Smithtown: Can It Make Something Out of Nothing?

In 1965, Smithtown, Arkansas, had virtually no natural resources, core competencies, human capital advantages, or infrastructure advantages. The local river was impassable and not suitable for transport, and the town had no rail line and no airport. Smithtown’s young population (about 18,000 scattered across two counties) was pretty much stagnant and comparatively less educated than the rest of the United States. Although Smithtown had low-cost land and labour, which was ideal for tourism, it lacked anything that tourists typically looked for and had just a few natural attractions, although nothing spectacular. The town’s leaders wondered what the future would hold and whether there was anything they could do to steer the town’s future direction and avoid its ruin.

This case is suitable for a graduate or undergraduate course on urban or regional economic development, particularly if the course has a focus on implementation. The case can be used at the beginning of the course (to frame some of the long-term trends impacting the US economy and to introduce the concept of cluster economics) or later in the course (to explore visitor-based economy). After working through the case and assignment questions, students will be able to do the following:<ul><li>Discuss the changes in the US economy after World War II, noting particularly the transition from primarily a production to a service economy and how de-industrialization left many US communities without their traditional economic reason to exist.</li><li>Understand clusters, a commonly used concept in economic development, and see how a region without obvious comparative advantages was able to create a vibrant economic cluster from which it continues to reap benefits.</li><li>Discuss the visitor-based economy (VBE)-tourism, entertainment, and related activities (which has grown to be one of the largest sectors in the US economy). Consider especially when a VBE strategy might be viable and what might be the potential downsides.</li></ul>

• economic development
• tourism
• VBE
• economic growth
• arts
• entertainment
• arts and entertainment
• clusters
• growth
• creative