New Geography

Tag: Heartland

  • Searching for Los Angeles by the Gateway Arch – a Reminiscence

    The obsession started before the earthquake.

    I was driving on Manchester Road, and something about the slant of light off the car dealerships, the particular combination of Mexican-food diner/meat market/bank/shoe store/train-whistle-in-the-distance, and the unending nature of my errand was enough to take me back. I was on San Fernando Road, and for a just a split second, I was happy – happy to be in traffic, happy to have the glare of the sun in my eyes, happy, even, to be hopelessly late — because I thought that I was back in Los Angeles.

    I was obsessed with Los Angeles. I had lived there for three years. I started my first real job there as a history professor at Cal State Northridge. My son was born there, in Hollywood no less, right across the street from the world headquarters of the Church of Scientology. But my husband worked in St. Louis, and after my son was born, I took leave from my job and we started family life in St. Louis together.

    I told this story to just about anyone who would listen. Random mothers in the park, random co-workers of my husband, random grocery store clerks, random anyone. I wanted the whole world to know I belonged back in LA. And when there was no one there to listen, I stole moments to look at web sites filled with jacaranda trees and the views from Griffith Park. Motherhood proved readily adaptable to the aesthetic of studied dishevelment followed by the young filmmakers, writers, and web designers of my old neighborhood, and I eagerly embraced it (at least the dishevelment part). When winter came and St. Louis’s farmers’ markets ended, I would grill my husband upon his return from the grocery store. “Are you sure this was the best produce they had? Are you sure you even bought this today?”

    I didn’t just miss the sunny days and the fresh vegetables and our hipster neighbors (although I did miss those desperately, even the hipster neighbors). I missed LA’s problems. I’m a historian of the American West; I have a fondness for the twentieth century. And LA just happens to be THE twentieth-century western city. It’s not just the highways or the cars, although I thought about them too, especially when I was on Manchester Road. When I was in LA, I couldn’t drive to work without thinking about managing the water supply or the way Angelenos had covered over the desert in their yards with bougainvilleas. I couldn’t stop by the hardware store or look at a bus stop or pick up some of that fabulous lettuce without thinking about unionization. I would exit the highway early just to drive through a neighborhood and think about immigration. When my cousin asked why I liked Los Angeles so much, I said without even pausing at the irony: “The people there are so real.”

    So at first it seemed like more obsession, and no one was having any of it. When I proposed that maybe, just maybe, it would be possible to line St. Louis and Los Angeles up side-by-side and compare them – to look a little harder for that bit of LA that I thought I had seen on Manchester Road, virtually no one heard me out.

    My mother: “You must remove LA’s weather from your browser’s start-up page.”

    My aunt, distastefully: “That sounds like a blog.”

    My husband, who saw just the faintest echo of an earlier obsession with my home state of New Mexico: “Not everyone measures success in terms of proximity to mountains.”

    For those who knew me, this was just one more ploy to get back, if only in my imagination, to the city that had, with its smog and its traffic and its astronomical housing prices and its gross inequalities and its devotion to surface appearances and its unrelentingly bright days, won my heart.

    For those that didn’t know me, it just sounded weird. “This must feel really different,” said the grocery store clerks and the mothers at the park and my husband’s co-workers and the teachers at my son’s day care. “Oh, no,” I would say. When I first fell in love with LA, I had heard the urban historian Greg Hise lecture on how Los Angeles was not the great urban exception, how it actually had great similarities to Pittsburgh and St. Louis. ST. LOUIS!

    “St. Louis,” I would say when anyone gave me the slightest opening, “is a combination of neighborhoods like LA. It has the same public transportation problems, a large Catholic population, a history of racial segregation and a deracinated downtown.” I didn’t actually say deracinated.

    When I started looking, I found more parallels, large and small. Prominent Armenian populations in both cities, a history of fraught public education, both were once part of Spanish territory, both had an elite oddly fascinated with itself (“What high school did you go to?” ask St. Louisans. “Are you in the industry?” say Angelenos), and a similar wackiness in small corners of each city – the drag queen in a wheel chair I once saw in Hollywood; the cigar-smoking elderly man who jogs near Forest Park.

    But there must have been something about the exercise that seemed kind of pathetic. “What’s wrong with St. Louis?” asked my friends from elsewhere. “Nothing,” I’d rush to tell them. “It’s a great town — Forest Park is awesome; there are good restaurants; we can walk to the art museum AND the zoo AND to work AND to day care all from our apartment. It’s a great city for kids. It has a world-class symphony.” “So what’s wrong with St. Louis?” they’d say again. “Nothing,” I’d say, “It’s just…this will seem melodramatic, but it’s just that I don’t feel fully awake here.”

    It seemed best to let the idea drop. Sure, cities are more than climate and topography, and there might just be a few scraps of St. Louis that shared whatever magic I had found in LA, but it did seem kind of silly. I let it go.

    When my husband tried to wake me, I could feel the shaking. “What is it?” I said. “An earthquake,” he said. “hmmm,” I said. “What do we do?” he asked. I wasn’t fully awake, and I didn’t want to be. I thought about getting up. For a St. Louis earthquake? “I don’t know what to do here,” I said and went back to sleep. But the next day, everyone was talking about it — the grocery store clerks and the teachers at my son’s day care, and my husband’s co-workers. “Did you feel it?” “The epicenter was in Illinois.” “It was a 5.2.” “Is this common?”

    It’s not common, but it wasn’t the first time either. There are earthquakes in St. Louis. I had known that already, but this one made me think again. Maybe there are other similarities, things I had come to consider distinctly LA, when really they were things places shared.

    I decided I would go looking for Los Angeles right here in St. Louis. I don’t know what I will find. Maybe something about what it means for people to live together in a city. Maybe something about the homogenization of America. Maybe something about why we’re willing to call some places, but not all places, home. I know it makes little sense to go looking for Los Angeles where it is not. I do, after all, know where it is. I’ve been there before. But I’m fully awake now.

  • Is the heartland the economic armpit of America?

    Writing in the Wall Street Journal last week, native Kansan Thomas Frank isn’t too complimentary on the state of affairs:

    …you will find that small-town America, this legendary place of honesty and sincerity and dignity, is not doing very well. If you drive west from Kansas City, Mo., you will find towns where Main Street is largely boarded up. You will see closed schools and hospitals. You will hear about depleted groundwater and massive depopulation.

    While the windshield tour may yield an array of sorry small towns, much of the mostly rural Heartland has beaten the national job growth rate since the early 1970s. Like the rest of the nation, the heartland of America is urbanizing — producing many small growth nodes of prosperity.

    While many of the small prairie towns are dying on the vine, the biggest reason is not “electing people like Sarah Palin who claimed to love and respect the folksy conservatism of small towns, and yet who have unfailingly enacted laws to aid the small town’s mortal enemies,” as Frank suggests, but rather a combination of larger factors including the re-balancing of 100-year old settlement patterns and the macro effects of automating the ag industry.

    So what’s the prevailing politics in small towns? Here’s the Iowa Independent’s Douglas Burns writing about Obama’s “bitter” rural American’s gaffe:

    …does any thinking person believe Obama’s brief and failed turn as a rural anthropologist will hurt him more than what Republican presidential candidate John McCain said today in Alabama?

    “We must reduce barriers to imports, to things like ethanol from Brazil, and we’ve got to stop subsidizing ethanol in my view,” Senator McCain said.

    If the ivory-towered urban elites hawking their tiresome flyover views on cable television each night want to see what a bitter small-town American looks like, they can come to western Iowa during the second year of what we have every reason to expect would be a decidedly anti-rural John McCain presidency.

    Barack Obama misspoke. John McCain didn’t.

    Rural Americans know the difference.

    Burns also correctly predicted Palin’s Vice Presidential nomination. What all three of us can agree on is that many rural voters seem to elect candidates who enact policies contrary to their interests. Can Obama make any real inroads with Great Plains rural voters?

  • Paper to Paperless: Realigning the Stars

    The paper and pulp industry has been good to Wisconsin, the number one papermaking state in the nation. Wisconsin produces more than 5.3 million tons of paper and over a million tons of paperboard annually. The pulp and paper industry employs more than 35,000 people in the state representing roughly eight percent of all manufacturing jobs in Wisconsin. These are good jobs with good benefits. Papermakers earn over 20 percent more than the manufacturing sector average and over 50 percent more than the average wage in the state.

    The paper and pulp industry has been a major driver of the economy in the Wisconsin Rapids area – located about 100 miles north of Madison – since the 1800s. The Wisconsin River, whose powerful flow and easy access lured fur traders and loggers from as far away as Quebec, runs through the area. It served both as the “highway” for raw product coming and the energy source for mills.

    Through the later part of the 19th and the early 20th century, Wisconsin Rapids and neighboring communities of Stevens Point, Nekoosa and Port Edwards all benefited from this access through increased trade and commercial opportunities, concentrated in lumber operations. These locations became part of a series of paper and pulp mills that remain part of the region’s economic landscape.

    Today, as in many smaller communities, the long-time economic bastion faces major challenges. The paper industry nationally is confronted with reduced demand resulting in plant and machine shutdowns. Globalization plays a factor as foreign competition from other countries such as China, Korea and Malaysia – where production costs are significantly lower and demand for paper is rising – now are seizing larger market share. Consolidation, through mergers and acquisitions by international firms, has played a major role as paper and pulp companies have struggled to gain market share and rationalize assets.

    These challenges and obstacles have become a stark reality in the Wisconsin Rapids area. In June of this year, one of the major paper companies – Domtar – closed the mill in Port Edwards putting 500 people out of work. In virtually any community, the loss of an employer this size would be cause for alarm – and particularly so for a small community far from any large metropolitan area.

    Although still committed to keeping its leading role in the paper industry, the community needs to diversify and grow its economy. One rising star – often the Holy Grail for rural community economic developers – is information technology, specifically software design and support. Wisconsin Rapids is home to Renaissance Learning Systems a leading provider of reading software for K-12 students in the United States and Canada. The company employs over 700 people and its software products are used in approximately 50,000 classrooms across North America.

    This is a success story that we at Praxis Strategy have encountered in other smaller communities, from Fargo, N.D., to Wenatchee, Wash. Small technology companies – far from the light and luster of Silicon Valley – are finding rural locales ideal for nurturing growth and attracting talent. Instead of being a primary driver, in this case the water and land resources of the region serve as critical amenities for workers seeking a “slower paced” and physically attractive place to raise their families and call home.

    Renaissance is not alone. Sami Saydjari, president of Cyber Defense Agency, a virtual company that deals with “defending critical cyberspace,” is also headquartered out of Wisconsin Rapids. “(It’s) not Ground Zero,” Saydjari says, describing one competitive advantage the area offers. It is far away from major population centers and areas prone to natural disasters – key for disaster recovery and conducting mission critical defense work.

    It may not have the allure of Silicon Valley or Boston’s 128, but for a growing number of nascent knowledge-based IT companies, rural and small town areas are showing surprising appeal. Since 2000 virtually all the fastest growing regions for information jobs have been found among small towns and cities, ranging from Springfield, Mo., to Grand Forks, N.D. It’s a trend that could reshape more and more of small town and rural America over the coming decades.

    Doug McDonald is a Senior Associate with the Praxis Strategy Group, a development firm specializing in economic development strategies and initiatives for small to medium-sized metropolitan areas and urbanizing rural regions.

  • Rural America could bring boon to Dems

    By Joel Kotkin and Mark Schill

    Perhaps no geography in America is as misunderstood as small towns and rural areas. Home to no more than one in five Americans, these areas barely register with the national media except for occasional reports about the towns’ general decrepitude, cultural backwardness and inexorable decline.

    Yet in reality this part of America is far more diverse, and in many areas infinitely more vital, than the big-city-dominated media suspects. In fact, there are many demographic and economic dynamics that make this part of America far more competitive this year than in the recent past.

    Both parties have acknowledged the importance of this battlefield through their choices for vice presidential nominees. Barack Obama’s running mate, Sen. Joe Biden, is being touted not so much as a Washington foreign policy wonk but as the “scrappy kid from Scranton” — even though he has represented Delaware in the Senate for 35 years. Even more obvious is John McCain’s tapping of Alaska Gov. Sarah Palin, a former small-town mayor from a rustic state without anything close to a major metropolitan area.

    Even though many very small towns — with, say, fewer than 10,000 people — have continued to decline in population, there’s a significant demographic and economic rebound taking place in a host of somewhat larger communities. Places such as Sioux Falls and Fargo in the Dakotas as well as Asheville, N.C.; Wenatchee, Wash.; and Springfield, Mo., have been drawing a steady stream of people and businesses from both big cities and suburbs.

    This dynamic could provide some welcome surprises for Democrats and potential nightmares for Republicans. During the primaries, Obama startled observers with his ability to win over Democratic voters in places like the Dakotas, Montana, Kansas, Nebraska and Indiana. More importantly, according to recent polls, he is running between 10 points and 30 points ahead of John F. Kerry in 2004.

    Where are these new Democratic voters coming from? Most of Obama’s primary wins came in what may be seen as the new heartland, a widely dispersed group of fast-growing smaller towns and cities stretching from the Sierra Nevadas to the Appalachians. He did particularly well in college towns as well as those places where high-tech and cutting-edge manufacturing companies have set up shop over the past decade.

    This demographic and political dynamic has been building for years. In 2004, even Kerry came close to winning places such as Wisconsin Rapids, a small city of 17,500 in the central part of the state. Although the area has lost some high-paying blue-collar jobs in the paper industry, it has also attracted a growing number of sophisticated companies such as software firm Renaissance Learning, which employs more than 750 in the area.

    Some of these workers are originally from the area, but many others bring with them tastes and opinions forged in Silicon Valley, Raleigh-Durham or the Massachusetts tech corridor. Their politics may not be Chicago liberal, but people settling in such emerging “virtual suburbs” tend, like their tech-oriented counterparts, toward a pragmatic, mildly liberal politics.

    Other demographic groups are also changing the political complexion of some of these areas. Hispanics, for example, have been moving in large numbers to rural and manufacturing areas in the Great Plains and rural South which, until recently, were dominated by culturally conservative Anglos.

    At the same time, affluent baby boomers from the coasts and large Midwestern cities — some retired, some working via the Internet — are also flowing into some of these places. Surveys of older Americans find far more would prefer to resettle in small towns than in big cities. Some of the fastest growing towns for seniors include Missoula, Mont.; Eugene, Ore.; Moscow, Idaho; and Charlottesville, Va.

    As a result, these areas have become more cosmopolitan in their outlook. It is no longer unusual, for example, to see Indian, Chinese and other foreign-born professionals — or Asian restaurants or edgy coffeehouses. Fargo, once the very definition of staid, now boasts an excellent boutique hotel, a clothing store catering to metro­sexuals and several pricey restaurants.

    These shifts have not escaped the notice of the Obama campaign, which has put 50 campaign workers and 100 volunteer teams in North Dakota, long considered a lock for Republicans in November. Similar deployments are taking place in other rural states.

    Yet it may still be a stretch to see some of these places voting for a big-city liberal like Obama. It’s one thing to support homegrown populist Democrats such as North Dakota’s Sen. Byron Dorgan or Montana Gov. Brian Schweitzer, who have a fine sense of how to negotiate the sensibilities of their constituents on issues of farm subsidies, guns or gay marriage.

    McCain should hope Obama’s Hyde Park intellectualism and liberalism won’t play well beyond more affluent recent migrants and students. McCain may not win as big as President Bush did in 2000 and 2004, but he could hold on to enough rural and small-town voters to keep these states in the Republican column. McCain’s moderate image may hurt with some evangelical voters, but at least outside of the South, this may keep more moderate, younger and recently arrived voters in the fold.

    Finally, the fact that many small towns are doing relatively well may make voters somewhat less likely to bolt the GOP. Few places in the countryside are suffering anything like a Dust Bowl-level catastrophe, although some now worry about a looming decline in commodity prices. And on some issues, such as fossil fuel development, McCain can appeal to constituents of small towns that have been enjoying an energy-fed boom. Pushing American energy development will work well in these areas, although the Arizona senator’s opposition to ethanol subsidies could hurt in others.

    And even in rural places worst hit by the economy — such as traditional, manufacturing-dominated small towns in Indiana, Ohio, the Carolinas and Pennsylvania — Obama has yet to prove himself. In almost all these places, Hillary Rodham Clinton triumphed easily in the primary, usurping the grass-roots populist message. Obama has yet to show that knack.

    Rural and small-town areas have fewer very poor constituents and a greater concentration of middle-income voters than cities, and far fewer wealthy households than cities or suburbs. These mostly white, working-class voters — heavily concentrated in states like Wyoming, West Virginia, the Dakotas, Montana, Maine, Idaho and Kentucky — could be the key to winning the micropolitan and small-town electorate. And these places could prove a critical battleground.

    There are two regions where these voters might matter most. One is the sparsely populated Great Plains states that once represented a solid block of Republican strength. Obama not only has the chance to steal some electoral votes but also could divert McCain’s resources in more traditional battleground states.

    The other is a series of traditional battleground states: Ohio, Missouri and Indiana. If Obama can gain some of the traction Clinton achieved in these states’ small towns and cities, McCain’s chances fade to almost nil.

    Joel Kotkin is a presidential fellow at Chapman University and executive editor of newgeography.com. Mark Schill is an Associate at Praxis Strategy Group in Grand Forks, N.D., and the site’s managing editor.

    Other articles in the Three Geographies Series:
    The Three Geographies
    Urban America: The New Solid South

  • Heartland Infrastructure Investment Key to the Nation’s Growth

    By Delore Zimmerman and Matthew Leiphon

    Infrastructure investment in America is poised to jump to the front of the policy agenda over the next few years. With the election of the next President, new priorities and objectives are sure to be set on several key issues, including national infrastructure investment. Some of this will be addressed in a major new Congressional transportation funding that will include a major push for all kinds of infrastructure.

    Infrastructure is one of the fundamental building blocks of economic opportunity, something increasingly recognized by pundits as well as political leaders in both parties. At NewGeography.com we hope to expand the discussion about infrastructure policy by examining its role in our communities, and exploring innovative new funding options for its provision.

    We have already looked at the history of infrastructure investment by focusing on the accomplishments of the New Deal. In the next few weeks we will examine current and future trends in infrastructure investment, both here and around the globe, and the fundamental role that infrastructure plays in promoting economic growth and driving innovation.

    Unlike earlier periods of infrastructure expansion, which were often uniformly national or regional in scope, today’s infrastructure needs related to economic development are often closely tied to the specific circumstances, resources, capabilities, and aspirations of the local economy. And, because federal resources alone will most certainly be unable to meet skyrocketing needs, local and private resources be mobilized to the greatest extent possible.

    One major initiative we are developing deals with the role of infrastructure in America’s Heartland, an often-overlooked, perhaps insufficiently understood part of our country’s economic landscape. Today’s Heartland is made up of thousands of rural small towns and hundreds of second and third tier cities scattered across America. They have deep roots in agriculture, forestry, mining or fishing but many have made a steady and successful diversification transition to an economy that now includes strong, globally competitive manufacturing, energy or service industries.

    Heartland communities outside the major metropolitan areas possess many underutilized assets. These include relatively low housing costs and a good business climate, quality schools, a reasonably educated and productive workforce, and available land and other resources for expansion.

    More recently the resurgence of the Heartland can be traced to strong performance in traditional pillars of small town and rural economies ‐‐ food and energy. But as history shows, resource-based markets are often subject to the whims of global cycles that can rise and fall with little warning. The Financial Times recently noted the biggest drop in commodity prices in over 25 years, although from record highs. But the drop does point to the volatility of these markets and the risk of over-reliance on high prices in crops and livestock to keep the Heartland economies robust and growing.

    To avoid a return to what may be seen as the “commodity trap”, there needs to be a commitment to infrastructure that could help grow other sectors of the economy as well as best leverage the commodity-based economy. This includes standard infrastructure such as highways, airports, harbors, utility distribution systems, railways, water and sewer systems, and communications networks. New facilities to distribute energy resources to the rest of the country—including pipelines to supply the water necessary to propel both energy production and manufacturing—will also be needed.

    But we also see the need to pay attention to specialized infrastructure such as university and lab facilities, technology and training centers, multi-modal shipping facilities, and research parks. These infrasystems – integrated fusions of facilities, technology and advanced socio-technical capabilities – have emerged as key drivers of innovation and the locus of future higher-value industries and higher-paying jobs.

    Federal resources will probably not be available meet these needs, as a 2006 GAO concluded For that reason, here and elsewhere around the world, cash-strapped governments are viewing private investment as an increasingly important piece of the infrastructure investment puzzle. Concurrently, banks, pension funds and other private investors are considering infrastructure as a new, long-term asset class that offers a combination of hard assets and visible long-term earning streams.

    This confluence of circumstances has given rise to a new set of private infrastructure funds that have attracted billions of dollars and Euros from individual and institutional investors alike, beyond traditional equity investment, public utility bond issues and into outright privatization of assets.

    The key question is will the new private infrastructure investment vehicles will find their way to the Heartland or remain concentrated in the large metro areas like their venture capital counterparts. Communities and second and third tier cities are, after all, often financially stressed because of a limited tax base, the high costs associated with size and scale, and difficulties adjusting expediently to population growth or decline.

    A possible solution lies in creating a Heartland Infrastructure Investment Bank. This institution would focus solely on infrasystem investments that would create higher-value opportunities in science and technology, manufacturing, energy and advanced services in smaller commuters. The Bank is to serve as a lead or secondary lender on projects of economic significance in the American Heartland and is intended to leverage considerable co-investment from the private and public sectors.

    We first developed the concept of a development bank while working on a project for the Washington, DC-based New America Foundation. Now we are looking for practical advice from potential investors, communities and policy makers. Please help us build a better future for the American heartland.

    Delore Zimmerman is President of Praxis Strategy Group and publisher of NewGeography.com Matthew Leiphon is a Research Analysis at Praxis Strategy Group

  • Rural Pennsylvania – Refocusing Economic Development Strategies

    James Carville, the gifted political strategist and pundit, once reportedly referred to Pennsylvania as, “Pittsburgh and Philadelphia with Alabama in between.” And to be sure, many urban sophisticates share this belief.

    But this perception comes from a different time when Pennsylvania’s cities boasted huge, overwhelmingly Democratic populations while the suburban and rural areas, albeit sparsely populated, were culturally aligned bastions of red state Republicanism.

    Yet over the past several decades Pennsylvania’s populations and politics have shifted. The southeastern cities of Philadelphia, Lancaster, Harrisburg, York, and the Allentown-Bethlehem-Easton corridor now comprise one vast urban region stretching from the Susquehanna to the Delaware River. The other three urban regions include Wilkes-Barre-Scranton, Pittsburgh and Erie. Beyond these urban areas, are the 48 counties that comprise rural Pennsylvania.

    The expansion of urban Pennsylvania has ushered in not only demographic changes but also political changes in suburban areas. Today there is only one Republican member of Congress whose district resides mostly in the four suburban southeastern counties of Bucks, Montgomery, Delaware and Chester. These counties have been solidly Republican for generations. The same political trend can be observed at the State Senate and State House levels where seats held by Republicans for over one hundred years are electing Democrats.

    In the process rural Pennsylvania has lost much of its traditional political clout in Harrisburg. Although their populations have grown faster that he rest of the state – mainly due to the in-migration of “downshifting” Baby Boomers — rural counties have also been losing their economic power as well.

    This can be seen by the fact that rural Pennsylvania is falling behind in terms of income and jobs. A Pennsylvania State University state titled, “Pennsylvania’s Rural Economy: An Analysis of Recent Trends,” found that in the 1960s rural workers earned 84 cents for every dollar an urban worker earned. By 1999, that number fell to 73 cents.

    Similarly, a March 2007 study by the Brookings Institute found a household income gap of nearly $9,000 per year between rural and urban Pennsylvanians. Brookings also shows an education gap. In 2000, 19.3 percent of rural residents had not completed high school and 15.4 percent had completed college compared with 17.7 percent and 25.1 percent in urban areas.

    Much of this has to do with a long-standing economic transition. Rural Pennsylvania, has been losing its former jobs — many of them well-paying union positions — in mining, textiles, stone, clay and glass and primary metals. These have been replaced by generally lower wage jobs in health care, education, restaurants, and social services.

    As a result, rural Pennsylvania has been shifting from a region that produced wealth to a region that consumes and services wealth. In 1969, 78 percent of income came from earnings. In 1999, this percentage has been reduced to 62 percent. Income from retirement doubled as a percentage while income from dividends, interest and rent increased from 11 percent to 18 percent over the same period as reported by Penn State.

    The shifting employment trends in rural Pennsylvania offer a glimpse into the spiraling downside of economies that either do not grow or have job growth without real wage growth. The region is left with a stagnant tax base where local governments can provide basic services only by continuing to raise taxes. These taxes make it difficult to attract new business and retain existing industry.

    The question is what can be done to reverse the trend. Rural Pennsylvania has untapped strengths: abundant natural resources, strong work ethic, solid communities and high quality of life. These are the qualities on which to build the future for this vast region.

    Sadly, however, these strengths are barely taken into account in Pennsylvania’s economic development strategies. These primarily have focused on tourism, entertainment, and attracting high tech jobs to the state. Billions have been invested to build new stadiums in our urban areas and convention centers across Pennsylvania. This kind of investment has done very little to capitalize on the inherent strengths of our rural communities.

    Nor has the state really addressed the economic impact of $4 gasoline on our economy and quality of life. Some people say that this shift will herald a return to our urban centers and mass transportation. Others see the rebirth of manufacturing in America as logistics costs coupled with rapid inflation in countries like China and Vietnam depreciate their advantage as cheap manufacturing centers.

    This possible shift in global trade offers a unique opportunity for rural Pennsylvania which has the workforce, the low land costs and a location — the area is within ten hours of 40 percent of the US economy — well-suited for global competition. But sadly the state — unlike many in the southeast and Texas — is taking little action to build new infrastructure to move goods and services quickly and efficiently between ports, rail and roads.

    Such jobs in trade, distribution and manufacturing could be critical to a revival in rural Pennsylvania’s economy. These are family wage jobs that often pay 10 percent higher wages than similar jobs in other industries according to The Business Roundtable. High energy prices also make the area’s resources competitive again. Coal is now in play as is new exploration for natural gas. Rural Pennsylvania can benefit from new coal gasification technologies as well as new gas exploration in its rural center.

    These jobs as well as those in manufacturing and logistics can only grow by implementing a new economic strategy which focuses not only on stadium and convention centers but upon basic infrastructure. Such a strategy would help link these communities with national and global markets and facilitate the expansion of manufacturing and mining as well as making it easier for high-tech service companies to locate in rural areas.

    It is time to make a basics-oriented approach the cornerstone of a determined effort to turn around rural Pennsylvania. These communities are great places to live and raise a family, and are populated by hard-working, motivated people. What they need now is a commitment to the kind of infrastructure investment that will allow them a decent shot at an economic renaissance.

    Dennis M. Powell is president and CEO of Massey Powell an issues management consulting company located in Plymouth Meeting, PA.

  • New Deal Investments Created Enduring, Livable Communities

    Growing appeals for more public infrastructure investment make two critical claims: that this would help stimulate the economy in the short run while making our country more productive over the long run. Unlike tax rebates and other short-term stimulus, a major infrastructure investment program can have powerful effects on community life beyond boosting spending at the local Wal-Mart.

    I thought about this recently when I visited my boyhood hometown of Wishek, North Dakota. Wishek is a small, farming town of 1,200 people nestled in the gently rolling hills of the central Dakotas, about 17 miles from the South Dakota border. Its population is made up largely of people who trace their origins to German immigrants from Russia. These people previously were recruited by Catherine the Great to farm the steppes near the Black Sea.

    Seeing a greater opportunity in North America, these Germans started to arrive in 1885 to homestead the Dakotas’ deep sod prairie – a glacial moraine of earth and rock. They were lured by the romantic thrill of developing a “Territorial Empire” that later became the states of North and South Dakota.

    This dream was widely realized by the 1920s but all but dried up and almost blew away during the drought-ridden thirties. That dream would have extinguished if not for the enlightened programs of the New Deal — from soil conservation to loans for farmers to the Works Progress Administration (WPA).

    Growing up in Wishek during the 50s and 60s, you rarely heard about the New Deal. Life was good, pretty much everything you might imagine small town childhood to be in Middle America. The pace of life was easy; everyone knew everyone and almost everything about anyone. The fortunes of the community rose and fell with farm prices, sometimes fluctuating wildly from year to year. Kids roamed freely on foot and in cheaply fueled cars and there were ample opportunities to participate in almost every facet of community life. With a k-12 school population of about 500 to 600, any child or young person who wanted to could play some kind of role in sports, arts and music, or church related activities.

    Unknown to me — and not widely discussed by the 1960s — was how many of the community’s best and most used facilities were constructed by the WPA. During the drought years of the mid-‘30s, the city park was enlarged and developed with a children’s playground, clay-surfaced tennis courts and a light skating rink paid for by WPA. Later a $6,000 bond issue was floated to build a pool that was designed by WPA engineers and is still in use today. Then in 1942 a new auditorium — a truly landmark building for the community — was completed for use by the school district. The auditorium continues to be used today as a civic center for community and family events including Wishek’s premier regional event the annual Sauerkraut Days.

    This investment strategy in community infrastructure was played out across North Dakota. Elwyn B. Robinson, in his classic “History of North Dakota,” recounts the massive investment in North Dakota:

    “In North Dakota the W.P.A. alone, between July 1, 1935 and June 30, 1942, built 20,373 miles of highways and streets, 721 new bridges and railroads, 166 miles of sidewalks, 15,012 culverts, 503 new public buildings, 61 additions to public buildings, 680 outdoor recreation facilities, 809 water wells, 2 irrigation projects, 39 sewage treatment plants and 9 water treatment plants. It reconstructed 1,002 bridges and viaducts, 2,180 public buildings and 1,721 culverts.”

    To be sure, today is not the “dirty” thirties of the Dust Bowl. It is also far different from the serene place of my boyhood in the 50s and 60s. Some of the old infrastructure needs maintenance while other infrastructure needs have changed significantly. A proposed wind farm just south of town, for example, has been delayed because of the lack of electric transmission capacity throughout the region. In addition, like many rural communities the major employment base is now in manufacturing and health services, pointing to the increasing and essential importance of broadband telecommunications, roads and air service that permit link places like Wishek with the national and international economy.

    Yet if we look about us, the legacy of New Deal endures to this day. It provides clear evidence of the impact that infrastructure investment can make on even the smallest of communities. Much of the current discussions about infrastructure investment too often focus on the giant projects and national implications. However, the case for a renewed investment agenda can be made most persuasively by pointing out what such investments have done for local communities — city or small town — in the past. And what they might have failed to become if there had never been a New Deal.

    Delore Zimmerman is CEO of Praxis Strategy Group and Publisher of www.newgeography.com.

  • Impending Doom for the Heartland?

    The Financial Times recently made note of the biggest drop in commodity prices in 28 years. This, of course, is a fall from record highs and some analysts are continuing bullish forecasts. The Reuters/Jeffries CRB index has continued its decline the past few days:

    It’s a trend to keep an eye on.

  • Dayton, Ohio: The Rise, Fall and Stagnation of a Former Industrial Juggernaut

    What Dayton can tell cities about staying competitive in the global economy

    Few people would recognize Dayton, Ohio of 2008 as the industrial powerhouse it was less than one hundred years ago. Once a beacon of manufacturing success, Dayton claimed more patents per capita than any other U.S. city in 1900. Its entrepreneurial climate nurtured innovators such Charles Kettering, inventor of the automobile self-starter and air travel pioneers Wilbur and Orville Wright. As the U.S. economy took off after World War II, Dayton was home to the largest concentration of General Motors employees outside of Michigan.

    The city also nurtured companies that would became stalwarts on the Fortune 500, including National Cash Register (NCR), Mead Paper Company, business forms companies Standard Register and Reynolds and Reynolds, Dayco and Phillips Industries. To put this in context, just 14 U.S. cities could claim six or more Fortune 500 headquarters in 2007. Not a bad performance for an urban area that peaked as the 40th largest city in the U.S. in 1940.

    These early industrialists were more than just business men. They were also visionaries. The founder of NCR, John H. Patterson, is widely credited with laying the foundation for the first modern factory system, pioneering the basic principles that still drive much of modern advertising, and redefining the relationship between labor and management.

    NCR may also have been America’s first truly global business. “The cash register,” writes Patterson biographer Samuel Crowther, “is the first American machine which can claim that on it the sun has never set.” Even as Patterson was toiling away in a little shop in Dayton, cash “registers were being sold in England and Australia.” The company’s first non-US sales office was established in England in 1885 and its first European factory was established in Germany in 1903.

    It’s difficult to underestimate Patterson’s influence on American industry. By 1930, an estimated one-sixth of all U.S. corporate executives had either been an executive at NCR or been part of Patterson’s management training programs. Among NCR’s alumni were IBM’s visionary CEO Thomas Watson as well as the presidents of Packard Motor Car Company, Toledo Scale, Delco (now Delphi) and dozens of others.

    What may separate men like Patterson to their equivalents today in places like Silicon Valley was their intense civic involvement. Patterson was one of the first business leaders to try to apply scientific management to local government, testing out his ideas in rebuilding the city after a disastrous flood ruined downtown Dayton in 1913. He also helped create the Miami Conservancy District, one of the nation’s first flood control districts that still manages a system of low-level dams and levies that keep downtown flood-free to this day. Perhaps one of Patterson’s most prescient civic innovations was bringing the city manager form of local government to the first large city in the U.S.

    As significant as Patterson was as an individual, he was not alone. The Dayton area benefited from the entrepreneurial drive and civic commitment of hundreds of businessmen that built large companies, many publicly traded. Patterson was the most iconic of the icons.

    Dayton’s Economic Descent
    Today one would not expect such vision in Dayton, and you would be unlikely to find it. Since the early 1970s, nearly 15,000 manufacturing jobs disappeared at NCR. Automobile plants cut payrolls as the economy restructured toward services, and foreign competition outsold domestic manufacturers. As late as 1990, five General Motors plants employed more than 20,000 people regionally. Now, fewer than 12,000 work in these factories and Delphi is on the cusp of closing two more plants. NCR’s world headquarters employs fewer than 3,000 people. Mead Paper Company has merged with a competitor, becoming MeadWestvaco and its corporate headquarters has moved to Richmond, Virginia.

    As the economy has tanked, the city has shrunk. After peaking at more than 260,000 people in 1960, the city is barely clinging to a core city population of less than 160,000. In the 2000 census, Dayton ranked 147th in size nationwide. Its metropolitan area is now ranked 59th.

    Meanwhile, the suburbs have grown. Nearly 74 percent of Montgomery County’s population lived in Dayton in 1930. The growth of suburban cities shrunk that proportion to less than a third by the mid 1980s. Now, less than 20 percent of the metropolitan area’s population lives in the city of Dayton.

    Lessons for Other Cities
    Dayton’s early dependence on traditional manufacturing, with a particular emphasis on assembly line work, put the region at a competitive disadvantage as growing international trade and dramatically reduced transportation costs allowed for the global dispersion of factory work.

    Yet perhaps most remarkable is not the region’s decline, but its resilience. Despite the ongoing decline of manufacturing sector, the metropolitan area still knits together a population of over one million people. What accounts for this?

    First, the regional economy has diversified. Now, as in other metropolitan areas, the growth in employment is in services. Two local major health care networks – Premier Health Partners and Kettering Medical Network – employ 15,300 in facilities that are nationally recognized for their quality of care. Wright Patterson Air Force Base is a center for scientific research and development and employs another largely civilian workforce of 21,000.

    Second, some of the large industrial companies of the past have evolved to meet the needs of an information economy. NCR, while its presence has diminished, is now a high tech company. Reynolds & Reynolds, a former business forms manufacturer, now provides software in niche markets such as auto sales. The region is also home to the legal information services provider Lexus/Nexus, now a division of Reed Elsevier but originally a division of the Mead Paper Company’s investment in data management services.

    Third, core parts of the traditional manufacturing base literally retooled to become globally competitive. In the early 1980s, more than 600 machine shops employed nearly 20,000 people. As the 1990s unfolded, this number had fallen by half. As the 21st century got its start, the number of tool and die shops had revived and employment was rebounding close to 15,000. The shops remain small, but they are deeply invested in global trade. Productivity is up along with incomes.

    Fourth, the region remains at a strategic logistical and demographic location in the Midwest. The city of Dayton is at the cross roads of two major interstate highways – the major east-west link I-70 and the north-south connector of I-75. Combined with access to three major airports, the Dayton region can easily benefit from and tap into economic growth in nearby metropolitan areas such as Columbus, Cincinnati, and Indianapolis. Ironically, many of the highway improvements some believed would “empty” the downtown – the interstates plus a partial beltway, I-675 – ended up tying the city and suburbs to other larger urban areas and enhanced the region’s geographic importance.

    Dayton’s economy may no longer provide the flash and glitter of 20th century economic leadership, but the region has demonstrated a remarkable robustness that holds lessons for other cities striving to remain competitive in a global economy. All cities or economic regions pass through periods of growth and decline. The real question is whether they can adapt to changing economic circumstances.

    Dayton survived by building on the secrets of its past success. Its innovative manufacturing base has become more tech-centric and service-oriented. New areas of vitality such as health services have been enhanced. The city may no longer be what it was at its peak a century ago, but its future is far from grim.

    Sam Staley, Ph.d., is director of urban and land use policy at the Reason Foundation and teaches urban economics at the University of Dayton. He is a fourth generation native and current resident of the Dayton area.

  • The South Rises Again! (In Automobile Manufacturing, that is)

    Volkswagen’s announcement last week that it will build a new assembly plant in Chattanooga, TN is the latest sign of triumph for the South’s growing auto industry. The new plant will sit within close proximity to one Toyota is building north of Tupelo, MS (where the popular Prius will be manufactured), and another that Kia broke ground for last year in West Point, GA on the Alabama border. This joins existing plants such as those operated by Nissan in Nashville and Smyrna, GA, BMW’s plant in Spartanburg, SC and three assembly plants in Alabama.
    With the average cost of building these facilities at over $1 billion, and the high-paying manufacturing jobs they represent, these plants promise to give the area a substantial industrial base for years to come. On top of all this, BMW even announced a $750 million expansion of its Spartanburg plant in March.

    What’s interesting about these decisions is how foreign auto manufacturers are all choosing to forego building new facilities in the Upper Midwest where the labor market has many idle, qualified workers. Instead they are heading to locales south of the Mason-Dixon line, where such skilled employees in the past have been comparatively scarce.

    The impact has been devastating for the upper Midwest. Michigan, for example, has lost an astounding 34 percent of its auto jobs in the last five years leading to a glut of available and experienced workers. According to the U.S. Dept. of Labor, Michigan still leads the country in auto employment with 181,000 jobs followed by Indiana. But the next three states are something of a surprise: Kentucky, Tennessee, and Alabama.

    Why is this happening? Some it may have to do with the fact that recently laid-off workers in Michigan bring habits developed working in unionized environments – something which foreign automakers do not want, even though unions are very powerful in Germany, for example. The United Auto Workers (UAW) has found it hard to organize foreign automakers in general.

    In contrast, unions are comparatively weak in the South. Though Alabama has seen a huge jump in the number of its auto workers in recent years, according to its state department of labor, only 7,100 are unionized.Nationwide, according to the Bureau of Labor Statistics, around 12 percent of workers belong to unions compared to just over 10 percent in Alabama. However, the “Yellowhammer State” looks positively union-saturated compared to its neighbors: less than 5 percent of workers in Georgia, Texas, South Carolina, Virginia and North Carolina belong to them.

    But it’s not only a question of unions. The South is attractive to auto makers due to its network of rail and highway lines that make transport to key markets easy and affordable. Furthermore, many southern cities — notably Houston, Charleston and Charlotte — have made big infrastructure investments in recent years.

    Another plus for the South has been the growing role of universities in creating a research hub for the auto industry. The Clemson University International Automotive Research Center is the nation’s only school to offer a Ph.D. in automotive engineering and has secured $200 million in commitments. Additionally, the South Carolina center has created partnerships beyond auto manufacturers with other universities in the area: Auburn, Mississippi State, Alabama, Alabama-Birmingham, Kentucky and Tennessee.

    Alabama has seen the biggest net gain in auto-related jobs, having added more than 30,000 in the last ten years. The state has three plants: a Mercedes-Benz U.S. International in Tuscaloosa, a Honda plant in Lincoln and one for Hyundai-Kia in Montgomery. Additionally, many suppliers have set up shop to service the new Kia plant under construction just over the border in Georgia. A survey by the Alabama Automotive Manufacturer Association found that there are nearly 49,000 auto jobs in the state with another 86,000 jobs that depend on the purchases of these employees resulting in a combined payroll in 2007 of $5.2 billion.

    The overall impact of some of these plants may not be felt for a few years since three of them are just in the process of being constructed. But, with new behemoth facilities manufacturing some of the most fuel-efficient vehicles on the road, it appears that an industrial anchor for the region’s future has been secured. It also confirms a growing shift in the industrial geography of heavy industry in this country from the traditional Midwestern heartland to regions south of the Mason-Dixon line.

    Over time these changes will provide tests for regions both North and South. In the North, regions will have to learn how to compete in higher value-added, specialized industries, as we can see in places like Wisconsin. For the southern areas, the need to maintain and develop sophisticated industrial infrastructure — particularly in term of skills — will remain a major challenge in the years ahead.

    Andy Sywak is the articles editor for newgeography.com.