Wednesday, April 22nd, 2009
Along with Detroit, Cleveland is the poster child for major Midwestern urban decline and a favorite punching bag for the national and international media. But Detroit’s travails are easy to understand. Anyone can look at and attribute them to the auto industry and poor race relations. The reality is more complex, but at least Detroit lends itself to a narrative. Cleveland is a different story. What happened in Cleveland to cause this? Even I cannot come up with a “grand unified theory” of Cleveland, which those of you who read this blog know is very unusual.
I was drawn to start thinking about Cleveland by this “tourism video”:
It’s humorous but also curious. Why would someone, presumably a local, create something like this?
That got me to wondering about Cleveland. I’ve actually never been to Cleveland. That in itself is notable. Out of the 11 Midwestern cities I typically cover in this blog, I’ve been to all but two, and most of them many times. (Kansas City is the other, but it’s a bit out of the way and arguably as much Great Plains as Midwest). Business never took me to Cleveland, another data point. And despite my desire to spend a weekend at least in all these places, Cleveland just never made the cut.
I also haven’t written much about it. I scan the news in every Midwestern metro daily but seldom find much that would cause me to write a major post about Cleveland. While not writing about it certainly plays a role, I get less web traffic from Cleveland than any other of my Midwest cities. I get more hits from New York, LA, SF, Boston, and DC than from Cleveland. It might be the only city in the Midwest where I don’t know of a web site that has linked to me.
It doesn’t appear to just be me either. Jim Russell over at Return to Pittsburgh says, “A better definition of Cleveland is a cul-de-sac of globalization”. He excoriates their lack of regional thinking. He also reminds us that Richard Longworth, author of the seminal work on the challenge of globalization in the Midwest, “Caught in the Middle“, found Cleveland an odd place indeed. Per Longworth:
“In all my travels through the Midwest, Cleveland was the only place, big or small, that seemed heedless of the global challenge. Only 4 percent of its population is foreign-born, in an era that demands new blood; the city government isn’t sure it wants more. One of its leading economists told me, ‘You can’t kill manufacturing–that’s stupid,’ but manufacturing is fleeing and cities need new ways to support themselves.”
Cleveland’s economic development establishment comes in for criticism not just from bloggers like Russell and journalists like Longworth, but from economic development professionals like native Ed Morrison:
“Most of the people doing regional economic development in this town don’t really know what they’re doing. It’s not really that surprising that the region has launched some remarkably unproductive efforts.”
That’s pretty stunning coming from a guy who lives there. I don’t know Morrison, but he works for Purdue University and commutes from Cleveland, where he also founded an open source economic development organization called I-Open that appears to be one of the few things keeping Cleveland’s economy in business. I’m alert for such things, but I don’t think I’ve heard Morrison criticize Indiana’s economic development, or anyone else’s, like that. He actually sounds a bit like a woman scorned, so I’m sure there’s a story in there someplace, but it’s pretty telling nevertheless.
Neither Morrison nor Russell care much for the site selection consultant tours Cleveland has been doing. You can see coverage of them here and here. Russell hits us with an interesting excerpt from the Plain Dealer:
“To distinguish its red-carpet tours, Team NEO crafts attention-grabbing invitations. For the tour during the Rock Hall’s induction weekend, invitees received small guitar cases with invitations tucked inside.
“‘We are competing for these jobs against Indianapolis, Detroit, Pittsburgh,’ said Team NEO’s Carin Rockind, vice president of marketing and communications. ‘We have to break through.'”
I realize gimmicks are par for the course, but does this person really think anyone is going to pick Cleveland over those other cities because of the quality of their swag? Detroit? Michigan is economic kryptonite these days, so that’s no problem. Pittsburgh is a much tougher competitor for jobs these days than a lot of people give them credit for but is still a rather slow growth place dependent on “eds and meds”. Those are easy cities to measure yourself against. But let’s look at Indianapolis and do a quick comparison of the two cities.
|Population Growth Last Year||(0.3%), 51 out of 52 large US metros, 10 out of 11 large Midwest||1.3%, 40% higher than national avg, 19th in US large metro, #1 in Midwest large|
|Migration||Negative (net out-migration)||Positive (net in-migration)|
|GDP Growth 2001-2006||21%||26%|
This is just a sample, but will give you a feel. On any relevant measure, Indianapolis beats Cleveland. Most notably, Cleveland’s population is shrinking meaning that the labor force situation is deteriorating over time.
Like almost all other cities, Cleveland is chasing dreams of life sciences, high tech, and green industry. That’s totally undifferentiated, though there is no denying that the Cleveland Clinic is one of the absolute best in the entire world, so anyone in a health care related company that could leverage the Cleveland Clinic connection would have to take a serious look at Cleveland. But beyond that, I couldn’t find much else, nor any indication that there is any strategic depth to the thinking in these spaces, and I spent a lot of time looking. Grass roots organizations like I-Open and E4S seem to be thriving, but it looks like they are just filling the vacuum left by the establishment.
Indianapolis, like most places, also has the same list of industries, but to that you can add things like motorsports and the sports events industry. Also, where that city is shooting for the target sector du jour, it has, in some areas, really taken a look at where it can win and tried to be focused on its target. For example, in the green industry segment, the Energy Systems Network is looking at some very focused areas, with a largely private sector funding model. Interestingly, Ed Morrison helped develop this. In the high tech space, it isn’t just scattershot here and there, but there’s a mini-cluster in internet marketing companies that is one of the nation’s biggest, with over 1,000 employees. The era of the large, megalithic corporation as the engine of growth is coming to a close. Tomorrow’s economy will be powered by clusters of smaller, densely networked firms that in aggregate will add up to what a traditional HQ used to bring. The motorsports and internet marketing clusters are right on point with this.
Plus there are plenty of other emerging sectors. I talked previously about how proximity to Chicago creates unique opportunities for Indy (and Milwaukee). And how the central Indiana region was primed to be a center for BPO. KMPG recently named Indianapolis one of only two US cities as hot spots for BPO (Boise was the other). In fact, the Indianapolis region has some of the most favorable geography of any city for BPO with the region-leading but still low cost downtown in the middle and a ring of ultra low cost small cities ringing it within easy commute distance.
Indianapolis has its problems to be sure. It is no Sunbelt boomtown by a long shot. But it runs rings around Cleveland, as do other Midwest growth champs like Columbus, Kansas City, and Minneapolis. Having Cleveland compete against any of these cities in most spaces isn’t even a fair fight. It would be interesting to see a study done on average incentives paid for site selections and what the averages are per city. I’d speculate that if Cleveland didn’t have some unique tie in like the Cleveland Clinic, it has to pay much more to win. That is, it has to buy the business.
This must put the state of Ohio in a bind since given an open playing field, most businesses are going to choose already thriving Columbus over Cleveland. But tilting incentives towards Cleveland to compensate would fracture the fragile balance in a state with 7-8 decent sized cities, including three major metros over one million in population. It’s a tough balancing act.
Now obviously the TeamNEO guys aren’t going to flagellate themselves in the media. That would only be material for other cities to use against them. They’ve got to do their best to sell the city and maximize what they can out of its assets such as my favorite, the Cleveland Orchestra (one of the absolute best in the entire world – I love some of their old recordings), the Rock N Roll Museum, the Cleveland Clinic, Lake Erie, and the transit systems they have. (I salute Cleveland for its transit, and especially the new Health Line BRT). But it makes me wonder if they believe their own press.
As I’ve noted of many Midwest cities, there is a legitimate marketing problem out there with vanilla and negative brand images in the marketplace. But it’s not just a marketing problem, it’s a product problem. If Midwest cities want to make themselves attractive to the labor force of tomorrow and new economy businesses, they need to change their aspirational value proposition and start changing the product to match it. I don’t see that happening in Cleveland, except in pockets.
Back at the beginning of the decade the Cleveland Plain Dealer did a fantastic series called “The Quiet Crisis“. You should definitely look at this, but be careful, because it can suck you in and take up tons of time. I spent a few days looking through all these articles. What strikes me is that all of the problems in Cleveland were well known a decade ago, but what has really happened in response? It’s eight years on and the answer is Not Much. To a great extent, it just didn’t seem to resonate locally. I recall again how Longworth recounted the editor of the paper telling him how the sections on globalization and immigration “landed with a thud” and that Cleveland seemed content to sit “sour and crumbling” on the lake.
Again, what is it? What happened here? Lots of large Midwestern cities got walloped by the Rust Belt era and globalization, but few came through as bad as Cleveland and Detroit. Again, the auto industry provides a narrative lens through which to process Detroit. But in Cleveland I’m having trouble grasping it. Was it steel dependency? If so, why did Pittsburgh walk through the valley of the shadow of death and come through it still standing? They aren’t a thriving city by any means, but seem to have bottomed out and even hit the inflection point in a few eras. Pittsburgh is even being touted recently as a role model for Detroit, though I don’t know if I would go that far personally.
There has to be some sort of historical dynamic going on that I’m not aware of. The only angle that makes any sense at all to me is that something poisoned intra-region relations long ago and that carries through to today. Cleveland to me exhibits some of the worst regional cooperation I’ve ever seen, with tons of in-fighting. Jim Russell rails on them for not including Youngstown in Northeast Ohio. But that’s small potatoes. I remember last year when a suburban community called Avon wanted to build an interstate interchange. A developer was even going to pay the cost. But since it was on an interstate highway, it had to be put into the regional transportation plan from the MPO, and since the MPO was controlled by Cuyahoga County, they vetoed it until Avon agreed to a tax sharing deal. In effect, Cleveland is trying to solve its problems by extorting money from its own suburbs at gunpoint. This is terrible. I’ve never seen anything like it anywhere. Whatever one’s opinion of sprawl or regional taxes, this is not the right way to do it.
Cleveland seems to have forgotten that a great city needs great suburbs. We have to bring the city up, not pull the suburbs down. In a region of the country that is too often struggling, every part of a metro area has to bring their A game, and there needs to be a recognition that a rising tide lifts all boats.
Beyond that, Russell’s calling Cleveland a “cul-de-sac” struck a chord. Cleveland just seems curiously disconnected from the rest of Ohio, from the rest of the Midwest, and from what is going on out in the world. Normally if I post an article about a city, it gets forwarded around in that city and I get lots of hits from there. We’ll see if anyone in Cleveland even notices this. In fact, I’ve got to confess, I’m running a bit of an experiment with this one. Will anyone in Cleveland notice? I’ll post a comment in a few days to let you know how it turned out.
In the meantime, I’d love to hear any thoughts you have that explain the Cleveland situation since I will admit to being at a bit of a loss. For more input, Ed Morrison gives his take over at New Geography in a two part series called Cleveland: How the Comeback Collapsed (part one and part two). I should clarify something here. Ed Morrison, Jim Russell, and I all post stuff at New Geography, but we have no financial or other relationship because of that. I know Jim via email through blogging, but I don’t know Ed from Adam, though I read his stuff.