Single-Industry Towns: How the World Is Learning to Live After Heavy Industry

Why do some single-industry towns find a new role, while others live for decades within the old economy?

In Kiruna, Sweden, an entire church was moved. Not as an architectural experiment: the mine that still sustains the city is deforming the ground beneath the old center. In Yubari, Japan, the mines closed long ago, and the municipality went bankrupt while trying to replace coal with tourism. Detroit lost most of its residents but retained the territory and infrastructure of a city built for more than a million people. These stories look very different, yet each raises the same question: what happens when a city’s core economic function changes faster than the city itself?

A single-industry town is usually defined by the share of people employed by one enterprise. That definition is convenient for a register, but it says little about how dependence actually works. A plant or mine ties household incomes, contractors’ orders, retail revenues, the tax base, utility networks, vocational education, and young people’s expectations into one system. An enterprise may employ only one-fifth of the workforce and still shape the horizon of the entire city.

The crisis of a single-industry town therefore rarely comes down to the closure of the factory gate. It is a spatial crisis: the economic function disappears in one place, while the housing, roads, schools, and human ties built around it remain. Global experience matters not as a collection of successful city brands, but because it shows which mechanisms can reconnect a place with the economy — and who pays for the transition.

Large-scale industry in the twentieth century favored concentration. Ore was found in specific locations, power plants were built near fuel sources, ports handled particular freight flows, and military bases occupied strategic sites. The more tightly production, labor, and infrastructure were brought together, the lower the costs became. Cities grew around enterprises on the assumption that the core industry would remain for decades.

This model was effective as long as production was growing. The company or the state built housing, hospitals, and cultural centers; professional skills were passed down within a single industry; local businesses catered to workers’ demand and the enterprise’s procurement needs. Specialization accelerated development, but at the same time made the city resemble a portfolio of a single asset: good years strengthened the entire organism, while bad ones spread through it without barriers.

A turning point could occur for four reasons. The deposit was being depleted. Technology was reducing the need for labor. Production was moving to places where it was cheaper or closer to the market. The state was abandoning coal, a military base, or the previous system of subsidies. For a city, the origin of the shock mattered decisively. Extending the life of a competitive enterprise, preparing for resource depletion, and surviving the sudden departure of the owner are three different tasks.

As a city specializes, it accumulates three types of capital. Productive capital is tied up in equipment, skills, and supplier relationships. Spatial capital is tied up in land, housing, and utility networks. Social capital lies in professional culture, trust, and residents’ expectations of a fair future. A sectoral shock devalues them at different rates. A machine can become obsolete in a single day, engineering skills can find adjacent uses, and utility networks can continue to require spending for decades.

This uneven pace is what makes the transition difficult. An investment project typically assesses future income; a city, at the same time, bears the costs of the past. While a new industry is building up its workforce, the municipality bears the cost of maintaining vacant districts. While the college revises its programs, families decide whether to wait for new job openings. Policy must sustain the transition period in which the old economy is already weak and the new one has not yet formed a market.

First to disappear is workers’ direct income. Purchases, rent, repairs, and local services then decline. Contractors lose their main client, the budget loses tax revenue, and the college loses demand for its established programs. As families leave, the market shrinks even further. The worse the services and the condition of the urban environment, the more readily those with a choice move away. A downward spiral emerges in which demography and the economy reinforce each other.

Municipal costs, meanwhile, adjust only slowly. Water systems, roads, and district heating networks cannot be reduced in proportion to the number of residents. An empty building also costs money: it must be secured, mothballed, or demolished. Land and housing lose value, making it harder for families to sell their homes and move to where jobs are available. Part of the population can therefore become tied to place while losing access to its former employment.

This is where the key difference between supporting a company and a city’s transition emerges. Supporting production can delay the blow and preserve competencies. A city strategy addresses a broader question: which functions will remain in demand after the industry changes, how many people the new economy can support, and how to distribute the cost of transformation between the company, the state, and residents.

The labor market changes especially slowly. New jobs may appear in the same city and remain out of reach for existing workers: the required qualifications, pay levels, age requirements, and employment arrangements are different. Retraining helps where there is genuinely local demand for the new occupation. Without such demand, a certificate merely records training, not a move into employment. That is why the International Labour Organization links a just transition to social protection, enterprise development, skills, and dialogue with workers, rather than to a single retraining course.

Kiruna illustrates a rare case in which the core operation remains profitable, yet continuing it requires rebuilding part of the city. Ground deformation has forced buildings to be relocated and a new city center to be developed. The mining company LKAB compensates property owners and finances a substantial share of the move. The economic core is preserved, while the costs created by the industrial decision are not simply left to the municipality.

The lesson of Kiruna is broader than the story of moving houses. The transition begins long before the enterprise closes: with an assessment of reserves, environmental liabilities, the future use of the land, the cost of infrastructure, and the fate of workers. As long as the company is generating revenue, the city has a partner and a source of financing. Once the resource is depleted, the territory’s bargaining position becomes weaker.

For decades, the Ruhr region was sustained by coal and steel. When that role began to wane, the region did not find a single industry capable of taking its place. It gradually reconfigured its entire functional mix, developing universities and research institutions, environmental technologies, logistics, services, and culture, cleaning up rivers, and returning industrial land to use.

This diversification drew on the past, though it did not copy it. Engineering culture, transport, a dense network of cities and large companies became resources for new markets. A miner did not turn into a researcher in a matter of months; instead, over the course of a generation, the region changed its education system, entrepreneurial environment, and way of life. The last mine closed in 2018, almost six decades after the coal crisis began.

The Ruhr experience dispels the expectation of a quick turnaround. The OECD treats industrial transition as a long-term, place-based policy: innovation works together with skills, small business, the urban environment, and coordinated governance. New specialization is more likely to grow out of related capabilities than to arrive in the form of a stand-alone factory brought in from outside.

After the departure of the U.S. Navy from Subic Bay in 1992, the Philippines inherited a port, an airfield, roads, and a trained workforce, but lost the operator and main employer. A special administration and free-port regime made it possible to quickly offer these assets to new users. Speed was part of the solution: abandoned infrastructure loses value every year.

In Bilbao, the transition took a different form. The Guggenheim Museum became an international symbol, but the transformation rested on river cleanup, the metro, the reconstruction of the waterfronts, and the work of Bilbao Ria 2000. This company assembled and prepared former industrial land, and the rise in its value helped finance subsequent projects. The cultural landmark worked within an urban system that was already changing.

The difference between Bilbao and the many unsuccessful attempts to replicate its success lies in the scale of governance. A single landmark attracts visitors; a transformed area changes land values, people’s routes, and business location decisions. A city needs an institution capable of assembling parcels, coordinating transport, channeling part of the new revenue into the next phase, and staying the course after a change in the political cycle.

Detroit long maintained its networks and services across a territory whose population fell from 1.85 million in 1950 to less than 640,000 in the 2020 census. The shrinking tax base, combined with the high cost of maintaining infrastructure, became one of the causes of the municipal bankruptcy in 2013. Exiting the crisis required restructuring finances, demolishing hazardous buildings, delivering services more compactly, and putting vacant land back into use.

The Yubari case shows the cost of trying to postpone the contraction that began back in the 1960s with the decline of the coal industry. As the mines closed, the city invested in tourist facilities, hoping to bring back jobs and revenue. Tourist traffic did not make them pay off, and the losses had to be covered by the city budget, driving debt higher. In 2006, Yubari declared financial insolvency, and from 2007 onward, under the supervision of the central authorities, it began to scale back services and adapt its infrastructure to new realities.

Managed shrinkage is often seen as an admission of defeat. In practice, it can protect quality of life: compact development, reliable basic services, relocation assistance, and the repurposing of vacant land give remaining residents more than costly efforts to maintain the former scale. Growth remains a possible goal, but it ceases to be the only way to measure success.

This decision also has a difficult aspect. It is not an abstract map that is shrinking, but people’s homes and neighborhoods. If relocation is carried out solely to save money, it destroys trust. If residents receive comparable housing, clear timelines, and improved services, a more compact city can become a new social contract. Here, people’s participation is just as important as calculating the length of utility networks.

The most straightforward policy response to a plant closure is to bring in another plant. Sometimes this works, especially if the site still has power, transport links, and a workforce. But the new enterprise is usually more automated than the previous one and creates fewer jobs. It may depend on a single buyer, import components, and make almost no use of local suppliers. The city changes the sign at the gate while preserving the same risk structure.

A more resilient economy emerges from connections. A major investor creates initial demand; local companies develop repair, logistics, components, and services; colleges train workers for several employers; land and infrastructure become available for new projects. Then the departure of one company causes damage, but does not break the entire economic cycle. The goal of the transition is to create options — for the worker, the entrepreneur, and the city budget.

Yubari had to align its ambitions with real demand. Detroit had to accept a new scale. The Ruhr had to turn mine closures into a long-term regional transformation. Bilbao had to create an institution capable of managing the territory for decades. Subic Bay had to quickly reallocate old assets to the new economy. Kiruna is allocating the cost of industrial development in advance.

Behind these different stories lies a common mechanism. A large employer connects far more than the company’s own workforce. Its wages sustain trade and services, its taxes sustain the city budget, and its orders sustain local suppliers. When production declines, the shock spreads through the entire system. As residents leave, demand and the city’s revenues fall; deteriorating services push the next wave of departures.

Therefore, a new factory, road, or museum becomes a turning point only when a new system emerges around it: a market for its output, local suppliers, trained personnel, accessible infrastructure, and governance capable of linking projects to one another.

Global experience does not offer a universal recipe, but it does suggest a sequence of questions. What shock is the city facing, and is it reversible? Which assets retain value beyond the old industry? What market can a new function serve? How long will it take to change skills and institutions? Who will pay for social protection, land remediation, and infrastructure restructuring?

The answers yield four options: modernize a viable core, grow new industries out of existing competencies, reconnect assets to external flows, or bring the city into line with a new scale. In actual policy, these approaches are often combined. The Ruhr has diversified while reclaiming land; Detroit has been downsizing infrastructure and creating new growth districts; Kiruna is preserving the mine and building a different center.

The result is not reflected in the number of facilities opened. Residents gain a choice of employers, local companies receive orders in different markets, the budget becomes less dependent on a single source, and infrastructure matches the size of the population. The city acquires the capacity to weather the next sectoral downturn without another collapse.

For Kazakhstan, this conclusion is especially important. Many of its single-industry towns were created as links in the production chains of a vast country and are located far from major markets. Their future therefore depends on two questions: what function a city can perform in the modern economy, and which territories, companies, and transport flows that function can connect the city to.

In the next article in the series, we will examine how Kazakhstan’s single-industry towns differ from global examples and why a reduction in the official list does not necessarily mean that dependence has been overcome.