Sunday, October 12th, 2008
I’ve always struggled with SWOT analysis (strength, weaknesses, opportunities, and threats). It seems to me that most situations can be viewed in multiple dimensions. Or, as the well known philosophical proposition puts its, everything implies its opposite.
Consider the case of Eli Lilly in Indianapolis. It’s obviously a huge strength of the city to to have a major life sciences company headquartered there. Lilly money literally built the city. But Lilly is also, in a sense, a weakness. An anchor company like that provides stability and a base to build on, but as we know, an anchor holds you in place. Absent Lilly and other “legacy” employers in life sciences, what would the picture really look like for Indiana in that sector? Would the state be hungrier to build its life sciences industry if these jobs didn’t show up in the surveys, inflating the region’s true performance? Lilly is an opportunity as well. As the company pursues a Boeing-like “systems integrator” strategy where it no longer wants to be a traditional vertically integrated concern, there are big opportunities for Lilly spinoffs to turn into something, and for local services firms to start doing more business with Lilly. The Greenfield laboratory sale to Covance is a case in point. And of course, there are also threats around Lilly. Pharma is a maturing and consolidating sector. While Lilly has made smaller, opportunistic purchases, it has shunned the mega-deals that others have done. Lilly’s board clearly understands that most of these deals are not good for shareholders, and have decided to be wise stewards of their shareholders’ money. That doesn’t mean that they wouldn’t let some other dumb board of directors waste their shareholders’ money. If Lilly were acquired, it would certainly send shockwaves through the region, and I don’t think the city has a contingency or action plan for it.
So in many respects, things are what you make of them. Applying this to the Midwest, I always hear people whining and complaining about how we don’t have oceans, we don’t have mountains, the climate is terrible, it’s flat and boring, etc. Well, this might all be true. But is it a bad thing? Does it mean you can’t compete?
Try this thought experiement. Pick a smaller Midwestern city and exchange its population with that of San Francisco. What do you think the reactions would be. Here’s my bet on what the Midwesterners would say about San Francisco:
- This place is terrible. It’s an earthquake zone for crying out loud. It costs twice as much to built things here because of that. It isn’t fair.
- I hate it here. The terrain is so rugged. People today want pedestrian and bike friendly neighborhoods. We could never have that with all these hills.
- Why did we have get stuck on the tip of this crappy peninsula? We’re isloated, there’s no room to expand, we’ve got all these bridge choke points, etc. This is killing our competitiveness.
- The weather sucks here. It’s foggy all the time, it never gets warm, you need a jacket in August, etc.
- Just our rotten luck, we’ve got the ocean, but it’s cold and their’s no good beaches. The winter is yucky and rainy.
- Woe is us, we don’t have any water since the whole West is nothing but a gigantic semi-desert. Those jerks the Midwest have the Great Lakes, plus they get plenty of rain too. I can’t believe their luck.
Get the picture?
Try the experiment the other way. What would our friends from San Francisco think of the Midwest? What would they do to build social and built environments to take advantage of what the Midwest has to offer. Consider: the Netherlands is flatter than a pancake, but they managed to turn that into an advantage by creating the most bicycle friendly country in the world. And lest you think the Midwest climate prevents that, I’ll tell you that the Netherlands is famously rainy and not very warm to boot. I think our friends from out west might have a very different view of the Midwest from its current residents.
Yes, there are good hands of cards and bad hands of cards. But often it is just how you play them. The person who has the best hand doesn’t always win. Heck, a lot of time the person with the best hand folds and isn’t even in the game. That’s too many Midwestern places. They’ve already all but folded.
Yes, all things equal, I’d like sunny weather all the time too. Climate has definitely played a role in the migration from the north to the south and west. And beyond the physical environment the Midwest suffers from a host of legacy problems that are legitimate challenges. Nevertheless, I don’t think any of that is a reason the Midwest can’t compete.
We’ve got to invert the world. Stop looking at things from the traditional negative perspective. Start looking at them in a whole new way. Stand the problem on its head. How can we turn our perceived weaknesses into strengths? Why can’t we use flatness and open spaces to our advantage? Why not exploit centrality? Not in a superficial “60% of the US population is within an X hour drive” way but in a deeper, more structural way. Why can’t an agricultural legacy be a strength, particularly with the trends in local, organic, and environmentally friendly food production? There is no possible way to have environmentally friendly farming in California when the state’s entry agricultural complex is dependent on dams and irrigation. Similarly, what’s there in the manufacturing heritage? What about the people and culture? Start figuring out the way to make a liability into an asset.
I’m not going to offer the prescriptions here, but I do believe that much of changing the game for the Midwest is around changing the mindset. And looking at the region in a new and fresh way is a big part of that.