Thursday, October 11th, 2012

Chicago: The Midwest’s Global Gateway

This article is part of the State of Chicago series.

Chicago is a city that has been ignoring its traditional role as capital of the Midwest in order to focus on ambitions to be a global city. But as this series has illustrated, Chicago has not thrived recently with this approach. Much of its economy remains tied to the region and to manufacturing, and with those sectors having struggled, Chicago has likewise struggled. Also, global city Chicago, powerful as it might be, is simply much too small to carry the region on its own. A broader plan is needed.

As part of that, I’ve advocated that Chicago re-embrace its role as capital of the Midwest. As I noted, Rahm Emanuel had a shift in rhetoric earlier this year when he described Chicago as the capital of the Midwest to the Guardian newspaper in the UK. I thought this was a great move.

The question then becomes, how do you do that? That’s a difficult one. As I noted in my “Mega-Skepticism” post, it’s not exactly obvious what it is we are actually supposed to do when it comes to cross-regional collaboration, even when we think it’s a good thing.

But some things require no special efforts. Chicago is already the cultural center and business services center of the Midwest. No program required. Some ideas I’ve already explored elsewhere. The brand repositioning I discussed in a previous installment could be seen as part of this. Also, about three years ago I wrote a four part series called “Reconnecting the Hinterland” in which I explored ways Chicago could reconnect with the Midwest. I won’t reprise that here, but you can read it for yourself in Part 1A, Part 1B, Part 2A, and Part 2B.

What I’d like to highlight today is something that reconciles global city Chicago with being the capital of the Midwest, namely a self-conscious positioning of Chicago as the Midwest’s global gateway.

Much of the Midwest doesn’t seem to know much about globalization except that it flattened their towns, and as a result they don’t like it very much. But while there’s some blowback of sorts against it, it doesn’t seem realistic to think that we are going back to the status quo ante.

This leaves most cities with a problem: they aren’t very connected to the global economy or the global idea flow. Even successful places seem to more or less ignore the global angle, something I brought up in a previous post. Globalization is curiously absent from the radar. That may be in part because they don’t see how they can relate to it. Chicago may talk about global conferences and global talent attraction and global non-stop flights, but only a handful of other Midwest places can aspire to this type of “direct globalization,” at least right now.

Yet I think many people get it that the global angle is important. This is where there could possible be collaboration with Chicago to global benefit. How could Chicago position itself as the on-ramp to globalization for Midwest cities? The analogy here would be something like an airline hub. People from most Midwest cities don’t have non-stop flights to many if any international destinations. So they are able to connect through O’Hare to get that access.

Now, the analogy breaks down a bit when we consider that it isn’t necessary to use O’Hare as your international gateway. You can connect through Atlanta or lots of other places. And this probably applies to lots of knowledge networks too. The global system isn’t hub and spoke necessarily. It’s more of a mesh network.

But it still seems that intuitively there’s a natural role Chicago could play. For example, most foreign consulates are in Chicago, so that’s where you look to if you need a visa or something. International speakers and leaders are frequently in Chicago. Why not look to jointly sponsor something where either delegations from other Midwest cities are invited to Chicago to be part of that, or where there are multiple Midwest stops on a regional tour of sorts?

A focus on being the Midwest’s global gateway doesn’t mean Chicago has to abandon standalone global city functions like the futures exchanges. It can keep what it has and opportunistically build there as well. But the global gateway role seems like something that would be both aligned with its global ambitions, and helping to revive the region it depends on for its own economic health.

This regional capital role is one that I’ll admit I don’t have an entirely ready made answer for. So clearly work needs to be done. Atlanta and the New South is probably the best example to look at. Atlanta clearly blossomed as a result of its own ambitions and transformation, but also its embraced of its role as a Southern city and the turnaround in fortunes in much of the region. Boston’s role in New England might be somewhat similar, but it’s less useful since New England could almost be seen as simply metro Boston writ large, and outside of the core region of Boston, much of New England is no better off than the Midwest (arguably worse, in fact).

What Chicago doesn’t need to do is take a parasitical view of its Midwest capital role. Unfortunately, Rahm’s rhetoric suggests this is what he may mean by the term. For example, in announcing Google’s move of the former Motorola Mobility operation to downtown, he said, “This is going to be a mecca for drawing people from the greater Midwest.” Google executive Dennis Woodside echoed this, saying, “We have the opportunity to really pull from the universities across the entire Midwest.”

True or not, these words will only tell anyone in another Midwest town that Chicago plans to try to steal their best and brightest, something they already agonize over anyway. Actually, Chicago’s talent flows aren’t that great, as the OECD study and others show, and a number of Midwest cities are more than holding their own in talent attraction. But in this case words speak louder than actions. It’s like border cities in Indiana trying to build regional collaboration initiatives when the state’s biggest economic development strategy is poaching business from adjacent states. It just doesn’t work.

Especially when you are the big dog, words matter and are paid attention to. I’m not sure what Rahm actually thinks. I hope he doesn’t just see the rest of the Midwest as a place he can strip mine to build Chicago. But regardless, he should be careful with rhetoric that might be seen as inflammatory by surrounding places.

9 Comments
Topics: Economic Development, Globalization, Public Policy, Regionalism
Cities: Chicago

9 Responses to “Chicago: The Midwest’s Global Gateway”

  1. the urban politician says:

    Hmmmm….

    While you are correct, the lack of specifics really doesn’t move us forward very much.

    In addition, I am not sure Rahm’s intentions to “pull from local Universities” should entirely be misconstrued as some slimy effort to drain the midwest of all of its talent.

    For example, Rahm’s recent trip to Urbana asking tech/engineering students to consider moving to Chicago after graduation (instead of fleeing for the Bay Area) is one situation where he is simply trying to put Chicago on the map where it otherwise has lagged, and really this has nothing to do with trying to leech the rest of the midwest.

    In fact, I would argue that Chicago is more concerned about competing with the coasts than really competing with other midwestern towns and cities. When Rahm talks about attracting University talent to Chicago, I think he is less concerned about such talent staying in the midwest, and instead more concerned that such talent would bypass Chicago and move to the east or west coasts. I can not say for certain, but for Chicago at least I think this remains the biggest threat.

    In regards to strengthening ties to the midwest, keep in mind that you are talking about public policy. Businesses are going to do what they need to do, and I think Chicago area businesses are already fairly well connected to their hinterland. What can the Government do to help define and promote this role? That is, more precisely, what we should be asking.

  2. Dan Johnson says:

    This is why we should be building high speed rail to connect the Midwest to Chicago and O’Hare.

  3. Chris Barnett says:

    TUP, I don’t think Rahm (or anyone else) has to do anything special to attract Midwest university graduates to Chicago. That happens as a function of Chicago’s dual role as “Capital of the Midwest” (biggest city in the region) and close to home for Midwestern kids.

    Good jobs is what will (to borrow Aaron’s phraseology) hoover up the Midwest’s best and brightest. Pleading with UI grads by Rahm won’t create jobs in the short run.

    Rahm would do better employing the “alumni” strategy: lure experienced Midwesterners back home from the coasts to start businesses.

  4. the urban politician says:

    Chris,

    Rahm didn’t visit UI in Urbana to promise “good jobs”. He went there to convince them to consider moving to Chicago to create their next big idea rather than heading to “The Valley”.

  5. Chris Barnett says:

    TUP, that’s my point: talking to grads with stars in their eyes isn’t likely to be productive until a startup culture gets rooted first.

    I think a good approach would be to go to “The Valley” and get someone with a track record and some cash and a Midwestern background to come back and do their next big thing. (Jim Russell’s boomerang/alumni concept.)

  6. Rod Stevens says:

    I’d be looking at German cities for how to do more international trade. The whole country is heavy on exports, not just to Europe but the rest of the world. Chris Gibbons of the economic gardening movement is an expert on how to help local firms sell to the rest of the world. This means getting beyond “trade mission” junkets for mayors, and down to the nuts and bolts of how to connect local firms with overseas buyers. Chicago needs to keep selling to the factories that moved from Milwaukee to China.

  7. Racaille says:

    “Atlanta and the New South is probably the best example to look at. Atlanta clearly blossomed as a result of its own ambitions and transformation, but also its embraced of its role as a Southern city and the turnaround in fortunes in much of the region”

    I am not sure what you are thinking here, but Atlanta is the epicenter of the housing meltdown in regards to lack of banking regulations. It is the only reason that area has experienced growth in the last 15 years. Period.

    It has nothing to do with it embracing itself as a Southern City with ambitions or transformation.

    Furthermore, I wouldn’t even considered it a city. It’s a giant suburb with a few tall buildings much like every other Sunbelt “city”.

  8. Matt D says:

    “I am not sure what you are thinking here, but Atlanta is the epicenter of the housing meltdown in regards to lack of banking regulations. It is the only reason that area has experienced growth in the last 15 years. Period.”

    Racaille, that’s a ridiculously ignorant statement. I’m no fan of Atlanta, but their growth is very real, and not unusually tied to the housing boom. It’s certainly no Phoenix.

    The Chicago MSA has had a greater housing meltdown than the Atlanta MSA, per the Case Schiller index.

  9. Racaille says:

    Matt D says:

    “Racaille, that’s a ridiculously ignorant statement. I’m no fan of Atlanta, but their growth is very real, and not unusually tied to the housing boom. It’s certainly no Phoenix.”

    Please consider:

    http://www.bizjournals.com/atlanta/print-edition/2012/06/29/new-regulations-are-hurting-banks.html?page=all

    “Since 2008, there have been at least 80 bank failures in the state, the highest in the nation.”

    http://www.bankdirector.com/index.php/magazine/archives/3rd-quarter-2012/when-the-devil-went-down-to-georgia/

    “In-migration was our industry,” says Walt Moeling, a longtime Atlanta banking attorney and a partner with Bryan Cave LLP. “We saw a lot of employment gains, most of them related to people moving here.”

    “Bankers and wannabe bankers wanted in on the action, and on their terms.”

    And that was the only forcing-function that Atlanta had for growth. And it’s over.

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