Tom Walsh: Innovation could be what drives Detroit's economic growth
A Brookings white paper states that the 4.3 square-mile area of Woodward Avenue from downtown Detroit to Midtown comprises just 3.1% of the city's land area — yet is has nearly 55% of the city's jobs and 11% of the business establishments. / Mary Schroeder/Detroit Free Press
By Tom Walsh
Detroit Free Press Business Columnist
Flying in to attend and speak at
the meeting will be Bruce Katz, director of the Washington, D.C.-based
Brookings Institution’s metropolitan policy program.
In a Brookings white paper to be released Monday, Katz and co-author Julie Wagner cite Detroit early and often, as one of a group of U.S. cities that are actively exploring urban innovation districts — as opposed to suburban corridors of isolated corporate technology campuses in places like Silicon Valley — as emerging drivers of future economic growth.
“We think Detroit may be one of the few places that gets out ahead of this trend,” Katz told me last week, “based on what we’re seeing now, spinning off of the medical centers in Midtown, plus what
Dan Gilbert and Quicken Loans are doing downtown, and the potential of the M1 Rail project to link those clusters.”
In the paper titled “The Rise of Innovation Districts: A New Geography of Innovation in America,” a full page is devoted to Detroit, including a map of downtown and Midtown, locating spots from the Compuware and M@dison buildings to the College for Creative Studies and Wayne State University.
First off, it is not a government handout program, such as the Empowerment Zones created by Congress in the mid-1990s to funnel grants, tax credits, bonding authority and other benefits to highly distressed communities.
Rather, innovation districts, as defined by Brookings, are “urban enclaves that cluster leading-edge anchor institutions with startups and spin-off companies, business incubators and accelerators in the relentless pursuit of cutting-edge discoveries for the market.”
Most activity that fits that description in Detroit is clustered in a corridor along Woodward, from the riverfront up to the New Center area. “Today,” the Brookings paper states, “the entire 4.3-square-mile area comprises just 3.1% of the city’s land area — yet is has nearly 55% of the city’s jobs and 11% of the business establishments.”
Does this focus on downtown and Midtown suggest that the other 97% of Detroit’s neighborhoods, parks and commercial areas will be afterthoughts in the city’s future economic development strategy?
Not necessarily.
For one thing, said Katz, innovation districts can emerge in distinctly different forms, depending on each city’s unique assets and geography. Boston has transformed its old seaport area, adding 6,000 jobs there, even while the Cambridge Kendall Square area across town — anchored by the Massachusetts Institute of Technology — has spawned scores of new startup companies and led to the building of 1,000 housing units in the past decade.
Laura Trudeau, the Kresge Foundation’s managing director for the Community Development and Detroit programs, noted that efforts to spark and support entrepreneurship in Detroit have begun to spread beyond the core city and into the neighborhoods. She cited the New Economy Initiative for Southeast Michigan’s new NEIdeas competition, offering $500,000 in grants to 32 small existing neighborhood businesses with good ideas that have potential to create jobs.
Detroit is poised to emerge from its bankruptcy and long economic slide at an opportune time, Katz said, because trends in open-source innovation and technology requires close collaboration — and therefore proximity and density — among today’s knowledge workers.
“The period of closed suburban complexes guarding their secrets is ending,” he said.
Katz may be right about that, but it’s also clear that Detroit, a world leader in innovation a century ago, is at a very early stage of defining a new economic growth model.
The city has some key innovation district ingredients — anchors and startups and incubators and committed foundations — in place.
Now let’s see whether Duggan and his team can replicate their early successes with accelerating blight-removal and streetlight replacement efforts, when it comes to a strategy for growing innovative, job-creating businesses.
In a Brookings white paper to be released Monday, Katz and co-author Julie Wagner cite Detroit early and often, as one of a group of U.S. cities that are actively exploring urban innovation districts — as opposed to suburban corridors of isolated corporate technology campuses in places like Silicon Valley — as emerging drivers of future economic growth.
“We think Detroit may be one of the few places that gets out ahead of this trend,” Katz told me last week, “based on what we’re seeing now, spinning off of the medical centers in Midtown, plus what
Dan Gilbert and Quicken Loans are doing downtown, and the potential of the M1 Rail project to link those clusters.”
In the paper titled “The Rise of Innovation Districts: A New Geography of Innovation in America,” a full page is devoted to Detroit, including a map of downtown and Midtown, locating spots from the Compuware and M@dison buildings to the College for Creative Studies and Wayne State University.
Where business thrives
What exactly do they mean by an “innovation district”?First off, it is not a government handout program, such as the Empowerment Zones created by Congress in the mid-1990s to funnel grants, tax credits, bonding authority and other benefits to highly distressed communities.
Rather, innovation districts, as defined by Brookings, are “urban enclaves that cluster leading-edge anchor institutions with startups and spin-off companies, business incubators and accelerators in the relentless pursuit of cutting-edge discoveries for the market.”
Most activity that fits that description in Detroit is clustered in a corridor along Woodward, from the riverfront up to the New Center area. “Today,” the Brookings paper states, “the entire 4.3-square-mile area comprises just 3.1% of the city’s land area — yet is has nearly 55% of the city’s jobs and 11% of the business establishments.”
Does this focus on downtown and Midtown suggest that the other 97% of Detroit’s neighborhoods, parks and commercial areas will be afterthoughts in the city’s future economic development strategy?
Not necessarily.
For one thing, said Katz, innovation districts can emerge in distinctly different forms, depending on each city’s unique assets and geography. Boston has transformed its old seaport area, adding 6,000 jobs there, even while the Cambridge Kendall Square area across town — anchored by the Massachusetts Institute of Technology — has spawned scores of new startup companies and led to the building of 1,000 housing units in the past decade.
Laura Trudeau, the Kresge Foundation’s managing director for the Community Development and Detroit programs, noted that efforts to spark and support entrepreneurship in Detroit have begun to spread beyond the core city and into the neighborhoods. She cited the New Economy Initiative for Southeast Michigan’s new NEIdeas competition, offering $500,000 in grants to 32 small existing neighborhood businesses with good ideas that have potential to create jobs.
Focus on neighborhood
Detroit Mayor Mike Duggan, in his campaign for office and by his actions during his first five months on the job, has put a big focus on neighborhoods. Katz said Duggan can be a major force in shaping and executing Detroit’s innovation district strategy. “Mayors can make a huge difference,” Katz said, noting that former Seattle Mayor Greg Nickels and former Boston Mayor Tom Menino steered key innovation development to a rundown warehouse district and old waterfront area, respectively, in their cities.Detroit is poised to emerge from its bankruptcy and long economic slide at an opportune time, Katz said, because trends in open-source innovation and technology requires close collaboration — and therefore proximity and density — among today’s knowledge workers.
“The period of closed suburban complexes guarding their secrets is ending,” he said.
Katz may be right about that, but it’s also clear that Detroit, a world leader in innovation a century ago, is at a very early stage of defining a new economic growth model.
The city has some key innovation district ingredients — anchors and startups and incubators and committed foundations — in place.
Now let’s see whether Duggan and his team can replicate their early successes with accelerating blight-removal and streetlight replacement efforts, when it comes to a strategy for growing innovative, job-creating businesses.
Contact Tom Walsh: 313-223-4430, twalsh@freepress.com or on Twitter @TomWalsh_freep
Why Detroit Is Fertile Ground for an Innovation District
Techonomy
With 90-percent occupancy rates, 10,000 new jobs, a brand new
Whole Foods, and the repurposing of a long-abandoned GM building as a
design center, midtown-downtown Detroit—soon to be linked by a new rail
line—is poised to become the country’s next “innovation district,”
suggest Brookings Institution’s Bruce Katz and Jennifer Bradley in The New Republic this week.
What’s an innovation district? A metropolitan hub, they say:
In Barcelona’s innovation district, for instance, 4,500 new businesses and thousands of housing units sprang up in under a decade. Katz and Bradley point to research arguing that, despite our ability to network globally and work remotely, physical proximity among potential collaborators is key to innovation. Urban density, therefore, makes for the most fertile ground.
Even across the knowledge-intensive industries—biotech, telecomms, semiconductors—there are so-called “spillover benefits” to being housed so closely that chance encounters are within walking distance.
But Katz and Bradley say an innovation district is about more than those companies and industries:
“This,” Katz and Bradley propose, “is how the Detroit economy could, slowly but surely, regain traction.”
What’s an innovation district? A metropolitan hub, they say:
“Where the density of innovative
institutions and companies … begets still more new businesses, new
products, new export opportunities, and new jobs.”
In Barcelona’s innovation district, for instance, 4,500 new businesses and thousands of housing units sprang up in under a decade. Katz and Bradley point to research arguing that, despite our ability to network globally and work remotely, physical proximity among potential collaborators is key to innovation. Urban density, therefore, makes for the most fertile ground.
Even across the knowledge-intensive industries—biotech, telecomms, semiconductors—there are so-called “spillover benefits” to being housed so closely that chance encounters are within walking distance.
But Katz and Bradley say an innovation district is about more than those companies and industries:
“What really makes it hum is people, not
just those who live and work there, but also networks of leaders in
institutions like medical centers, philanthropies, non-profits, zoning
departments, and local businesses. These leaders need to be committed to
connecting an inventor, an entrepreneur, and a crew of first-rate
workers. They need to be knowledgeable about how to make real estate
development deals happen in urban areas, using the complex public and
private financing mechanisms that are often required before a market
fully takes off. Even after losing more than one million residents since
its peak, Detroit still has these people, and they are committed to the
city’s success, now more than ever.”
“This,” Katz and Bradley propose, “is how the Detroit economy could, slowly but surely, regain traction.”
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