22 Aug Smart infrastructure the key to regional viability
Cities and regions need to understand that their infrastructure can either attract or repulse new corporate facilities. They also need to understand that when they talk about infrastructure, and adding or improving upon it, they need to be more encompassing and include all layers of infrastructure and not just the “traditional view” which includes roads and bridges, public transportation (rail) and highways.
I call this the “1950s vision” which was focused on building more infrastructure to support the first three levels which include driving on roads and from a metropolitan standpoint adding more stops on the rail lines.
Economic development means creating jobs and jobs keep regions viable. When jobs leave a region, increased crime and drugs move in to replace them. When people are working, tax revenues keep municipal services alive and vibrant. When tax revenues go down, crime and more social programs go up. Good government fosters good commerce. Bad government fosters no commerce.
The definition of critical infrastructure needed to support commerce for a city or region can be seen below in this eight-layer model:
CHART 1: CRITICAL INFRASTRUCTURE: PLATFORM FOR COMMERCE
|7||BROADBAND CONNECTIVITY NETWORK
|5||POWER (GRIDS, NUCLEAR POWER)|
|4||TELEPHONE NETWORK (VOICE ONLY)|
|1||PORTS/ DOCKS/ WATER|
Source: JAMES CARLINI, KEYNOTE SPEECH, 2008.All Rights Reserved
TEN DYING CITIES
There was a recent Forbes article that reviewed the ten dying cities in America. The list included CANTON, OH; CLEVELAND, OH; DAYTON, OH; YOUNGSTOWN, OH; DETROIT, MI; FLINT, MI; SCRANTON, PA; SPRINGFIELD, MA; BUFFALO, NY; and CHARLESTON, WV.
Out of the top ten, it is interesting to see that over half the cities are in Michigan and Ohio. They are the typical Midwestern manufacturing cities that need to adapt to a changing global economy. Ohio is very hard hit and comments after the article really tell the story better than the author’s perspective:
From the Cleveland, OH area:
I currently live in a suburb of Cleveland, Ohio and grew up in the Cleveland area. I can tell you why Cleveland is one of the dying cities of the rust belt. The central city has about half the population it had in 1950 while the region is Balkanized with some 50 odd suburban city, village and townships in the county. In addition, the city and county has what amounts to a one party political system leading to heavy patronage and incompetence in local government. Until this byzantine system of local government is changed, Cleveland will continue to decline.
From the Toledo, OH area:
The entire way Toledo (and Lucas county) is run, is so backwards that you would think that our city council is from the former Soviet union. Homes actually go down in value here, not up like they are supposed to.The crime is getting bad here too, it’s almost like no body gives care anyone
From a political perspective, one reader summarized the article’s observation on this:
Canton, OH — Mayor=D, Governor=D
Cleveland, OH — Mayor=D, Governor=D
Dayton, OH — Mayor=D, Governor=D
Youngstown, OH — Mayor=I, Governor=D
Detroit, MI — Mayor=D, Governor=D
Flint, MI — Mayor=D, Governor=D
Scranton, PA — Mayor=D, Governor=D
Springfield, MA — Mayor=D, Governor=D
Buffalo, NY — Mayor=D, Governor=D
Charleston, WV — Mayor=R, Governor=D
Although there were some people defending their cities, most were agreeing with the author’s conclusions.
Another Midwestern city that suffered the same job erosion and other corporate closures is Fort Wayne, Indiana. The big difference between Fort Wayne and places like Canton and Dayton is that the political leaders saw what was coming and they got out of a traditional mode of approaching economic development. They were faced with some real challenges that included growth and the necessity to service more area without adding to the budget.
From 1999 to 2006, Fort Wayne’s population grew 33 percent, from 190,000 to 252,000; its non-public safety employees grew two percent, from 936 to 950.
Notice how they did not bloat government to service the added population. If anything, they looked at new ways to perform day-to-day operations as well as provide a better platform for doing business for corporations looking to locate new corporate facilities.
Today, Fort Wayne also has Fiber to the Premise (FTTP) to over 128,000 subscribers. This $100 million-plus investment made by Verizon has helped changed the direction that Fort Wayne was going in.
The Ten Dying Cities need to review what they have as far as infrastructure and analyze what needs to be done in order to build a solid platform for commerce to build upon. They need to re-vitalize their infrastructure, including network infrastructure and not think like it is the 1950s. This is what many business writers, economic commentators, and traditional industry perspectives) are missing:
1950s solutions will not solve 21st Century problems
Traditional city politicians, economic development consultants, and the traditional business and municipal advisors of lawyers and accountants do not get this concept.
A revitalization of the first three layers of infrastructure defined in the PLATFORM for COMMERCE (Chart 1) does not address the broadband connectivity needs of today and tomorrow.
In Illinois, a $30,000,000,000 roads program looks like a “good investment in the infrastructure” to many politicians. A better investment would be to take 10% of that money and build several fiber optics-based highways across Illinois concentrating on areas for high-tech and sophisticated specialized developments.
Antiquated utilities approach
My recent white paper, Intelligent Business Campuses: Keys to Future Economic Development, discusses the new approach to Master Planning for new developments. One of the new key concepts is the idea of including planning for network and power requirements upfront, before the road is built, the parking lot is laid and the landscaping is planted. This not only saves a lot of money but it also helps to more clearly define the “platform for commerce”. Many traditional real estate and business park developers have yet to adopt this approach and continue to build for the wrong century.
Thinking about where utilities should be brought in and how much capability should be brought in actually saves money on a project. This extra planning step adds significant value as the target market for tenants becomes more sophisticated and those regions that can offer more will attract a higher level of potential tenants.
Horse-and-buggy approaches which include one connection to one central office of the phone company for network services and one connection to one power company from one station (or power grid) are obsolete. (The status quo)
Double the connections as well as the carriers on each of these two intelligent amenities and you just have ascended into providing a more rigorous platform for a whole new tier of sophisticated corporate facilities that site selection committees are looking for above-and-beyond the status quo.
CARLINI-ISM : There is no magic bullet in economic development. You need to spend money to make money.
This article previously appeared in MidwestBusiness.com, and was reprinted with its permission.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC.
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