Without a Thriving Detroit, Michigan Cannot Catch that Train to Prosperity

5/19/10

When I attended Wayne State University in Detroit back in the mid-’80s, scattered around downtown Detroit were white pillars that supported… nothing. They looked as though they were part of a kind of ancient Roman ruin—but these pillars were brand new. They were the beginnings of Detroit’s People Mover, a raised monorail that was to take riders to various sites downtown. It was also derided as then-Mayor Coleman A. Young’s “train to nowhere,” the Motor City’s poor excuse for a mass transit system. The pillars stood alone for a few years because funding had run out in the middle of construction. At the time, these columns appeared to be emblematic of everything that was wrong with Detroit—a half-thought-out idea with no support.

But now more than ever, Detroit needs new ideas, and before they can be thought through and sufficiently supported somebody needs to start tossing them out there. Which brings me to Xconomy’s just-ended series in which we asked our Xconomists—some of the nation’s leading entrepreneurs and innovators—to answer the open-ended question: “What are five things that entrepreneurs and innovators in Michigan can do to reinvigorate their regional economy?” Of course, you cannot ask innovators to always color within the lines, so some gave us four things, others six, but all of them were insightful, provocative, even at times humorous.

But I wanted to begin by pointing out what was, unfortunately, not discussed in most cases: downtown Detroit. It is almost as if there was an unspoken assumption that there is no hope for what is perceived to be a burned-out hulk of ruins resting by the Detroit River, and all efforts at economic revival need to focus on the scattered suburban remains of that impact crater.

The sentiment is understandable. First of all, many of our Xconomists come from academia, and so might be predisposed to see Ann Arbor and the University of Michigan as the center of the area’s innovation universe. Secondly, perceptions of downtown Detroit, particularly among ex-Detroiters, often remain frozen in time during those “train-to-nowhere” days. And, thirdly, overlooking downtown is common even among those who live and work around here. The business incubators and organizations Ann Arbor SPARK and Oakland County’s Automation Alley often get larger chunks of state support than their scrappy cousin, TechTown in Detroit.

However, now that TechTown is beginning to crank out entrepreneurs and companies—thanks in large part not to state support but to out-of-state private organizations like the Kauffman Foundation—international media attention is at last focusing on at least one aspect of Detroit that is not all bad. TechTown programs like FasTrac and incubators like TechTown One and TechTown Two are deservedly getting attention not because they are any better, or more successful, than other suburban incubators. But because they are at Ground Zero. In Detroit.

I think Ann Arbor is a great little college town. I think there are some wonderful things happening there in the way of translating academic excellence into innovation and entrepreneurship. Xconomy Detroit is already filled with examples. But Ann Arbor will never be the center, the economic hub of the region. World-changing ideas will continue to flow from Ann Arbor, to be sure, but very few things will be actually made there. It takes a city of Detroit’s size, diversity, and manufacturing capacity to turn world-changing ideas into world-changing products. If Detroit continues to fail, the region will never be the economic powerhouse it once was—and people will not want to once again live, work, and raise their families here.

The People Mover is running now. My wife and I take our two young boys downtown sometimes just to ride it. They love it. Every time we take them into the city of Detroit, I am always struck by how impressed they are by the tall buildings. I don’t tell them that most of the buildings they’re marveling at are empty and decaying inside. Between college and my return to Detroit 15 years ago, I lived in the Boston area, in Manhattan, near Philadelphia, and I know what “real cities” should look like. Detroit isn’t there yet.

If the Xconomists shied away from tackling the quandary of downtown Detroit head-on, they had a wealth of ideas for the region that could be instructive for the downtown as well. Many of them are already being implemented. And some of them are direct criticisms of strategies being taken.

Susannah Malarkey, executive director of the Technology Alliance in Washington state, writes: “Here is a don’t: Don’t chase after out-of-state businesses with big tax breaks. It’s so last century and it is a big waste of time and taxpayer money. Really focus on growing your own.” This could be a direct criticism of what Michigan Gov. Jennifer Granholm’s administration is doing—although I would add that tax breaks are being used not only to attract out-of-state companies, but to make sure Michigan’s homegrown businesses do not leave for greener pastures.

MIT professor Robert Langer writes: “Bring more venture capital into the region.” I met many people at the recent Michigan Growth Capital Symposium who would agree—although the positive spin on that is because Michigan hosts so few deals, we appreciate what we get and really know how to give VCs their money’s worth when they do invest.

Deborah Dunsire, president and CEO of Millenium, the Takeda Oncology Company in Boston, writes: “By developing partnerships with universities like University of Michigan and Wayne State University, local entrepreneurs can access new ideas and support incubator companies coming out of these institutions that will help grow the economy. The entrepreneurs should be in close contact with local government to help them understand which types of skills might be required. That way, re-training initiatives can be directed towards providing the correctly skilled workers.”

This is already being done, on a modest scale through state programs like the Green Jobs Initiative and No Worker Left Behind, which is actually a model for the nation in its attempt to retrain former automotive engineers for new types of, for example, cleantech engineering work. And local universities are already involved in business incubator projects like TechTown. Dunsire is spot-on when she says that more should be encouraged. We need to clone these programs a few hundred times.

San Diego’s Larry Bock—once you get past his joking (I hope) reference to bulldozing the Detroit suburb of Hamtramck—has some interesting thoughts on using excess auto manufacturing capacity to build batteries, electric motors, renewable power, and wind power chassis systems.” He also says that local government officials should spend at least a year traveling around the world—”so they don’t think the universe has been modeled after Michigan.” International trade missions are a major focus of Automation Alley, although I have spoken to the head of another incubator who says that the focus should be the exact opposite: Get foreign officials and businesspeople to come to Detroit and see what we have to offer.

Other themes our Xconomists hit on include investment in education, training, and retraining; getting state government more involved in early-stage funding; lowering taxes on businesses; developing regional clusters of innovation; adequately funding tech transfer offices; and creating a culture where our successful entrepreneurs are hailed as heroes as much as our beloved Detroit Red Wings.

I think our Xconomist series can become a roadmap for what could be done, for possibilities, to finally get this city rolling on a train to somewhere, supported by pillars from across the region.

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  • Kashif

    As much as I agree with your writing here, the unfortunate reality is that unless and until attitudes change, things are not going to change in Detroit. The race riots of 1967 left an indelible mark on the psyche of people who live and work in the region so that those who at one time lived and worked in Detroit moved out to greener and “safer” pastures in the suburbs while those who remained behind simply played up divisions of race/class to advance their own narrow political self interest (re-election). This has gone on unabated for nearly 40 years or so (with only momentary interruption during the Dennis Archer administration).

    One cursory glance at the prior Mayor, City Council, School board, and police of Detroit over the past 7-8 years fills in the picture. Look also, at the denialism and deflection at the recent Chris Hansen NBC Dateline story.

    Look also at any of the candidates for Governor and you see the exact same attitudes among those running on the (presumed winning) side of the Republican aisle.

    Not sure what if anything can be done about that.

  • http://www.reframedetroit.com Michael Beaton

    We at reframe Detroit agree Kashif that the basis for a revived Detroit requires dramatically different values, attitudes, and beliefs. We need Detroiters that respect life and property. We need Detroiters that value life-long learning. We need a culture that is sustainable and welcoming of others over the long-term. The brutal reality of the situation is that current social environment of Detroit is toxic and dangerous. Seemingly, every day this month, we have been besieged with headlines of violence. To stop this downward path, change in Detroit has to come from within; within each individual, within each street, within each community. We at reframe Detroit are about to embark on a long-term plan to change Detroit’s core values and hopefully, restore a sense of community. reframe Detroit will launch a series of marketing campaigns challenging Detroiters to choose their path, for its their choice that determines their life, their family’s future, and their community’s ultimate destination. We know the challenge is immense; but, frankly, we believe our way will result in change for the better.