Strategies for Transforming the “Rust Belt”

Many cities, especially the old manufacturing centers hardest hit by economic transformation and demographic shifts, are developing and implementing strategies to attract new residents and new investment. Options that have been or are being deployed to once again grow these cities include targeting immigrants and knowledge workers (“creative class”) as well as place-based initiatives focusing on downtowns and neighborhoods or on amenities like the arts, open space and transit. Leveraging the capacity of so-called anchor institutions – partners including foundations, universities and health centers – continues to be an important part of these efforts.

Economist Jeremy Nowak, who also is the Chair at the Federal Reserve Bank in Philadelphia, argues that there are several trends that should help older “legacy cities” grow. Factors he and others view as significant include:

• Suburban and exurban empty nesters seeking urbanized spaces with amenities;
• Adults in their 20’s starting to form new households, albeit often households of one;
• Cities as critical gateways for new immigrants;
• The value of academic and health centers and other “growth nodes” found mostly in cities;
• Knowledge workers and those connected to the arts and to cultural institutions arts and culture congregate in cities;
• Societal trends in support of sustainability, walkability, dense social networks and place making are aligned with the values of the urban environment.

Even a casual observer of cities will agree that challenges remain. Research by NLC and other institutions acknowledge that cities must work through issues of poverty, crumbling infrastructure, low quality schools and general conditions of blight as well as perceptions about the ineffectiveness of government institutions in general. Most importantly, says Jeremy Nowak, “a city must come to terms with the cost of public benefits and the actual worth of those goods or services.”

In order to attract middle class families, a city must provide amenities that have broad public value – great public spaces, transportation systems that connect to jobs, residences and recreation opportunities, places that are safe and clean, and services that are fairly priced. City leaders also must embrace the shared governance and management models (partnerships with CDC’s, neighborhood associations, nonprofits and private sector firms) that offer innovations in delivering public goods and services toward the goal of achieving prosperity for all.

Practical Examples

Baltimore’s Mayor Stephanie Rawlings-Blake seeks to grow the city’s population by 10,000 in 10 years. Efforts include the Vacants to Value program, which is rehabilitating vacant housing and offering home buyer incentives, demolishing 4,000 blighted structures, and leaving some land vacant as green space, urban agriculture plots or adjunct yards for existing homes. The mayor wants to cut city property taxes by 20% (reducing the cost of government in the process) and invest in core infrastructure including mobility strategies. A partnership with the state will invest $1.1 billion in new school construction (10-15 buildings) and rehabilitation of others.

There is useful data to help the city target resources. Research from the Baltimore Neighborhood Indicators Alliance discovered that 35% of neighborhoods in the city (19 of 55) experienced some recent growth. Historic preservation tax credits were an especially critical incentive bringing older houses into prime condition for habitation. Neighborhoods that grew were accessible to roads and transit networks allowing residents to get to jobs, shopping and recreation easier and faster. By contrast, little growth occurred where there is blight and vacant properties. Even where there is good access to mobility networks, neighborhoods with vacant properties are not growing.

In the Idora neighborhood of Youngstown, Ohio, keys to future growth were upgrading the image of neighborhoods, strengthening the real estate market, and engaging large numbers of residents in the renewal process. The goal was to rebuild confidence so that property owners again would be willing to invest both dollars and time in owning and managing a quality home and community. The city’s Lots of Green program acknowledged the need to manage empty space in neighborhoods and encouraged the active role for residents.

Geneva, New York undertook image building initiatives to first create and then strategically market a dozen unique neighborhoods. Working through the city’s Office of Neighborhood Initiatives and in partnership with volunteers from the Geneva Neighborhood Resource Center, residents are engaged in a process of setting standards they expect from their blocks and houses.

Some revitalization tasks are symbolic like creating a neighborhood mural or new place-centric signage. Other tasks strengthen the real estate market through rehabilitation and sale of formerly vacant houses, aggressive promotions of neighborhoods with the help of real estate agents, and targeted first-time homebuyer incentives.

Other, more tangible efforts, such as strengthening grass roots community associations that engage in problem identification, assessment and solution, often depend on support from city government. That support may take various forms such as advocate, facilitator and champion. I believe that an essential role for city government is to help make recoveries possible by using grants, special lien programs, and clean-up assistance to support confidence-building efforts implemented by residents in concerts with local nonprofits or other community-based institutions. Through such actions, cities create an enabling environment for actions by community stakeholders.

Future Thinking

The analysis presented here was gathered during a forum that brought together thought leaders from the cities of Baltimore, Cleveland, Detroit and Philadelphia. These leaders were convened by the Funders Network for Smart Growth and Livable Communities and four of the Federal Reserve Banks, with NLC as a supporting partner. Three more such gatherings will be organized during the balance of 2013 and into 2014. In our role of knowledge partner, NLC will contribute to these cross-city discussions but also facilitate the dissemination of knowledge beyond the four target cities.

Detroit and DETROPIA

The words come at you harshly and powerfully. Decay. Ruin. Emptiness. America’s Pompeii.

These words accompany images of Detroit from photographers Andrew Moore and Camilo Jose Vergara. The photos have been part of two exhibitions at the National Building Museum in Washington, Detroit Disassembled and Detroit Is No Dry Bones.

Using a large-format presentation, Moore presents images of some of the most iconic structures in Detroit. Viewers come face to face with the downtown United Artists Theatre, Michigan Central Station, The Guardian Building, Ford’s River Rouge Complex and the East Grand Boulevard Methodist Church. All are in various stages of disintegration. At the Cooper Elementary School on the city’s East Side, prairie grass is overtaking the isolated structure.

Vergara has been documenting the urban environment in Detroit for over twenty-five years. He chronicles storefronts on Mack Avenue from 1993 to 2012. Other photos highlight the former Packard auto plant and the graffiti that covers so many of the city’s structures. Critics have called his images Ruin Porn but Vergara expects that those viewing his images “will come to appreciate how the city continues to survive and reinvent itself.”

It’s hard to find hope or redeeming grace in Moore’s work but Vergara seems more interested in perseverance, reclamation and the audacity of the human spirit. His work seeks to offer some focus on those who never left the city and those new residents who see a certain authentic beauty in what is vanishing.

The documentary film DETROPIA by Heidi Ewing and Rachel Grady also tackles the paradox of demise and rejuvenation. This award-wining film (Sundance, Naples, SilverDocs), seeks to make the complex challenges of globalization, race relations, urban decay and the disconnections between citizens and government more approachable. Moreover, the film, through the stories of residents, adds the elements of humanity and commitment to place that the Moore and Vergara photographs do not provide.

The National League of Cities will give its members a sneak peak at DETROPIA before the film’s release on public television later this year. City and town leaders attending the Congressional City Conference in Washington will be given a special viewing and an opportunity to discuss the film on Monday, March 11.

The stories in this film have broad applicability beyond Detroit. For public officials, the film can be a catalyst for assessing and addressing the many challenges that face neighborhoods and communities in the post-recession period.

The Latest in Economic Development

This week’s blog discusses a new report focused on the recent (and future) performance of the Great Plains, the Boston Consulting Group’s take on the skills gap, an example of the “knowledge problem” with regard to incentives in Oregon, and preparing your city for millennials. Comment below or send to

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A new report by Joel Kotkin takes on the role of America’s Great Plains in the 21st century. Many observers (those on the coasts) had predicted the region’s downfall, but in reality, the Great Plains have done very well: “Paced by strong growth in agriculture, manufacturing and energy – as well as a growing tech sector – the Great Plains now boasts the lowest unemployment rate of any region.” Three factors will continue this trend: 1) natural resource wealth; 2) technological advancement; and 3) demographic changes. Download the full report here.

The Boston Consulting Group says that the “skills gap in US manufacturing is less pervasive than many believe.” This statement follows the consulting firm’s continued predictions of a resurgent US manufacturing sector. BCG notes that the shortage represents less than 1% of all US manufacturing workers and less than 8% of highly skilled manufacturing workers. Furthermore, “only seven states – six of which are in the bottom quartile of US state manufacturing output – show significant or severe skills gaps.” That said, the report notes that a skills gap could be a growing problem down the road, particularly as high-skilled manufacturing workers begin to retire. The release also highlights a few programs designed to close the gap, including Quick Start in Georgia and the Austin Polytechnical Academy in Chicago.’s recent decision to open in office in Portland, Oregon, highlights the murky environment of economic development attraction, where imperfect information often places officials between a rock and a hard place. Utah was also trying to land the firm and was purportedly preparing to offer a multi-million dollar package, but no deal materialized. On the surface, the end result makes Oregon look foolish for offering generous terms when with no real competitor, but the idea that Oregon was pre-emptively preparing for an incentive war is probably misguided; the Oregon Business Development Department said that its offer wasn’t based on what Utah was or wasn’t offering. It “weighted the value of the Salesforce jobs against the cost of incentives.”

At, Bill Fulton prophesizes that “just like baby boomers, the preferences of the millennials will drive our society for two generations. They’re making location decisions based on their idea of quality of life. And they’re going to make all those decisions in the next few years – by the time they’re 35.” Fulton reckons that if cities want to attract these up-and-comers, decision makers and planners only have a few years to set the tone. But he likes what he is seeing; from Omaha, Nebraska to Rochester, New York, second tier cities are developing urban cores to cater to millennial tastes.

*** The “Latest in” will go on a short hiatus and return in December.

The Latest in Economic Development

This week’s blog discusses cities’ quests to foster technology hubs, new strategies beyond traditional manufacturing, the impacts of re-shoring, a commitment to streamlining small business regulations, and rural economic development strategies. Comment below or send to

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Possessing high-tech startups is obviously a tremendous asset for cities, but developing a “tech hub” is not a realistic goal for all cities. At, Matthew Yglesias explains that “while it would obviously nice to become the next Silicon Valley, the fact is that Silicon Valley is already where it is.” Focusing on the fundamentals (schools, infrastructure, etc.) is more important than choosing the “hot” sector of the day. Inventor extraordinaire James Dyson, of vacuum cleaner fame, recognizes the value of non-tech, which is why he is establishing an incubator at his alma mater that will focus on engineering physical products. Dyson says that “with the world abuzz with digital, we are losing sight of real engineering.

If manufacturing is going the way of agriculture in the 1800s due to technological advancement and globalization, economic development must look at opportunities beyond manufacturing in the traditional sense (including beer). In the case of western North Carolina’s Transylvania County, Dale Katechis of Colorado’s Oskar Blues Brewery located a production facility there because two of his interests – mountain biking and lowering shipping costs to the east coast – aligned organically. But there are also steps regions and cities can take to stimulate non-traditional manufacturing operations. Kalamazoo, Mich. recently modified its zoning regulations to allow bakeries and breweries to locate downtown. This heads-up move is serving to accommodate the already burgeoning “beer trail” in west Michigan. For more on how cities are courting craft breweries, check out this post from NLC’s Katie McConnell.

Many commentators are hoping that “re-shoring” will turn the tide of the US economy, signaling a return to increased exports and manufacturing capacity, but this view may be premature. The rationale behind the shift is the changing economic fundamentals between the US and China. Knowledge@Wharton notes that in 2000, “US wages were almost 22 times higher than those in China, but by 2015, wages in the US will only be four times higher.” While this may turn out to be true, the article points to the fact that wage rates are not the only determinant a company considers when deciding where to locate, not to mention there are options other than China to source low-wage labor, including Vietnam and Indonesia. Re-shoring is an encouraging development, but it probably won’t catalyze a new explosion in US manufacturing.

Two of America’s largest cities are re-focusing their efforts on streamlining regulations for small businesses. Responding to a spike in the number of fines levied on small businesses, New York is committing to a review of the city code to remove obsolete regulations, issue warnings instead of immediate fines, provide customer service training for inspectors, and establish an agency liaison to industry groups. Rahm Emanuel is also joining the party with a proposal to “restructure the city’s business licensing center with the aim of helping small businesses get licenses and find potential financial assistance more quickly.”

Economic development in rural locales presents its own set of unique challenges and opportunities. A recent article from the USDA outlines five key lessons for rural economic development strategies: 1) wealth creation is context dependent; 2) it is critical to understand the interrelationships among multiple forms of wealth; 3) degrading some types of assets may undermine the benefits of investing in others; 4) diversifying assets may reduce risk; and 5) local ownership has benefits but may also entail risk.

The Latest in Economic Development

This week’s blog discusses a different kind of university business park, manufacturing in Silicon Valley, the future of economic growth, a new report from Deloitte on fixing joblessness, and a closer look at the last jobs report.

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How do you mix academics, nonprofits and businesses to bring research to market?  According to Bill Fulton in Governing, the Centennial Campus at North Carolina State is doing it right. “Centennial — located just south of the main North Carolina State campus in Raleigh — is now everybody’s poster child for how a university business park should work.” As expected, because of Centennial’s success, “it seems every university wants to create a mixed-use research/commercialization campus within walking distance of faculty labs.” Universities like Arizona State and Nebraska have followed suit in their own way.  Fulton exclaims the future of economic development lies not in research parks with “proprietary innovation on closed corporate campuses, but in the walking, strolling and random interaction of Centennial.”

Silicon Valley is a place dominated by the “knowledge economy,” with firms churning out apps and software like hotcakes,  but there are more companies making tangible stuff there than you may think. Silicon Valley actually has the second highest concentration of production jobs among America’s big cities. But of course, this isn’t the manufacturing of yore; these firms are “boutique manufacturing operations relying on fewer workers, more computer code and mind-boggling machines.” So, some of these firms definitely provide opportunities for lower-skilled workers, but the article points out that “as manufacturing becomes more sophisticated they’ll need more training for the best jobs.”

A recent post on Ezra Klein’s Wonkblog asks an intriguing question: Have we reached the end of economic growth? Brad Plumer summarizes the work of Northwestern economist Robert Gordon, who postulates that before the industrial revolution, there was hardly any growth whatsoever followed by a relatively short period of extremely high growth (aided by technological progress) leading us to today. Could we hypothetically be headed for another long period of low/no growth? Probably not. As expected, there are many in the economics community who don’t share this unconventional view, and Plumer does a nice job boiling down the responses of John Cochrane, Matt Yglesias, and Chris Dillow, among others.

This week, Deloitte released a report on fixing joblessness through education, employment regulation, immigration, foreign investment, and unemployment insurance. The report stresses continual learning, making the case that “specific job skills learned through a BA will last for five years, and will then have to be renewed” – not necessarily through formal education, though. The report also calls for removing licensing restrictions on a host of occupations; this has been well documented recently. Other suggestions the report makes are to increase FDI inflows and relax immigration rules to encourage entrepreneurs to stay in the US.

In the last jobs report, the unemployment rate declined from 8.25% in July to 8.11% in August; what accounts for this improvement? Unfortunately, some of this was due to people exiting the labor force – “the labor force participation rate hit a new post-1980 low.” Initial reactions perceived this as a sign that people are giving up, sitting home and doing nothing because they can’t find work. But according to the Atlanta Fed, “the number of discouraged, marginally attached people corresponds to… approximately 1 percent of those not in the labor force.” So, although the unemployment rate improves in many cases because of people leaving the labor force, it is usually not for reasons which we most often think.

The Latest in Economic Development

This week’s blog explores manufacturing’s resurgence, making a place “creative,” and keeping and attracting foreign entrepreneurs and students. Comment below or send to

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Chatter about manufacturing’s resurgence in the U.S. is being fueled by moves to “reshore” production facilities, growth in advanced manufacturing sectors and increases in goods exports.  “The top factors for bringing these jobs home cited by these executives surveyed by Boston Consulting Group: Higher labor costs in Asia (57 percent), ease of doing business (29 percent), and proximity to customers (28 percent),” notes The Global Post.  What will manufacturing’s comeback mean for local economies? The ripple effects of manufacturing are huge, especially when accounting for foreign investment: each job supports another five jobs, based on economic activity that is tied to suppliers and spending by employees of U.S. units of foreign companies and their suppliers, Reuters reports.

But as the Wall Street Journal details, there is reason to be skeptical of this good news: lagging wages in the U.S. are propping up the industry and have negative consequences for the economy.  “Sluggish wages are squeezing workers’ incomes and spending. That, in turn, hurts retailers who target middle-income earners and restrains the vigor of the economic recovery.”

“Musical” interlude, data debate, and big boxes going small.

Although most have abandoned the notion of becoming the next Silicon Valley, communities across the country are trying to figure out just the right mix of what spurs innovation and creativity. Rural towns like Greeley, Sherman and Valley County, NE think the answer lies not necessarily in hard assets, but in the soft ones. “It’s far harder to create communities of people driven by values like trust, fairness, dreaming big, and willingness to risk and fail.” Get those components right, reports the Daily Yonder, and younger entrepreneurs will stay.  Youth entrepreneurship must become a priority within a community’s economic development strategy, and according to the Center for Rural Entrepreneurship, includes interactive entrepreneurship education, supportive community environment, peer networking and pathways from education to opportunity.

Even places like Silicon Bayou (aka New Orleans) and Denver that are targeting high-tech are using strategies grounded in local assets, particularly their talent. They are leveraging existing industries and top universities and colleges and working to encourage collaboration among entrepreneurs, investors and government agencies, notes MSN Business on Main.

But what if your town has no people? That’s right…no people. Fast Company puts the spotlight on a new city in New Mexico named CITE (The Center for Innovation, Testing and Evaluation) being developed with the hopes of being one of the most innovative places in the world, with no plans for permanent residents. CITE is “a 15-square mile, fully functioning but empty town next door, unlike any other R&D facility in the world, that will be used to test everything about the future of smart cities, from autonomous cars to new wireless networks.”

Foreign students and entrepreneurs have also been lauded as key assets for growth. It’s no wonder that recent news (Fiscal Times) of an exodus of foreign students has prompted “a bipartisan group of senators to introduce legislation that would seek to make it easier for foreign students who hold post-graduate degrees in math, science or engineering from American colleges to remain in the U.S. after they finish their studies,” notes Wall Street Journal’s Washington Wire blogger Corey Boles.

While there is a high likelihood of U.S. legislation getting bogged down in an immigration debate, The Telegraph details Canada’s plans to move full force on attracting foreign entrepreneurs and building a “fast and flexible” economic immigration system. According to Citizenship, Immigration and Multiculturalism Minister Jason Kenney, “We need to proactively target a new type of immigrant entrepreneur who has the potential to build innovative companies that can compete on a global scale and create jobs for Canadians.” See these NLC resources for more on local roles to support entrepreneurs and foreign students.

The Latest in Economic Development – 3.22.2012

This week’s blog explores New Orleans’ revitalized entrepreneurial culture, presents an alternative read on manufacturing jobs data, explains a couple policies meant to jump start startup creation, and highlights the use of contests to spark innovative solutions. Comment below or send to

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With the perception that venture capital is drying up for startups, states in the DC area are filling the void to provide capital.  Maryland is definitely leading the way in size and scope; last week, the state announced an $84 million fund that will be dispersed among startups and venture capital firms as part of its InvestMaryland program. Virginia’s fund, managed by its Center for Innovative technology, is much smaller at $6 million, but is larger than in previous years. The District of Columbia is also doing its part, developing the Certified Capital Company Program, which raised $50 million which will be divided among venture capital firms. While these funds may fill a needed gap in startup investment, they are backed by the tax-payer, which brings in an element of pressurized risk that is not inherent in private investment. (Washington Post) – Continuing this theme, see also this 2011 article from that points out common pitfalls of government VC funds: low capitalization and short-sighted dispersion of cash to jump start entrepreneurship.

The conventional wisdom among economists that US manufacturing job losses throughout the 2000s were due to productivity gains may have been flawed by selection bias. While no hypothetical economist would go out on a limb and claim that the job losses were solely due to productivity gains, presidential advisers such Robert Reich (Clinton) and Glenn Hubbard (Bush II) explained they were the main reason. But a new look at the numbers suggests that the “state of US manufacturing is not as bad as the employment numbers make it look. Instead… it’s significantly worse.” Apparently, some of the data used to defend the productivity argument did not account for globalization factors such as cost savings from moving operations overseas and the emerging technology industry, of which the majority of products are assembled in Asian countries. (Washington Post)

In the aftermath of the Hurricane Katrina disaster, there wasn’t much hope for New Orleans, but thanks to Greater New Orleans, Inc., the Idea Village, and the New Orleans Downtown Development District, the city’s entrepreneurial spirit has bounced back. Evidence of this is the NOLAbound program, which was held last week. The program invites a group of “social media influencers” from around the country to immerse themselves in the entrepreneurial culture of New Orleans. Focusing on four industries (the arts, bioscience, digital media, sustainability), the program showcases New Orleans as a hot spot for potential entrepreneurial opportunities. (Fast Company) – Also, check out the Idea Village-organized Entrepreneur Week, another entrepreneurial event that brings venture capitalists, investors, business people, MBA students, and policy leaders to New Orleans to support the local entrepreneur community.

With Congress unable to come together on anything lately, a bill that has garnered bipartisan support recently has been the JOBS Act, which would allow crowdfunding and eases IPO regulations. While the bill has broad support in Congress, what would be its actual effect on the investment and entrepreneur environment? Eric Schurenberg explains that the bill will “make it a lot easier for start-ups to raise money and will lower the cost of going public,” but “while the democratization of capital formation sounds good as a theory, it will likely be messy in practice.” (Inc.) via (Innovation Daily)

In a complex and unpredictable world, and with a government strapped for cash, can open innovation contests save the day?  Over the last year, the Obama administration has encouraged ordinary citizens to solve complex problems through contests that provide nominal amounts of cash for the winners (see Tom Kalil, Deputy Director of the White House Office of Science and Technology Policy, states that one of the advantages is that “you only pay when (the solution) is successful… so it’s a way for agencies to get more with less.” In the article, David Bornstein also mentions the Aspen Prize for Community College Excellence, which is a contest that determined which American community colleges were the most successful based on educational and labor-market outcomes. (New York Times)

The Latest in Economic Development – 3.5.2012

This week’s blog continues our recent dialogue regarding advanced manufacturing and its employment implications, as well as the emotionally popular draw of professional sports complexes. We also explore the uncertain future of urban retail, “rural gentrification” in small cities and towns, urban revitalization in former industrial powerhouses, and a new program to help small wineries export to China.  Comment below or send to

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In the last few weeks, this blog has highlighted articles that have made the case for a resurgent advanced manufacturing sector in the US, but with an important caveat; the job market isn’t exactly filled with workers with adequate training for these potential jobs. Thomas A. Hemphill and Mark J. Perry of the Wall Street Journal explain that “a majority of US manufacturing jobs used to involve manual tasks such as basic assembly. But today’s industrial workplace has evolved toward a technology-driven factory floor that increasingly emphasizes highly skilled workers.” Because of this, many open manufacturing job vacancies are left unfilled due to the shortage of qualified workers. So what is being done to buck this negative trend? Since the era of the apprenticeship is largely dead, manufacturers are partnering with trade schools, high schools, community colleges, and universities to develop a technically-trained workforce that can contribute immediately.

In golf, there is an oft repeated saying: drive for show, putt for dough. In an economic development context, as Seattle has recently experienced, the proposal to build a new sports arena might be the 300 yard bomb that makes the highlight reel, but Amazon’s downtown office building commitment is the crucial 15 foot par save.  This is highlighted in Jordan Royer’s article on, which walks us through the interesting dynamic of public appeal vs. overall impact when it comes to economic development projects. With the loss of the Seattle Supersonics still fresh in their minds, it is understandable that Seattleites would choose to focus on the new arena project intended to bring the NBA (and maybe the NHL) back to the city. But the Amazon deal, in which no public money will be spent, will most likely end up being the better deal economically.

The events of the Great Recession turned a lot of business models on their heads, and retail was no exception. Tom Stoelker of the Architect’s Newspaper describes the plight of both large and small retailers succinctly: “Retailers… are caught in a Catch-22. Today’s urban customer wants small shops and a homespun product while demanding the convenience, variety, and price that only chains can offer.” With the retail industry in limbo, the implications of zoning regulations are more pronounced in determining the direction of urban retail.

Small city economic development efforts often don’t get the same attention as their big city counterparts. Yet small city economic development can be just as crucial, and just as innovative as in large cities. This article, posted on Planetizen by Thomas Sigler, shines a light on some smaller communities like Lewisburg, PA, Beaufort, SC, and Hood River, OR that offer culturally vibrant living without the hustle and bustle of big city life. Sigler examines the concept of “rural gentrification” and its effect on these small towns. He paints a picture of the towns’ transitions from big industry to small business, and the positive and negative effects of rising housing prices due to the recent influx of people searching for better opportunities and lifestyles.

“From Flint to Chattanooga, Saginaw to Pittsburgh, the goal has been the same: revitalization to draw back residents, talent and investment,” says Amy Lane in a recent Bridge Magazine article. In it she explores the challenges and successes of urban reinvention. Written from a Michigan perspective, Lane (helped by a quote from NLC’s James Brooks) articulates how lessons from Pittsburgh, Chattanooga, Philadelphia, and Cleveland can be learned and applied to the Detroit area, but in fact, they can be helpful for any community coming back from the brink.

China is a BIG country, and as its purchasing power grows, so will its demand for luxury items such as wine. To tap this vast market, the Small Business Development Center, in Albany, New York has developed an innovative new initiative to help New York wineries export their products to China. The agreement with the Chinese entails a New York state wine outlet in Shanghai, enabling the collective wine industry in New York to access a “booming marketplace.” The SBDC will also help the wineries sell their products in Chinese stores and hotels, accompanies by promotional events to effectively market their wine. (Watertown Daily Times)

The Latest in Economic Development – 2.23.12

This week’s blog entry explores the economics behind Major League Baseball’s spring training, looks deeper into “Smart Growth” strategies, provides small business hiring poll results, and explains Richard Florida’s take on Obama’s manufacturing focus.  Comment below or send to

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As Major League Baseball returns to its sunny spring training destinations in Arizona and Florida, what are the economic impacts of hosting the world’s best baseball players? Even as the fiscal conditions of Sun Belt cities have been strained in recent years, the competition to attract professional baseball teams for a limited time each spring is fierce.  The upfront costs to host spring training are steep – Lee County, Florida sold “up to $81 million in bonds to fund a new baseball stadium where the Boston Red Sox would play 18 exhibition games in the spring per year.” This was in 2010, when the county was reeling from the burst of the housing bubble. The return on investment from spending public money on baseball gets mixed opinions, depending on who is asked. Community leaders tout the investment as a “proven economic driver,” while economists are more skeptical. (

“Smart Growth” has been all the rage lately; what gives?  Roger Showley of the San Diego Union-Tribune interviewed Geoffrey Anderson, president of Smart Growth America, and Bill Fulton, vice president for policy and programs, to get a handle on the movement. Anderson explains that one of the challenges to implementing Smart Growth policies is convincing the public to support it given the admittedly mixed success of past development strategies. Fulton adds that the way forward is to show people successes, mentioning San Diego, where the New Partners for Smart Growth conference was recently held. (San Diego Union-Tribune)

A recent Gallup poll showed that 85% of small businesses surveyed said that they are not hiring. Why not? Put simply, they are not convinced that the economy is strong enough, and their revenues are not providing enough cash to justify taking on more employees. In addition, nearly half report that the challenges of government regulations and healthcare costs are “exacerbating an already uncertain and difficult decision.” And although small business hiring continues to struggle, this is the best it has been since January 2008. See the results here: (Gallup)

President Obama recently announced a renewed policy focus targeted at improving and enlarging the manufacturing sector in the US.  The administration posits that if the manufacturing sector improves, that would mean not just more, but better paying jobs. But is that entirely true? Richard Florida points out that production job wages are less than stellar, and highly paid manufacturing jobs require knowledge-based skill sets to operate advanced machinery and perform complex analyses.  This set-up further confirms the widening gap between high skill, high wage jobs and low skill labor, and has implications for workforce development strategies for the future. (Atlantic Cities)