Prior to the pandemic, during stay-at-home orders, and at present, small businesses in commercial corridors and Main Streets more often used their locations to coordinate with other nearby businesses, collaborate with business associations, adapt operations, and attract people visiting other nearby businesses or tourist attractions."