Monday, November 17th, 2008

The Facts on the Ground

Conventional wisdom says cities should build on their assets. But they should really build on their liabilities. While assets can be building blocks for the new, more likely they are the legacy of the past, not the foundation for the future. The only reason cities have assets is because previous generations didn’t try to build on the assets of their day – they went out and created something new. And all too often “building on assets” turns into “defending the past”, as cities and states try to protect the industries and ways of doing business that worked in the days of yesteryear, but are failed strategies for the new economy.

I say “Invert the World“. Take the things you can’t change but you think are holding you back and figure out how to recontextualize them into an asset. Make your weaknesses into strengths. Turn what only you’ve got into a weapon no other city can match.

It’s critical for the Midwest to face up to the facts on the ground, stop whining about them and start doing something with them. There are the things we can’t change, but we can make them into something we can use instead of something to complain about. Some of these are:

  • Centrality. How do we make being in the center of the country instead of the coasts an asset? Typical logic revolves around being a distribution center, saying we are X hours from Y percent of the population. And while that’s true, I think there’s an opportunity to dig deeper and figure out how to exploit centrality in a more structural way.
  • Flatness.
  • No Boundaries. Cities like Indianapolis and Columbus have no barriers to growth in all directions.
  • Seasons. I particularly like how the Twin Cities embraced the notion of being part of the frozen north and being a winter sports haven.
  • North meets South (for cities in the Southern tier of the Midwest)
  • Rivers and Lakes. They often seem to divide or create barriers. But why does it have to be this way?
  • Water, more generally. We’ve got a huge amount of it.
  • Bottlenecks, especially for Chicago and Detroit. It’s unlikely they will ever be free flowing, so how do you make being a bottleneck work for you?
  • Large African-American populations. As I’ve argued before, the city that puts its black community at the center of its growth strategy is going to reap a big dividend.
  • Agricultural heritage. Why not own local and sustainable agriculture? Why not figure out the agribusiness model to make it work at scale? There is no such thing as environmentally friendly farming in irrigation dependent California, but there could be in the Midwest.
  • Unions. This one particularly intrigues me. Clearly, the era of achieving above market pay through the cartelization of labor is drawing to a close. Unions are, paradoxically, becoming obsolete as much of what they originally fought for has become standard in the workplace and globalization destroys their cartel function. But why not find a new role? Unions have long been active in worker training and certification. Why not take it a step further and morph the unions into educational institutions? Leverage unions as a key vehicle to help the Midwest have a competitive advantage through a uniquely skilled workforce that can’t be matched elsewhere.
  • Multi-state metro areas. For those that are, how can you make this work to your advantage instead of as a source of structural weakness?

I don’t suggest this is an easy task. But many of these are structural conditions other parts of the country don’t have. If the Midwest can figure out how to turn them into the assets of tomorrow, this creates a “wide moat” barrier that other cities without these structural advantages can’t match. It also allows the Midwest to live up to our brand promise, and build a New Midwest based on the best parts of the old and our unique geography and history, rather than trying to import someone else’s story. It’s time to stop playing defense, turn the tables and go on the attack. This is how you do it.

Topics: Strategic Planning

5 Responses to “The Facts on the Ground”

  1. Anonymous says:

    You had the courage to mention unions. Unions are such a hard subject to discuss with people. I find it similar to issues involving race. People are too sensitive about it. Even the media softens it, barely mentioning how union pensions keep Detroit auto floundering.

  2. Ahow says:

    Agreed on the unions (with an exception for teachers). Do you think that GM, Ford, and Chrysler would be in the position they are in if they could have moved to Define Contribution plans, adjust pay according to the economy, and be able to hire and fire at will? I highly doubt it. Would they workers quality of life suffer? Yes, because they would be brought down to the level of EVERYONE ELSE IN THIS COUNTRY! Unions are sinking the ship.

    Teacher’s unions are still necessary because they are subject to public funding and their beneficiaries (children) are not of voting age.

  3. The Urbanophile says:

    Thank you for the comments.

  4. Alon Levy says:

    A few ideas/comments:

    Centrality: it doesn’t do much good, outside distribution. Even then, there’s no reason for anyone to build distribution centers in Indy instead of Tulsa, Lexington, or Memphis.

    Flatness/no boundaries: if anything, this just creates sprawl, which makes it harder to have a coherent metropolitan government.

    Rivers/lakes/water: that’s more viable. From Boston to Washington to Milwaukee, the northeastern quarter of the US has one of the world’s stablest ecosystems. (It’s the Northeast-based thinking about the environment that led to catastrophe when applied in the West.) In the West, people have to fight over water, grazing, and smog. In the East, the natural environment was destroyed 150 years ago so nobody cares anymore, water is plentiful, and atmospheric inversions don’t happen.

    Black populations: it depends on the state of race relations. In most of the industrialized North, they’re terrible. New York’s race relations are improving, but, crucially, they depend on Caribbean immigration. Malcolm Gladwell has shown how white employers like black immigrants because they perceive them as different from the native-born blacks they hate. It can be different if there’s black political leadership, but it depends on whether it looks like Barack Obama or like Kwame Kilpatrick. In either case, encouraging immigrants tends to be easier than healing race relations.

    Agriculture: local agriculture pretty much by definition resists being turned into big business. Indy can help develop farming technology, though, on the model of Chicago and Kansas City’s stockyards.

    Unions: unions don’t do training and education – that’s what universities are for. The most successful union systems are those that can penetrate the professions and adapt to their employment structure, which is different from this for semi-skilled industrial labor. Scandinavia is good at this; the Anglosphere is crap. There can be change there, but it won’t come from local unions, and it definitely won’t come from the part of the US that’s worst-affected by free trade.

    Multistate metro areas: from New York’s perspective, these are an unmixed curse. The same goes for bottlenecks.

  5. The Urbanophile says:

    Alon, thanks for the comments. I personally think we can dig deeper and do better. I keep coming back to Nintendo, which couldn’t compete with Sony and MSFT. Their answer: don’t even try? Instead, go a different way and come up with something really compelling. I think the Midwest can do something similar.

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