USA: Map of the United States.
Place has always mattered. Across American economic history, “place” has played a pivotal role. In the 19th century, Lowell, Mass. was a hub of U.S. textile production because of a nearby waterfall that could power 10,000 looms. Milton Hershey needed milk to scale production for his new candy bar, so he put down stakes near eastern Pennsylvania’s dairy farms; across the state, Pittsburgh, at the junction of three rivers and with proximity to large coal deposits, was the perfect place for making steel. Edward Libby moved his glass company to Toledo to take advantage of the region’s large deposits of high-quality sand and abundant natural gas for production, laying the foundation for the Glass Capital of the World. Positioned at the crossroads of east and west, and north and south, St. Louis leveraged steamboat, rail, and westward expansion to become a vital transfer point for commodities and goods, growing into one of America’s largest distribution centers.
Earlier this month, the Council on Competitiveness’s National Commission on Innovation and Competitiveness Frontiers launched its second phase of policy-generating work at the University of California at Davis, hosted by Chancellor Gary May, bringing together more than 100 senior leaders from across the country. Place-based innovation and economic growth is a major theme for the Commission’s work in the year ahead. Panelists, keynote speakers, and participants explored the “state of place” across the United States, how places are changing, and strategies helping them grow, innovate, and compete.
Mega shifts change the fortunes of places. Over the past half-century, globalization, rapid technological change, and a shift to a service economy have changed what makes places thrive. Some places have leveraged these changes into an upward economic spiral, but many of America’s once-vibrant communities — from urban centers to small towns — have suffered due to economic decline, community distress, and social despair. David Greene, President of Colby College in Waterville, Maine described this reality: “This was a mill town. It had both textile mills and paper mills for over 100 years, completely sustaining the economy and middle-class income for people. They started to disappear in the 1970s, 1980s.” We see this in towns and rural areas across the country. As Under Secretary of Commerce for Economic Affairs Jed Kolko said, “it is harder to thrive in places that aren’t thriving.”
Under Secretary Kolko offered topline insights drawn from the U.S. Department of Commerce’s Regional Economic Research Initiative. Geographic inequality — the spread between high- and low-income places — has steadily widened in the United States. The growing gap is at least as much about the top places pulling away as it is about the lower-ranked places falling farther behind. There is also strikingly less geographic mobility. This makes closing economic gaps harder, since people are less likely to move where incomes are higher and opportunities richer. When places have moved up in economic rankings, it is almost always because an industry or a particular company took root and created a sustainable agglomeration that drives income growth, mobility, and workforce development that lifted educational attainment.
Different places, different challenges. The challenges hindering economic development and growth vary in communities across the country, such as affordable housing, a lack infrastructure, or struggle to attract talent. Others need to create opportunities for existing residents, as those with little opportunity lose their young people, and therefore a population on which to build. A lack of a diverse industrial base can also be a problem because industries and companies rise and fall. In his hometown of Rochester, NY, Under Secretary Kolko recalled how it was an incredibly successful place for decades, but its fortunes were tied to Kodak. In the late 1970s, Kodak employed 50,000 people in Rochester; at the time it filed bankruptcy in 2012, jobs had been cut 90%, to 5,100.[i]
A place and its culture can be difficult to change as well. National Commissioner and University of Wyoming President Ed Seidel discussed his journey in making the case for the university to build a school of computing and a statewide program to bolster digital skills such as software engineering, cyber security, AI, and entrepreneurial capability. In the beginning of his efforts, fewer students than expected applied initially for the software program at one of Wyoming’s community colleges because they were not being adequately informed of the value of a computing education in the 21st century. Both traditional fields — such as agriculture and mining — and newer ones, like AI, need individuals with strong computing skills. “Sometimes promoting new activities can be seen as counter to proud traditions of the state,” President Seidel said. “So, these are really deep cultural issues.”
No one-size-fits-all solution. When it comes to solutions, Under Secretary Kolko distinguished two kinds of investments: “Some programs try to combat geographic inequality by targeting distressed places, while others are more focused on boosting competitiveness by targeting higher capacity places.” For the former, investments may be needed to build capacity or infrastructure such as high-speed broadband, or functional public schools and services. Places with higher capacity are better prepared for boosting regional and national competitiveness in a range of technology fields.
Universities can be good at identifying what is needed in a town, community, or region because they are embedded in these places. As Council Executive Committee member Suresh Garimella, University of Vermont President said, “We’re best when we take on local problems by working with our local communities and local industry, and apply local wisdom.”
Dr. Shashank Priya, Vice President for Research at the University of Minnesota provided an example from its statewide network of campuses. At the university’s flagship campus in the Twin Cities, the focus is innovation, intellectual property development, and commercialization, creating a complete ecosystem for driving research-based innovation from lab to market. Meanwhile, its Morris campus leverages its plentiful sunshine and wind to concentrate on growing the solar and wind energy infrastructure, and incorporating the learnings into the classroom curriculum. Its Crookston campus has a niche in agricultural and animal breeding, so they are thinking about next-generation agriculture and the infrastructure to advance that for the nation. Rochester, Minn. is home to the Mayo Clinic, so there the university and Mayo are co-developing the NXT
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Model for place-based innovation. UC Davis has also long been a model of being connected to its region’s economy, including its farmlands and wine country. UC Davis is ranked No. 1 nationally in agriculture, forestry, and veterinary medicine, generating $12 billion in economic impact. It is home to the Robert Mondavi Institute for Wine and Food Science, with departments on viticulture and enology, and on food science and technology focused on food chemistry, microbiology, processing, and sensory science.
“We are pioneers in food, food as medicine, next generation food systems, food and food policy,” Chancellor May explained. “Part of our ongoing mission is to take our traditional strengths in agriculture and expand in food and food systems. Innovative areas we believe are the next in line to solving some of the world’s challenges.” I outlined that potential in my May 2022 Forbes column on “The Future of Food.”
UC Davis is also underway on Aggie Square, a new innovation district at the intersection of university, industry, and government, hosting whole ecosystems in emerging areas of technology and life sciences, and providing inclusive teaching and offering training programs from entry level jobs to doctoral degrees. A key pillar in this project is a Community Benefits Partnership Agreement, a roadmap for ensuring local residents are included in the success story of Aggie Square. It includes significant benefits for the Sacramento community, and in particular, the neighborhoods surrounding Aggie Square, including a $50 million investment in affordable housing and jobs for residents. With this agreement, the university has a chance to create new opportunities.
Chancellor May described its aims: “The university partnered with the City of Sacramento on Aggie Square to build a thriving innovation hub where companies, researchers, students, faculty, and community will work side by side. It will create a new public space with welcoming, accessible entry points that connects UC Davis with local communities. Aggie Square will be the cornerstone of a regional identity and economic development.” Chancellor May sees Aggie Square as a place with “the potential to truly transform the livelihoods of our neighbors and economic growth in the Sacramento region. Not only will Aggie Square be good for the university. It will be good for business and good for the community.”
[i] Kodak’s Retooled Economic Role, Rochester Beacon, January 20, 2022.
Source: https://www.forbes.com/sites/deborahwince-smith/2023/05/02/pay-attention-to-place/