The Cloud Is the new Main Street

NEW YORK (TheStreet) -- A new economic force is gathering that is changing the way Main Street does business -- and it's not the one you think.

For decades, there has been a gradual shift of economic activity from small retailers, often found on one commercial drag in small towns (hence the shorthand "Main Street") to big box stores like Wal-Mart (WMT). Now another shift is happening, where new small businesses are starting that are entirely Internet- and cloud- based. 

As corporations have slowly become larger in terms of employment, the classic main street has been in decline. The clearest example of a direct connection is the criticism Wal-Mart in particular has received over the years for damaging main street when it moves in.

An example of one study by Loyola University has pointed to a clear reduction in employment and earnings due to the presence of Wal-Mart in the Westside area of Chicago. Another study has found that counties with more Wal-Mart stores in 1987 had higher rates of poverty and dependence on public assistance in 1999 than counties with fewer or no Wal-Mart stores. The data show that five years after Wal-Mart's entry, an average of four small retailers are displaced. In an op ed for the New York Daily News, Small Business Congress of New York City spokesperson Steve Barrison wrote, "Countless communities, and peer-reviewed surveys across the country, all reach the same conclusion: When Wal-Mart moves in, small businesses, and jobs, move out; Main St. dies." (To be fair, Wal-Mart is only best known example of this phenomenon.) 

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