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The Economics of Place

The following Blog entry was originally intended for another publication. It didn’t run so I am sharing it here. As always, thanks for reading.

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Experts from around the world–in academic, business and public sectors alike-agree that investing in communities is a critical element to long-term economic development in the 21st century. That is especially true in Michigan, where we struggle to emerge from our free fall, and again claim our place as an economic powerhouse and hub of ingenuity once again. The Michigan Municipal League began a movement to put communities at the center of our state’s turnaround, by focusing on the economics of place. Through our work, we make the business case for investing in where we call home.

It started several years ago, in exploring what it will take to return Michigan to greatness. We looked high and low and came to believe with absolute certainty that our future depends on our ability to compete for talent. And as we dug deeper, we found that “talent” (young, college educated, creative people, often entrepreneurs) demands great places. To them, an absolute prerequisite is a vibrant urban center that appeals on an emotional level. They want to live and work where they feel something-connected, challenged, inspired, excited, free and effectual. These are 21st century communities.

You just don’t get that in a subdivision thirty miles outside the city center, no matter how nicely the lawn is manicured. Don’t get me wrong, many people feel wonderful in that setting too, but for this key demographic, the urban experience is paramount. We’ve spent decades decimating our inner cities and are now left with the challenge of rebuilding them, which is the key to sustaining whole regions.

Thus begins the classic “chicken or the egg” debate about jobs and talent…can a city attract talent without jobs? Will business locate somewhere devoid of talent? Some get lost in the argument “which comes first,” but it’s been a few years now since CEO’s for Cities delivered the research showing sixty-five percent of college educated young people choose where to live first, then find a job. And regardless of the order, each demands the other.

Detroit Skyline

Consider this, here in Detroit, our overall population has shrunk by 25% in the last 10 years. BUT the number of college-educated residents under the age of 35 has increased by 59%! I don’t know many folks who would say they are flocking here for the great jobs. Rather, as the New York Times piece “Detroit Pushes Back with Young Muscles” says, “These days the word “movement” is often heard to describe the influx of socially aware hipsters and artists now roaming the streets of Detroit.” I read the article beginning to end, no mention of tax rates, the regulatory environment or anything even close to that. The focus was on a unique, authentic place where people felt at home and part of something important. In the olden days we called it a community.

I was interested to read on your website website that “what works” with regard to business development in the inner city is clustering and anchor institutions. Because, guess what? The same thing works in attracting talent to a city! This demographic is transient en mass; a few relocate and drag along some more who pass the word and before you know it, Detroit is in the New York Times being called the next Brooklyn or TriBeCa. Clustering at its finest!

Our research shows that, in terms of “place,” talented educated people want a walkable, dense, traditional urban setting, with diverse entertainment, social and cultural options (think anchor institutions), and a sense that the place is welcoming to all backgrounds and lifestyles. Also of great importance is sustainability, and not just as a social issue. To the young talented set, it is a way of life and they value a community that prioritizes green initiatives like local foods, adaptive reuse and alternative energy. Entrepreneurship is often a solid option for these folks, so supportive peer networks and flexible work spaces are also critical in their location choice. Another big game-changer in attracting talent is transportation, something we can’t seem to figure out here in the Motor City. These folks don’t always want to sink money into a car, they want options including mass transit, and they want to be able to safely ride a bike or walk.

Our city centers truly serve as the heart for an urban region and we must work together to ensure health and vitality by creating places we feel passionate about, places that speak to the next generation of talent. We live this mission every day, please cheer us on and follow our progress through my blog, check out our new book and stay up to speed with our radio show, available through podcast, details on our website!

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