Not All Cities Get IT Booms

By SAM URETSKY

Call it a tale of three cities. The Dodge brothers and Henry Ford created Detroit, admittedly from the inside out. In 1910, the Dodge brothers built their automobile factory in Hamtramck, Mich., a city almost completely surrounded by Detroit. The Washington Post described Dodge Main as “... a hulking industrial citadel of foundries, assembly buildings and warehouses that once employed 36,000 autoworkers at the end of World War II …”

The plant was closed in 1980, unable to compete on costs with the Japanese factories, but it was probably the start of the creation of Detroit as the motor city capital of the world. The Dodge plant was a huge market for suppliers, and so suppliers moved their operations to be nearer the markets.

Henry Ford built his first assembly line factory in Hamtramck as well, to produce the Model T, Packard Motors built the largest factory in the world in Detroit, and General Motors was similarly headquartered there.

Competition from Asian nations and states, which offered Right to Work laws that cut labor costs, cut into Detroit’s position, but there is still a great deal of manufacturing in the area.

Cities can grow like pearls, from a grain of sand in much the same way as a shopping center traditionally relied on a magnet store to draw a large number of shoppers, and then rented out the smaller stores to smaller retailers. When Amazon announced that New York City would get a share of its HQ2, the draw was not the charm of the town, or even the cultural benefits, and probably not even the tax cuts (although Amazon got plenty of those), but a high population of computer professionals. True, New York had its Silicone Alley, with many small start-ups, but as a financial center it had thousands of IT professionals working in areas that weren’t thought of as technology centers, but relied on technology for routine operations.

With less publicity, Google announced that it was expanding its presence in New York. The Wall Street Journal reported, “The plan … would give Google room for nearly 20,000 staff in the city, including those it has now — rivaling the approximately 25,000 jobs Amazon.com Inc. is projected to add ...” The New York Times reported “Apple, Facebook, LinkedIn and Uber have also embarked on recent New York expansions — much of it driven by a hunt for talent. Each is creating hundreds or thousands of high-paying jobs and leasing or building millions of square feet in commercial real estate..”

Many cities joined in the competition for Amazon’s HQ2, and in 2016 there was discussion of retraining programs to bring technology centers to some of the southeastern states, but even a nation as large as the United States can only support a limited number of centers for any single industry. In the 1960s, Willys Motors advertised its Jeepster with the slogan “Holy Toledo What a Car,” but Toledo could never become the industrial center to rival Detroit.

Many smaller cities are fading, unable to attract profitable industries, but others are fining their own niche. In January 2018, Forbes magazine published an article, “Why Louisville Is Becoming America’s Aging Capital.” The report says “Turns out, Louisville (population 1.3 million) is home to America’s largest cluster of aging care businesses, such as nursing homes, home-based health care, hospice and other senior living services. Think health care and health insurance behemoth Humana, as well as Kindred Healthcare, Trilogy Health Services, Atria Senior Living and Signature HealthCare, all headquartered here.” This growth was not by chance. The city, and its government, chose aging and health care as an industry worth developing, in large part because of the projected growth of the 65+ population which, by 2050, is projected to be over 20% of the population.

There are many lists of innovative cities in the United States, each learning to focus on an area of projected growth. Minneapolis is expanding in the areas of medical and surgical supplies and equipment, Chicago, although long a center of food industries, has the largest waste-water treatment plan in the world, and leads the nation in water purification patents, which is already a worldwide need.

Today we seem to be focused on technology, but many cities have looked beyond the horizon to find growth industries that they can cultivate. There is a future beyond Amazon for those willing to look for it.

Sam Uretsky is a writer and pharmacist living in Louisville, Ky. Email sdu01@outlook.com.

From The Progressive Populist, February 1, 2019

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