Friday, June 12th, 2009
New Economy Pipedreams
Every single city and state it seems wants to both turn itself into the new Silicon Valley and the next biotech center. The New York Times this week runs a great article showing the futility of these efforts for the vast bulk of cities:
At a recent global biotech convention in Atlanta, 27 states, including Hawaii and Oklahoma, paid as much as $100,000 each to entice companies on the exhibition floor. All this for a highly risky industry that has turned a profit only one year in the past four decades.
Skeptics cite two major problems with the race for biotech. First, the industry is highly concentrated in established epicenters like Boston, San Diego and San Francisco, which offer not just scientific talent but also executives who know how to steer drugs through the arduous approval process.
“Most of these states probably don’t stand much of a chance to develop a viable biotech industry,” said Gary P. Pisano, a Harvard Business School professor and the author of “Science Business: The Promise, the Reality and the Future of Biotech.”
“You can always get a few top people,” Mr. Pisano said, “but you need a lot of critical mass.”
Second, biotech is a relatively tiny industry with a lengthy product-development process, and even in its largest clusters offers only a fraction of the jobs of traditional manufacturing. In the United States, only 43 biotechnology companies employ more than 1,000 people.
Very true. There certainly can be some additional winners in the space, but they are likely to be few. Every city and state has at least one decent medical school and some companies in the sector. It can be easy to delude yourself that you are differentiated or have unique capabilities. A more realistic view would take a hard look at this.
It may indeed be worth having a foot in the life sciences game, but I would also look for other sectors where you can complement it that with niches you can get first mover advantage on and dominate. I’ll again recall the motorsports example in Indianapolis as a good one.
The NYT article is an absolute must read.
On a related note, a Pew study shows above average job growth in the green tech sector in Michigan. This is clearly good news for a state that has taken an economic beating recently.
The challenge for the Midwest in green tech is two-fold. First is that it is yet another sector everyone is taking. Second is that green tech is only a transitional field. As with the internet and business, in a future there won’t be “green technology”, there will just be technology. All of it will be green. Similarly for manufacturing, energy, etc. The field as it exists today will likely dissolve as it is subsumed into traditional industries.
Could the Obama administration put major federal dollars behind a shrinking cities plan? The answer may be Yes according to an article in London’s Daily Telegraph. I encouraged just this in my article about Detroit. There is simply no way most Midwest/Rust Belt cities are going to grow fast enough in their urban core to regenerate all the neighborhoods that were once there. All but a handful have vast tracts of blight across large swaths of their inner cities, often in what Jane Jacobs called “gray belts” of old, single family homes. Particularly for those that were built after the 1920′s, they are often smaller, with obsolete floor plans, often not that well built, and are in major decay. They don’t function as urban districts and probably never will without major retrofits. Cities are going to have to target specific nodes and corridors for redevelopment and consciously decide to forego investing in others if there is any hope of moving the needle. This is what I’ve advocated in Indianapolis, calling for a “100 Monument Cirlces” strategies focused around traditional neighborhood commercial nodes linked together to form chains to downtown and each other.
This might seem like a cruel or heartless policy, one unfair to those who don’t live in favored districts. And I can’t argue against that. It’s true to a great extent. But that’s also the reality of the situation. The alternative may be the further decline of the entire city and and even bleaker future ahead. There are no guarantees this strategy will work, but the alternative looks much worse.
More on the Grass Roots
Following onto my series on the new grass roots (see part one and part two), Ed Morrison of open source economic development fame has some interesting warnings for Indianapolis over at the IBJ’s News Talk blog.
He reminds that virtually all of the projects involved bricks and mortar. They’re things, not people. He thinks the power brokering and equivalent of smoke-filled rooms that revitalized the city since the ’60s will never work with arguably more important — and intractable — social problems like school dropouts.
Indianapolis mastered its strategy before there was an Internet and power began to disperse to more people, Morrison says. Now, the city needs to learn to take advantage of networks of people — not necessarily an easy transition.
As someone who’s long said that cities are about people, not just buildings, I couldn’t agree more on the bricks and mortar part. You need the physical to be sure, but if you don’t have the people, it ultimately won’t matter.
Similarly, I don’t think there’s an either-or on networks. To me the best mix is a strong combination of top-down and bottoms-up. The civic leadership strength of Indianapolis is still an asset I believe, particularly if marshaled in the service of the hard changes that continue to be necessary to take the city forward. This needs to be complemented by new networked capabilities, however.
Jim Russell talks about zero sum economic development thinking in the Midwest. The money quote:
Cleveland is at war with everywhere not Cleveland. Dayton is at war with everywhere not Dayton. The same is true for Pittsburgh and every other Rust Belt city. As long as this parochial perspective holds, Atlanta will continue to win.
Here’s a presentation with some really great descriptions of various public plazas in the United States today. It includes Cincinnati’s Fountain Square. (Via Union Station Advocates in Denver)
Complaints about the new arena design in Atlantic Yards in the NYT
The High Line is now open. This is an innovative park in the bed of a former elevated railroad that has an excellent and forward-looking landscape design from what I’ve seen. I can’t wait to check it out in person.
The Economist profiles municipal budget deficits in the United States.
A very interesting, creative take on what the future could look like by Amsterdam’s NL Architects. (Via @acceptgiro)
I want to suggest everyone surf over and check out a new blog called Human Transit. It’s run by Jarrett Walker, a transit consultant who worked on the plan for the Minneapolis system. He’s down in Australia-New Zealand these days, but the blog is going to be US focused. I very much like his rational and balanced approach. Here’s an excerpt from his manifesto:
My goal is not to make you share my values, but to provide perspectives that help you clarify yours. Much of my work has been about analyzing public transit problems to separate the technical question from the question about values. To take just one example, most transit agencies will tell you they want maximum ridership, but they usually also operate some low-ridership services that meet other goals, often to provide basic mobility to transit-dependent people who live in low-ridership areas. Every agency decides, explicitly or not, whether to spend a dollar on building high ridership or to spend it on serving people who really need it. Stated this way, this is a question of values. It has no technical answer, because it’s a question about what your community feels is most important. My role is to point out the question itself, show how it’s lurking inside debates that may seem to be about something else, and help you form an opinion based on your values.
Check it out.
The Infinite City (A Chicago Sojourn)
Chicago’s recent bike parking challenges (Vote With Your Feet)
Mag Mile facing a glitz gap (Crain’s Chicago Business)
CTA ridership drops in the recession (CTA Tattler)
Revitalizing Over the Rhine – Part One (CNU)
Revitalizing Over the Rhine – Part Two (CNU)
$120 million restoration of Union Station to begin (Columbus Dispatch)
Ohio Supreme Court rules against city residency requirements (Plain Dealer)
Creative economy in Central Ohio (Community Research Partners)
Urban villages in Detroit’s future? (Free Press)
Urban entryways to Indiana cities deserve our attention (Morton Marcus)
It’s about time we all loved Louisville (Business Lexington)
Beyond the rust belt a year later (TheDeal.com) – Via RustWire