Part One of a five-part series

Detroit’s future is on the minds of its own citizens, those in the broader metro area, and those serious leaders who are thinking about the future of Michigan.

Today Michigan’s oldest, largest, flagship city serves as America’s best example of a struggling urban area. But, if our leaders act wisely, Detroit could provide a much-needed framework to guide both its own resurgence and, nationwide, the rebirth of America’s many other “shrinking cities,” as well.

However, any attempts to position Detroit as a guide must pay close attention to sound principles of sustainability in our New Economy and be very cognizant of how Michigan’s first city was born, grew, boomed, and then evolved into what it is today.

In this five-part series, we look closely at Detroit, its history and the global, national, statewide, regional, and local trends and resources its people can use to restore the prosperity it once enjoyed.

Detroit’s Past Success
For almost a century, Detroit was one of the major economic powerhouses of the United States.

It emerged from a small trading post in the early 1800s, leveraging its advanced technologies in flour milling to become one of the leading flour export ports around the globe. Soon, it became the nation’s premier location for shipyards and the building of steam ships.

By the 1860s, it had become the leading steam engine production and export point. Then, by leveraging its local expertise in copper alloy production and exports, Detroit birthed its machine industry, in the 1890s.

By the early 1900s, Detroit was the premier place for manufacturing and exporting internal combustion engines for boats. So it was no surprise when, in the early 1900s, Detroit then leveraged its historical command of internal combustion technology with assembly-line technologies to become the nation’s automotive manufacturing capital.

By innovating around internal combustion engines to power cars and trucks, and by removing the horse and wagon as a power source in the movement of goods and people, Detroit created a level of prosperity that was uncommon in most American cities.  

Detroit’s success, based on a culture of innovation, was the envy of the nation. By 1950, its population swelled to almost 2 million people. This happened because Detroit’s economic environment, with its assembly-line technology, was very attractive to capital and to skilled and unskilled labor—and workers migrated to the city from around the country to take advantage of its bounty. 

Detroit was not only the birthplace of the automotive industry; it was also the birthplace of the labor movement. It became a major industrial, cultural, economic, social and artistic hub, and one of the nation’s most diverse cities.

Detroit’s very essence was innovation, giving it the ability to combine capital and skilled labor to produce new, mechanical goods for a growing nation’s increasingly prosperous middle class.

And so it was that, with one of the highest per capita incomes in the U.S., Detroit became a bastion of American prosperity. 

Current State of the City
Today, instead of 2 million, Detroit’s population is approximately 800,000, with a per capita income below $15,000, about half of the national average. Economic activity in Detroit is now a quarter of what it was at the city’s peak. Detroit is the epitome of the nation’s financial and economic problems and the poster child of a “shrinking city.”

Whatever the economic statistic, the city is at or near the bottom of the nation. This includes such things as unemployment rate, foreclosure rate, abandoned properties, tax reverted properties, mortgage loan delinquency, poverty, food insecurity, and brownfield sites. 

These problems are not Detroit proper’s alone. According to the 2009 Milken Institute Index of Best Performing Cities, the Detroit metropolitan area—in spite of its flourishing suburbs in Oakland, Wayne and Macomb counties—ranked dead last in economic performance nationally.

Coincidentally, in 2009, Michigan also ranked dead last in economic performance. Since 2000, more than 200,000 people have left the city, so it is no surprise that in recent years,

Michigan was one of two states that lost state population despite national growth in population.

Does the agglomeration of economic losses in Michigan explain the decline of Detroit? Or, do the economic challenges of Detroit explain the economic challenges of Michigan? This is a “chicken or the egg” problem.

In fact, both may be true. To adequately answer these questions, however, it’s important to understand how states or regions grow. 

What Are Successful Places Doing?
In our analysis of very successful states that have a high per capita income, a high employment rate, and a rapidly thriving and prosperous population, one common feature they all have is a strategically relevant, creative, entrepreneurial, innovative, and dynamic major city, whose economy is so globally relevant that its success drives the success of nearby metros and the overall success of the state.

A good example of this is the rapid resurgence of the Washington, D.C. metro area (northern Virginia, southern Maryland and eastern West Virginia) when the District itself started to hop.

Denver, Colo.; Salt Lake City, Utah; Pittsburg, Penn.; Seattle, Wash.; and Portland, Ore. are other examples. When things start to happen in cities, the surrounding regions benefit. In fact, given the concentration of economic activities in cities, urban economies can sometimes dominates the overall state economy. 

Furthermore, in our analysis of successful cities and metro areas, we observed that the kind of economic environment that the city operates in drives its success.

What do I mean by economic environment?

If state policies do not encourage urban revitalization, urban place-making, metropolitan transit, urban innovation infrastructure, strong urban universities, urban public sector accountability, versatile nonprofit and civic organizations, and a whole list of other things that, research confirms, explain the existence of strong cities, it is almost impossible for an urban economy to thrive.

I recognize that certain mindset and cultural issues—particularly related to racism, social distancing, segregation, and poverty alleviation—can shape the future of cities as well, with consequent impacts on metro areas and the states that harbor them.

So, for Michigan to be successful, Detroit must be successful: and for Detroit to be successful, Michigan must have a mindset of success with respect to Detroit. 

Detroit Can Be Successful
But the question remains: Can Detroit be successful?

Here is another, equally important question, however: Can the state of Michigan become more successful through a pro-Detroit-success strategy?

If we are stuck in the “Old Economy” way of thinking, the answer is “no.”

However, if we see that states and cities can adopt new forms of economic activities based on the requisites of the emerging “New Economy,” then the answer is “yes.” If it is possible in Boston, Mass., San Francisco, Calif., and Washington, D.C., it is certainly possible in Detroit.

Central to the ability of any city to rebirth itself is the notion that talent and knowledge matter in economic rebirth. The ability to concentrate knowledge workers and creative, innovative individuals in cities through place making, and to become a more attractive place to live, work, play, find entertainment and relaxation—these can drive the resurgence of a city. 

Leveraging opportunities globally also matters.

Right now, our cities are connected to the local economy. They need to be better connected to the global economy, too. So, obviously, amenities matter. Knowledge and creative workers flock to places that offer integrative quality-of-life amenities—culture, public transit, walkability, the stuff of community.

These amenities also include what more people are beginning to call “green infrastructure.”

Knowledge institutions, with their ability to generate the next generation of scientific and other innovation, affect the performance of places. Public and private partnerships matter, where cities need dedicated but creative leaders working across the aisle to make things happen. A positive mindset by city and suburban residents is crucial.

And cities have to think success to be successful. That is why the racial challenges that drove much of the exodus of non-African American people from cities will not help in the repositioning of a city like Detroit.

But there is plenty to be hopeful about when it comes to Detroit.

Many of the places that we have looked at for models of success have far fewer assets than Detroit. So, the current status of the city cannot be attributed to its lack of assets, be they natural, cultural, civic or otherwise.

The challenge for Detroit is how to understand those assets and leverage them in the context of the New Economy. There is the added challenge of understanding what the New Economy means and how future success must be built on such knowledge.

Finally, Detroit must have a vision and an implementable plan to turn knowledge into action and a more prosperous future for the city.

I’ll be writing about those ideas in the next four installments of this series.

Dr. Soji Adelaja is the John A. Hannah Distinguished Professor in Land Policy and director of the Land Policy Institute at Michigan State University. This article was first published on Aug. 27, 2010 by LPI and is used by permission.