Birmingham was founded in 1871, during the post-Civil War Reconstruction period, through the merger of three pre-existing farm towns, notably, former Elyton. It grew from there, annexing many more of its smaller neighbors, into an industrial and railroad transportation center with a focus on mining, the iron and steel industry, and railroading. Birmingham was named for Birmingham, United Kingdom, one of the UK's major industrial cities. Many, if not most, of the original settlers who founded Birmingham were of English ancestry. From its founding through the end of the 1960s, Birmingham was a primary industrial center of the South. The pace of Birmingham's growth during the period from 1881 through 1920 earned its nicknames The Magic City and The Pittsburgh of the South. Much like Pittsburgh, Birmingham's major industries were iron and steel production, plus a major component of the railroading industry, where rails and railroad cars were both manufactured in Birmingham. In the field of railroading, the two primary hubs of railroading in the Deep South were nearby Atlanta and Birmingham, beginning in the 1860s and continuing through to the present day. The economy diversified during the later half of the twentieth century. Though the manufacturing industry maintains a strong presence in Birmingham, other businesses and industries such as banking, telecommunications, transportation, electrical power transmission, medical care, college education, and insurance have risen in stature. Mining in the Birmingham area is no longer a major industry with the exception of coal mining. Birmingham ranks as one of the most important business centers in the Southeastern United States and is also one of the largest banking centers in the United States. In addition, the Birmingham area serves as headquarters to one Fortune 500 company: Regions Financial, along with five other Fortune 1000 companies.
The Great Depression hit Birmingham especially hard as sources of capital that were fueling the city's growth rapidly dried up at the same time that farm laborers, driven off the land, made their way to the city in search of work. New Deal programs made important contributions to the city's infrastructure and artistic legacy, including such key improvements as Vulcan's tower and Oak Mountain State Park.
The wartime demand for steel and the post-war building boom gave Birmingham a rapid return to prosperity. Manufacturing diversified beyond the production of raw materials and major civic institutions such as schools, parks and museums, were able to expand their
Main Street Birmingham focuses on growing entrepreneurship and revitalization in nine urban neighborhood commercial districts. Its multi-pronged approach includes coordinating and supporting merchants associations, coaching business clients, workshops for small and start up businesses, and managing special events in each district from painting murals to farmers markets. In 2010, it saw more that $8 million in public and private investment. Recently it opened a new business incubator in one neighborhood district and an incubator for creative professionals in another district.