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Lately I have felt the need to write a column on how local communities can weather a potential National economic storm or crisis. In an era of global economic inter-connectedness, small communities are increasingly vulnerable to the ripple effects of financial crises and economic downturns. However, communities can fortify themselves with careful planning and proactive measures. Communities can build resilience and weather economic storms more effectively.

One of the most critical steps a small community can take is to diversify its economic base. According to a study by the Brookings Institution, communities with more diverse economies experienced less severe job losses during the 2008 financial crisis and recovered more quickly afterward. To achieve this, local leaders should attract a mix of industries, rather than relying heavily on one sector.  They support small businesses and entrepreneurs through incubator programs and mentorship, thus investing in workforce development matching diverse job opportunities.

Just as individuals are advised to maintain emergency savings, communities should establish robust "rainy day" funds. Communities can maintain unrestricted fund balances of no less than four months of regular operating revenues or expenditures. This provides a buffer against unexpected shortfalls helping maintain essential services during downturns.

Investing in infrastructure and technology can make a community more attractive to businesses and residents, while also creating jobs. The American Society of Civil Engineers notes that every $1 invested in infrastructure generates $3.70 in economic growth. This might include high-speed internet access, which is crucial for attracting modern businesses. Might include efficient transportation systems to facilitate commerce and commuting. Also, if you are able, creating sustainable energy projects that can reduce long-term costs and attract eco-conscious businesses.

Strong social networks within a community can provide informal safety nets during tough times. A study published in the American Journal of Public Health found that communities with higher levels of social capital were more resilient during the Great Recession. To build social capital, you can encourage volunteer programs and community organizations, create public spaces that facilitate social interaction, support local events and festivals that bring the community together.

A well-educated, skilled workforce is more resilient to economic shocks. According to the Bureau of Labor Statistics, during the 2008 recession, unemployment rates for those with a bachelor's degree or higher peaked at 4.9%, compared to 11% for those with only a high school diploma. That said, encouraging the trades can off-set this as the trades are some of the most steady and high-paying jobs in the current employment landscape. Work with your local high schools, community colleges and trade organizations to grow this critical employment base.

This one should be #1 on this list! Encourage residents to support local businesses can help keep money circulating within the community. The American Independent Business Alliance reports that on average, 48% of each purchase at local independent businesses is recirculated locally, compared to less than 14% of purchases at chain stores.

Strategies might include, creating "buy local" campaigns, and/or establishing a local currency or time bank system.

Responsible fiscal management is crucial for long-term community stability. Maintaining a balanced budget and avoiding excessive debt is critical.  Implementing progressive policies that don't overly burden low-income residents. Regularly reviewing and updating tax policies to ensure they're fair and effective.

Small communities can benefit from partnering with neighboring areas to pool resources and create economies of scale. A study by the National League of Cities found that 75% of local officials believe that regional collaboration is essential for economic success. Shared services (e.g., waste management, emergency services), joint marketing efforts to attract businesses and tourists, collaborative workforce development programs.

Creating a formal plan that addresses potential economic shocks can help communities respond more effectively when crises occur. The U.S. Economic Development Administration recommends that communities conduct regular economic vulnerability assessments and develop strategies to address identified weaknesses. Key elements might include identifying trigger points for implementing emergency measures, strategies for quickly redeploying community resources in a crisis, clear communication protocols to keep residents informed and engaged.

By implementing these strategies, small communities can build the economic resilience needed to withstand and recover from financial crises and economic downturns. While no community can completely insulate itself from global economic forces, those that take proactive steps to diversify their economies, invest in their workforce, build strong social networks, and plan for potential shocks will be better positioned to weather economic storms and emerge stronger on the other side.

John Newby is a nationally recognized Columnist, Speaker, & Publisher. He consults with Chambers, Communities, Business & Media. His “Building Main Street, not Wall Street,” column appears in 60+ newspapers and media outlets. As founder of Truly-Local, he assists chambers, communities, media, and businesses in creating synergies that build vibrant communities. He can be reached at: John@Truly-Local.org.