A Lincolnshire council has admitted it is not able to attract large-scale engineering firms to the area to boost employment.
East Lindsey District Council said the economic situation, combined with the area's location, meant they would concentrate on tourism to create jobs.
This comes after more than 100 jobs were lost when Alford based engineering firm Finnveden closed in March.
Officials said they would look to smaller businesses to help the economy.
Dozens of jobs have also gone at Horncastle clothing manufacturer Tayberry and at Skegness ball-bearing factory Minebea in the past year.
Nigel Howells, Chief Executive of East Lindsey District Council, said they had to be realistic about what was possible.
"It is very difficult to see industry of that type coming back into the area as they were there for historical reasons.
"There are some opportunities for engineering on which we can piggy-back but we need to be realistic that we are not going to be able to attract large scale (firms) into the district - we are just not in that location.
"So instead we are really going to have to work on diversification."
Former mayor of Alford, and a town and district councillor, Grant Allen admitted the area was feeling a bit "down and shell shocked" but there were hopeful signs
He said: "What I am pleased about is so many of the people from Finnveden have bitten the bullet and gone off on their own as electricians, painters and so on.
"A couple of the local shops are being redecorated, so somebody is going to have a go and reopen. so there are bright spots on the horizon."