The Rise of Counter-urbanization And The Future Business Implications

Counter-urbanization is a social and demographic process where large numbers of people move from urban areas to rural areas.

Understanding counter-urbanization

In much of the developing world, there has been a large shift toward city living as the rural population moves to urban areas in search of work.

In high-income countries, however, the trend is reversed. In a process called counter-urbanization, people have been moving out of cities and into rural areas since the 1950s.

Since that time, counter-urbanization has been driven by several factors, including:

  1. An increase in car ownership and subsequent mobility. Cars mean that city workers can commute to their place of work each day. Improved road networks have also shortened commute times in some cases.
  2. Technology. Virtual conferencing software, among other things, has enabled more employees to work remotely. As a result, there is less dependence on proximity to an urban area. 
  3. Pollution, congestion, and crime. Many cities are simply unpleasant places to live.
  4. Retirement. In general, affluent countries tend to have aging populations or large cohorts of retirees. Retirees tend to settle in rural or seaside locations.
  5. Greenfield sites. Many new businesses prefer to establish themselves on the fringes of cities on undeveloped or agricultural land. Employees in these areas can then live in rural areas and enjoy a relatively short commute.

Effects of counter-urbanization on rural areas

When there is a mass influx of residents into rural areas, several effects can be observed. It’s important to note that there are both positives and negatives to counter-urbanization.


  • New residents bring money into small towns, ensuring that essential services such as banks, post offices, cafes, schools, and gas stations remain viable.
  • Previously derelict buildings are restored or redeveloped as suitable for habitation. If done sensitively, this can preserve the heritage of rural areas.
  • Farmers owning land in rural areas can make money by selling vast tracts of land to developers.


  • There may be initial conflict as city-dwellers do not appreciate the pace or values of rural life
  • Large housing estates built in rural areas can sometimes spoil their cultural or aesthetic appeal. They may also necessitate that native vegetation be cleared.
  • Congestion increases as country roads and intersections are not designed to handle large volumes of traffic. An increase in traffic also brings noise and pollution.

Impact of counter-urbanization on urban areas

While urban areas will not suffer from a lack of infrastructure or suitable land, counter-urbanization presents a different set of problems:

  • Those who move into rural areas tend to be highly skilled or experienced. This leaves an untrained and inexperienced workforce in the city who cannot fill “white-collar” positions.
  • Population decline in urban areas means that local governments experience a reduction in revenue. This leads to the cutting or elimination of essential services as governments can no longer fund infrastructure designed for a much larger population.
  • Urban decay, where cities or parts of cities fall into disrepair. Large American cities such as Detroit and Baltimore have experienced urban decay in recent decades.

Key takeaways:

  • Counter-urbanization describes the movement of people from urban areas to rural areas.
  • Counter-urbanization is driven by many factors, including a general increase in car ownership and road network capacity. Some also move to rural areas in response to urban pollution or their impending retirement.
  • Counter-urbanization brings money into rural areas which keeps essential services viable. However, many who choose to reside in rural areas often recreate the noise and congestion they were trying to escape in the city.

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