Co-Build and the Silver Tsunami

Three quarters of all small business owners in the United States are approaching or past retirement age. The potential closure of these shops, restaurants, offices, and services threatens to leave a gaping hole in communities, weakening local economies, and putting people out of work at a time when employees are also at risk of losing their jobs to online shopping and AI. Fortunately, CoBuild Montana is developing solutions that help owners transition existing businesses in ways that benefit their employees and their communities as well as themselves.

As readers of Ecocities Emerging know, through the hard work of Kirstin Miller, our Executive Director, Ecocity Builders co-founded CoBuild Montana, an organization dedicated to developing accessible, replicable solutions that create economic opportunities, jobs, and stronger communities, (goals also found in our Ecocity Standards.) The recent CoBuild Montana Summit featured three days of panel sessions and workshops on topics ranging from affordable housing, rural health, food systems, biochar, and energy as well as creative problem solving that helps entrepreneurs turn ideas into action.

Rather than attempt to address all of these topics, this article focuses on just one session: The Missing Middle Meets the Silver Tsunami. This panel drilled down on the fate of the farms, shops, and family businesses that are essential to our cities and towns and solutions to keep them rooted in their communities rather than have them sold to out-of-towners or, worse, disappear entirely.  

Lack of Exit Plans

Studies show that while small employers are generally aware of the need to prepare for a smooth transition, relatively few have actually developed an exit plan. A 2026 survey by Chase revealed that only eight percent of the small business owners who plan to retire within the next ten years say they are fully prepared for a transition of ownership.   In addition to threatening the stability of communities, this lack of preparation should be a wake-up call for the millions of employees working in small businesses run by soon-to-be-retired owners.  

AI Uncertainties

Compounding this tidal wave of retirement, AI is adding further uncertainty for future employment. Optimists predict that the AI revolution will resemble the Industrial Revolution and its progeny by spawning new forms of work that will keep almost everyone gainfully employed. However, even the optimists, or at least many of them, acknowledge that there will likely be much personal hardship as some portion of the workforce remains idle while waiting for the AI Revolution to produce these future forms of employment. Other optimists claim humanity will benefit by being able to spend more time not working. These optimists envision solutions like universal basic income (UBI) as a substitute or supplement for a traditional paycheck. Presumably UBI would be funded by taxing the corporations that prosper by substituting robots for humans. However, these are the same corporations that spend millions of dollars on lobbyists tasked with reducing corporate taxes. Do the optimists expect these corporations to become more enlightened or perhaps more willing to fund UBI once they realize that unemployed people will not be able to afford to buy their products?

Depopulation

In addition to aging business owners and technological disruption, a growing number of communities will struggle with the threat of shrinking populations caused by below-replacement birthrates, climate migration, and erratic immigration policies. Depopulation will not be evenly distributed. Communities in or near metropolitan regions with healthy economies are likely to keep growing. But smaller communities in rural areas may be challenged to maintain their economic health and quality of life even as they lose population. One study predicts that 10,000 US cities will be depopulating by the end of this century or are already losing population.,

As detailed in previous issues of Ecocities Emerging (including Smaller (and better) Cities – Ecocities Emerging) Allan Mallach, author of Smaller Cities in a Shrinking World, calls for communities to prepare for demographic shifts with a strategy he calls networked localism: “… the process by which a region, county, city, or even neighborhood frees itself from overdependence on the global economy and invests its own resources to produce a significant portion of the goods, services, food, and energy it consumes from its local endowment of financial, natural and human capital” (Mallach p 265).

Mallach’s advice aligns with the experiences of the panelists of the Silver Tsunami session at the CoBuild Montana Summit. Small business owners should explore optional ways of keeping their businesses in the community when they retire, including co-operatives, ESOPs (employee stock ownership plans), and other forms of employee ownership. There are numerous benefits to forming a co-op or transitioning a traditional business to one of many employee-ownership models: the business continues to serve the community, the workers retain their jobs, and employee ownership has been shown to improve business productivity.

The panelists stressed that it often takes years to choose and implement these exit strategies. Consequently, it is important that business owners begin planning early and that they remain focused on transitioning ownership despite the many crises and distractions that inevitably occur in small businesses.

Transitioning ownership is not an easy task. But the time and effort are essential to keeping small businesses intact and in place, maintaining healthy economies, and protecting local jobs at a time when the silver tsunami and other forces generate employment and community uncertainty.

Notes