Memphis' $3 Billion Bonus For Being Average

It didn’t get any headlines, but it was news nonetheless.

In a presentation to 500 people at Leadership Memphis’ annual community breakfast, Portland economist Joe Cortright said that our city gets a $3 billion bonus if it can just get to average in the key indicators of the 50 largest U.S. metros.

That’s why the big idea for Memphis is this: “Get to the middle.”

Those average cities on the list of the top 50 metros now have $3 billion more in economic activity than Memphis, so rather than set unattainable goals right now, Mr. Cortright said that Memphis’ best course of action is to set a goal of being average. That will put $3 billion more money into the pockets of our people and into the economy.

Differentiation

Making a persuasive case that a city’s distinctiveness is its competitive advantage, he said: “Distinctiveness matters more today than decades ago. Competitive strategy is about being different. Think about what makes you distinctive in this global economy. It is the unusual behaviors that lead to economic opportunity and distinctive innovation.”

Punctuating his speech with 75 slides of key factors determining the success of the 50 metros, Memphis was in the bottom ranks in way too many key areas such as creative workers, patents, new business, jobs growth from new firms, venture capital, higher education students, cultural participation, home ownership, travel and foreign-born citizens.

The ones that particularly caught our attention were that the Memphis metro is #50 in the economic integration of its neighborhoods, #47 in creative professionals, #44 in patents, #47 in cultural participation, #48 in restaurant variety, #50 in small businesses, #48 in foreign travel and #49 in library visits.

Battle Of The Bulge

Memphis is younger than most metros, caused by a bulge in student-age children. “In today’s tight labor markets, they could be a significant advantage, but only if they are educated,” he said, pointing out that educational attainment of Mid-Southerners is lower than the average metro.

Among Memphis’ strengths are its connection with FedEx, which has one of the strongest 18 brands in the U.S. “Perhaps only Coca-Cola and Atlanta have a brand as closely associated with a city as Memphis does with FedEx,” he said, adding that it’s no surprise that Memphis has twice as many people working in the logistics sector as the average metro.

He also commended the work of Memphis Bioworks Foundation for finding a unique niche – orthopedics – for its biotech strategy while most cities “have no idea what they are good at.”

Headlines

Some other headlines from his presentation:

• Older residents are moving away
• Memphis is in middle of pack for population growth
• Memphis is among nation’s most diverse metros because of 45% African-American population
• Hispanic population is much lower than average metro
• Asian-American population remains small
• Very few foreign-born residents
• Lower than average new business birth rate
• Weak jobs growth from new firms
• Low venture capital investment
• Below average entrepreneurship among college-educated young adults
• Average in manufacturing
• Below average in creative occupations
• Fewer restaurants per capita
• Low magazine subscriptions
• Drinking problems relatively low
• Low in physical activity
• Weak cultural participation

Behaviors And Beliefs

Mr. Cortright also spotlighted behaviors and interests of the Memphis metro. Most surprising – and defying long-held conventional wisdom - is that Memphis’ religious participation is slightly below average for the 50 top metros.

Apparently, it’s not because we’re at cultural events, because we are next to last in cultural event attendance. We are in the bottom four in art gallery visits, lecture attendance, classical concert attendance, or in book buying. We are dead last in arts establishments. At the same time, we are in the top 10 in hunting and attending sporting events.

At the same time, our “geek factor” is low. We are #1 in agreeing with the statement that “we’d be better off without computers” and we were last in agreeing that “surfing the Internet is more interesting than watching TV.”

Pessimism

As for the neighborhoods in our metro, we lead the 50 metros in neighborhoods with the highest segregation by income. We are in the top third of metros in segregation by race, indicating that class, not race, is the major driver of neighborhood segregation. Jobs sprawl in Memphis is more than the average metro.

Meanwhile, Memphis metro residents are pessimistic and especially concerned about crime. We are in the top five metros in percentage of people who agree that “no matter how fast our income goes up we never seem to get ahead,” “it is hard to get a good job these days” and “saving for the future is a luxury I can’t afford.”

This economic concern is coupled with an equally big concern about crime. Of the 50 largest metros, ours is first in agreeing with the statement, “I am in favor of very strict enforcement of all laws” and “police should use whatever force is necessary to maintain law and order.” We are also in the top three in worrying about family members becoming crime victims and we are in the bottom three in believing that most people are honest.

Good Old Boys

Overall, there is nothing elitist about the Memphis metro. We ranked in the top five in subscriptions for Jet, Ebony, Essence, Soap Opera Digest, Guns & Ammo, Southern Living and Southern Accents. We’re in the bottom five in Martha Steward Living, The New Yorker, Vanity Fair, Gourmet and Bon Appetit.

Speaking of food, our spending reflects a barbecue culture. Memphis buys 260% more than the average metro in frozen poultry, 235% more corn on the cob, 185% charcoal, 183% more refrigerated dips, 180% more meat, and 133% more in baked beans.

Our To Do List

So after sifting through all of these measurements – and 40 more that he didn’t show at his presentation – what was our colleague’s advice for Memphis?

1) Take care of the basics. “Increase choice in education and make sure you deal with public safety.”

2) Build on your strengths. “You have a young, diverse population at a time when the rest of the country is wrestling with Baby Boomers moving out of the workforce. You have a labor force if you educate them. Take a difference that could be a weakness and make it a strength.”

3) Build on your brand identity. “You have unique industry and cultural assets.”

4) Take risks. “Who’ll be the next Fred Smith and how do you create the environment for world-class ideas?”

5) Don’t play copy cat. “Lots of metros are doing good things, but they may not be what Memphis should and can do. Decide what you can do better than anybody else in the world.”

6) Create neighborhoods that attract 25-34 year old, college-educated workers. “They are the most mobile people in the country, and they are moving to the centers of metro areas, where they are looking for great inner city neighborhoods – walkable, bikable, transit-linked, and green.”

7) Focus on early childhood readiness and higher education investment. “The more educated people you have, the more successful you are. Better education equals better economy. Raising the level of education is the most important thing you can do to improve your standings.”

8) Focus on dropouts. “They are the most expensive problem for your city.”



(Mr. Cortright’s slides will be posted on the Leadership Memphis website shortly at www.leadershipmemphis.org.)