|Image showing vacant land between existing structures on Detroit’s East Side. Source: wikipedia.org|
Anyway, lately my blogger buddy Jim Russell has been touting the emergence of what he calls the “Legacy Economy”. Here’s how he describes it, at Pacific Standard:
I see the Legacy Economy as a the reattachment of economic activity to the geography of natural resources, albeit talent replacing abundant coal. Talent is the new oil, or something like that. Given the demographic decline taking over the globe and more places actively competing for the same creative labor, I expect the sites of talent production (i.e. universities) to anchor a diverging economic landscape.
The thought of this has given me a good deal of hope, because nearly six years after the financial collapse that launched the Great Recession, I think most people struggle with what the “Next Big Thing” is going to be that drives our economy. Four years ago an educated guess might have been “sustainability”, but is anyone thinking about an economy aligned on those lines today?
Meanwhile, the Innovation Economy, notably the tech and finance industries, regrouped and recovered. In the process, what used to be clustered in the innovation and tech hubs of America is now spreading across the country. In the recent past the best and brightest migrated to where their talents fit best. Today, the hubs are high cost and the businesses are looking for cheaper talent and cheaper alternatives. Hello, Legacy Economy.
As I look at Rust Belt cities, those that were never really able to compete in the Innovation Economy, I see glimpses of a prosperous future, but not for all people and certainly not for all Rust Belt cities. A few things seem to be happening in this emerging economic environment:
- Talent goes where it wants to go, and for the tech industry that no longer includes only Silicon Valley, Austin, Boston or the other usual suspects.
- Tech is converging, and the impacts of that are now being seen in other industries.
- The producers of talent, wherever they are, may be the biggest beneficiaries of a “boomerang” that brings talent back to its source. Prodigal sons (and daughters), if you will.
The Pentagon will fund each institute to the tune of $70 million, with the consortium members raising and appropriating an equal amount.
The Chicago consortium is made up of 73 companies, universities, non-profit groups and research labs, the White House said. It will be led in Chicago by UI Labs, a research and supercomputing center established last year by the University of Illinois.
EWI, an Ohio-based manufacturing company with a Detroit plant, will head up the 60-member consortium focusing on lightweight metals.
For the Department of Defense, the White House said lightweight and modern metals will mean “armored vehicles strong enough to withstand a roadside bomb but light enough for helicopter-transport.”
In my reading of this, the Chicago consortium is the one that is moving in the direction of the Legacy Economy, because it is linking the talent and research capability of Global Chicago to do broad-scale, next-level manufacturing research Meanwhile, Detroit seems to have gotten funding for a group that will focus on a far more specific endeavor in lightweight metals technology, with a much lower ceiling.
Also over the weekend, the other news was an excellent interview with Thomas Sugrue by the Detroit Free Press. Sugrue is a Detroit native, professor of history and sociology at the University of Pennsylvania, and author of “The Origins of the Urban Crisis”, an influential book that chronicles the dual role of race and deindustrialization on the Motor City. One might think that Sugrue would believe that Detroit’s Dan Gilbert-led downtown revitalization efforts in the midst of bankruptcy is the start of something entirely different for Detroit. He’s not so sure:
Look, Detroit is more interesting for a visitor now than 15 or 20 years ago for all the amenities that appeal to creative class types like me. It’s great. I have more restaurants that I want to try in Detroit and more bars that I want to go to than I can possibly visit even on several trips. But there’s not really robust evidence that unless that kind of infusion of capital and population on a large scale happens that (the creative class) is going to play a really dramatic role in remaking cities. And no city in the United States faces such a big obstacle to that kind of transformation than Detroit, even for all of its appeal to artists, musicians and other folks involved in creative pursuits.
Here’s the kicker:
How do you stabilize the housing market in neighborhoods where residents are city employees, blue-collar workers, folks working the service sector? The odds are pretty steep because there’s not a lot of bling in revitalizing outlying lower middle class neighborhoods. Developers aren’t particularity interested in them.
I peer into my crystal ball and I see a Chicago in 20 years that could be an advanced manufacturing leader, given its talent production assets. Twenty years hence for Detroit, I see a city that looks like Chicago does now — bifurcated, a safe and dynamic inner core filled with creative class types, and outlying areas that still struggle to maintain their viability. Without question, an improvement over current conditions there. But I wonder if it has the ability to transcend its legacy to improve even more lives.
Someone please make it plain.