Can the industrial transition revalue older industrial cities?
Below is the Nowak Metro Finance Lab Newsletter shared biweekly by Bruce Katz.
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June 23, 2023
Over the past eighteen months or so, I have become intensely interested in the industrial and energy transformation underway in the United States. The staggering volume of advanced manufacturing-oriented transactions, fueled by federal and state investments, is scrambling economic performance across and within metropolitan areas. My colleagues and I recently examined the emerging spatial geography of advanced manufacturing in a recent post entitled The Industrial Transition and the US Metropolis — The New Localism.
All of this has prompted me to re-publish an op ed that appeared in the Financial Times on May 31st. The op ed focused specifically on the potential roles older industrial cities can play in the industrial transition. Those roles could be broad and varied, stretching from the attraction or expansion of industrial companies to the building of academy/corporate campuses that blend applied research and workforce development to the upgrading of logistics infrastructure.
As always, I welcome any and all comments.
Older industrial cities can be central to America’s economic future: This article originally appeared in the May 31st edition of the Financial Times
One of the tantalising questions about US president Joe Biden’s muscular industrial policy is whether it can reverse decades of economic decline in cities and metropolitan areas that bore the brunt of deindustrialisation.
Older parts of the US, like much of Britain and Europe, are littered with hundreds of communities that collapsed under the weight of offshoring, outsourcing and globalisation at any cost. But today, America is undergoing a remarkable industrial transition. Market dynamics, geo-political tensions and unprecedented federal investments are catalysing a re-shoring of advanced manufacturing in the defence and civilian sectors, as well as an accelerated decarbonisation of the US economy.
These macro forces have metro effects. Advanced manufacturing values places that can provide industry with the platforms and tools they need. Large companies and smaller firms alike require suitable sites for production activity, properly assembled, prepared, and zoned. They need access to a steady stream of qualified workers who can master the complex nature of advanced production; applied researchers who can continuously assist with product and process innovation; quality housing that is affordable to workers of all incomes; and infrastructure of all types that enables the efficient movement of ideas, goods, services, workers and energy, within and across metropolitan areas.
Many older industrial cities and metropolitan areas retain legacy assets that are central to this manufacturing future. These assets have been dormant and undervalued for decades. But they did not disappear and they are now available for industrial purposes. Some lesser-known federal programmes are beginning to unlock this potential. Last autumn, the Biden administration announced winners of the $1bn Build Back Better Regional Challenge, initially appropriated in the American Rescue Plan Act, to advance national competitiveness by scaling advanced industry clusters. The programme was flexibly structured, asking communities to define and then leverage their distinctive competitive advantages through an array of investments. It essentially challenged locations to embrace Dolly Parton’s maxim, “find out who you are and do it on purpose.”
The results are promising. Manchester, New Hampshire, once home to the largest cotton mill in the world, received funds to scale its BioFabrication Cluster to produce and distribute regenerative tissues and organs. Buffalo, New York is expanding a highly regarded workforce development centre to serve a regional network of manufacturing firms. St Louis, Missouri is establishing an Advanced Manufacturing Innovation Center to serve the needs of Boeing and its suppliers in the defence aerospace sector, explicitly modelled on an applied research campus perfected in Sheffield, England.
Significantly, Buffalo and St Louis are locating their facilities in the most disadvantaged parts of their cities, ensuring that the benefits of re-industrialisation accrue to low-income residents and communities.
These and other efforts are being watched closely by cities and metropolitan areas from coast to coast. They are likely to become models that are adapted throughout the country as federal industrial policy takes full effect.
For decades, cities were told to plan the post-industrial city, driven by service rather than production economies. Now, almost overnight, they are being challenged, across sectors and jurisdictions, to deliver the industrial metropolis.
The stakes are high. Deindustrialisation in the US exacerbated persistent inequalities, roiled national politics and helped stoke populist outrage. The revival of older industrial locations is as much about restoring national cohesion as driving economic competitiveness.