Urban economic development strategies: do you invest in people or places? ... yes

Urban economists debate investing in places--big projects, working to attract plants, build sports stadiums, etc.--vs. investing in people--education, small business development, and quality of life initiatives.

A chapter of Richard Florida's book, The Great Reset, discusses this debate in terms of the rust belt, and comes down fully in favor of the people approach. See "How to Revitalize Rustbelt Cities." (Thanks Nigel for the tip.)

The article starts off by discussing the Shrinking Cities movement and then moves into focusing on regional (but place-based) assets such as universities, neighborhoods, community organizations, and will and how to leverage the opportunities presented.

My line about this is that places like Pittsburgh--one of the examples in the piece--have what I call "a desperate willingness to experiment" because they have no other choice. But Pittsburgh, in terms of revitalization opportunity, has at least seven advantages that many other communities no longer possess.

First, it has a number of quality universities that continue to attract talent, and at least two of the universities have strong engineering education programs which

Second, help develop new technologies and generate spin off businesses which build the region's economy and provide higher paying jobs.

Third, it doesn't hurt that the University of Pittsburgh Hospital System is world class, especially in organ transplantation. This anchors medical care as a key "local" industry.

Fourth, Pittsburgh still has a handful of large national and global companies based there, a mix of manufacturing-research based companies like PPG and the U.S. headquarters for Bayer AG, software companies, and service industries (such as Mellon Bank). This means that there are still job and idea-producing industries there, even though these businesses are subject to the same concentration and downsizing trends affecting such companies.

Fifth, Pittsburgh has a couple of incredibly strong foundations still present locally, focused on funding organizations and initiatives that improve the city both socially and economically.

The real mover and shaker in the Pittsburgh foundation world are the Heinz Endowments, which fund in significant ways community organizations and initiatives, but hyper-focused on results. In other words, rather than continuing to fund the same old organizations generating middling results, they measure and fund accordingly, while at the same time provide support for capacity building so that organizations are focused on building the capacity for improvement

From the Heinz website:

Our mission is to help Southwestern Pennsylvania thrive as a whole community--economically, ecologically, educationally, and culturally--while advancing the state of knowledge and practice in the fields in which we work.

(In an interesting irony, the Scaife Foundations, which are known nationally for funding what we would call very much "hard right and conservative" causes, are based in the Pittsburgh region, derived from Mellon wealth, but locally fund significant and important economic development initiatives, such as adaptive reuse historic preservation based projects.)

By comparison the foundations and institutions in the DC area focus more on maintenance of the status quo (even if they would deny it). Funding innovation, initiative and challenges to the prevailing consensus, wisdom, and agenda is the last thing you should expect from the local foundations here.

Sixth, it helps and maybe this comes from the innovation history and legacy that the region exhibits, that organizations there are problem and self-help focused.

The Sprout Fund's Seed Award, which funds small citizen-initiated projects, is more innovative than just about any foundation-based program that I can think of in the DC region. It's about fostering initiative and self-help, rather than looking to the government to solve your problems.

Other similarly focused organizations include the Pittsburgh History and Landmarks Foundation, one of the nation's most effective local historic preservation organizations, and two impressive technical assistance organizations, the Community Design Center of Pittsburgh and the Community Technical Assistance Center.

Despite the many universities based in DC, plus the local affiliate of the Local Initiatives Support Center, I would aver that we have no such comparable organizations in DC. Most cities in need of revitalization lack such organizations, and it makes revitalization that much more difficult.

Ahh, and the "community development corporations" there are far more intriguing than in most cities. The South Side Local Development Corporation has led the revitalization effort on East Carson Street, one of the first Urban Main Street programs, and one of the most successful. The Penn Ave Arts Initiative is the joint effort of two neighborhood groups, and its one of the more successful arts development initiatives I've seen, working in a very difficult area with limited opportunities. The Lawrenceville Corporation's 16:62 Design Zone is another best practice revitalization initiative. And the Northside Leadership Conference has a number of interesting local development initiatives, and in part receives funding from the local hospital complex. Plus, Neighbors in the Strip continues to plug along (with inadequate support from the city) on their public market creation initiative. A 6,000 s.f. market opens this summer (their proposal is to take over part of the old B&O food auction warehouse for a full-fledged market).

Seventh, the arts organizations there have some heft. The Pittsburgh Cultural Trust has focused on re-establishing arts uses downtown and maintaining and extending the arts infrastructure there. The Carnegie Institutions set a standard of excellence as well. Etc.
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So I guess the point is that you need to have people-focused institutions that are place-committed. Capital can move anytime. But locally focused and locally committed institutions won't move. And if these institutions can develop a focus on improvement that is based on best practice, innovation, and quality then they become the levers and fulcrums of a new kind of industry.

If they don't, revitalization efforts are muddled and don't ever amount to very much.