The New Economy is changing the rules for economic development.

Many American leaders seem to believe that the U.S. is simply facing a temporary recession and that the economy will come back soon. But New Economy advocates view things quite differently: They say we are nearing the tail end of the old industrial economy and are in the early stages of a remarkably different, global New Economy.

This paradigm shift is so profound that, nationwide, many economic development specialists are at a loss for how best to move forward. Too few of them understand that development now requires competing for key knowledge infrastructure, and that this means building places that attract knowledge workers and knowledge companies.

In the New Economy, it is a place’s amenities—its energy solutions, arts and culture, entrepreneurship, knowledge institutions, population attraction, and information and communications technology—that do the trick.

So, in this article, I look at each of these and their implications for Detroit’s future. These are my picks for the best paths leading to the city’s resurgence.

Green Infrastructure
“Green infrastructure” means a city’s natural, recreational, ecological, and sustainability-related assets. Those range from natural amenities like parks, greenways, waterways, the Great Lakes, and urban forests to LEED-certified, high-efficiency buildings.

These assets need official actions that enhance them. They include repositioning traffic in the city so that it does not dominate the landscape; improving walkability, bikeability and recreational opportunities; promoting urban gardens and farming; and tearing down dilapidated homes to make way for clean, new, open spaces.

For Detroit, building green infrastructure would also include speeding up deployment of renewable energy on some of the city’s vacant land. Wind and solar energy deployment could, in fact, help redefine the city. After all, no town has yet earned the title “America’s Green New Economy City.” So Detroit can distinguish itself by embracing such an image in authentic ways.

The MSU Land Policy Institute’s soon-to-be-released study on the economics of green infrastructure highlights how specific elements of green infrastructure interact to drive the green economy.

Detroit and its partners should not only understand what the city has to offer for such interactions, but also begin integrating them into critical destination points. In other words—make full use of highly attractive things like riverfronts, emerging greenways, and vacant land.

The city should also pursue urban agriculture that is economically sound, environmentally benign, and socially compatible, and beef up its planning-related departments to make this happen.

With so much vacant-space potential, Detroit can be the national epitome of urban, green recreation and tourism. Underutilized neighborhoods can be reconstructed to feature the green attractions that high-economic-impact people are seeking.

Evidence is mounting that green infrastructure has a strong positive effect on a place’s employment, income growth, and overall attractiveness. LPI’s recent Chasing the Past study is one of many that explain this, while other studies show that determining where talented people move to is the best predictor for where knowledge companies will likewise move to.

So, to stem Detroit’s steady population loss, it should begin enhancing its green infrastructure. But this must be done strategically and involve many partners and funding sources.

Energy Efficiency
One top opportunity that Detroit can leverage to green up its reputation is energy efficiency—for public and private offices, commercial real estate, and residential buildings.

For example, given the depleted quality of much low-income housing, there is a huge market for new affordable housing units designed and built to sharply cut overall housing costs for many city residents—particularly in terms of energy consumption.

There are a lot of things in Detroit’s favor: The country’s huge foreign outlay for oil, natural gas, and other energy raw materials; the growing instability of energy raw material prices; competition with China, India and several other emerging nations competing for those materials; and the strong federal commitment to growing the economy via efficiency and clean-energy industry development.

These all bode well for the city’s ability to attract national and foundation funding to establish its smart energy persona. In fact, with such huge federal resources available to retrain workers for green jobs, clean-energy reform could lead the city’s comeback strategy. 

That is why I suggest that Detroit adopt the most aggressive renewable energy mandates in North America. Due to huge federal support for green jobs, worker training to replace existing homes' power sources with renewable ones, and the great new opportunity to build a new and efficient transportation infrastructure in metropolitan Detroit, the city seems well positioned to establish and fulfill those mandates.

In short, Detroit needs its own, 21^st-century energy plan to drive its march toward national leadership on energy efficiency. That plan could make the city very attractive as a low-cost destination point for new, green, industrial and social activity.

Arts and Culture
Detroit’s unique history as one of the world’s music and recording capitals for jazz, blues, gospel, rock, and pop is a big advantage. Studies show that knowledge workers flock to places where art, culture, and fun flourish.

The city’s arts and culture scene can be revamped, rebranded, and aggressively promoted, enabling Detroit to leverage its history as part of defining its future. We have to bring more nightlife to the city’s already active scene: Young people are always looking for such entertainment, so increasing and emphasizing the city’s already bubbling art and culture can be a huge help in attracting them.

Entrepreneurship
For many generations, people in Detroit benefited from the industrial economy its early entrepreneurs built. Today, renewed and expanded entrepreneurial efforts are crucial to the city’s future success.

Since entrepreneurs are attracted to places that welcome them, and to places with entrepreneurial development infrastructure, the city must embrace what I call “economic gardening.” That means making sure it is tolerant of new ideas and supports entrepreneurial activity.

Recruiting entrepreneurs is key, but so is creating an atmosphere that makes it easier for them to thrive. That means reaching deep into neighborhoods and communities to explore creative opportunities that can blossom into unique economic activity that help define the next economy.

Higher Education
A high percentage of Wayne State’s students never graduate, which is unacceptable at a university meant to play a very meaningful role in Detroit’s future.

But the city deserves not only a top-notch university; it also deserves one that is optimally engaged in driving social and technological innovation in the city and the region.

Other universities in the Detroit area can also engage in and with the city, which represents the most important challenge facing Michigan and the best opportunity for the state to reposition itself.

Michigan has invested extensively in science and technology development to address its challenges. So, innovation focused on businesses, communities, people, and places promises to have a strong effect.   

Population Attraction
There has been a lot of talk in recent years about “right-sizing” cities.

This can and should be done in ways that attract certain segments of the population. Since knowledge workers tend to move to environments that they like, and companies and economic opportunities tend to follow them, creating places and environments that these workers favor is extremely important. Detroit must create an environment that attracts people—all people—but most especially the highly educated knowledge class, which drives a big part of today’s emerging economy. 

Mounting evidence suggests that immigrants also matter. The average first-generation American today is better educated, more risk-accepting, and more entrepreneurially oriented than the average citizen. So, what infrastructure will attract population and immigrants? A growing body of research shows that green infrastructure, arts, culture, fun, sustainability, and a dynamic social network are key. 

Information and Communications Technology
While places that were successful in the past positioned themselves early for manufacturing excellent things, today they must position themselves to create value, much of it outside of manufacturing. Knowledge workers use their thinking abilities to create a great deal of value.

That is why Detroit should figure out how to attract the most economically active segments of the population—knowledge workers. Though ambitious, a citywide comprehensive Wi-Fi infrastructure would be a great step in that direction. Cyber connectivity is a premium in today’s society. 

Detroit’s Global Image
Detroit’s fame as the Auto Capital of the World remains strong, but given the continuing decline in the broader auto industry’s status, Detroit’s reputation is now badly out of step with the optimal image of what a modern city is. Global, not local, relevance is what is important today.

Given the growing wealth of frontier and emerging nations, Detroit must market itself to the global community in new ways that don’t have much to do with automobiles.

Happily, a number of efforts are underway to improve Detroit’s acceptability to foreigners and foreign investments. 

Placemaking for Prosperity
If one believes that a city like Detroit is simply stuck and cannot shape its own future, then one might as well throw in the towel and settle for admiring its formidable past glory.

However, New Economy opportunities make it possible for places like Detroit to have more control over their future. Economic activity seems more dependent on internal, not external factors today, which means cities can take actions to achieve their objectives in the New Economy.

Talent is more moveable than manufacturing plants. Innovators seek interesting places to live and work. Creative individuals prefer an environment that nurtures their abilities. And recent college graduates tend to flock to places where they can both work and play hard.

So, things like a city’s range of dining and entertainment opportunities can make a difference in attracting economic activity. More and more people see “green” and sustainability as things they can achieve and experience, not only in suburbs and rural areas, but also in urban areas.

Is it possible, then, for a city to use policies and investments to redefine itself as a relevant place? My personal and professional opinion is, “Yes!” This is what I have defined as “placemaking for prosperity in the New Economy.”

So, the ultimate question is: Can Detroit be place-made for prosperity?

Dr. Soji Adelaja is the John A. Hannah Distinguished Professor in Land Policy and director of the Land Policy Institute at Michigan State University. A longer version of this article was first published by LPI on Oct.1, 2010, and is used by permission. Read Part One of this five-part series here, Part Two here, and Part Three here.