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Friday, June 13th, 2008

The Hustler as a Key Component of Urban Success, or Why Greed is Good

A consulting colleague of mine always said he felt the most telling single metric about any business was its gross profit margin percentage. It tells you, he says, so much about a company. For a city, I think perhaps the most telling statistic might be net migration. Whether or not people are moving to your city or moving away from your city says so much about a place.

If you look at all the great cities in the world, you’ll notice they all went through some type of “gold rush” period, where speculators, hustlers, immigrants, entrepreneurs, and others eager to seek their fortunes poured in. Cities have always been the land of opportunity, where people could go to chase after their dreams. Almost every large, successful city has had large bursts of newcomers during boom times and maintain their attractiveness to outsiders over the long haul.

Migration statistics tell us whether or not a city is viewed as a place where outsiders are willing to say, “This is where I’ll make my fortune” or raise a family or chase another dream. But let’s face it, at some level most of us do care about the money. When greedy and unscrupulous carpetbaggers show up, when large numbers of immigrants start pouring the doors, when corporate highflyers are ready to set up shop, when indie rockers move to your town to start up their band, when entrepreneurs move their to start up their companies, etc., you’ll know you’re doing all right.

If you take a look at the Midwest, you’ll find that net migration figures correlate very closely to the conventional wisdom view of the health of the community. Minneapolis, Kansas City, Columbus, and Indianapolis all have material in-migration. The others are flat to declining. Clearly these four cities are generally considered among the best performing in many respects. The interesting outlier is Chicago. That city is typically viewed as highly successful, but is suffering from outmigration. It has very high international in-migration, but this is exceeded by domestic outmigration. Does this indicate that the Chicago region is not as healthy as it looks? Or is it merely a special case of demographic transition in the Midwest’s only true “global city”? Time will tell I suppose.

24 Comments
Topics: Demographic Analysis, Economic Development, Talent Attraction

24 Responses to “The Hustler as a Key Component of Urban Success, or Why Greed is Good”

  1. Anonymous says:
    June 13, 2008 at 9:34 pm

    I do not agree that in-migration necessarily equates to whether a city is successful or not.

    Chicago is a great case in point. Any out-migration from Chicago is to its suburbs; the in-migration all depends on who is in-migrating. For Chicago the in-migration as a percentage likely includes large numbers of young upwardly mobile college educated people. That number am sure exceeds the combined total of the same of Kansas City, Minneapolis, Columbus and Indy.

    Would also scrutinize just where the statistics are coming from as would bet they are suspect

  2. SpeedBlue47 says:
    June 14, 2008 at 2:10 am

    Net In-Migration statistics may be suspect, as indeed most much statistics are, but their is indeed seem to be a trend amongst cities that follow this pattern. I would probably doubt that the statistics are so out of whack that they would show the opposite of migration trend, though it may not accurately represent the dynamics of a very large Metro area.

    Indianapolis has not been bigger population wise than Chicago since the 1850’s, when the Hoosier state capital was twice Chicago’s size. But what has transpired in the intervening 150 years is proof positive of UPs point. Everyone wants to be in Chicago because there is a sense that their dreams can be fulfilled there, and a lot of that stemmed from the combination of the city’s river and lake access, and then it’s rail access. Around this was built a number of organizations, corporations, and institutions which turned the excess of the day into lasting monuments of the city’s achievements. Chicago also grew up fast and early, and centered its development around its main geographic feature: The Lake. Most of the other early bloomers feel desolate because their cities were able to be decimated by the highway system, the onslaught of FHA and VA loans, urban renewal projects, and public housing. Others died due to being a one-dimensional city(Cleveland, Pittsburgh).

    Indianapolis needs to bring to the table something distinct, there is no geographical frontier anymore. It’s sports business is a first step towards establishing a cultural identity, but something more is needed. What draws people to the “sunbelt”? Contrary to popular demand, it is the regulatory and taxation environment. That’s why Houston, a city with low taxes and no zoning for almost its entire existence is now the 4th largest city in America. That’s what Indy could bring to the table, a simplified and less burdensome taxation scheme, less red tape for development, and a stand against unionization of labor(which don’t really raise the aggregate wages paid in an industry, but do create gross inefficiencies in labor). This would make it “a little more southern” in a good sense, and might bring some Midwestern expatriates back north of the Mason-Dixon line.

  3. Anonymous says:
    June 14, 2008 at 9:29 am

    Am sure this will raise some feathers, but would suggestthat in-migration experienced by Indy, Kansas City, Minneapolis and Columbus is fueled by their geographic locations. Each would draw the majority of their in-migration from < 100 miles as Joe or Jane from Hooterville decides to pick up and move to the 'big city'. There is nothing wrong with that, but think is speaks more to the relative lack of opportunity in Hooterville vs the mid size MW metro's. Chicago is a totally different animal. Sure, it gets its share form Hooterville...but it also gets lots of in-migration from the very metro's cited (Indy, KCI, MSP and Columbus)

    Think a real example of success with in-migration would be when sizable out-migration occurs from Chicago (NY, Boston etc) to places like Indy, MSP, KCI, Columbus.

    Sure, there are examples of that but it is statistically insignificant.

    In this part of the country, Chicago rules as the “Big City”. Next in line is Detroit (which is 2-3x’s as large as Indy)and despite its problems will be #2 for a long time to come.

    The rest of the large metros in the region do need to focus on what makes them different. In my opinion, Indy, Columbus, KCI, MSP are comparable in that there is not much that stands out about any of them. The other group includes Cinci, Louisville, St. Louis, Memphis & Nashville who all share a river heritage and the history which that begets.

    Then there is Cleveland which is like a little Detroit complete with Detroit-like challenges and Milwaukee, overlooked in the shadow of Chicago

  4. Anonymous says:
    June 14, 2008 at 2:49 pm

    I believe Urban statitics came from the US Census Bureau. Which I agree does have a few problem areas, but generally speaking I think they get things right.

    The post questioning some of this comes from a person or people from a city that seems to have a huge and complicated complex problem about itself on many fronts. It begins with L and ends in ville. Just a guess.

  5. Anonymous says:
    June 15, 2008 at 6:34 am

    Anon 1:49

    A post from someone who wrong headedly believes Indy is on the same level as Chicago and is superior to Cinci, L-Ville, N-Ville.

  6. Anonymous says:
    June 15, 2008 at 7:05 am

    The Urbanophile must suffer from memory loss. In March of this year he posts: http://theurbanophile.blogspot.com/2008/03/census-bureau-releases-2007-county-and.html

    Yet, the most recent post “Minneapolis, Kansas City, Columbus, and Indianapolis all have material in-migration. The others are flat to declining. Clearly these four cities are generally considered among the best performing in many respects.”

    Why would the Urbanophile leave off L-Ville from the list of material in-migration cited in June when it exceeded Columbus and MSP in March?

    # Indianapolis – 11,350 (2,758; 8,592)
    # Kansas City – 8,808 (3,852; 4,956)
    # Louisville – 8,052 (1,554; 6,493)
    # Minneapolis – 7,493 (9,689; -2,196)
    # Columbus – 6,458 (4,035; 2,450)

    BTW: Museum Plaza infrastructure/site construction costing $14M is now underway. Arena site demolition continues.

  7. The Urbanophile says:
    June 15, 2008 at 12:49 pm

    Firstly, my stats on migration come from the Census Bureau, which is the standard source.

    The Chicago area’s outmigration is based on an MSA view, not a city only view. The aggregate outmigration is small, but there’s a huge bifurcation between large international in-migration and large domestic out-migration.

    By the way, there are county to county migration flow documents available on the Census Bureau site, so anyone who wants to can do their own very detailed analysis of the origins and destinations of migrants.

    As for Louisville, I’m not sure how the Louisville vs. other places got into this thread. I would appreciate everyone not trying to become a your city versus my city type of thing. At a very minimum, it would be nice if people did not post anonymously.

    As I noted in my posting describing the latest Census Bureau stats, Louisville had very good domestic migration numbers. This would be an indicator of health in my opinion.

  8. Cathy says:
    June 15, 2008 at 1:31 pm

    Anon 6:05, its pretty clear that the blog author has a clear disdain for the city of Louisville.

  9. The Urbanophile says:
    June 15, 2008 at 1:39 pm

    Cathy, why do you say that? I have posted any number of laudatory things about Louisville.

    It’s a shame that Louisville boosters can’t bear the thought that anyone isn’t 100% positive on the city. Anyone who reads this blog knows that I rarely give 100% positive reviews of anything because very few things in fact are perfect and because perfection is to a great extent subjective anyway.

  10. El Fuser says:
    June 15, 2008 at 11:14 pm

    I’m a little skeptical of the numbers for Columbus, OH… the city still has the ability to expand its territory far into the surrounding areas.

    Indianapolis has been landlocked for quite sometime, so any population growth seems that much more impressive. Indianapolis has seen actual growth as opposed to simply annexing new areas and the people they contain.

  11. David says:
    June 16, 2008 at 7:17 am

    Urbanophile:

    Please explain then why you left the Ville off the most current posting in regards to in-migration?

    Understand that you wish to avoid the my city vs your city thing. Would suggest you get your facts straight and do your homework to avoid that from happening. Also believe the Indy bias needs to be toned down; ok to celebrate its strengths and successes but they should not be positioned as necessarily the cure-all for challenges that other cities face. Every metro is different with their own strengths, weaknesses and challenges.

    I agree with Cathy.

  12. Anonymous says:
    June 16, 2008 at 10:57 am

    Man, do these Louisville folks have an inferiority complex or what???

    This blog has been very critical of many things in Indy and complimentary of many things in Louisville.

    If you want to read nothing but good things about your beloved little town, I suggest your point your browser elsewhere.

  13. CoryW (cwilson758) says:
    June 16, 2008 at 2:41 pm

    Urbanophile-

    Keep up the good work. I know that you love many things about the great city of Louisville and you shouldn’t have to continuously defend your own damn blog if you happen to not cite it in a discussion.
    Technically, Louisville is SOUTH, eventhough it is only a River away from the “north” thus the reason why the Urbanophile did not cite it when discussing the midwest.

  14. David says:
    June 16, 2008 at 4:26 pm

    Anon: 9:57

    It is remarks like your “beloved little town” that underscore, thy problem is thine.

    CoryW:

    Not buying it. I thought the Urbanophile is about cities/metro’s with a focus on Indy (first) and then the regional metros (second). All I did was point out 2 posts by the Urbanophile that say different things based on presumably the same information.

    Am still with Cathy!

  15. Anonymous says:
    June 16, 2008 at 6:46 pm

    If I remember Urban’s orginal post about this in-migration issue…it was pointed out that Louisville actually had an upward positive movement over previous indicators. I am not going look the orginal post up, I am sure my memory servers me correctly on this.

    But it also said that Louisville had not previously been doing that wel but, this was good news for Louisville.

    The cities he mentioned in this post are the cities that generally hold those top 4 positions. Given that, I can see why he may have not looked up every detail and just slipped into what has been the “norm” is understandable but the reaction to it is not understandable.

    Additonally the cities he mentions in this post happen to be the cities that are generally looked to and at as success stories in the region. I am sorry Louisville doen’t fall into the group in most people’s view.

    I too have picked up on this “Louisville” complex issue.

  16. The Urbanophile says:
    June 16, 2008 at 6:57 pm

    This is a blog, not a government sponsored research program. As such, I pretty much write about what I want to write about. I’m not interested in some mythological fairness doctrine. If you don’t agree with what I write, then you are free to start your own blog and write whatever you’d like. Alternatively, I allow comments and don’t delete them unless they are spam or patently abusive, which is extremely rare.

    As CoryW noted, I started my blog to write about the cities of the Midwest. Louisville isn’t even in the Midwest, though I felt it had enough similarities to make it worthwhile writing about from time to time. What’s more, I grew up there, and so still have a lot of positive feelings about the city. I wanted to try to put it on the radar in the greater Midwest, and make a case that this was a city that belonged in the conversation.

    Unfortunately, it appears to be one of those places that is loaded with boosters who can’t stand to hear a discouraging word said about their home town, and who make it their business to attack anyone who gives anything other than their one true version of the truth and various other real or imagined slights. This thin skinned approach and an inability to engage in self-reflection isn’t good.

    I’ve written many positive things about Louisville, and have long, for example, been a huge cheerleader for Museum Plaza. I seem to have gotten little but criticism for not being positive enough. I’m sorry people feel that way. If it makes you feel better, I do think Louisville’s migration figures of the last year are a positive sign. I’d like to make sure that continues into the future before I celebrate too much, but it is unmistakably good.

  17. David says:
    June 17, 2008 at 8:10 am

    Urbanophile:

    Dude, citizen journalism opens the door to criticism, espescially if the facts are ignored.

    Also, while I might disagree with some of what you publish, majority of responses have been to ANON comments made by one or more people who make outright false statements.

    Urban: Your blog is overall well done, interesting and it provides a platform for your point of view. Overall, a balanced view.

    While I am an admitted booster of the Ville, am also aware it is not perfect and it has missed out on lots of opportunities. Critique of the Ville based on facts is welcomed and accepted. When that critique is itself an attack based on false information (mostly from other commenters) they should be prepared for a response.

    Whether the Ville is Midwestern, Southern is sorta moot. The fact is Indy, Cinci and the Ville’s suburbs are all less than 100 miles apart. Could you imagine how attractive this triangle could be if each of these metro’s could capitalize on their own strengths but also figure out a way to work together?

  18. Anonymous says:
    June 17, 2008 at 5:17 pm

    I can’t disagree more speedblue47’s political diatribe. Houston covers a very large area which bumps up its population figures. It also has horrible air and water pollution. Traffic is an absolute nightmare, which is why the city is building light-rail lines.

    The Fortune 500 corporations based in Houston are mostly in the energy sector, which isn’t surprising because Texas is the center of the American oil and refining industries due to the fact that it had a lot of oil which brought people to start companies and cities.

    The Port of Houston as well served as a key magnet for growth.

    Allowing developers to rape the natural environment and not pay for infrastructure upgrades is the best way to send a metropolis spiraling into eternal gridlock and horrible air pollution.

    Having a well developed infrastructure and an educated workforce are the most important drivers of business investment.

    Indiana is already very business friendly. Kicking the working man in the balls by being more anti-union only decreases working conditions and health benefits, leading to more poverty and malcontent.

  19. The Urbanophile says:
    June 17, 2008 at 6:17 pm

    David,

    Thanks for the comments. I’ve been intrigued by the idea of better collaboration between Louisville, Indy, and Cincy, but haven’t been able to think of a lot of ways to operationalize this. What would they collaborate on?

    There are already some limited examples. For example, there’s a mutual aid agreement for major disasters. The respective electric utilities help each other out after storms. But what else?

    Most people seem to view collaboration in terms of the division of labor and specialization. But that’s a hard sell to any city. We couldn’t, for example, easily agree to make Cincinnati the “headquarters city”, Indianapolis the “life sciences city” and Louisville the “tourism city” with each city supporting the other’s efforts. None of these cities is giving up anything in their pursuit of all three.

    I’m legitimately interested to know what form such a collaboration might take, and how it might be operationalized. Joint foreign trade missions or something like that, perhaps?

  20. David says:
    June 17, 2008 at 9:08 pm

    Urbanophile:

    None of the cities are going to quit going for the HQ’s, Life Sciences or Tourism or a host of other things.

    Maybe 30 years out they might decide to replace their individual airports with one that is in the middle of the triangle and connect it to their cores via rapid transit; or the MLB Reds will finally decide enough is enough and split home games among the 3 cities and have the AAA, AA and A minors rotate games among the 3; same could be done with the Pacers. Each could support their own NFL team.

    Is ‘pie-in-the-sky’ but the 3 combined are far stronger than any 1 by themselves. Would be worth a discussion to brainstorm at the very least.

  21. Anonymous says:
    June 18, 2008 at 7:47 am

    I just don’t see the cities coming togehter like that. Why would Indy give up it’s life science industry and emerging techonolgy sector, sports etc…same goes for Cincy with P&G.
    Additonally Indy is already opening a brand new airport. Louisvlle can have the Pacers…please take them.

  22. thundermutt says:
    June 18, 2008 at 9:02 am

    I can see it now: Shelbyville International. (Right out of “The Simpsons”.)

  23. The Urbanophile says:
    June 18, 2008 at 4:56 pm

    David, I agree, it’s worth the consideration – please don’t hesitate to send me any more ideas you have.

  24. Gary says:
    June 19, 2008 at 7:31 am

    This is a little off topic but, I am fine with having a triple A baseball team (Indians). I think going to the “vic” is a much better eperience than going to a Reds game. I also don’t see the the talent difference is that great,

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