Subscribe/Feeds

• Subscribe by Email
• Subscribe in a Reader
• Subscribe to Comments
• Become a Facebook Fan
• Follow on Twitter
• View Photos
• Watch Videos

Search

Tuesday, May 8th, 2012

Re-Branding Indianapolis Through Humanitarian Efforts by Kelly Campbell

[ One of the traps of smaller cities is thinking that because the talent pool is smaller and very well connected, once you are plugged in, you must know everybody cool in town. But the reality for me in places like Indianapolis is that I am constantly amazed by how many cool and interesting people I've never even heard of, much less met.

Well, I recently came across a blog post by Kelly Campbell, one of those cool people I'd never heard of, that presented her passionate case for pursuing global humanitarian efforts in Indy, using her grass roots example to show how. Kelly previously worked in the fashion industry in New York, and now runs The Village Experience and writes for the Blue Vine Collective (She was also one of the IBJ's 40 Under 40 last year, and you can read more about her over at the IBJ). Kelly not only sees humanitarian efforts as a whitespace opportunity to exploit, they are a personal passion of hers. This shows it as an area that not only has good strategic relevance, but also fits with the cultural ethos of the city. Which is exactly what cities should be looking for. She graciously gave me permission to republish her post - Aaron. ]

Indianapolis has long been known as the “Crossroads of America” and one of the “Sports Capitals of the World.” We host large-scale conventions, international races, and very soon…the Super Bowl. Huge corporations including Eli Lilly, Cummins, and Rolls Royce call Indianapolis home. We are a relatively small city, but we’re on the map.

What I envision, though, is being on the map for something more meaningful… something more impactful. I see Indianapolis becoming a model for other cities to follow in regards to our local to global connections and our humanitarian efforts. Why couldn’t Indianapolis become known as the “humanitarian hub” of the country or even the world?

Many conversations in the community have been taking place around this topic. Indianapolis is now hosting monthly networking events through the Indianapolis Intercultural Network to connect young professionals with an interest in the international world – you walk into one of these events and the topics of conversation range from discussing shipping methods in Togo to recent adventures on the pirate infested beaches of the Kenyan Coast to improving the quality of water in Haiti to debating the image of the U.S. around the world. There is no shortage of interesting people or interesting and thoroughly exciting conversations taking place – all while supporting locally owned and operated businesses around town. This has really proven to be a catalyst to connect the right people to each other and jumpstart the move towards Indianapolis becoming a true international player in the humanitarian sector.

For years, several grassroots organizations have been leading the way in connecting Indianapolis to the rest of the world. The Village Experience has been working with artisans in over 30 countries and operating socially responsible trips to multiple countries in the developing world. Building Tomorrow has been constructing schools and making a huge impact on education in Uganda. Timmy Global Health has changed the face of healthcare in the developing world. The International Center has been bringing in foreign delegates and connecting them to local Indianapolis citizens and businesses. Exodus Refugee Center has been helping refugees make Indianapolis a home for many years. Provocate and Provocate Haiti have been centralizing international efforts and bringing awareness to social justice issues around the world and more specifically building community among all of those involved in Haiti. Without much media attention, these groups have been at the forefront of working in the international arena. What a great base from which to start this move forward.

One specific example of how Indianapolis is becoming more known for it’s international efforts is the East Africa Fundraiser hosted in September 2011.

Organizations and individual citizens approached the Village Experience with grandiose ideas of making a difference in this overwhelming disaster on the other side of the world…the only problem, not one of the organizations on its own had the ability to mobilize resources at the level desired. The solution…work together and make a bigger impact. Organizations such as Bluevine Collective, Indianapolis Intercultural Network, w/purpose, Provocate, Indego Global, and IUPUI joined forces, created a committee of members with large social media followings, and got to work planning a citywide event centered on bringing awareness to the East African famine and raising funds to help alleviate it. We used The Village Experience as our planning hub and as the venue for the event. We contacted the food trucks, local beer vendors, and our friends at Five Star Catering to join in and help us. We created facebook pages, blanketed cafes and coffee shops with flyers, sent out personal invitations, and promoted to all of our customers both in the store and through outside events. We reached out to Nuvo… and they responded by making it the featured event of the week. The pieces of the puzzle were coming together. The last piece of the puzzle… to which organization were we going to donate the money?

After weeks of research, we decided to donate any funds raised to the Global Enrichment Foundation. We didn’t want our efforts to be a drop in the bucket and go mostly to administrative costs at large organizations. We wanted our efforts and our funds to really make a difference. Global Enrichment Foundation became the perfect partner. They were a young, grassroots organization based in a small city in Canada. They maintained low administrative costs. Their founder was energetic and believed in sustainable development and helping people regardless of religious beliefs. And most importantly, they had a very personal connection to the people of Somalia and were working where no one else dared to go. They were on the ground in Kenya and Somalia trucking in life-saving food and water to those effected by the famine… and at the same time, they were developing programs to educate and empower women. It was the perfect fit.

We set a date for our fundraiser, and in the meantime, The Bluevine Collective reached out to followers in the weeks preceding the event and were successful in raising a great deal of funding. The day of the event, we had a huge turnout and were extremely excited to see so many new faces that showed up to do their part in ending the famine in East Africa. We raised $10,000! Not bad for our first attempt at hosting a community based event in collaboration with local partners to tackle a social justice issue.

But, we didn’t stop there. We wanted Indianapolis to be different. We wanted to follow our money to East Africa and really connect to the cause. So, The Village Experience took a group to Kenya in November to hand carry over the funds and meet with reps from The Global Enrichment Foundation. The group volunteered throughout the country for two weeks and gained a better understanding of why events like this happen and why the world seems to turn a blind eye. The world, except Indianapolis, that is. We returned energized to strengthen this newfound partnership and were thrilled when Global Enrichment Founder, Amanda Lindhout, sent over photographs from the Convoy of Hope in December, which was funded in part by our efforts. I still get a little emotional when I look at these photographs and see The Village Experience and The Bluevine Collective logos on the trucks and at the food distribution sites in Somalia. Indianapolis was making a name for itself – and on the humanitarian level at that.

If we can do something like this, there is no reason we can’t do more. I challenge Indianapolis to take the next step. In October 2012, The Village Experience will be hosting Somaly Mam – human trafficking advocate from Cambodia and CNN Hero – for a night of networking and raising awareness. With 9 months to plan a citywide event, I am betting that Indianapolis will prove to be the best stop on her international advocacy tour. This is a woman who is changing the lives of young boys and girls by rescuing them from brutal human traffickers and challenging governments to do more to protect their children. Indianapolis has its own human trafficking task force and deals with this issue on a daily basis. Let’s all join forces and put an end to human trafficking… once and for all.

This post originally appeared in the Blue Vine Collective on January 17, 2012.

Sunday, May 6th, 2012

The OECD Reviews Chicago

Update 5/20/12: This post has been edited to reflect a correction. Please see here for details.

The Organization for Economic Cooperation and Development (OECD) is an international organization that has its roots in the administration of Marshall Plan aid to rebuild Europe after World War II. The OECD was invited by the Chicagoland Chamber of Commerce* to perform a “territorial review” of Chicago’s regional economy. I believe this is the first such review the OECD has ever undertaken in the United States. The results were released a couple months ago. The Chicagoland Chamber graciously sent me a copy. (The report is available online here – thx Jim Russell for the link). I did a read through of this inch-thick, 332-page report and wanted to share a few observations about it. As the quote at the top might indicate, this report, like Rahm Emanuel’s economic strategy, was fairly gloomy. My points will be topical and not an integrated narrative as I did not get to undertake as thorough a review as I might like.

Interesting Statistics

The OECD review amassed quite a bit of interesting statistical data on Chicago and puts them in the context of other major cities in the 34 countries that comprise in the OECD. I think that by itself made the review worth doing. I might suggest other cities take a look at this to determine if such a study would be relevant to them, particularly as international comparisons can be difficult to pull off.

This report is a goldmine of stats and there’s way too much to list here, but a few things that jumped out at me:

• The OECD report benchmarked labor productivity, which is less commonly looked at in economic studies. Chicago’s is above average but growing more slowly than average.
• Chicago has trailed the nation in job growth. Had Chicago simply matched the national average in job growth since 1990, the region would have 600,000 more jobs than it does today.
• There was quite a bit of sectoral analysis of Chicago’s economy. In fact, they actually normalize the sectoral composition of Chicago’s economy when looking at job growth to see if its under performance in job growth was due to concentration in slow growing sectors – but it was not.
• Chicago is known for having America’s second largest business district, but it ranks only fifth out of the top ten regions in America for the percentage of its jobs in the core city. Between 1960 and 1990, over 96% of new regional jobs were created outside downtown.
• There were many other interesting statistics around labor force participation, mobility of educated labor, elderly dependency ratios, educational attainment, poverty, patents, the structure of governments, taxation, etc.

Excess High End Talent

According to the OECD, Chicago suffers from a skills mismatch in its workforce. This is not just true at the bottom end of the economy as might be expected, but also at the top end, where there is a surplus of highly skilled labor:

At the high end, there is a large pool of high-skilled, highly educated workers, in principle more than sufficient to fill the jobs available at that level … at the high-skill end, data for the tri-state region points to an apparent oversupply.

To some extent this shouldn’t be a surprise. Chicago is a desirable city for people to live in, particularly for educated workers inside its heartland catchment area. As with other big city talent magnets, the economy doesn’t always supply the right employment for all the people who want to live there. The many articles about unemployment in Portland, for example, illustrates this, and Chicago is similar. In that regard, you might see the skills surplus as a sign of local strength.

However, the skill concentration in Chicago isn’t producing the type of high end innovation economy seen elsewhere. As the OECD notes, “Indicators suggest that the Chicago Tri-State metro-region does not rank as highly among the US knowledge hubs as one might expect, given the size of its economy and population and its concentration of world-class research universities.”

Also, Chicago may not be as attractive a talent hub as its aggregate numbers indicate. Again per the OECD:

To be sure, the Chicago Tri-State metro-region remains an attractive place for many migrants, but it is less attractive than many of its US metro-region peers. Moreover, if the analysis is confined to highly educated people of prime working age (25+, with at least a bachelor’s degree), then the picture is even more problematic. During 2005-09, more such people moved into the area than left it, but the net gain was relatively small compared with other large US metro-regions. Los Angeles, for example, benefited from a net gain of nearly 80,000 highly educated people in 2009, compared with 3,500 for the Chicago Tri-State metro-region.

When you under-perform as a talent magnet and still can’t put high skilled labor to good use, that’s a definite sign of trouble. This was one thing that was eye opening for me in the study as I’d previously assumed the high end of the market was in pretty good shape and that skill mismatch problems were the result of a large under-educated population vs. open jobs requiring mid-tier skills.

Policy Prescriptions

The OECD’s recommendations were not nearly as strong as its assessment of the region’s conditions. This shouldn’t be surprising as it is easy to look at data and see what may be wrong, but it is not always obvious what to do about it. The recommendations fall into five broad categories:

• Better Skills Matching
• Improving Innovation and Entrepreneurship
• Investments in Transportation and Logistics
• More Green Industry Growth
• More Effective Institutional Arrangements

First off, including “green growth” as one of only five major chapter headings is a joke. The aggregate number of jobs identified as specifically green is small. And as I’ve noted many times, there’s no such thing as green industry. Pretty soon there will just be industry again – it will all be green. So if Chicago and the US aren’t doing well at today’s industries, why would we think they would do any better at tomorrow’s? “Green” isn’t some sort of fairy dust you can sprinkle on and work wonders with. If anything, the acceleration of transition to more green practices will only drive more manufacturing offshore, exactly as it did with light bulbs. The track record of trying to create “green jobs” almost everywhere has been poor and has failed to live up to the hype, so I can’t believe the OECD is doubling down on this snake oil.

For the other areas, the OECD doesn’t break much new ground, though does highlight some interesting international case studies of regions getting it right. The sections more or less regurgitate the laundry list of organizations and initiatives already in place, then tag on “do more and coordinate better.” Examples include, “create region-wide capacity to match skills supply with demand” and “broaden the innovation focus [to include] non-science-and-technology-based innovation.”

By contrast, there was little focus on what counterproductive initiatives might be trimmed. While, for example, the report notes that many of the excessive numbers of local governmental units probably should be eliminated or merged, it doesn’t really look at how many of the alphabet soup of various non-governmental civic development groups might likewise be better off euthanized. Given the unified civic leadership nexus of Chicago, this should in theory be much easier than killing off governments, which are famously resistant to elimination. It’s hard for civic sector leadership to scold state legislatures about the need to consolidate when they can’t even do it themselves. This shows that the OECD had to deal with local political reality, so it probably pulled a lot punches in the recommendations. Statements of raw flattery such as “All key public and private stakeholders are keenly aware of what needs to be done to address these issues effectively” show the extent to which the OECD wanted to avoid ruffling feathers and challenging the Chicagoland status quo, which is disappointing.

I might also take issue with the way the problems were attributed to these structural factors without addressing at any great length many of the clear drivers of Chicago’s under-performance. For example, Chicago is the regional capital of a greater Midwest that has been struggling as a whole. It’s tough to swim upstream against that. (I’ll have more to say on other underlying factors in a subsequent analysis of my own).

In short, this report got it half right in giving us a very good look at the current conditions, strengths, challenges, and international comparisons. Where it lagged was in fully articulating the structural landscape driving the under-performance and developing compelling strategies for turning the ship around. Still, if I were a region out there looking for a good snapshot of where I stood in the marketplace, the OECD would be on my list of people to call.

* Disclosure: I won a competition sponsored by the Chicagoland Chamber in 2009.

Thursday, April 5th, 2012

Louisville and Lexington Point the Way to Greater Inter-Regional Cooperation

I’ve written before about how Louisville Mayor Greg Fischer saw cooperation with Lexington as a vehicle for making his smallish region more competitive. This has gone beyond talk. As Louisville and Kentucky fought it out on the basketball court, the New York Times was reporting on how the two cities are planning to become economic teammates. Amy Liu of the Brookings Institution also wrote about this initiative.

The first concrete step in this is something called the Bluegrass Economic Advancement Movement. It’s a partnership around advanced manufacturing between the two cities developed in conjunction with Brookings. Here’s a video about it. It’s a big goofy, and the production values clearly need improvement (such as the two minutes of basically dead air at the end of it), but it should illustrate what they are trying to get at. (If the video doesn’t display for you, click here).

I’ve historically been a bit skeptical of the mega-region concept. I could never figure out exactly what it is mega-regions were supposed to accomplish that would provide step change improvements in metro area performance. It’s not exactly clear here either what is going to ultimately happen. However, if you are going to make mega-region type development happen, Louisville and Lexington are pretty well placed to prove out the concept. They are in the same state, they are both too small to plausibly go it alone in the global marketplace, and they are close – only about 80 miles apart. They are just far apart to be separate media markets and spheres of influence, but close enough to make going back and forth a breeze. They also decided to pick just one area to start with, which I think was smart. I’ll be very interested to see what comes out of this. Anyone interested in cross-regional collaboration should keep an eye on what’s happening here.

Sunday, April 1st, 2012

More Thoughts on the Urban Hierarchy

Few topics get the urbanist blood stirring like the perennial debate over ranking cities. My latest piece on the reordering of the urban hierarchy spawned yet another rekindling of that debate. Among those weighting in were Richard Florida at the Atlantic Cities (whose ideas shaped my original post), Kenan Fikri of the Brookings Institution over at the New Republic and Jim Russell at Burgh Diaspora. There is also a lively comment thread here at the Urbanophile. I wanted to respond to some of the points raised.

The first is the idea that globalization is not a zero sum game and that one city’s gain doesn’t have to come at another city’s expense. This is true. A rising tide can lift all boats. Also, as people like Saskia Sassen have noted, global cities typically don’t compete because they specialize in different things.

However, global cities themselves are a relatively recent phenomenon. Not every city of prominence in the past has yet successfully made the transition to the global age. Early in the industrial age there were cities like Cincinnati that emerged as titans only to fall back as new upstarts arose. It seems axomatic that creative destruction is not going to leave the current system of global cities locked in the current network positions and relative hierarchies that they are in today. And just because cities can in effect “win” in an absolute sense from globalization, they can clearly end up falling back on a relative basis.

I again particularly believe this is a risk for cities that are not the premier city in their country and which are located in the already developed world. As Florida noted, the top of the pecking order is incredibly stable over time. How many times has a #2 or lower city passed up a #1 city in the modern age? Not many. Only two cases come to mind right now, both from extraordinary events. Toronto supplanted Montreal after the latter decided to re-embrace its Francophone heritage at the expense of English speakers, and I believe Rio was once the first city of Brazil and lost out to Sao Paulo after the capital was moved to Brasilia. (Other examples? India perhaps? How many that don’t involve the capital moving?) But there’s much more churn the further down you go.

There is also the question of whether or not I’ve changed my mind about Chicago, particularly in relation to previous posts like this one. I don’t think so. In fact, I think that 2009 piece holds up rather well. Probably to some extent I have come to realize the weaknesses of Chicago’s story though as I dig into the numbers and see what’s going on elsewhere. Also, I think it’s a city that has been (at least until Rahm took over) singularly oblivious to the challenges it faces (though in fairness I guess LA gives it a run for the money), so I work to highlight those rather than the good news which already gets plenty of press. For example, the major national media fawned all over Chicago when Rahm announced his infrastructure plan. I could run ten negative stories and not counter that press, but I feel it’s my job here in this blog to tell the story that’s not being told.

I still clearly believe Chicago has experienced a huge and remarkable transformation. I witnessed most of it personally. I’ve seen a hundred buildings added to the skyline, vast tracts of the central city rejuvenated, a major transformation of the physical face of the city, and more. It would not surprise me at all to discover that it is Chicago that leads the nation in repatriation of jobs from the suburbs to downtown. It has a food scene that holds its own with anybody. And it continues to grow and improve in many ways despite obvious challenges like pensions. I continue to believe the Chicago story is real.

Yet in a sense it was the 90s that was really Chicago’s decade. I’ve got some forthcoming writings on this topic that will explore this in more detail, but just as one teaser, I can tell you that on a metro area basis, Chicago actually added more jobs than Houston in the 90s. But the 2000s were a tough decade for Chicago. What’s more, I don’t think Chicago fully grasps the extent to which other cities have moved even further forward, though you’ll occasionally see someone who gets it, such as in a recent Reader article on competitive cocktailing. So I think Chicago has done well and continues to only get better in many ways, though it has hit a rough patch and I think clearly has suffered a relative decline in standing and importance.

Also, while I pivoted off a Chicago article, I don’t think Chicago is alone. Los Angeles is clearly a “sick man” city in many ways, though a lot of its problems are self-inflicted. I also think Boston is suffering on a relative basis as NYC-DC becomes the premier northeast axis instead of NYC-BOS. This is perhaps why Philadelphia is showing signs of revival.

As for Fikri saying that Washington’s media exports were puny in comparison to NYC and LA, this is true if you look at things like movies and TV shows. But what I had in mind was the huge base DC is becoming for political and other media and reportage. Washington has a huge number of foreign correspondents. Fully 56% of full-time foreign journalists live in DC. Another 34% are in New York. 8% are in California, presumably mostly to cover Hollywood, with perhaps the odd Silicon Valley correspondent. Only 2% are based elsewhere in America. (If you look at part time foreign journalists as well, NYC is the #1 market). I don’t have much at my fingertips right now, but I’ve also read many stories about more media, particularly the politically oriented variety, relocating from NYC to DC. This gives a place like Washington a huge media footprint and platform for which to get its word out to the world in addition to its status as the most important political capital in the world. There’s a reason that those foreigners Phil Rosenthal wrote about in the Chicago Tribune think there are only three US cities: New York, LA, and DC. Combine that with the wonkish atmosphere and the highly educated population, and it’s also no surprise that something like Greater Greater Washington is the most successful city blog in America.

Someone commented that Washington had nothing on Chicago in his estimation. As far as the central city goes, I’d probably agree with that. But it’s not just what you have, it’s where you are headed, and Washington is clearly headed up, in terms of its global and national importance, its economy, its population, its education levels, and its urban environment. When the Burnham Plan came out, Chicago was arguably not a very attractive place either. It was the Houston of its day in a way. But it was a city on the rise. So too with Washington today. It is America’s next great metropolis, at least as long as the federal government’s money and ever increasing control over American life hold up.

Thursday, March 29th, 2012

The Great Reordering of the Urban Hierarchy

My latest blog post is online over at New Geography. It is called “The Great Reordering of the Urban Hierarchy.” In it, I look at how the relentless expansion of the US federal government and the “spiky world” forces of globalizations are revamping the urban hierarchy of the top tier cities in the United States. While not a definitive view, it seems that New York is going from strength to strength, while Washington, DC emerges as America’s new “Second City.” This has been to the detriment of Los Angeles, Chicago, and Boston. It’s controversial to be sure, but I hope you’ll enjoy it. Comments definitely encouraged on this one.

Update: Richard Florida has more to say on this topic over at The Atlantic Cities..

Tuesday, March 27th, 2012

Applying Jane Jacobs Tenets of Vibrant Neighborhoods to Car-Based Cities by Tory Gattis

[ Tory Gattis is a former McKinsey consultant who writes about urbanism for the Houston Chronicle, in his blog Houston Strategies, and elsewhere. He's an unabashed and articulate proponent of the "Houston model" of urbanism. In this post, he applies Jane Jacobs' views of the virtues of density to a car-based city like Houston. While I realize many won't appreciate this point of view, I want to continue to present a variety of well-argued positions that challenge the thinking of all of my readers at some point along the way. Next week, Tory applies the insights of this piece to Houston vs. Manhattan - Aaron. ]

Jane Jacobs four tenets of vibrant neighborhoods are, in short form:

1. Mixed primary uses that create traffic/vibrancy throughout the day
2. Short blocks to make neighborhoods more walkable
3. Mixed age and overhead buildings to enable a diversity of businesses
4. Population density

To put them in context, it’s important to understand that Ms. Jacobs formed these tenets while observing her Greenwich Village NYC neighborhood (and similar ones) during the 1950s (the book came out in 1961). It was an urban world in the midst of a major transitional upheaval, as the car moved from a luxury to a standard household item for the middle classes. Cities at the time had been built around walking and mass transit, and accommodating the car was traumatic: too narrow streets, not enough parking, and freeways plowing through neighborhoods. Today, the vast majority of us live in an urban/suburban landscape built around the car – with accommodations for parking and major arterials and freeways – which makes the tenets seem almost quaint and disconnected from our modern world.

The problem as I see it is that these four principles have hardened into dogma in the urban planning community without really understanding the meaning and philosophy behind them. To some extent, I even think Jane Jacobs herself suffered from this too-narrow understanding of her own insight. Let’s see if we can get to the true essence of these principles, and then talk about how they might apply to modern car-based cities.

The goal is a very subjective concept called “vibrancy.” What is vibrancy? To put it simply, vibrancy means a buzz of people interacting and transacting in win-win exchanges – both economic and social. Vibrancy was very visible in Jane’s world: people on the street and sidewalks, jostling and bumping as they went about their daily businesses, often in street-level retail establishments just off the sidewalk. In the car-based world, that vibrancy is more hidden. Sure, you can see the cars (sometimes way, way too many cars in congested traffic), but you don’t really see the people or the interactions as they hide inside the cars, strip centers, and office buildings. They’re there, but we don’t “feel” them as much as we do in a classic Jane Jacobs walkable neighborhood.

Vibrancy starts with a very simple decision: is there some interesting or necessary activity that draws me out of my home? Work? Shopping? Socializing? Whether I’m in a walk-up apartment in New York or a house in the suburbs, the question is the same. More options increases the likelihood of drawing me out. And I have to weigh-up those interesting options against the barriers to going out, particularly mobility: how much time, effort, and money is required to go do this activity? A good, cheap restaurant is an easy choice when it’s right down the street, but a harder one in heavy traffic with unpredictable parking or with some long walks and subway rides in possibly unpleasant weather. There’s always leftovers in the fridge and something on TV, the mortal enemies of “vibrancy”.

The flip-side perspective is that of the business owner: what kind of reasonable customer base will I be able to draw on? The more barriers between me and them, the less likely they are to patronize my business. What is my “draw zone”? The more people – and the more money – in that draw zone, the better my prospects. That means a larger diversity of businesses can be supported.

Looked at through these lenses, Ms. Jacobs’ four tenets make instant sense. If you assume walking as the primary mobility mode, distance becomes a major barrier to vibrancy. Taxis are expensive – not to mention a major pain to flag down, even in NYC – and transit is generally a hassle, slow, and loses time in waiting and transfers. Thus we need as many interesting activities and options as possible within as short a distance as possible to get vibrancy. Mixed-use and mixed-cost buildings increase the variety of options within that short distance – and more options increases the likelihood that one or more of them will be attractive enough to draw you out on a given day, evening, or weekend. Short blocks make walking routes more direct, and put more options within the same travel-time range. And density provides the raw fuel of consumers to keep all those interesting street shops economically viable. The more eclectic a business, the larger the draw zone – in size and population – it needs to stay viable: convenience stores and dry cleaners are easy – offbeat bookstores and sushi restaurants are harder to support. The mobility zones are so limited in this world, that the only way a neighborhood reaches critical mass for vibrancy is to stack as many people as possible right on top of the businesses: mixed-use and density.

In the car-based world, distance becomes far less of an impediment. Speed determines the “mobility/draw zone” – fast arterials and freeways with minimal congestion. Short blocks and mixed-use become somewhat irrelevant because the pertinent geography now spreads over miles instead of blocks. Mixed age/cost buildings are still important, but over a much larger area. Harsh zoning and permitting can limit commercial space availability, increasing scarcity and prices and driving out lower value uses, thus limiting commercial diversity (see yesterday’s post on Opportunity City vs. Pleasantville). Density still matters somewhat, but far less than before. Generally speaking, in Jane’s world, mobility is relatively fixed and slow (walking, transit), but density is variable – therefore the key to vibrancy is to pump up density. In the car-based city, density tends to stay in a reasonably narrow and low range because of the need to accommodate cars and parking – plus consumer preferences for stand-alone homes – but mobility is variable: average trip speed is very dependent on the availability of high-capacity, smoothly-running arterials and freeways. I would go so far as to call the freeway the “short block” of the car-based city because of its similar relative improvement to the size of the mobility/draw zone.

So the four tenets of vibrancy transformed for the car-based city get reduced to two:

1. Loose zoning/permitting constraints to enable both a wide diversity of businesses as well as population density where there is consumer demand (apartments, condos, townhomes)
2. Maximized mobility with a well-designed, high-capacity arterial and freeway network

These two principles maximize the population within the largest possible mobility/draw zone, which gives vibrancy its best chance of reaching critical mass and flourishing.

All of this is not to say that car-based cities like Houston don’t need mixed-use, walkable neighborhoods – but they’re not required for us to be a vibrant city/metro. A “nice-to-have” amenity, if you will. What’s going on in downtown, uptown, midtown, and The Village (among others) are good, healthy developments – and I think Jane would approve – but they’re not the end-all/be-all of vibrancy.

Next week, we’ll go into more depth on density vs. mobility by comparing Manhattan and Houston trip scenarios, and what that means for vibrancy, “suburban monotony”, frontage/feeder roads, and Jane Jacobs’ “dead zones”.

This post originally appeared in Houston Strategies on May 3, 2006.

Tuesday, February 28th, 2012

What Kodak’s Failure Might Teach Detroit About Success by Rod Stevens

Last month Kodak declared bankruptcy, and this month it quit selling cameras, something it has been doing since 1900. Did Kodak fail because it did not move from film to digital faster, or because it did not stick to what it knew best, laminating film? A close look tells us something about how other places with deep knowledge and fascination with a given
science or technology might find new success in global business.

What Business Are You In?

The Economist titled its article on Kodak’s bankruptcy “Gone In A Flash”, but watching Kodak go down was like watching a ship slowly sink under the waves in clear shallow water. At one time Kodak controlled 90 percent of the film business and 85 percent of camera sales. In the late 1980s it had a workforce of more than 145,000 people. Today it employs about a tenth that much. It’s not gone, but it is a shadow of its former self.

Conventional wisdom would say that Kodak failed because it defined itself as a film rather a photography business. This says that if Kodak had done so, it could have made the shift to digital earlier.

This is the strategy approach taught in almost every major business school, often using a Harvard Business School case study titled “Marketing Myopia” written 52 years ago by Theodore Levitt, when railroads lost traffic to both cars and trucks. Levitt argued that the railroads thought in terms of products rather than needs, that instead of defining themselves as “railroad companies” they should have called themselves “transportation companies”. Had they done so, they might have invested earlier in containers, multi-modal terminals, barge lines and even package services like UPS and FedEx.

It’s a pretty persuasive argument, but there is another, basic question that deals with the identity of companies: if you think of yourself solely in terms of markets, of your customers and the service you provide them, are you bound to limit yourself in what you can do, in who you serve? What if, in evolving to meet your customer’s needs, you leave behind the things you do best, and no longer engage the interests that brought you into business in the first place?

Almost everyone – people, companies, and communities – have “core competencies” or things they do better than others. These are the abilities that define them. Many successful companies are founded on one person’s fascination with a process or technology that they found application for. They gather people around them who share this fascination, and over time this fascination becomes part of the company culture. Weyerhaeuser, for example, isn’t just a wood products company. The people there love growing trees. Weyerhaeuser has gotten out of a lot of its old lines of business, but the company’s core assets remain vast tracts of forest land.

Kodak’s Core Competency and the Challenge of Digital

Back in 1880, when George Eastman founded the company, traveling with a camera meant loading up a pack horse with a huge camera the size of a refrigerator, glass plates the size of printer paper, bottles and bottle of chemicals, and even a tent to prepare everything in. George Eastman found a way of eliminating the fuss, by pre-coating the chemicals, and over time the company pioneered the laying down of chemicals in very thin “films” on substrate. The company’s expertise was physical chemistry, the physics of how atoms bond together and jointly react to light, heat, radiation and other changes around them.

Kodak’s challenge was that shifting from chemical to digital photography involved a different discipline – circuitry and software. Digital cameras are essentially a box with glass on the front and back and a whole lot of wiring, chips and motors in between. Kodak may have understood more about how to coat that glass on the outside than it did about what went on inside. Look at the companies that have done well in digital photography – Canon, Nikon, and Panasonic – which all come out of a long Japanese tradition of precision manufacturing and electronics. Until digital came along, Kodak had mostly sold cheap plastic cameras that had little or no electronics inside. Kodak’s strategy for cameras had been very close to Gillette’s with razors: give away the holder to sell the consumables.

Kodak had stumbled once before in trying to diversify its film business. In 1988, believing that it could apply its core knowledge of chemicals to medicine, it bought Sterling Drug, one of America’s largest pharmaceuticals companies. By the mid 1990s, however, Kodak had divested itself of most of the company. It may have known physical chemistry, but it did not know biology.

How Might Kodak Have Survived?

What if instead of branching into digital and software, Kodak had instead stuck to making film, but found new markets for its knowledge of chemicals and coatings? What if, instead of trying to call itself a “photography” or “image” company (something Xerox did half-successfully), it had redefined and expanded the markets for “film”?

To answer this, consider some of the other “film” inventions of the past 40 years: Post-It Notes from 3M; breathable fabrics and bandages from Goretex; flat panel displays from Samsung; Teflon pots and prosthetics; polarized glasses; and even osmosis filters for creating clean drinking water.

You might argue that if a company doesn’t focus on one or two markets, it cannot know these well enough to meet their needs and follow their evolution. This is true for many companies, but some are so good at something, so driven by a given fascination or competency, that they can pull off new product development across a variety of markets. Sometimes the markets come to them, asking them to adapt their technologies and know-how to new uses. 3M is one of these companies.

Apple is another, albeit with far fewer products. In each case, it has used its core competency in “ease of use” to create a new platform that others build on, in many different markets. Had Apple stuck just to computers, it would today be competing with Dell and HP for low-margin hardware sales. It updated and downsized the Sony Walkman with the iPod, moving into consumer electronics. It filled the iPod with iTunes, taking on the recording industry. It made those downloads portable, with the iPhone, taking on Nokia and Blackberry. It brought audio and visual together with the iPad, taking on Amazon and Netflix. And now, with iCloud, it is taking on Microsoft. There is one consistent quality here: ease-of-use.

The Lessons for Cities

Today whole communities are trying to reinvent themselves in business, turning from their traditional strengths in machinery or glass or steel or wood products to growth industries like biotechnology, social media, financial services and “green technology”. (This last really isn’t an industry. “Green” is just table stakes.) Often it is not clear what special skills or bragging rights these places have to offer in these new fields.

Maybe it is time for these communities to revisit what they do well, the techniques and technologies that have historically defined them, and instead put money and focus into updating their competencies, and finding new markets as well. One of the reverse sides of global trade is that there is now a world of markets out there, and you can be sure that somewhere someone is facing a new problem that is old to us. That’s what being export-driven is all about, thinking beyond traditional geographies and supplier relationships to find new ones. This is what a lot of what economic gardening is about.

Most places, especially in the industrial heartland, have long work traditions that revolve around technology. America’s original military industrial complex was in the Connecticut Valley and the area south to New Haven, which, not surprisingly, gave rise to a robust machine tool industry that was strong until the early 1980s. In places like this, people spoke “machinery” at the dinner table. As the factories of America empty out, we’re losing these skills, but if communities act quickly enough, they can update the skills and find new markets, just as Kodak should have done.

There are a number of examples of places with special skills that do not have biotechnology or software at their core. They may involve software, but the core fascination is something else. Milwaukee, for example, is expert at process control, maybe because it used to make both beer and cars. Grand Rapids is expert at workplace design. Portland, a place that runs, walks and hikes, does all things outdoors. Boston, which teaches, provides educational materials. And Las Vegas, a major tourism center, entertains.

Let’s take the last example for a minute. With its huge base of gambling casinos, shows and showy buildings, Las Vegas knows how to capture people’s attention and take money out of their pockets. The gambling machine companies that supply Las Vegas with its slot machines have learned how to use the adrenaline-inducing effects of video games like Grand Theft Auto to keep people sitting down. Perhaps Las Vegas can teach the video gaming industry something it has learned on the casino floor or with lounge acts. This seems like a far better business opportunity, long term, than selling health care to desert retirees.

Or how about Detroit, the “Motor City”? Detroit has been expert in motors and engines for more than 120 years, since before Henry Ford. A key shipping point in the Great Lakes, Detroit used to build both boats and the engines that powered them. Later, as the auto industry evolved, this expertise in motors and machinery found its way into windshield wipers, electric windows and air conditioners. Today nearby Ann Arbor is one of the engineering and technology capitals of the world. Combining new and old, Ann Arbor could anchor the new (Nano) Motor City.

Did Kodak prove Harvard wrong? Maybe it is more important to hold on to do what you do well and find new customers for this, than to hold slavishly to markets but lose yourself in the process. Kodak didn’t have to die on the back shelves of Wal-Mart. It could have stayed in the film business, making water filters for Africa. For America’s expert cities, maybe it is time not to reinvent themselves, but to reinvent their customers, and how and where they apply their expertise.

More by Rod Stevens
The Software of Placemaking
The 31 Flavors of Urban Redevelopment

Rod Stevens of Spinnaker Strategies is a business development specialist and change agent who pioneers new sources of revenue. He has worked with entrepreneurs, investors, Fortune 500 companies, universities and municipalities on projects that change how we live, work, learn and play.

Sunday, February 19th, 2012

Replay: Louisville – Vice City

[ This one from the archives is the final installment in my Louisville trilogy this week. It's a concept brand positioning idea for the city. Keep in mind, this is supposed to be a bit tongue-in-cheek, while being realistically rooted in the city and showing how places should be thinking about themselves in a crowded, competitive marketplace - Aaron. ]

I am a believer that in a modern era that has witnessed the fragmentation of the great American common culture, and the relatively small in number but broad in reach institutions that served it, it is important for cities that are not blessed with natural amenities or killer low costs to increase their strategic differentiation. They should try to find market segments they can target more effectively than others. And they should try to build a unique local environment rooted in their history and character, but which is also forward looking, that creates a distinct, unique flavor of urbanity.

I’ve also suggested that Louisville should focus on quality over quantity. It already has fantastic neighborhoods many cities would kill for. Strengthening those, making targeted investments in its downtown, riverfront, and other well-chosen areas, and focusing on strengthening its unique assets are the actions I would take.

I’d like to throw out today a further concept positioning strategy for Louisville that I call “Vice City”. It’s not exactly that, but I couldn’t think of a better name for it. It’s not necessarily a serious proposal, and I strongly doubt there would be any local interest in it, but I do think that by studying the idea, it can hopefully generate some interesting thoughts about the city and what it could be. Please view this as a speculative proposal or thought experiment.

In a nutshell, this idea positions Louisville as “New Orleans North”. I can’t help but noticing a few parallels between the two cities.

• New Orleans is a river city – Louisville is a river city
• New Orleans has a French heritage – Louisville is named after a French king at least, and has adopted a lot of French symbology
• New Orleans has great restaurants – Louisville has great restaurants
• New Orleans has Southern, historic, genteel neighborhoods and traditions – Louisville also has Southern influenced, historic, genteel neighborhoods and traditions.
• New Orleans has a huge reputation as a haven of vice and partying – Louisville used to have that reputation.

That last bit is interesting. River towns were always rough places. Louisville’s riverside docks were, like waterfronts the world over, rough and rowdy havens of drunkenness and debauchery. “Lively Shively” was historically home to distilleries and strip clubs. Until quite recently Louisville had any number of blue establishments downtown. Reputedly the reason Green St. was renamed Liberty St. long ago was to help eradicate the reputation Green St. had acquired far and wide as a home of the burlesque. Think about Louisville and Kentucky and what comes to mind? Horse racing (gambling), bourbon (drinking), tobacco (smoking), and coal. We’re talking about a place whose history and brand are already heavily associated with vice.

New Orleans had a similar heritage. The big difference is that New Orleans, probably for cultural reasons, was always proud of its seamy side. Like Las Vegas, it recognized that in a country which is dominated by a strong moral sensitivity, there was an opportunity to carve out a niche – and a highly successful one – catering to, shall we say, a more lax standard. And the party pit in the French Quarter and downtown casinos largely have no ill effect on New Orleans’ neighborhoods, many of which still look like they are fresh from the pages of an Anne Rice novel. Now New Orleans may not be a truly successful metro area for many reasons, but try to imagine it without the tourist industry.

Louisville, by contrast, has long tried to stamp out vice in that city. And today it has largely succeeded. Where long ago you could once have a good time in a burlesque joint on Green St., today your choices in downtown entertainment tend to the extremely generic, such as the heavily subsidized 4th St. Live complex. By stamping out vice, Louisville to a great extent stamped out fun and character from much of its downtown.

One way to envision a successful, unique strategy for Louisville is to do something similar to what New Orleans did, namely creating a great combination out of the best of Mobile and Las Vegas. From Mobile you take the laid back southern charm, aristocratic traditions, gentility, and high culture. From Vegas you take vice, fun, and a certain joie de vivre.

By the way, does this sound familiar? It should, because it is an almost perfect description of the Kentucky Derby. You’ve got the tradition at the pinnacle of horse racing as a sport combined with gambling. You’ve got the fancy dress, fancy hats, and mint juleps of Millionaire’s Row combined with the raucous debauchery of the infield and people sneaking in booze by stuffing vodka down their trousers double-bagged in ziplocks (not that I’ve ever done such a thing…..). A great and winning combination.

Extending this to the city as a whole, we start with the fundamental aristocratic character of the civic culture. I’m not going to say this is unique to Louisville. For some reason, it seems to permeate many of the river cities I’ve studied. Talking to someone about Louisville, he offered this insight, “Louisville is provincial, in all the best and worst ways. Louisville likes itself, is proud of itself, hangs on to its institutions, loves its (private, Catholic) high schools in ways I’ve never seen elsewhere”. This is clearly an example of aristocratic thinking, which is about self-regard, rooted in history and the land. This attitude also shows through in the particular contempt Louisville shows for newer cities, as well as the extreme prickliness of Louisvillians when it comes to outside criticism. In a democratic social state like America, aristocracy has a bit of a bad reputation, and it certainly has its downsides. But it also has its good points. Firstly, it generates a bit of unique local character all its own. Secondly, it gives people the cultural fortitude to say no to trends and hold onto local ways and to embrace an agenda that is different from what other people are doing. (I’m also describing Cincinnati here, you might notice).

From that, we take away the fierce pride in unique neighborhoods and historic traditions. We can also take the embrace of certain aspects of high culture, including fine dining (of which Louisville has a great tradition), mint juleps and the bourbon culture, the arts, etc. I definitely think this should be looked at as rooted in a very Southern approach. Again, this distinguishes Louisville. Most Southern cities seem to want to ape Atlanta as the next mega-growth story. This leaves the field clear to a major city that wants to adopt a Charleston/Savannah/Mobile type point of view.

One piece of this that must be rejected, however, is the racial baggage that comes with it. Also in common with New Orleans, Louiville has a marginalized African American community. Southern aristocratic culture is rooted in plantation culture, which has its Not Good points to say the least. As with other cities, it is a clear imperative for Louisville to improve race relations and to make sure that its minority communities share in its success.

On the other side, how can Louisville recapture the fun outside of Derby? There are some ways we might imagine. Again, instead of creating a “climate action plan” just like every other city, or banning smoking just like every other city, why not roll with the fact that Kentucky is a major tobacco producer and has the highest percentage of people who smoke to be the most smoking friendly city in America? You’ve got gambling at Churchill Downs, and already across the river at Caesars/Horseshoe, so why not put a couple of casinos downtown? I normally think this is a disaster of a downtown development approach, but if you are organizing around forbidden fun, why not? Loosen up on liquor licenses to create party zones, and also do something to make sure that the best transportation options for people who have been drinking are available so people can get home safely. Figure out how to become the micro-distillery capital of the United States. There are already great local breweries like New Albanian and BBC, try to make sure there are many, many more. Do whatever you can to make Louisville party central, and create a fun, unique environment you can’t get elsewhere. By the way, much like Vegas and New Orleans, this is also good for conventions if that is a business you really want to be a player in.

Louisville is surrounded by hundreds of miles of mostly not very exciting places in the lower Midwest and upper South, places that are very conservative in many respects. Why should someone have to fly to New Orleans or Vegas or where ever to have a good time partying when they can just drive or take a short hop to Louisville?

Here’s a short promo video that sums it up beautifully:

Of course, there is a problem with this. No one in Louisville is likely to want to do it. And the negative consequences might outweigh the positives, I’ll admit. Fortunately, as a blogger, I can put crazy ideas on the table to make people think though. And I think Louisville needs to be thinking indeed about what niche it should carve out for itself. Downtown condos, generic bars, a smallish convention center, sports facilities, etc. are not going to distinguish Louisville from peer competitive cities. Particularly when it is facing the headwinds of being regionally smaller and having low educational attainment.

At a minimum, I do think Louisville ought to be thinking about this notion of Southern aristocratic culture and how it can leverage it to best effect locally. That seems to be a no brainer since there are already extensive elements of it present.

This post originally ran on March 15, 2009.

Sunday, February 12th, 2012

Facing Tough Facts in Louisville

Some of you know that I’m originally from Louisville, Kentucky. I grew up in rural Southern Indiana just across the river (inside the Louisville MSA), but also had family in the South End and spent a lot of time as a kid stomping around the neighborhoods near Iroquois Park. I love Louisville and it will always have a special place in my heart. I don’t write about it much these days because as the blog has progressed, I’ve been forced to trim back my reading of local news sites and Louisville web pages were on the cut list. So I’m not as plugged in to what is going on there these days such that I can competently opine upon them.

But researching my four part series on the bridge deal fiasco (see part one, part two, part three, and part four) turned my attention back to the city. So I wanted to do a three part mini-series on Louisville this week.

Today I want to talk about the unpleasant strategic situation Louisville finds itself in in many areas. These are the basic facts on the ground that need to be addressed. Any credible civic development strategy needs to take these into consideration. It’s never easy for local leaders to admit, even privately, when their community is in a tough spot. But in this case we need to highlight three key areas where the data clearly indicates a challenge for Louisville, namely: it is too small, it is in a poor geo-political location, and it has low educational attainment.

Louisville Is Too Small

The first thing we need to address is that the Louisville region is frankly too small to match its aspirations. I normally focus on metro areas in the greater Midwest with more than a million people. With only 1.3 million people, Louisville is by far the smallest. And it lacks the effective population booster enjoyed by some other cities.

Consider some other metro areas on the smaller end of the scale. Say Milwaukee at 1.56 million, Nashville at 1.59 million, and Indianapolis at 1.76 million. These don’t sound that much bigger than Louisville, but consider: Milwaukee is 21% bigger, Nashville is 24% bigger, and Indianapolis is 37% bigger. This makes a lot of difference in terms of supporting region-wide amenities, infrastructure, and initiatives. For example, it explains why Louisville doesn’t have a major league professional sports team while the other cities do.

What’s more, the effective population of those similar cities is sometimes even higher. For example, Indianapolis is ringed by small industrial cities like Muncie, Lafayette, Kokomo, Columbus, etc. that are independent metro areas, but still contribute to Indy in the form of things like Colts fans, airport customers, TV market size, etc. Milwaukee’s metro area population is artificially low because Racine County, with 200,000 people and which actually borders Milwaukee County, is considered its own metro area. Just upriver from Louisville, Cincinnati benefits from being so close to Dayton that in some cases they function as one large metro. Businesses and such that locate in Warren or Butler County can draw from both markets easily.

Louisville, by contrast, is surrounded by mostly very rural, sparsely populated counties. Thus it gets less boost from an extended trade area in terms of population heft. Though in fairness I suppose there is some labor market benefit from this as well. I have read that Louisville has among the highest percentages of exurban commuting. One reason may be that there are so few job opportunities in outlying areas.

Also, while Louisville has healthy population growth and is growing a bit faster than the US average, other similar regional cities are growing too, sometimes faster on a percentage basis and quantity basis. Louisville added 121,000 people in the last decade, But Indianapolis, Columbus, and Nashville all added more than 210,000 people. This means that not only are those cities bigger, but the gap in population grew by more than 100,000 for all of them. That’s the equivalent of a Clark County, Indiana.

Recognizing that you are smaller doesn’t mean you have to mentally classify yourself as some lower tier city. (Debates over tiers of cities seems to be a perennial favorite on message boards). But it does mean you should be careful about trying to play keeping up with the Joneses, especially when it comes to major regional capital investments. Because Louisville simply has fewer bodies to spread the cost across, it needs to be very careful where it chooses to invest. (More on that later). I might also suggest that while growth is good, strategies that are predicated on changing Louisville primarily through quantitative growth are unlikely to ever close the gap versus regional peers, so I would not even have that as a goal.

Louisville Is in a Poor Geo-Political Location

A maximally geo-politically advantaged city might be one that’s centrally located and a clear primate city for the state it is in. Think Minneapolis-St. Paul. It’s as centrally located as you’d want to be in a state like Minnesota. It is the state capital and home to the state’s flagship university. It contains over 50% of the state’s population and is dominant economically. You might say as downsides that it has a twin-city structure, is near a state border, and doesn’t have the Mayo Clinic, but these are minor in comparison to what it has.

But you don’t have to be this dominant to have advantages. Indianapolis, Columbus, and Nashville are centrally located and are state capitals. Columbus has the state’s flagship university and is in an urban-dominated state. Indianapolis is the only large city in the state and thus in a sense has no “domestic” competition.

Louisville by contrast has many geographic disadvantages. It is on the edge of the state of Kentucky, not in the center. It is on a state boundary that is also a major river crossing barrier in an era where water transport is no longer king. It isn’t the state capital. It doesn’t have the state’s flagship university. Kentucky is a rural dominated state that also has a number of severely depressed areas that require significant state investment. Lexington is clearly much smaller and is in a different size class, yet conceives of itself as an equal in some ways (if not superior, especially with the UK presence) and the state often treats it as such. In fact, Lexington can sometimes been seen as a more authentically Kentucky city with its horse farms and whatnot, while Louisville is seen with suspicion.

This puts Louisville in a very tough spot. All major cities are likely net tax exporters to their state, but Louisville sends a truly staggering amount to Frankfort that it never gets back. I think it’s something like $700 million per year out of Jefferson County. The state’s priorities are generally in the rural areas. While I wouldn’t call the state legislature hostile to Louisville exactly, it isn’t really focused on pro-urban policy. As is often the case in bi-state metros, Indiana and Kentucky love to engage in “economic development” by encouraging companies to move back and forth across the Ohio River. Discussion about building bridges across the river takes up lots of leadership time and attention that could be focused on other things.

To me this makes me think that Louisville ought to plan on having to go it alone with its own resources in a lot of areas and not count on too much help from others (though obviously it should look for it where it can). We are already seeing this in the bridges project, which it appears will be mostly toll financed by local motorists. But Louisville should work hard to try to close some of the gaps that are clearly addressable. For example, better cooperation between Louisville and Southern Indiana is critical. Also,Louisville should be working to build connections and goodwill throughout the rest of Kentucky where ever possible.

Louisville Is Poorly Educated

As I’ve noted many times, college degree attainment is overwhelmingly dominant in explaining urban success. Harvard economist Ed Glaeser crunched the numbers and found that their historic college degree attainment explained nearly everything about why some Frost Belt cities succeeded and others failed. CEOs for Cities has also quantified a lot this in their Talent Dividend research.

Louisville fares very poorly here. Louisville’s college degree attainment is only 25.8%. This puts it 5th lowest among all 51 metro areas in the United States with over one million people. College town Lexington sits at 31.2% Louisville trails the overall US average of 28.2%. To be blunt, that’s not good.

I’ve always said that Louisville is a quality over quantity town. The core of Louisville has great neighborhoods. Louisville clearly punches above its weight in areas like quality restaurants. And it has had a number of notable cultural successes: the important early recordings of the Louisville Orchestra, many important indie rock performers (e.g., Will Oldham, Slint, Rodan), and items like Actor’s Theater’s Festival of New American Plays. This immediately suggests to me going for a more Madison, Wisconsin type of feel than rather than trying to ape Indy or Nashville. Unfortunately, Madison is the state capital and home to a major Big Ten School, and is smaller such that those make a huge impact there. Louisville lacks those drivers and has such low education attainment that a high end strategy would be tough to pull off except in just a small portion of the old city.

This is really going to inhibit Louisville on the economic development and there isn’t a lot you can do other than focus on blue collar industries in the short term (their huge UPS hub being a prime example of this), with a more selective and focused strategy around high end sectors, while working to boost educational attainment over the longer term. There’s some good news here in that Louisville grew its educational attainment rate by nearly five percentage points in the last decade, 16th among large cities.

Good and Bad Applications

I’d like to highlight a couple examples quickly of how Louisville has excellently and poorly handled its strategic situation.

Let’s start with the good. Mayor Greg Fischer decided to make as one of his initiatives seeking to find better ways to collaborate with Lexington, which is only about 75 miles away. As the Courier-Journal noted, “he envisions Kentucky’s two biggest cities adding jobs as a ’super region,’ rather than competing over companies, private investment and state money.” I had a previous post on this very topic that includes a video interview with Fisher called “Super-Regionalism in Kentucky.” This is an example of Louisville recognizing that it is too small to go it alone in the marketplace and it would be better to have a partner, plus trying to build bridges to a historic rival. We’ll see how this turn out.

A not so good example is the Ohio River Bridges Project I mentioned earlier and linked to my series about. Here we have a region taking on a huge $2.5 billion capital project that is going to be paid for mostly with local money through tolls. A smallish region like Louisville that isn’t even growing particularly fast does not need to be building this type of gargantuan and expensive infrastructure. That’s why in my series I suggested significantly scaling back the project even further.

Better Benchmarking

On another but related note, I’d also like to highlight how Louisville benchmarks and measures itself against the wrong cities. In the popular press, Louisville is generally compared against Indianapolis and Nashville, and those other cities are often trotted out as a rationale for pursuing some policy. For example, local leaders said that Indy and Nashville had city-county mergers. Indy and Nashville were growing much faster than Louisville. Ergo, Louisville needed to merge city and county government if it wanted to catch up.

I’m not saying merger was necessarily wrong. The problem is that Indianapolis and Nashville are nothing like Louisville. They are in the same rough size category (though bigger as I noted) and nearby, but that’s about it. I’m not sure there’s a whole lot Louisville can learn from looking to those places.

On the other hand, a city like Cincinnati is much more similar to Louisville. It’s also a historic major river city in a multi-state metro, on the edge of the state, not the state capital, with rival cities inside Ohio, etc. It also shares the same type of insular culture (maybe even moreso). Yes, it’s bigger, more educated, and home to many corporations in a way Louisville isn’t. But it seems like there’s a lot that could be learned from comparisons there. If I were Louisville, I’d be looking to benchmark against other river cities, not places that are so different. When you look at how many of the historic river cities have fared, you see that most of them have struggled demographically and economically. Comparatively, Louisville actually looks quite good.

However, you rarely see Louisville comparing itself or looking to Cincinnati. Perhaps it’s because Cincy was always the “big city” for people in Louisville. It was perhaps always seen as in a different league than Louisville in a way say Indianapolis was not. Whatever the case, I’d suggest starting with Cincy and expanding to other older river cities.

To illustrate what I’m talking about, just check out this article that talks about Indy being the city Louisville should have been through the lens of the Super Bowl. I love this piece because the article itself and the reactions perfectly illustrate Louisville’s bi-polar nature, vacillating between self-flagellation and smug superiority. In any case, while I appreciate that Louisville being on the border between Indiana and Kentucky spawns some understandable rivalries between states, the comparison to Indy is flawed. I don’t believe Louisville could ever have done with sports what Indy did, even if it tried. That’s not a path for Louisville to regret going down. Nor is the type of downtown-centric development approach of Indianapolis a particularly good fit for Louisville IMO. (I’d tell Indy similarly that they aren’t likely to ever be able to replicate Louisville’s best qualities). I see articles like that one periodically, but rarely any similar articles featuring Cincinnati or another similarly situated city. Louisville needs to take stock of its situation and look for comparison places that more match its own situation.

Next up, a guest poster will take a visit to downtown Louisville. And I’ll revisit an old idea I had for the city.

More Louisville
Louisville: An Identity Crisis
The Case for 8664
An Examination of City-County Consolidation

Thursday, February 2nd, 2012

From Naptown to Super City

I have long touted the sports strategy that Indianapolis used to revitalize its downtown as a model for cities to follow in terms of strategy led economic and community development. I really think it sets the benchmark in terms of how to do it, and it has been very successful.

Indy is hosting the Super Bowl on Sunday, something that is locally seen as a sort of crowning achievement of the 40 year sports journey. As part of that, the Indianapolis Star and public TV station WFYI produced an hour long documentary on the journey called “Naptown to Super City.” I think it’s a must watch for anyone who is trying to figure out to revitalize their own downtown. An hour isn’t short, but given the billions of dollars cities pour into this, I think it’s worth doing some homework. It tells the story of how Indy went from a deserted downtown where local Jaycees were licensed to take their shotguns and kill pigeons to one where the Super Bowl is being hosted today.

I’ll talk more about the Indy strategy in a bit, but first the show. If you are in Google Reader this won’t display for you, so click here to watch.

One thing this brought home for me is the true magnitude of the change. Perhaps I’m being a bit uncharitable, but Indianapolis almost literally started with nothing. It was never a major, important American city. It had no brand in the market. And it had a downtown that was all but dead. Everything they have today was built almost from scratch.

Why do I think the Indy sports strategy was such a good one? Two reason: it was a good strategic area to go after, and it was backed up with very intelligent execution.

First, five reasons this was a good strategic goal to pursue:

1. It just fits the character of the city. Hoosiers love sports. The Indianapolis 500 and high school basketball were long established. It’s something they could behind in a way that they would never have gotten behind being the “vegetarian capital of the world” or something like there. It was authentic to the city. If you watch the video, you’ll note how locals embraced the events that were held that. That goes a long way towards explaining the success of the strategy. You have to be authentic to a place in your development efforts.
2. It was a whitespace opportunity where Indy could get first mover advantage. Today every city thinks they can make money off sports, but Indy really pioneered the notion that you could use sports as an economic development tool. There were a lot of firsts along the path, and that’s one reason Indy was able to take out a leadership position. Just as one example, Indy was first to do the “build it and they will come” model of building a stadium before having a team. As a result, they were able to grab the Colts, and do it in an era when you didn’t have to mortgage your whole city to make a team relocation happen.
3. Being America’s top city for sports events was a realistically achievable goal. I know this because the city achieved it. This is in great contrast to the umpteen cities who all claim they’ll be the “best cycling city in America” or some such.
4. There were huge collateral benefits to sports beyond the direct economic impact of the events and the jobs they support. They bring people to the city to show it off to people who might not otherwise come. They enliven downtown and create events that locals might actually want to attend. They also have been an amazing brand opportunity. Just think of the Colts. How many times a week during football season does the word “Indianapolis” get said on TV? Probably hundreds if not thousands. Imagine if the city had to pay advertising dollars for that exposure? Yes, sports is expensive, but I think it could be justified just as cost-efficient marketing alone. Think about how much companies pay just to put their name on the stadium. How much more is it worth to put your city’s name on the team or the event? Think about how much advertisers will be paying for a 30 second commercial in the Super Bowl? What’s it worth for all those mentions of your city during the Super Bowl again?
5. It was an initiative that had the possibility of being truly transformative for the city. Again, I know this is true because it was.

I’m not going to claim these were actually the thoughts going through people’s minds as the sports strategy developed or that it was this calculated. But all of these things were implicitly true all along, and I think clearly the people pushing sports must have gotten it on that at some level. So sports meets the first test of a great strategy in that it set out after a good strategic goal.

It was also something where there was a level of execution detail that far exceeded what most cities do. In business, it’s one thing to have an idea. It’s another thing to execute on it and achieve market leadership. It’s still another to generate sustainable competitive advantage that keeps you there over the long haul. Indianapolis has managed to do all of these with sports. I’ll highlight eight examples of how it did this:

1. It invested in world class facilities. A lot of these have remained top rated even long after they opened, like Conseco Fieldhouse, which is still ranked every year as the best arena in the United States.
2. Two, it laid out an entire district downtown around events hosting, with everything you need in close proximity – venues, the convention center, hotels, shopping, and entertainment. This is something that’s already been widely commented on by Super Bowl visitors who are amazed you don’t have to get shuttled around all over the place and that you can actually walk directly from the media hotel to the hotels where the teams are staying.
3. Three, because of this Indy is able to effectively “saturation rebrand” downtown for an event and otherwise cater to events in a way that few other cities can or will. In effect, the city has converted its downtown into a giant sound stage. Take a look at the pictures of the city. The whole downtown as been rebranded after the Super Bowl, including, for example, plastering a huge Lombardi Trophy images on the side of the city’s premier hotel. You can debate the value of this to the city, but there’s no denying its value to the NFL. How many cities are willing to do this to the extent Indianapolis is?
4. Indy created the Indiana Sports Corp. as the first ever non-profit management company for events. Today, everybody has adopted that model.
5. The city cultivated a large, experienced volunteer base for putting on events that is much more powerful than what others cities have.
6. Indy has been willing to take calculated risks in support of the strategy. Building the Hoosier Dome with no team to play in it – big risk.
7. It not only went after the events, it went after the sanctioning bodies that determined where the events would be held. The most important is of course the NCAA, but there are others too. This has resulted in Indy having a “cluster” of these organizations and direct access to the people making decisions that pays incalculable dividends. This is one area where the “face to face” discussions that occur in Indy gives the city a big leg up. It’s not just better for selling, it gives Indy critical advanced intelligence about how these organizations are conceiving of their future events needs.
8. Last but certainly not least, this has been a sustained, 35 year commitment. It wasn’t a party politics thing. It was a single project thing. It wasn’t a flash in the pan idea. It was something that has been relentlessly pursued over the long haul.

Add all this up and it is easy to see why still today, three or four decades after it first started and after pretty much every city decided to go after these types of events, Indianapolis is still the best place in America to host a sports event.

I hope this gives you a flavor why the Indy sports strategy was so good and so successful. It’s certainly something that’s not without its failures and downsides. The fact that sports has consumed disproportionate civic resources is one of them, and one highlighted by the documentary. But on the whole, most people seem very happy with the results.

Something the video highlights at the end is one essential attribute for success that you can’t plan for or make happen – luck. They ask questions like, what if the “Save the Pacers” telethon had failed back in the 70’s? What if the seats in the Hoosier Dome had been the originally planned variegated colors instead of the Colts blue and white colors when Bob Irsay walked in to check it out? There were many critical turning points where without a lucky break, who knows if the future of downtown Indy might have been radically different in some way. It should give us some humility about the limits of our ability to simply will things into being. On the other hand, it reminds us that if you aren’t in the game, if you aren’t swinging the bat, you don’t have any chance at all of hitting that home run. You have to play if you want to win.

Older Posts »

Telestrian Data Terminal

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

• arenn@urbanophile.com
• twitter.com/urbanophile
• linkedin.com/in/aaronmrenn

Please email before connecting with me on LinkedIn if we don't already know each other.