The Small Town Economic Development Flywheel: Why Growth Stalls—and How to Fix It
Part of a Series on Small Town Economic Development
This article is part of an ongoing series exploring tourism, downtown challenges, and economic development in small towns.
Over the past few weeks, I’ve written about parking, downtown struggles, tourism, events, and taxes.
At first glance, those seem like separate issues.
They’re not.
They’re all symptoms of the same underlying problem.
When you step back and look at it as a system, you start to see the pattern—and more importantly, why so many small towns struggle to create consistent, sustainable growth.
The Core Idea
Economic development isn’t one decision.
It’s not one project.
It’s not one event.
It’s not one investment.
It’s a system.
And when that system works, it creates momentum.
When it doesn’t, everything feels harder than it should.
The Economic Development Flywheel
When these elements work together, they create momentum:
Awareness brings people in
Access makes it easy to engage
Activity supports businesses
Businesses generate revenue
Revenue supports infrastructure
Infrastructure attracts more growth
And the cycle continues.
Why Small Towns Struggle
The challenge is that most towns don’t have a broken system.
They have a broken flywheel.
They focus on one piece and expect it to fix everything.
They invest in events → but don’t build consistent activity
They focus on parking → but don’t increase demand
They raise taxes → but don’t grow revenue sources
They improve infrastructure → but don’t attract new visitors
So the wheel never gains momentum.
What Happens When One Piece Breaks
This is where things get interesting.
Because you don’t need everything to fail for the system to struggle.
Just one weak point slows everything down.
No awareness → people don’t come
Poor access → people get frustrated
Low activity → businesses struggle
Struggling businesses → less revenue
Less revenue → limited reinvestment
Limited reinvestment → no growth
And the cycle reverses.
What This Looks Like Locally
You can see this play out in real time.
We talk about:
Parking challenges
Events
Declining foot traffic
Rising taxes
But those aren’t isolated issues.
They’re signals that the flywheel isn’t moving the way it should.
Why Tourism Matters More Than People Think
If you look at the flywheel, one thing becomes clear:
Awareness is the starting point
If people don’t know about your town, they don’t visit.
If they don’t visit, they don’t spend.
If they don’t spend, businesses struggle.
Tourism isn’t the whole solution.
But it’s one of the most important ways to start the cycle.
Why Events Aren’t Enough
Events can create activity.
But they don’t create consistency.
They’re a push—not momentum.
If the rest of the system isn’t working, events won’t fix it.
They’ll just temporarily mask the problem.
What Actually Moves the Flywheel
The goal isn’t to fix one piece.
It’s to get the entire system moving together.
That means:
Creating awareness (marketing, tourism)
Improving access (not just adding parking, but managing it)
Supporting consistent activity (not just events)
Helping businesses succeed
Growing revenue sources
Reinvesting strategically
That’s how momentum builds.
The Bigger Shift We Can’t Ignore
There’s another layer to all of this.
Behavior is changing.
People are prioritizing convenience more than ever:
Online shopping
Pickup services
Faster decisions
That means small towns can’t rely on old models.
You can’t force behavior.
You have to adapt to it.
The Goal
The goal isn’t more events.
It isn’t more parking.
It isn’t higher taxes.
The goal is simple:
Get the flywheel moving.
Because once it does, everything gets easier.
What This Looks Like in a Real Town
You can see this dynamic in action in Front Royal, VA, where all the pieces of a strong economic development flywheel already exist — but aren’t always fully connected.
With steady traffic flowing through Shenandoah National Park and along Skyline Drive, there’s a consistent stream of potential customers entering the area. The challenge is turning that movement into momentum — getting those visitors to engage with Downtown Front Royal, support local businesses, and create repeat activity that fuels long-term growth.
When the flywheel stalls, it’s rarely because one piece is missing. It’s usually because the connections between visibility, experience, and economic impact aren’t strong enough. When those pieces align, growth doesn’t just happen — it compounds.
Closing
This isn’t about one decision or one project.
It’s about understanding the system—and making better decisions within it.
Fix the system…
…and the results follow.
More from Scott Turnmeyer
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