Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / Detroit Eyes the New Economy

Detroit Eyes the New Economy

Pointing Motown toward the New Economy

October 13, 2010 |
Great Lakes Bulletin News Service

  Detroit’s waterfront, seen from Belle Isle, the city’s matchless island park in the Detroit River, offers trade and recreational opportunities other cities would love to have.

Part Two of a five-part series

To make a successful plan for Detroit’s recovery, we must first see what originally made the city such a huge success, and then consider what it needs to repeat that success in the emerging New Economy—as a number of other, once-distressed cities have.

It turns out that Detroit has most of the ingredients it needs; now it needs to focus on using them in ways that work well with that New Economy.

Before we list Motown’s many advantages, however, let’s look at some of the prime differences between what succeeded in earlier times and what works today when it comes to developing a city’s economy:

  • In the Old Economy, governments focused on keeping costs low enough and infrastructure adequate enough to make the community a good place to do business. In the New Economy, however, that may be insufficient. Being rich in talent and ideas is now vital, so Detroit needs to attract talented people with good ideas.
  • In the Old Economy, economic experts created incentives to attract large companies. But today, the share that large companies have of the national economy is so low that hosting a lot of them would be a liability. The vast majority of new employment now comes from smart companies that generate huge value by producing knowledge products—not manufactured goods. These firms turn creativity and innovation into high-value, globally marketed services.
  • In earlier times, successful places concentrate on vibrant industrial manufacturing sectors. But in the New Economy, diversity is key, and clustering related sectors within a region pays big dividends. Companies like “complete” places that offer significant quality of life and a vast array of amenities. Those amenities include a diversity of job opportunities, many of which emanate from emerging companies. 
  • In the Old Economy, American cities enjoyed cheap energy, and manufacturing ran on fossil fuel. Now, if energy prices continue to rise, our transportation system may become obsolete, replaced, at least for businesses, by information and communications technology. So, communities competing in the New Economy must depend on IT and communications—and be energy smart. 
  • In the Old Economy, a high-quality physical environment was a luxury because their high prices worked against attracting cost-conscious businesses. Today, however, physical and cultural amenities are key in attracting knowledge workers. Bike paths, trails, beautiful downtown designs, and nightlife attract the knowledge class. Such things can change the economic fate of a city.
  • In the past, successful cities had a fixed competitive advantage in a specific resource or skill—say, cheap hydroelectric power or machine tooling. Today, cities need to host organizations and individuals that can learn and adapt.
  • In the Old Economy, people followed jobs. That’s changed drastically: talented, well-educated people now choose where they want to live, then they look for jobs.
  • Previously, successful cities had government-led economic development, with a large government providing good services. Today, bold partnerships between business, government, and nonprofits lead cities toward success.
  • In the Old Economy, a connection to global opportunities was not essential, but in the New Economy global connections are crucial to success.

These sharp contrasts between what worked in the Old and the New Economy mean we must rethink how we move Detroit forward. Having the right amenity and asset mix can attract the very people that cities across America are trying to reach.

That is the essence of place making—a city positioning itself to attract the people and resources it needs to turn itself around. In the New Economy, it’s all about people, those high-impact, economic agents that have the potential to create jobs or attract industry because their talent pool is so strong that industry follows them.

If Detroit’s economy is built on the fundamental principles of place making in the New Economy, Michigan can derive great benefits from a thriving and vibrant major city. 

Critical Assets of Detroit to Build On
So, what assets does Detroit have that it can leverage? There are actually quite a few.

First, it’s an international border city and transportation hub, and so it can take even more advantage of the steady stream of international traffic that it attracts.

Detroit is also a major cargo gateway to the Northeast, so it is essential to do the same thing with domestic traffic, as well—traffic amounting to billions of dollars of goods.   

Detroit is also a Midwest megalopolis that is attractive to immigrants, has first-class medical facilities, boasts a leading university and several colleges, an increasingly vibrant downtown and cultural amenities, an historic and cutting-edge music industry, an emerging film industry, and major sport franchises.

The city must examine how better to mesh new policies with those assets, including how to translate its attractiveness to immigrants into stronger economic advancement. 

Borders aside, Detroit offers ready access to a major coastline and a very long waterfront, which opens up more great opportunities in domestic and international trade, recreation, and other activities.

The city also has an abundant supply of fresh water, open space, great parks, and a strong urban agriculture movement. It also has a very large amount of underutilized, affordable urban land; a great deal of underutilized infrastructure; a great deal of very affordable housing; a readily available labor force; and diverse neighborhoods and ethnic communities.

These assets are ones that any city would wish it had. The trick is knowing how to use them.

Ready, Set, Go
The Detroit region’s smartest leaders are trying to harness these assets in partnership with an innovative and committed community of non-governmental organizations intent on reviving the city, including such key foundations and groups as the Sustainable Design Assessment Team (SDAT), One Detroit (1D), Model D and Metromode (Detroit-focused news from Issue Media Group), Detroit Renaissance Inc., Detroit Renaissance Creative Corridor, and New Economy Initiative for Southeast Michigan.

They also include NextEnergy, Community Foundation for Southeast Michigan, Greenways Initiative, Regional Sustainability Partnership, Woodward Light-Rail Transit Line, Detroit Metro Convention & Visitors Bureau, Green Entrepreneurs Group, Detroit Eastern Market and other farmers markets, Focus Hope, InsideDetroit.org, Detroit Black Community Food Security Network, and many more.

Remember, the keys to the New Economy are people and organizational assets. Detroit has both, and they are ready to work on behalf of the city to achieve a better future. So, synergy between city government and these organizations will create some great opportunities for the economic rebirth of the city.

Detroit may seem like it is down and out but, actually, Detroit is lucky. It has critical assets that translate into huge potential. But successful places build on the assets that are relevant.

That is why the Detroit leadership is now working on a number of projects that relate to these assets.

In our next installment, we’ll look at how “the stars are lining up” right now for our state’s flagship city to take a big leap forward.

Dr. Soji Adelaja is the John A. Hannah Distinguished Professor in Land Policy and director of the Land Policy Institute at Michigan State University. This article was first published by LPI on Sept. 3, 2010, and is used by permission. Read Part I of this five-part series here.

Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
p (231) 941-6584 
e comments@mlui.org