The transition from industry to knowledge
Sixty-five urban areas - many of them in Pennsylvania and Ohio - are having trouble changing their economic base.
Paul Brophy
is a principal with Brophy & Reilly L.L.C. and director of the American Assembly's Retooling for Growth project
We have heard a lot in this election about Ohio and Pennsylvania as political bellwethers, but they may be more relevant as economic ones. Their high concentration of older metro areas where industrial manufacturing is declining mirrors the state of America's urban economy.
Sixty-five urban areas around the United States are having trouble making the transition from an industrial-based economy to a knowledge-based one, and are struggling in the global economy. Pennsylvania and Ohio have more of them than any other state: Allentown, Harrisburg, Lancaster, Reading, Pittsburgh and Philadelphia; Canton, Cincinnati, Cleveland, Dayton, Mansfield, Youngstown and Warren. But it's a national phenomenon: Detroit; Los Angeles; Milwaukee; Oakland, Calif.; and St. Louis are also suffering from slow employment growth, a diminishing tax base, aging infrastructure.
The largest 100 U.S. cities contain 65 percent of our population and about 75 percent of our gross domestic product. If dozens are struggling, what does that mean for the national economy?
The major candidates have said little about them, yet the stakes for these metro areas in this election are high. The decline of all these older metropolitan areas is hurting an already ailing economy. Getting them well could help the economy get well.
Sen. Barack Obama has proposed a federal office of urban policy and other measures that acknowledge the importance of older cities. Both he and Sen. Hillary Rodham Clinton favor funding minimum-wage increases, the Earned Income Tax Credit, and more education and training, all of which would help people living in these metro areas. A few days before the Pennsylvania primary, Clinton and Obama aides debated urban policy publicly, and statements on urban issues were posted to Obama's Web site (not, though, at the Web sites of Clinton or Sen. John McCain as of this writing).
But stump-speech rhetoric about NAFTA or China or greedy CEOs is a far cry from what we need: a national debate and coherent proposals. Who is talking about it? The people who have no choice: policy experts, government officials, and civic and business leaders. A group of them met recently in Hershey, Pa., and produced a report titled "Retooling for Growth." It finds that NAFTA and China aside, our own approaches to metropolitan development are often the problem. Here are some ideas that came from that meeting for correcting them:
Think metro. As studies from the Brookings Institution make clear, we need strategies for entire metropolitan areas, not just central cities. If cities and their suburbs compete against each other, the whole metro area is less competitive globally. Whatever we do must help metro areas compete globally; our efforts need to cut across political jurisdictions. Philadelphia and its surrounding cities and towns won't compete well globally if they insist on seeing each other as competitors. Stop talking "urban" - which these days is code for "older central city" - and start talking "metro."
Build homegrown jobs. Most job growth comes from indigenous businesses and local entrepreneurship. The real payoff lies in building from existing business clusters and strengths. For Greater Philadelphia, that means areas such as advanced health care, pharmaceuticals, and information technology.
Attract and retain highly skilled workers and entrepreneurs. This key task starts with quality-of-life issues: safe neighborhoods, good schools, and cultural and other amenities.
Build on assets. Older metro areas offer landmark architecture, urban infrastructure and attractive density. They also have colleges, universities, hospitals, and other "anchor institutions" that can form the foundation of a knowledge-based economy. We need to invest in them.
Forge a new compact with government. Subsidies to cities for economic development have traditionally been a grab bag of political items and earmarks. What we need instead - even though it is painful politically - are investment decisions based on sound economic strategies, aware of an area's market strengths, ideas likely to achieve a good economic and social return.
Perhaps we are finally beginning to see some focus on "urban" (again, think "metro") issues in this election. But candidates need to understand: America is largely a nation of metro areas, and their condition contributes fundamentally to America's overall economic health.
The Web site for the American Assembly's Retooling for Growth project is www.americanassembly.org.
The Web site for the American Assembly's Retooling for Growth project is www.americanassembly.org.


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