Monday, July 22, 2013

The RTP is not Detroit, Detroit is not the RTP

I don't really want to get into a big discussion on Detroit's bankruptcy -- you can go elsewhere for that sort of thing. That said, The Atlantic's James Fallows posted a reflection from a reader, and I found one aspect to be a bit silly (emphasis mine):
And yet, there is hope. Detroit has begun to reinvent itself, both in the city and in the metro area as a whole. SE Michigan does have a ton of engineers and a high level of R&D dollars being spent. While the bankruptcy is sad, just as GM's bankruptcy on 1 Jun 2009 was, it'll be far sadder if Detroit can't continue to reinvent itself as it has from the darkest days of 2008-9. The bankruptcy is payment for the sins of the past - but this purgatory should lead Detroit on a path to success. There's no reason that Detroit can't mirror what North Carolina's Research Triangle did in the '90s and '00s. And considering how much Detroit has made America look at herself over its history - I think we should all be rooting for the Motor City to rocket forward from here.

Not only can I not help but love Detroit - I can't help but believe in that city too.
Contra what your local economic development council tells you, you can't grow that kind of R&D focus overnight. There's probably plenty of reasons that Detroit can't turn itself into RTP, and not soon enough for it to make a difference -- a shame, to be sure.

[Seems to me that the main difference between Detroit and the RTP region is difference in economic focus of the regions: automobile manufacturing versus life sciences. Which one of those does America still have a relative comparative advantage in? I also wonder if there's a difference between the concentration of research-oriented universities in the RTP region and the Detroit area.]

UPDATE: Lisa Jarvis and Celia Arnaud point out that the more likely places for a life sciences renaissance in Michigan would Ann Arbor or Kalamazoo. This actually reminds me of something that I meant to point out in the original post, which is the seeming annihilation of Michigan's pharmaceutical research centers during the 1990s/2000s. It would be interesting to know what percentage of Michigan resident life scientists ended up 1) leaving the region, but still working in pharma or 2) staying in Michigan, but leaving pharma.

19 comments:

  1. One thing that Michigan in general has going for it is a solid chemical industry (both Dow and Dow Corning among others). I think Detroit could, over time, because something of a new RTP but it won't be pretty and it won't be soon.

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  2. Pittsburgh might be a better model for what Detroit could become. Plus, these things take time--RTP was founded all the way back in 1959.

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    1. I think that's what I really am getting at. Serious region-wide economic growth is not a mix-and-stir. It's something that takes time and metric sh-ttonnes of federal and private R&D funding, none of which are in surplus right now.

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  3. Detroit management needs to change its tune if it wants any hope; and it won't, given the history of the place. Oppressive tax system, Svengali-like grip of organized labor actively supported by government and the list goes on. It looks like hell-on-earth because of the way the place was run. Every college and university student should look at Detroit as a case study what over 5 decades of "progressive" rule does to a city.

    Detroit is actively hostile towards business and growth. City taxes on top of state taxes on top of federal taxes; businesses entering the city must often pay decades of back taxes on ruined property and the list goes on. The city has shrunk in size, but the size of the city government has not shrunk in proportion. To paraphrase Jack Nicholson from the original Batman, "This town needs an enema." And they are going to get one.

    Remember - anything that can't go on for forever, won't.

    My missive is not from an outsider: I'm a native Michigander (or Michiganian) I spent the first 22 years of my life there (just outside of Flint) and the running joke through my teen years was "The last one out, please turn out the lights"

    I wish them all the luck in the world. But my opinion is we have bankruptcy laws in the US for a reason. They should have been used with GM, and I pray they will be used with Detroit.

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    1. Nonsense, from start to finish (but unfortunately we'll probably hear this story a lot).

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    2. Anonymous, either refute an argument or don't bother commenting. "That's nonsense, even though this commenter is from the area and his observations track with the outside accounts of problems with Detroit pretty well."

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    3. Wolverine RefugeeJuly 23, 2013 at 8:23 AM

      Counterexample: Detroit isn't even in the same league as Chicago when it comes to corrupt government, excessive taxation, and unionism. Chicago is not falling apart. Detroit has.

      I've heard that narrative since I was a kid. It's not "nonsense," but it leaves out a lot of complicated, messy, ugly history. The riots in '67...globalization...bad choices by the Big Three...all of these are in play.

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    4. Well thanks for the etiquette lesson, wolfie, but instead I think I'll go on commenting freely as though I were on the Internet or something.
      I realize that it's probably futile to argue with the tremendous authority that comes from having grown up kind-of-near there. Still, perhaps we should consider a few other factors like the city having been built on an industry that collapsed, the end of revenue-sharing, post-1967 white flight, etc. No one can argue that the local leadership hasn't been corrupt or lacked vision, but corruption is not a synonym for progressivism anywhere beyond the fever swamps of the right-wing mind, and lack of vision is the most common persuasion among all political types. Another Democrat-dominated but more visionary city, Pittsburgh, provides a counterargument to Harry's thesis.

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    5. It's not an etiquette lesson (and the name's not "wolfie"), it's that providing no counterargument (or name, contra Mr Elston) makes your input worth less than nothing. Political flackery gets you zero points on the net or anywhere else. Wolverine Refugee, thanks for taking the extra minute to actually point out something interesting.

      Pittsburgh may be a good counterpoint to Detroit but I don't see where the unions or a Democratic mayor's office helped in any way, shape or form.

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    6. Probably not being corrupt as all-get-out helped some. (Having your mayor go to the hole is a good certification).

      I would imagine Pittsburgh is probably more conservative so some of the extremes of politics might be moderated. It did manage to maintain both a reasonable educational/research base and find new things to do, and while those things probably weren't done by the city government, they didn't mess them up, at minimum.

      nb There is a ChemBark commenter named Wolfie who is not entirely coherent - confusing BW with him/her is not accurate or complimentary.

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    7. Thanks Hap--i like to think i'm at least 10% more coherent than Chembark's Wolfie, but you never know how you come across to others.

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  4. Why Detroit when there are other places (as mentioned above) that already have some capabilities? There are still a number of great chemists in Kalamazoo and the surrounding area. I can't speak as much about Ann Arbor but there is def the infrastructure there!

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  5. Wolverine RefugeeJuly 22, 2013 at 7:52 PM

    I'm also a native Michigander (from the Saginaw area.) I can't help but think the media attention is somewhat overblown. Detroit is a basketcase and has been for as decades. The suburbs, in contrast, are massive and doing OK.

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  6. R&D in different industries is much faster. If Michigan focused on attracting new engineering firms - they could turn around. Granted, they would need to be devoted to some pretty creative strategies to attract good startups.

    Life sciences have too long of a development cycle to provide any short term benefits...

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  7. @Wolverine Refugee: You're correct that the media attention is focused on Detroit proper, not any of the burbs, and one should be clear to point out that it's Detroit (proper) that's in the crapper, not the suburbs, yet. The suburbs of Detroit are expansive to be sure, but each has their own governance and are, in general, smaller with fewer services that Detroit used to offer.

    From the Economic Collapse Blog (http://goo.gl/Sso7p) (undoubtedly not peer reviewed material):
    Unemployment in Detroit (proper) is over 16%. National average around 7.5%
    Police response time is 58 minutes (national average is 11 minutes. (I could do a shameless 2nd Amendment plug here, but won't)
    80K home are abandoned
    In the first quarter of 2013, about 40% of the street lights are not working.
    and there's more...

    From that description it sounds to me that Detroit is moving to "Lord of the Flies" or "Escape From New York" status pretty quickly.

    It seems to me that the locations in MI that are doing "better" (I won't say "fine" here) are those who have moved away from the Auto Industry paradigm and into other sectors. Kazoo and Ann Arbor were doing well until Pharmacia (spelling not withstanding) was gobbled up by Pfizer and then vomited into oblivion. (A lot of my colleagues got burnt during that transition). The last time I went through Kazoo was in the mid 2000s and it was starting to look a little worn.

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    1. Wolverine RefugeeJuly 23, 2013 at 8:10 AM

      Harry, that's the problem, isn't it? Detroit is a big city that lost its population (and tax base) to its suburbs starting with the riots in '67. There's been a long-term, unsustainable mismatch between the scope of services and the population.

      I imagine the rest of the state will follow a similar path--but probably not as dramatic.

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  8. Sideline ChemistJuly 23, 2013 at 9:12 AM

    I lived in MI for 9 very enjoyable years but left in 2007 when Pfizer axed the Ann Arbor site. Although a few start-ups (Lycera, Esperion, etc) eventually rose from the ashes of Pfizer's destruction of the MI pharma industry, there just weren't many jobs available in the area for scientists back in 2007. My colleagues that stayed mostly took different career paths (consulting, teaching, business development, industrial chemicals, CROs, chemical, equipment, or pharm services sales, etc). Those that stayed in drug discovery mostly left the state for CA, NJ, MA, or CT.

    There was some talk of using the tobacco settlement money to fund a Life Sciences Corridor from Lansing to Ann Arbor. Did anything ever actually come out of that or was the money diverted to other things?

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  9. "like the city having been built on an industry that collapsed"

    The car industry did not collapse. Toyota disrupted it with compact cars, then captured a large portion of US market share. Complacency to changing consumer needs and bloated unions collapsed the big 3.

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    1. I imagine the gas crunch helped, too - some of that is covered under "complacency to consumers" and some of it *cough*the Pinto*cough* was "consumers are expendable", which is a poor combination of attitudes. Some of it might be technological failures, but most of it was still "we don't care" (when Obama or his predecessor were talking about increased fuel standards for light trucks, Chevy in particular was complaining because their pickup engines were the least efficient of the Big 3, with the major designs not having been improved in **40** years; their rejoinder was that the engines worked and they didn't see any need to fiddle with them).

      Why do you think anything useful would be funded with tobacco money? As soon as my state could, they started charging for the quit lines and stopped caring about cigarettes other than to make sure their tax money keeps coming and any alternatives are taxed as badly. If they could have split the check among our legislators and some mayors without it looking bad, I'm sure they would have done so.

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