Detroit: America’s Laboratory for Innovation

4/23/10Follow @wroush

What the heck is Xconomy doing opening a bureau in Detroit?

The same thing we’ve been doing all along: seeking out technology innovators in key cities and chronicling the work they’re doing to turn their ideas into businesses that will drive the economy forward, both regionally and nationally.

There’s no question that Detroit falls short on many of the ingredients that propel tech-company growth in Xconomy’s other home cities of Boston, San Diego, and Seattle—things like an existing network of experienced serial entrepreneurs, a deep-rooted ecosystem of venture and angel investors, a menagerie of big high-tech anchor companies, and multiple top-level universities and research institutions churning out highly trained graduates and new technology concepts.

But in Detroit, the need for innovation is far more urgent than in any of those other places. So it’s going to have to make do with, and build upon, the resources it does have. And there’s nothing about the character of Detroiters or the automotive industry’s current woes to convince me that the city can’t bounce back.

For one thing, there’s no choice. The stakes are too high. If a way can’t be found to restart entrepreneurship and risk-taking in the region’s manufacturing, services, and technology industries, the city’s population, tax base, and infrastructure will continue to erode.

But more importantly, Detroit is a city of big ideas and big accomplishments. It’s the home of world-changing inventions such as the refrigerated railroad car, the automatic traffic light (the first one was installed at the corner of Woodward and Michigan in downtown Detroit in 1920), the mechanical clamping mop, and, of course, the assembly line—which became the key not just to unprecedented middle-class prosperity, but to the Allies’ victory in World War II. And that’s not even counting Vernors ginger ale (which was always in abundant supply around my grandparents’ house in Charlotte, MI), guerilla marketing, techno and rap music, and the Last Word (a cocktail combining gin, maraschino liqueur, lime and green Chartreuse).

And let’s not forget that Detroit is also home to two of the country’s largest corporations. Ford is currently America’s eighth largest company, and GM is No. 15, according to Fortune magazine. None of Xconomy’s other home cities can claim even a single company in the top 30, as measured by revenues. (Seattle-born Boeing is No. 28 but is now headquartered in Chicago, and Microsoft is No. 36.)

With such a powerful history of innovation behind it—much of it showcased at Dearborn’s Henry Ford Museum, whose collection of technological artifacts is rivaled only by the Smithsonian’s—Detroit is a city that no one should write off. Time Inc. certainly isn’t: last fall, the media giant bought a house in Detroit and is spending a year rotating journalists, photographers, and bloggers from CNNMoney, Time, Fortune, Money, and Sports Illustrated through the five-bedroom, $99,000 residence, where their stated mission is to bring “a sense of surprise, discovery, enlightenment, horror, joy, inspiration and fun” to stories about Detroit.

But long after the Time Inc. writers have departed Detroit, Xconomy will still be there, reporting on the city’s ongoing self-reinvention. Already, since the launch of Xconomy Detroit on April 20, our correspondent on the ground, Ferndale, MI-based Howard Lovy, has written up promising local stories like a $7 million funding round for Sakti3, a home-grown maker of lithium-ion automotive batteries, and the new focus on the “connected” automobile of the future at giant auto parts supplier Delphi, which is finally exiting four years of bankruptcy.

I grew up in Charlotte, a small town just south of Lansing, and for me “the big city” always meant Detroit. My family subscribed to the Sunday Detroit Free Press and drove into Detroit for an occasional Tigers game or a visit to the Henry Ford Museum or the Detroit Institute of Arts. I remember visiting the Renaissance Center, with its stunning atrium, shortly after the building opened in 1977; financed by Ford but now home to GM, the downtown skyscraper complex was built just a decade after the city’s devastating 1967 riots and symbolized another hoped-for rebirth in Detroit.

One building, of course, couldn’t arrest harmful trends such as outmigration, rampant drug-related crime, and dwindling market share for the domestic automakers—much less blunt the final blow that drove GM itself into bankruptcy in 2009, namely the freeze in car-buying brought about by ballooning gas prices and vanishing consumer credit.

But even as the economy is beginning to look up, Detroiters know they can’t look to auto manufacturing alone to revitalize the city. The region is going to have to think up new ways to excel (as the more than 700 people who have already gone through the FastTrac entrepreneurship training program at Wayne State University’s TechTown incubator are busy doing), as well as new ways to capitalize on its existing expertise and infrastructure for manufacturing products of all sorts. Yes, that includes powertrains and batteries and electronics for the next generation of cleaner automobiles—but it must also include solar panels and biofuels and wind turbines and military equipment and a host of other goods.

Detroit residents probably know, but other Xconomy readers may not, that the motto of the City of Detroit is Speramus meliora; resurget cineribus. That’s Latin for “We hope for better things; it shall rise from the ashes.” Pretty appropriate for a city that has, out of necessity, turned into a vast laboratory for innovation. At Xconomy, we believe in the power of technological innovation to rescue, and eventually supercharge, regional economies—and we’re looking forward to telling that unfolding story in Detroit.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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