Monday, August 04, 2008

New Economy Calls For New Thinking

We subscribe to a John Calipari theory of economic development – it’s all about talent - and a Fred Smith model of public investment – it’s all about entrepreneurship.

Everything else is pretty much a distraction.

Memphis needs a new framework for economic growth, and we begin by casting off traditional economic development thinking, the thinking that seems rooted in the belief that our city’s future is largely a projection of the present built on a low-skill, low-wage workforce in the age of a knowledge-based economy. In other words, we need to resist the temptation to fight for jobs rooted in existing economic shortcomings and workforce, because Memphis’ long-standing precepts about economic development are often our biggest obstacles to success.

Cities are sometimes like members of a dysfunctional family. Even when they realize things are bad, it’s hard to change, because it all feels so familiar. That’s always been a problem in Memphis, because although it’s becomes clear at times that we are ill-prepared to compete in the new creative economy, we just can’t make a clean break from the past. As a result, Memphis has been slow to adapt and compete in a global economy transformed by the dual mega drivers – technology and globalization – and fueled by the creativity of smart, talented workers.

Losing Ground

Now’s the time for new thinking.

Memphis is not only losing ground in today’s economy, but key indicators for the future economy are pointing in the wrong direction. In the Milken Institute rankings, Memphis is now ranked 144th (Nashville is #61, Knoxville #79, and Chattanooga #111).

Worst of all, many cities have already embarked on a journey based on the new realities of the new economy, and they are already executing “creative city” strategies, the kind that converges art, technology and commerce to create a cauldron of innovativeness that spills over into all that it does.

Creative cities have a strong sense of place, and its people have a shared narrative. It’s the kind of place that develops, attracts and retains the most coveted workers in the new economy – young, highly-educated professionals. The connection between a high percentage of adults with college degrees and success of cities in the knowledge economy couldn’t be clearer, and that’s why we need to get serious about tracking the in-migration and out-migration of these workers, and building policies to create the vibrant city that attracts and keeps these creative workers.

The Regional Platform

Meanwhile, it’s no surprise that the new platform for economic competitiveness is the region. What is surprising is how little progress Memphis has made in this regard. After all, Memphis has spent more than a decade talking the talk of regionalism, but little has been done to walk the walk. Today, state economies are all but irrelevant, because they are political entities. Regions are now the economic units of competition, and megapolitans will be the unit in the future.

In other words, the need for a new agenda right now couldn’t be more compelling. And it’s an agenda that has to focus on knowledge-based jobs in an entrepreneurial economy that depend on creative talent. If we haven’t quite figured out yet that we can’t compete with China and India for low-skill jobs (98.73% of workers in transportation, material moving and distribution are below the mean U.S. household income), we surely aren’t prepared for a future when these same countries will compete with U.S. regions for high-skill industries.

That’s why we’re paying the price right now for state government’s cuts in funding for higher education. At the precise time when higher education, and more to the point, higher education research, is a key competitive necessity for creative cities, our universities have been forced to cut enrollments, hike tuitions and reduce courses.

Entrepreneurial Universities

Memphis will never reach its potential as an entrepreneurial city as long as the University of Memphis is mired down by the anti-entrepreneurial educational bureaucracy of the state. In this regard, it’s past time for every one in Memphis to tell Governor Bredesen that we’re disappointed in the inadequate way that he’s dealt with his pledge to reinvent our state’s higher educational structure.

We can’t even get the governor’s support for University of Memphis to have its long-desired own board of trustees, so its needs aren’t always filtered through the political issues of other system institutions, such as Middle Tennessee State University, Austin Peay University, Tennessee State University, Tennessee Tech, and a hodgepodge of community colleges and technology centers. Our university deserves the chance to as resilient, flexible and entrepreneurial as the economy in which Memphis competes.

Meanwhile, Memphis needs to expand its focus beyond its big project mentality to improve the fundamental grassroots infrastructure that is generally ignored, such as neighborhood parks, schools as center for neighborhoods, culture (with a small c), and mixed-use, walkable neighborhoods.

Qualities Of Place

Place-making has never been more important. And yet, as important as the tangible quality of life are intangibles like tolerance (a distinct problem for Memphis) and being perceived as welcoming to all religions, ethnic groups and people of all sexual orientations. Because attracting immigrants is more and more a factor in a city’s success, these are more than just admirable characteristics. They are in very real ways economic benefits for cities, and in a world characterized by nothing so much as its diversity, Memphis should trumpet its diversity as an asset for our future, rather than refusing to face honestly its future as the nation’s first majority African-American metro.

But as successful cities have shown, there is absolutely nothing more important to economic growth as engaged leadership. That’s because transforming Memphis’ attitude toward economic development demands that every one gets off the sidelines and into the game – politicians, business leaders and nonprofit leaders.

And in keeping with the regional realities of the global economy, the new leadership must be developed on a regional basis, particularly if we are to have the clout to get concessions and funds needed from state governments in Tennessee and Mississippi on regional issues like transportation infrastructure and air and water quality.

Racing To The Finish

The lesson of the Governors’ Alliance on Regional Excellence – announced with great fanfare almost a decade ago and whose report cost almost half a million dollars – is that if there is no strong regional ownership of a regional agenda by strong regional leaders, its recommendations are destined to become an impressive tome on shelves with little impact to change things.

Finally, failed tax policies and tax freezes are overdue for reform. They are nothing but vestiges of old economy thinking that we need to reject once and for all. There is little evidence that tax cutting and tax freezes work as an economic growth strategy. If they did, we wouldn’t find that states that have higher taxes also have above average per capita income and more knowledge-based companies.

The race for economic growth in the future will be the hardest competition Memphis has ever been in. But we begin by abandoning the old and embracing the new. It’s a race to the finish, and cities that compete by the same old rules have already lost.


LeftWingCracker said...

I pretty much agree with all of this. However, we have to have a public school system that can produce the type of workers that such an economy requires, and then provide an environment that retains them.

I'm not at all opposed to attracting this type of worker from out of town, mind you, but I am a big believer in producing our own.

Anonymous said...

Cracker is so right. The other key E.D. aspect of the school system is that these typically young knowledge workers often have little kids... or plan on them.

They're turned off by the vibe (and cost) of the private schools, but most of the public schools seem too big a risk to make a statement with their child's future.

I see some of these people in line at 2 a.m. at open enrollment... the rest move to Collierville or out of the market altogether.

Anonymous said...

Denver just got a factory employing 400 people in the manufacturing of windmills. Because Denver got this factory, it is in a much better position to get more alternative energy manufacturing. This is the future. Converting the national energy grid from fossil to renewable energy sources. We only have a generation to do it and Memphis only has a couple of years to get in on this economic wave.

Zippy the giver said...

Nothing like the feeling of surfing,,, the back side of the wave. We are about 7 years late on the college improvement idea, Great Britain is already swallowing our colleges and colleges all over the world. They haven't come here to do it and that is a big statement about our quality of education.
Manufacturing will last till other countries start making the same things we do then the jig is up.
Memphis could be the world leader in verticle axis wind tech, we have plenty of wind, however, we're ten years to late for that too. The only way to make that work here is to couple some other win with it, like work for rehabilitated prisoners, but first we'd have to actually use that fed money for rehabilitating prisoners and get a successful program up and running. SUCCESSFULY rehabbed prisoner's kids aren't satisfied with repeating their parent's mistakes.
75% of business done in the united states is SMALL BUSINESS. (old stat) Memphis has been a blow up doll victim too long. Always taking the bait of easy money, never acknowledging the consequences even when they are tightening around Memphis' throat.
If we can't fix the elementary, middle, and high schools the universities don't have a chance.
If we do fix them it does.
We need to think transformation. Take what we have and figure out what the current knowledge bank has in it and come up with something new, otherwise, we are surfing the backside of this wave.
We need to transform our education system into something new: an education system!
My kids are outta there.

Tom Guleff said...

The Tennessee Education Lottery has closed out its fiscal year with a record total return for education of $286.1 million. This brings the total raised since inception to over $1.2 billion.

How about all this money ??

Aaron said...

"we surely aren’t prepared for a future when these same countries will compete with U.S. regions for high-skill industries."

As Zippy said, this has already happened.

Our corporate-economic engine naturally ships jobs overseas, it's the nature of serving the shareholder, management and the U.S. Consumer.

What we need our companies with integrity. Here is a new pizza company that in IMO is the future of a better corporate culture..

Anyone want to open one of these in Memphis? I am tempted! Add employee housing to their operation and this little company will be a great model for a more socially and environmentally friendly form of capitalism. Keep an eye on these dudes. They're changing the world-"one pizza at a time." What great slogan!

Aaron said...

Zippy: Let's all own this MCS problem and be a part of the solution. We need more accountability and that's a hard thing to push for if all the concerned parents have left town.
Collectively, a lot of parents have a pretty strong pull in the district.

Zippy the giver said...

Aaron, I'll give you that , but, if we wait on parents, well, the results are already in on that too in Memphis. They ain't showing up. That really isn't new, that's just blamestorming, parents are doing what they've always done, burying their heads in the sand.
What make s no sense for solution is this:
" because the parents aren't involved, as a solution, we will steal their money and screw their kids education at such a large scale we will destroy Memphis' future business prospects.
We at MCS do not believe in the accountability of MCS and don't believe we have been hired to educate children, we have in fact been hired to make excuses, list problems preventing work, blame everyone around, and cover up as much of our own accountability as possible at the least crack of daylight getting in. We think that talking the talk is better than walking the walk so, we will not put any plan with any chance of success in action, we will say that we will but we won't actually do anything. We will push the boundaries of accountability to the middle of culpability and evade all prosecution. Ifd you plan on working at MCS, be sure to show up at the sunday afternoon satan worshipping services, we BBQ a child on a mound of falsified report cards every week."
OK, maybe that's a bit too far, but, only the BBQ part, not the mound of falsified report cards.
I've put my butt on the line and made my presence known down there. As far as I'm concerned and as far as I have seen, I own the whole problem by myself and I am the only part of the solution because nothing has moved yet.
Where is year round school?
Where is affordable aftercare for those without vouchers?
How much cooperation can I count on?
When what I say makes sense, it should be 100%!
Maybe someone will actually do something, but, it won't be the parents. If they could have they would have already. So, they have been betrayed by MCS, they didn't have their backs, they had attitude and ideas about things that were to them more important than their charge.
I just can't figure how a city with the gigantic amout of poverty we have here, with as many impoverished kids are going to MCS, they can't figure that these parents can't afford to take a day off and keep food on the table. Callous people.
Maybe they know something about impoverished citizens getting millions under the table?
Maybe they know they can't take a day off and maybe that's exactly what they were banking on?

Yeah, a lot of parents would have a lot of power, we should go down there fill their parking lot and picket.
They don't support the parents with their lack of reporting and transparency, bad policies that get in the way of parents making a living, and they don't support the students with their lack of reporting and changing kids grades. Heck, they ALL need to be FIRED!
School board meetings where you get 3 minutes to say what you got and then NOTHING EVER HAPPENS.

If someone were to come up with a plan to make Memphis a ghost town over a few years, I'd say they could just do what's being done here now as a plan.

Chuck said...


I just have one question. Why?


Zippy the giver said...

I left my kids in MCS until they were three years behind after being brought in at two years ahead and advanced on all aspects of Tcap. No, my kids will stay out of MCS. They have suffered enough.

Harvey said...

I am having trouble understanding Smart City's sentiment that "creative cities" have a strong sense of place and a shared narrative. Regardless of how well or poorly Memphis fares in the next few years and decades, any city in America will be hard pressed to have as strong a shared narrative as Memphis.

Given, Portland, OR is full of transient, skilled workers in the "knowledge economy" who flock to the city because of its Green programs and art co-ops. But, that has nothing to do with a shared narrative. If those same workers are going to a city because of what it has to offer them, what is to stop them from leaving when the next job, home purchase, etc... in a different city arises? The answer is nothing.

That Memphis does not have a shared narrative or a mythos about it is false. We are up to our ears in sense of place. What we need is unselfishness. Even if Memphis has an influx of technology based, college educated workers, how in the world is that going to change the culture of violence and poverty and racism that plagues the city? In and of itself, that phenomenon will mean no change unless those people can see past their own comfort and have a heart to change the city. We already had some of those people and they moved away to Lakeland and Collierville.

We simply need people who are willing to do the hard work of living in the city and in some ways, putting their lives on hold while they work for its betterment. Of course, this is all predicated on my feeling that pulling Memphis out of its educational and moral stupor is more important than making it a player in the knowledge economy. While both objectives are immeshed with each other to a degree, I believe they are less immeshed than Smart City does and I think they are putting the cart before the horse.

Zippy the giver said...

THAT is a darn good question and one that deserves answering. There is no one qualified to give the answer to that question anymore.
I hope Dr. Cash takes down the devolving vestiges of days gone by and equalizes the system to true fairness.