New study reveals economic ripple effects of business closures, remote work and other disruptions

Many restaurants adjacent to office buildings are facing a permanent decline in foot traffic as remote and hybrid work becomes the established norm. But how will this change in behavior ripple through to businesses along commuter routes? Will it set off a chain reaction that extends far beyond the immediate vicinity of commercial hubs?

In a new paper published in Nature Human Behavior, a research team led by Takahiro Yabe of New York University’s Tandon School of Engineering and Esteban Moro of Northeastern University finds that when human behavior data is factored into the equation, It showed how connections extend far beyond proximity. The results show that businesses from gas stations to laundromats can make a big difference in their bottom line, even if they’re not located in a major business district.

“Urban science views cities as complex adaptive systems, rather than entities that can be designed with simple solutions,” says Yabe, an assistant professor in the School of Technology, Management and Innovation and the Center for the Advancement of Urban Science.

“Our research contributes to understanding how changes in the urban environment affect human behavior and economic dynamics. By focusing on the dependencies between businesses and attractions, It helps cities design more effective and equitable policies and infrastructure.”

Traditional models for measuring business interdependence rely primarily on mutual physical proximity. The research team, which also included researchers from the University of Pittsburgh and the Massachusetts Institute of Technology, analyzed anonymized mobile phone data collected from more than 1 million devices in New York, Boston, Los Angeles, Seattle, and Dallas, and found that people and other locations. I’m interested all day long. This allowed the researchers to create a detailed “dependency network” showing how different facilities depend on each other’s customer base and how far the disruption could spread.

This integration allows for improved predictions of business resilience during disruptions, such as those caused by the COVID-19 pandemic, compared to traditional models that relied solely on geographic proximity. The accuracy increased by an astonishing 40%.

These networks revealed surprising patterns. While traditional models focused primarily on neighborhoods, such as a coffee shop next to a closed office building, the reality is much more complex. The study found that while airports have a significant impact on businesses up to 2.5 to 3.5 kilometers away, supercenters and even universities can impact businesses within a 1.5 kilometer radius.

The researchers were also able to show how different types of facilities produce different ripple patterns. Shopping malls and universities tend to have strong but localized impacts, while airports, stadiums, and theme parks can have economic shocks for entire urban areas. Perhaps most surprising is that arts venues, restaurants, and hospitality industries can be significantly affected even when they are far from the source of the disruption. This can provide important points for people to design and operate cities.

“This network has great potential for urban planners and policy makers,” Yabe says. “For example, organizations like business improvement districts (BIDs) can use this to identify synergies between parks and surrounding businesses to optimize economic growth. It can also simulate the impact of interventions such as new infrastructure and predict the ripple effects across the region.” “

The publication comes with an interactive visual dashboard that allows users to simulate disruption and observe how it affects the economic situation of a city. Through a detailed map of Boston’s POIs, users can see exactly how connected individual businesses are to the community and beyond, and see where business closures extend far beyond blocks and neighborhoods. You can investigate how it affects

This study builds on previous work by Yabe et al. Last year they launched a project on how EV chargers impact eating, shopping and other activity patterns, aiming to provide policymakers with tools to support small businesses through smart placement. are. This project will consider where and how charging stations should be located to not only meet the needs of drivers, but also strengthen the economic resilience of local businesses and promote social equity.

Improving the accuracy of predicting business resilience during disruptions such as pandemics and natural disasters caused by climate change is an important advance for urban planners and policymakers working to strengthen the economic stability of cities. This insight provides a compelling rationale for moving from place-based to network-based approaches to urban economic planning and management. This recognizes that the health of a city’s economy is a web of interconnected threads.

Closing offices and museums may seem like an isolated event, but within the tightly woven fabric of a city’s economy, it can have far-reaching effects.