Brookings: Experts - Jennifer Bradley

How Metropolitan Regions Can Win Friends and Influence Economies

Bruce Katz and Jennifer Bradley — Mon, 21 May 2012 00:00:00 -0400

The collapse of the consumption-driven, domestic-focused growth model is giving rise to new thinking about a next economy that is fuelled by innovation, powered by low-carbon processes and products, driven by exports and rich with opportunity. These aspects of the next economy require metropolitan leaders to cultivate peer networks for improving collaboration and setting platforms for sustainable economic growth.

In an essay for Next American City, Bruce Katz and Jennifer Bradley highlight ways metropolitan areas can effectively share expertise. They call for metro areas to use the proper metrics to assess their unique competitive assets, expand metropolitan relationships beyond U.S. borders, and provide visionary leadership to set foundations for long-term prosperity.

The authors also encourage leaders to engage directly among each other and with constituents by using technology and social media to bolster networks.

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Publication: Next American City

Republican Candidates Don't Get Michigan (and Manufacturing)

Jennifer Bradley and Bruce Katz — Sat, 25 Feb 2012 00:00:00 -0500

Politics and economic policy are intersecting right now in Michigan, with important lessons for the rest of the country. Against the backdrop of the federal government’s rescue of the auto industry, presidential candidates are campaigning in a state that took a huge hit in the recession but has since rallied to post one of the strongest recoveries of any place in the nation.

Michigan is ground zero for the ferment in U.S. manufacturing, the sector that has done so much to power the recovery and a surge in overseas demand for American products. The resilience of the auto industry has played a significant role. American vehicle sales rose to 12.8 million in 2011. The Big Three claimed 47 percent of market share, their best showing since 2008.

Ford earned $20 billion, its best earnings since 1998 and its second-biggest annual profit in the company’s 109-year history. GM regained its position as the world’s largest-volume automaker and notched a record profit of $7.6 billion. Chrysler rebounded from a $652 million loss in 2010 to post a $183 million profit last year, its first full year of positive earnings since 2005.

Even if manufacturing does not regain the outsized share of GDP and employment it once had, it remains powerful engine of innovation, a driver of exports that are taming our trade deficit, and a source of good-paying jobs. Successful manufacturers, from giant auto companies to small machine shops, are pivoting to new lines of business like clean energy, adapting to new technology, and embracing a culture of continuous learning.

In states like Michigan leaders are looking to the future, one driven by innovation. By contrast, our national politics is still stuck in the past. Michigan’s GOP primary contest makes this all too clear.

When the leading GOP candidates talk about manufacturing in Michigan, they are usually squabbling over the wisdom of the auto industry bailout. This argument over counterfactuals (would the industry have bounced back without the bailout? How fast?) misses the point - what will the candidates do to make sure that American manufacturing stays strong?

When they do get around to answering that question, Governor Romney and Senator Santorum put forward proposals that show they are only partly listening to what the makers and innovators really need now.

In a speech last week to the Detroit Economic Club, Senator Santorum pledged to eliminate taxes on manufacturers and allow companies to repatriate profits tax free if they invest that money in plants and equipment. He also promised a 20%, permanent R&D tax credit. Governor Romney followed essentially the same script at his own DEC speech this past Friday, although he alluded to the need for greater private-sector investment and the importance of our institutions of higher learning. But, fundamentally, the focus of both candidates’ announced plans is on lowering taxes.

Certainly, manufacturers are very happy to pay lower taxes and welcome more support for research. But 21^st century manufacturing needs a lot more to flourish - and some of that has to come from government.

At a forum on innovation in Washington earlier this month, the chief executives of GE, Dow Chemical and Boeing mentioned tax policy, but they also pointed out the importance of immigration, education (especially in science, technology, engineering and math), attracting foreign direct investment, and the cut-and-invest policies in the deficit commission report. They also stressed the importance of learning from Germany and its interplay of universities, research centers, firms, and workers.

The federal government should be asking the important questions: What do companies and workers need to flourish in an economy driven by production and exports? What are the market gaps in providing capital, or applied innovation, or worker training? How can federal policies galvanize the talents of states and metros where industries are located?

Manufacturers know you can’t get into overdrive if you’re stuck in reverse. As Governor Romney and Senator Santorum travel through Michigan and other states, they should focus on what matters to the people who are driving the recovery and explain how they will deliver. They should aspire to collect ideas, not just delegates.

Authors

Publication: Global Public Square, CNN.com

Image Source: © Sarah Conard / Reuters

Michigan's Urban and Metropolitan Strategy

Thu, 23 Feb 2012 00:00:00 -0500

This report was launched at a February 23, 2012 Detroit Economic Club and Business Leaders for Michigan event. View video from the event »

Editor’s Note: Jennifer Bradley, fellow and co-director of the Great Lakes Economic Initiative, and Bruce Katz, vice president and director, are the lead contributors from the Metropolitan Policy Program at Brookings.

Why has Michigan enjoyed the second-strongest post-recession recovery among the 50 states? Because the state and its metropolitan areas are rich in the assets that will drive the next economy in the U.S. and around the globe.

The recovery has been powered by manufacturing, and Michigan’s metropolitan areas are where innovation prowess meets manufacturing experience. Ninety percent of the state’s high-tech industry employment and 80 percent of its advanced manufacturing jobs are in metropolitan areas. Six Michigan metropolitan areas had a higher number of patents per 1,000 workers from 2001 to 2010 than the average U.S. metropolitan area.
Exports have moved the US economy forward, as our manufactured goods have met ready markets abroad. Michigan’s metropolitan areas are also exceptional at producing goods and providing services that are in demand abroad. Of the 100 largest metropolitan areas in the United States, Detroit is 12th in terms of export intensity (the share of its output that is exported), and Grand Rapids ranks 8th. Thirteen of Michigan’s 14 metro areas are more export-intense than the U.S. average.
U.S. manufactured goods and exports are competitive to the extent that they are innovative. Michigan’s metropolitan areas are home to strong and emerging industry clusters and powerful anchor institutions like universities, medical centers, and research institutes that invent and commercialize new technologies and services.

For the past year, Business Leaders for Michigan, Public Sector Consultants, and The Brookings Institution Metropolitan Policy Program have been analyzing Michigan’s metropolitan areas to determine how state policy can best prepare the state’s metros, its economic engines, for the next economy.

We recommend that Michigan leaders:

1. Strengthen the link between innovation and manufacturing to increase regional exports and attract global investments.

Reorient the 21st Century Jobs Fund to include manufacturing and innovation, particularly among small manufacturers.
Create a strong foreign direct investment (FDI) strategy to attract innovative firms that fill gaps in key manufacturing clusters.
Help small manufacturers and service businesses increase exports through robust export assistance, promotion, and financing.

2. Support strong regional systems to train existing workers and welcome new ones to fuel economic growth.

Use existing workforce dollars to drive regional workforce strategies that match cluster strengths.
Seize the opportunity to demand changes in federal workforce laws.
Help highly educated immigrants gain Michigan professional certifications.

3. Make targeted investments that leverage distinct assets in urban and metropolitan areas to transform regional economies.

Support a small number of urban and metropolitan industry clusters with grants tailored to the specific needs of emerging, existing, or advanced clusters.
Designate one to three new “urban innovation districts” that connect innovation-generating anchor institutions with infrastructure, housing, and amenities, and support them with a 21st Century Places Fund.

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Michigan Poised to Move Ahead in Next Economy

Publication: Metropolitan Policy Program at Brookings and Public Sector Consultants

Image Source: © Rebecca Cook / Reuters

Web Chat: States and the Economic Recovery

Jennifer Bradley — Wed, 22 Feb 2012 00:00:00 -0500

The nation’s governors are gathering for their annual winter meeting in Washington, and jobs and economy will be the top items on the agenda. Frustrated with Washington’s partisan gridlock and lack of progress on the economy, many governors are now pressing forward with innovative solutions to jumpstart their economies at the state level and lay the foundation for long-term growth.

On February 22, Jennifer Bradley answered your questions on the economic health of the states during a live web chat with POLITICO.

12:30 Vivyan Tran: Welcome everyone, let's get started!

12:30 Jennifer Bradley: State innovation is part of the genius of our federalist system. Health care reform was law in Massachusetts years before the recent passage of federal legislation. During the 1980s, governors from both parties experimented with welfare and healthcare reforms, paving the way for federal advances in the next decade. Throughout the 1950s, public university systems, established by states like California and North Carolina, set the stage for the federal technology investments of the 1960s and 1970s. And before he was president, New York Gov. Franklin D. Roosevelt experimented with interventions that foreshadowed the New Deal.

With Washington mired in gridlock, states have no choice but to innovate. Smart governors are working with partners in metropolitan areas, which concentrate people, jobs, GDP, and innovation potential and are critical for job creation, revenue generation, and economic growth.

12:30 Comment From Tim: What are a few examples of innovation at the state level that have helped local economies get back on their feet again?

12:32 Jennifer Bradley: States like Nevada, Tennessee, and New York are organizing their economic development strategies around the needs of local and metro economies. They are focusing on aligning resources metros need, rather than sticking with the same old state agency stovepipes.

12:32 Comment From Katie: I see that you're with Brookings's Great Lakes Initiative. It seems as though Detroit and the whole region is experiencing a resurgence at the moment. What do you attribute this success to?

12:35 Jennifer Bradley: Manufacturing turns out to be a source of strength in the recovery (and will likely continue to be a source of economic strength, since it's so closely tied to innovation, which is the engine of economic growth). Places that have hung on to their manufacturing, particularly in sectors in which the U.S. as a whole is strong—like autos and transportation, and chemicals—have gained as those sectors have rebounded.

12:35 Comment From Sam: How successful have states in the "rust belt" been in revitalizing their economies following the recession?

12:38 Jennifer Bradley: This is a nice follow up to the previous question. States in the Midwest/Northeast that have done well have done so by really focusing on innovation and linking that to their manufacturing sector. Ohio has done this through its Third Frontier innovation program; Michigan has done this through its 21st Century Jobs fund to some extent. Focusing on exports also has been critical, because the recovery is also export-driven—all those manufactured goods are finding eager purchasers abroad.

12:38 Comment From Tony: Which states are close to fully recovered and which are still lagging behind?

12:40 Jennifer Bradley: The states with the strongest recovery, as of the end of last year, are North Dakota, Michigan, Louisiana, Wyoming, West Virginia, Utah, Indiana, Massachusetts, Alaska, and Oregon.

You see there a mix of natural resources economies, and manufacturing and exports economies (Intel, for example, is a big exporter in the Portland, OR, metro).

12:40 Comment From Beth T: Many politicos see manufacturing as a way for states to emerge from the recession and begin to provide high-paying jobs for their citizens. Given the cheap cost of manufacturing in places like China, is this realistic?

12:43 Jennifer Bradley: My colleagues at Brookings just devoted several hours to this very question at an event this morning! Chinese labor costs are rising, and there are a lot of other factors that make U.S. manufacturing competitive. Job loss in manufacturing is not inevitable. Smart governors understand that manufacturing may not employ as many people as it used it, but it is an important driver of innovation in their states, so they are working to link up university research and manufacturing needs.

12:43 Comment From Abigail: Are there any state programs right now that could and should be scaled up to the federal level?

12:48 Jennifer Bradley: Michigan's governor has proposed a new approach to transportation investments, driven by data—which projects are going to deliver the most bang for the buck, and how do transportation investments support goals beyond just getting from point A to point B (goals like more exports, or supporting logistics hubs)? The federal government could certainly benefit from a more strategic approach to transportation as well.

The larger point though is not necessarily that the Feds should scale-up state interventions willy-nilly, but that they should be taking the same approach, asking "Where are the market failures, and how can we deploy our resources to solve those failures? What needs to be done, and how can we bring a unique solution?"

12:48 Comment From Donna: For a while in the 90s, every state was hoping to have the "next Silicon Valley." What types of industries/sectors are states trying to cultivate today?

12:51 Jennifer Bradley: One promising thing that my colleagues and I see is that states are no longer trying to be "the next" anything—they are trying to be the best versions of themselves and build on strengths that they have. Jed Kolko has done research indicating that 95% of new jobs come from existing firms—that's where smart states are starting, with what they already do well. For some states that's advanced energy, for some it's helping auto supply companies pivot to supplying parts for wind turbines.

12:52 Comment From Fran I: I've heard a lot recently about regional economic development as a tool states are using to support growth. Could you explain a bit more about what these are?

12:55 Jennifer Bradley: It varies from state to state. In New York, for example, Governor Cuomo established 10 regional development councils and asked them to develop strategic plans for their regions. These plans were evaluated by a panel of experts and the top four regions got $100 million in state funding. Colorado's Governor Hickenlooper used a different model. He told each county to create an economic development plan, constructed regional plans from those, and then used that as the state's economic development plan. Tennessee used something called "jobs base camps" to identify key clusters to support.

12:56 Comment From Karen K: How can the federal government encourage states to experiment in these sort of ways?

12:58 Jennifer Bradley: The federal government can listen to the states when they ask for flexibility. For example, governors like Michigan's Gov. Snyder has asked for a different, more flexible approach to spending federal workforce dollars.

Ironically, the federal government is spurring a lot of state innovation right now because it's paralyzed and gridlocked. The states (and metro areas, too) have no choice but to innovate, whether the federal policy environment is conducive to it or not. I certainly don't advocate continued paralysis at the federal level, but it shows that states simply have to get stuff done—they have to balance the budget, they have to respond to unemployment numbers, they have to bridge the gaps.

12:59 Vivyan Tran: Thanks for the questions everyone, see you next week!

Authors

Jennifer Bradley

Image Source: © Max Whittaker / Reuters

Great Lakes Monitor: Tracking Economic Recession and Recovery in the 21 Largest Metropolitan Areas of the Great Lakes Region

Jennifer Bradley and Richard Shearer — Thu, 15 Sep 2011 15:09:00 -0400

Editor’s Note: This report reflects data from the second quarter of 2011. Please visit our updated MetroMonitor for the latest quarterly data and analysis.

Overall Performance: Recession and Recovery
Great Lakes metropolitan areas reliant on education and government have performed better than most large metropolitan areas in the United States over the course of recession and recovery. Five Great Lakes metropolitan areas were among the nation’s overall strongest performing metropolitan areas; two are educational centers (Pittsburgh and Syracuse), and one is a state capital (Madison, also home to a large university). These three metropolitan areas have also gained government jobs since their prior total employment peaks.

The Great Lakes metropolitan areas in general are enjoying a strong recovery – but auto producing metropolitan areas still have not made up the ground they lost in the Great Recession. Akron, Grand Rapids, Toledo, and Youngstown are among the 20 best-performing metropolitan areas in terms of recovery performance; Detroit’s recovery has been stronger than that of most other U.S. metropolitan areas.

The Recent Pace of Recovery
The second quarter presents a mixed recovery picture in the Great Lakes region. While auto-producing metropolitan areas in the Great Lakes region are, as noted above, generally enjoying a strong recovery, in the second quarter of 2011, Cleveland, Columbus, Dayton, Detroit and Toledo saw both output and employment decline. This was not necessarily due to a loss in manufacturing jobs in this quarter; Columbus and Dayton lost manufacturing jobs during this time, but Cleveland, Detroit, and Toledo gained them. Both employment and output grew in the second quarter in Buffalo, Grand Rapids, Louisville, Milwaukee, Minneapolis, Pittsburgh, Rochester and Syracuse.

Employment
Every Great Lakes metropolitan area but one has added jobs since their recession employment trough, but none has made a complete jobs recovery. Des Moines is the only large Great Lakes metro that hadn’t begun its employment recovery by the second quarter of 2011. (Des Moines hit its lowest employment in this quarter, so has seen no increase).Madison and Rochester are within one percent of their pre-recession employment peaks. Milwaukee, Grand Rapids, Youngstown and Rochester were among the strongest metros in terms of employment gains since their recession troughs. Grand Rapids has seen employment rise 4.3 percent since its low point in the third quarter of 2009. Within the region, Des Moines and Indianapolis have seen the smallest percentage increases in employment since their trough quarters.

Unemployment
The average unemployment rate among large Great Lakes metropolitan areas in June 2011 was 9.1 percent, lower than the seasonally unadjusted national rate that month of 9.3 percent. Unemployment was above the June 2011 national average in six Great Lakes metropolitan areas, Chicago, Dayton, Detroit, Louisville, Toledo, and Youngstown. The lowest unemployment rates in the region were found in Des Moines, Madison, Minneapolis, Pittsburgh, and Rochester.

Output
Output growth in the Great Lakes metropolitan areas lagged other large metropolitan areas and the nation as a whole during the second quarter. Only nine Great Lakes metropolitan areas saw gains in output in the second quarter of 2011: Buffalo, Des Moines, Grand Rapids, Indianapolis, Louisville, Milwaukee, Minneapolis, Rochester, and Syracuse.

Housing
House prices fell for the third consecutive quarter in all Great Lakes metropolitan areas, and fell at a faster rate in the second quarter than the previous two quarters. House prices hit new lows in all of the 100 largest metropolitan areas of the United States in the second quarter, including those in the Great Lakes region. Home prices fell fastest in Minneapolis, Cleveland, and Chicago from the first quarter to the second, declining by at least 4.7 percent in each. In all, house prices dropped more than the national average of 4.1 percent in five Great Lakes metropolitan areas. House prices in Buffalo, Pittsburgh and Rochester dropped less than 3 percent. Nationwide, housing prices were down 26.7 percent since their peak. Six Great Lakes metropolitan areas have had larger declines: Chicago, Cleveland, Detroit, Grand Rapids, Minneapolis, and Toledo.

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Authors

Jennifer Bradley
Richard Shearer

Image Source: © Rebecca Cook / Reuters

The Government as a Spark Plug for Innovation

Jennifer Bradley — Thu, 11 Aug 2011 00:00:00 -0400

When he visits a battery plant in Holland, Michigan, today, President Obama will talk about the connection between innovation, advanced manufacturing, and economic growth. But he has an opportunity to make an even more important connection: between government action and innovation.

At a time when the federal government seems unable to manage anything well, and state governments are still grappling with budget shortfalls and crippling layoffs, it is easy to forget that the public sector is a critical driver of innovation, particularly in the energy sector. As James Duderstadt, Mark Muro, and others have pointed out, there are several market failures that cause private energy companies to systematically underinvest in innovation. One in particular stands out:

“Social benefits accrue from the knowledge created by innovative activity, which is added to the public domain once created and is hard for firms to control. Other firms may make use of this knowledge and reap the rewards, encouraging free-riding behavior where firms fail to invest and wait for other firms to finance the knowledge base.”

Venture capital, which is often a source of funding for emerging technologies, also is riddled with its own kinds of market failures. This analysis of venture capital investing in the Great Lakes region (which I’ve written about before) explains it’s not efficient for venture capitalists to track down every possible good opportunity in their sector. Instead, they maximize their chances of finding good investments by focusing on where they’ve been successful in the past, where most deals come from, and, honestly, where they can get to easily. That helps explain why California and Massachusetts get such a huge amount of VC investment, and why places like Holland, Michigan, often get overlooked.

One of the reasons governments exist is to overcome these kinds of market failures. Like roads, weapons systems, and public education, innovation is a public good, something that the public sector has to provide at an optimal level.

Thus, the Recovery Act allocated $2 billion to advanced battery technologies. Under Governor Jennifer Granholm, the state of Michigan also poured $1.38 billion into advanced battery research, as part of its efforts to help the auto industry in the state re-orient itself after decades of crushing job losses.

As the state and federal governments are looking for more and deeper cuts, the public seems to understand that some things are worth investing in. Last year, Ohio voters approved a $700 million bond issue to preserve the Third Frontier, the state’s program to invest in new technologies and their commercialization. This is an encouraging piece of evidence that voters understand the difference between debt or spending that lays the foundation for future growth, and that which does not make sense during a fiscal crisis.

Of course, having just agreed to cut $2.4 trillion from the federal budget over the next 10 years, Obama isn’t likely to call for the kind of federal spending on innovation that’s actually needed. And even if he did, there’s little chance Congress would agree. While Obama’s budget submissions for the last two years have proposed increasing key energy innovation spending, Congress has responded with cuts. In FY 2011, the federal energy innovation budget dropped 10 percent compared to the previous year. The House appropriations committee proposed $491 million in additional cuts from the Office of Energy Efficiency and Renewable Energy, which is almost $2 billion below the president’s budget request.

But Obama still can and should make a clear and explicit argument about the value of government spending. Government money can be intelligently applied to do good –good that would not happen otherwise. In the current political environment that’s a radical and counterintuitive statement, but that doesn’t make it any less true.

Authors

Jennifer Bradley

Publication: The Avenue, The New Republic

Image Source: Â© Kevin Lamarque / Reuters

Redefining the Role of the States

Jennifer Bradley — Tue, 22 Mar 2011 15:01:00 -0400

What are states good for? The 19^th century answer was that states are a critical counterweight to federal power. The 20^th century answer was that states are laboratories of democracy--tinkering with the beta versions of laws and policies before other states or the federal government adopted them on a large scale. The 21^st century answer is that states are the enablers and supporters of metropolitan economies.

One problem: States don’t really think this way. According to law, all the component elements of metros--cities, counties, townships, villages, etc.--are creatures of the state. The state determines the boundaries of local governments, the extent of their powers, and the flexibility of both. It’s counterintuitive for state leaders, many of whom have “graduated” from local government, to believe that metros and their needs should drive state policy.

But the numbers tell a different story. All but three states depend on metros for the majority of their economic output. As Alan Berube and Carey Nadeau have found, in 15 states, just one metro accounts for the majority of the state GDP (think of Chicago, Atlanta, and Boston). In 16 other states, two metros produce more than the rest of the state combined (L.A. and San Francisco; Dallas and Houston; Detroit and Grand Rapids).

So how could this inversion of the traditional state-local relationship get started? Michigan Gov. Rick Snyder has proposed a key first step: In an address to the state legislature yesterday, Snyder proposed creating metropolitan governments in Michigan, which would supersede city and county government and take on the legislative and executive powers of local governments. If Detroit and Grand Rapids adopted this form of government (admittedly, they aren’t likely to now, or in the near future), their political power might match their economic power.

Bruce Katz and I lay out some more ideas of how states can put themselves in the service of metros in a piece in the new issue of Democracy Journal. I’ll give away the ending:

"Between 1787 and 1789, states decided, for a variety of reasons including significant economic benefits, that they should cede some of their sovereignty to the federal government--which, at that time, was itself kind of a creature of the states, like municipalities are today. In 2011, states face a version of the same choice. The wise ones will embrace their metro-led future."

Authors

Jennifer Bradley

Publication: The Avenue, The New Republic

The Metropolitan Connection to the Next Economy

Jennifer Bradley and Bruce Katz — Wed, 16 Mar 2011 09:51:00 -0400

The Great Recession and the sluggish recovery have been a wake-up call for the nation. Americans, both policy-makers and voters alike, believed that we could build a sustainable economy on consumption, on endless acres of condos and starter mansions, and on financial products conjured from mathematical models and wishful thinking.

Clearly, it is time to chart a different path. We need to rebalance the American economy and cultivate the fundamentals that can bring prosperity back: robust exports, low-carbon technology, continuous innovation, and opportunity for all. And the path to a different and better American economy runs directly through our metropolitan areas.

The largest 100 metropolitan areas in the country are home to about two-thirds of the U.S. population and generate 74 percent of our GDP. In fact, metro areas generate the majority of economic output in 47 of the 50 states, including such “rural” states as Nebraska, Iowa, Kansas, and Arkansas. Metros are anchored by cities, but they aren’t synonymous with them. Metros include suburbs, edge cities, boomburbs, exurbs, exit-ramp office parks, strip-mall zones, and even rural areas. They aren’t defined by the number of skyscrapers, Starbucks, or iPads per capita, but are united by a shared economy.

Metros will lead the United States into the next economy because they possess the assets that modern economies need. Metros dominate U.S. trade and logistics. They concentrate the innovative firms, advanced research institutions, venture capital, breakthrough technologies, and skilled workers that will drive the next economy. And they are where networks of universities and community colleges stand ready to educate the next generation of U.S. workers. In short, metros bring together ideas, people, and technology in a virtuous cycle that generates more innovation and attracts still more people.

There is a lot that the federal government could do to lay the groundwork for the flourishing of metropolitan America: Set a price on carbon, invest intelligently in advanced research and development, make transformative investments in infrastructure, and overhaul our immigration laws. (We proposed some of these ideas in a Democracy essay, “Miracle Mets.” [Issue #12]) But no one believes that the federal government will do these things this year or the next. At best, it can attempt some targeted policy interventions around trade, maybe infrastructure, possibly tax reform. While Washington is strangled by partisanship and polarization, states will have to take up the burden of invigorating metropolitan areas and kick-starting the economy. Indeed, rebalancing the economy will require reorienting—radically—the focus of state government.

The role of states as “laboratories of democracy” is a mainstay of American federalist lore and study. States have broad powers over such market-shaping policy areas as infrastructure, energy, innovation, education, and skills training. Successful state leaders, whatever their partisan commitments, are usually forced to get extremely practical extremely fast because they have to balance their budgets and adhere to deadlines. They are also more easily held accountable for those budget decisions, especially when those involve program and personnel cuts. Many state leaders (and their local elected, business, and civic counterparts) are members of what we call a “pragmatic caucus,” in sharp contrast to ideologically driven federal lawmakers.

Yet the traditional assessments of state innovation fail to capture the real economy-building secret of states—namely, their special relationship with metropolitan areas. In the American system, metropolitan areas (and their component parts: cities, counties, suburban municipalities, and rural towns) are all creatures of state law. The state determines everything: the boundaries of cities and municipalities, the extent of their powers, the flexibility or rigidity of powers and borders. In other words, the state government decides who does what, where, and with whom.

States, though, are not accustomed to using their broad powers to unleash fully the entrepreneurial energies and dynamism of their metropolitan areas. In fact, states have often taken the opposite approach, constricting their metros fiscally and governmentally. State leaders need a profound shift in mindset. In the global economy, metros matter more than states, and states will succeed to the extent they can bolster their metro economies. An unintended legacy of the Great Recession may be the most significant restructuring of the mission and focus of state government since the progressive movement a hundred years ago.

Read the full article at democracyjournal.org »

Authors

Publication: Democracy: A Journal of Ideas

Image Source: © Richard Carson / Reuters

States Turn to Regional Economic Development Strategies

Jennifer Bradley — Mon, 31 Jan 2011 16:04:00 -0500

“We cannot win the future with a government of the past,” President Obama said last week, before promising a proposal to “merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America.”

He can learn something from Michigan’s Rick Snyder, the Republican governor who is retooling Michigan’s government, or significant parts of it, so that it is clearly in the service of the state’s metropolitan areas, its economic engines.

In his state of the state speech, Snyder pledged to make the state’s regions the drivers of state economic development policy, with state agencies in their service. “We have a number of very strong regional groups that are capable of taking the lead in the field.” This is a very mild-mannered way to describe a significant inversion of state policy. States usually don’t even recognize their regions, seeing instead a fractured map of hyper-local jurisdictions, commissions, and boards. And they certainly don’t tell them, “You show us the way, because you know best.”

Under Snyder, the Michigan Economic Development Corporation (MEDC) will station representatives in Michigan regions to make sure that state programs and policies complement, rather than complicate, local efforts. An Office of Urban Initiatives with outposts in Detroit, Grand Rapids, Saginaw, and Flint will also be created.

MEDC will take on the role of “clearinghouse—a best practice center,” helping one region replicate the successful strategies of another when it comes to opening up markets for export or luring foreign investment. Again, this is something new—a vision of metropolitan areas as a group of linked entities that all contribute to the state and to each other. This usefully ignores old regional turf wars.

Colorado’s John Hickenlooper, New York’s Andrew Cuomo, and Tennessee’s Bill Haslam have all promised similar sounding bottom-up regional economic development strategies.

One of the challenges of making regions and metropolitan areas more central in politics and more prominent in policy is that there aren’t regional mayors or metropolitan legislatures. There aren’t the same kinds of democratically legitimized leaders and public institutions that higher levels of government are used to working through.

The new pragmatic governors of Michigan, Colorado, New York, and Tennessee are trying to work with the regional governance, not government, organizations that do exist--collections of business, civic, philanthropic, and government leaders. If they show how this can be done, how these networks can be tightly integrated into the machinery of policy, then other states and the federal government can follow suit. America may be on the verge of getting the metro policy that it sorely needs.

Authors

Jennifer Bradley

Publication: The Avenue, The New Republic

Image Source: © Rebecca Cook / Reuters

Andrew Cuomo's Budget and Governance Plans for New York

Jennifer Bradley — Mon, 10 Jan 2011 15:11:00 -0500

State of the state speeches usually have the feel of New Year’s resolutions. This year, say the governors, the state will be richer, smarter, better, happier thanks to new programs, new rules, and new ideas. Of course, this year the pronouncements are more sober and dourer.

But good times or bad, implementation is always the hard part. That’s where the state of the state speech from New York’s newest governor, Andrew Cuomo, looks really interesting. He has made governance reform a priority, and wants to use the fiscal crisis to make it happen.

Local governments are desperate for cash, as their revenue streams are drying up and demands on services are increasing. The state itself doesn’t have the money to make up the shortfall because it’s got a mammoth one of its own. So localities are unusually primed to respond to financial incentives to do what they’ve adamantly resisted before, which is change how they work with their neighbors. And individual New Yorkers, feeling hard-pressed by local tax burdens, are also probably readier to reexamine their commitments to hyper-local government and service provision when those commitments have a clear price tag. Cuomo’s local governance reforms are providing those incentives (which sound familiar):

He calls for ten regional economic development councils that will coordinate state agency investments and demand that local governments show results to get funds. These councils will compete amongst themselves for a $200 million pot of additional state money for job development.
The governor ties property tax relief to local government consolidation or outright dissolution. The state provides additional monies when local governments merge or dissolve (these processes save money in the long run, but they often incur up-front costs) already, but Cuomo would mandate that half of this extra money go to property tax reductions. The state has more than 10,500 local government units--voters may decide it’s not so bad to be part of the township next door if their property tax bill drops.
Cuomo proposes $250 million for school districts that find administrative efficiencies, which are likely to come through several districts sharing services like busing, food service, and maintenance--or maybe even bigger steps like sharing curriculum development staff.

During the fiscal crisis, governments have shown that they will make significant changes in the way they do business for comparatively modest financial incentives. The federal Race to the Top program, which Cuomo referred to as a model, is a great example: Tennessee, New York, Florida, and Ohio had to make significant and controversial changes to charter schools, low-achieving schools, and teacher evaluations, to win Race to the Top grants in the range of $400 million to $700 million--which are just a fraction of these state’s overall education budgets of $3.8 billion to $19.9 billion.

But then there’s the legislature, which has the power to tank some of his most ambitious reorganization plans. For example, Cuomo has proposed that a state commission figure out how to eliminate more than 200 of the state’s 1000-plus state agencies, authorities and commissions. He wants the legislature to pass a law that would give it 30 days to reject the commission’s recommendations (up or down--no tinkering). If the legislature doesn’t act, the commission’s plan goes into effect.

Why would the legislature give up its power? Cuomo’s likely gamble is that they will have to, with a $10 billion budget gap looming this year, and bigger caps next year and the year after: “You can’t make up these kinds of savings over this long of period of time through a budget cutting or trimming exercise. We are going to have to reinvent government. We are going to have to reorganize the agencies. We are going to redesign our approach because the old way wasn’t working anyway, let's be honest.”

Editor's Note: The text of this blogpost was updated and published as an opinion piece in the Albany Times-Union on January 13, 2011. Read Jennifer Bradley's op-ed, "The Recipe for N.Y.'s Success" »

Authors

Jennifer Bradley

Publication: The Avenue, The New Republic

Image Source: © POOL New / Reuters

How Governors Should Tackle State Budget Deficits

Jennifer Bradley — Thu, 18 Nov 2010 13:08:00 -0500

States are cutting their budgets like mad in an effort to close deficits that often pass the billion dollar mark. Yesterday’s Wall Street Journal provides a grim catalog of state spending cuts: Most states have either hiked fees or chopped services for the disabled and the elderly. In New Jersey, budget cutting poster boy Chris Christie has held back $1.26 billion for schools and local governments, and Indiana and Minnesota have followed suit.

But indiscriminate cuts are as foolish as profligate spending. David Leonhardt’s column cuts to the chase, “A good deficit plan doesn’t simply make across-the-board cuts for years on end. It cuts funding for programs that do not spur economic growth and increases funding for those relatively few that do. Likewise, it raises tax rates that do not have a clear record of promoting growth and cuts those that do.” Leonhardt is talking about the federal government, which has the luxury of deficit spending while states don’t. But still, as Michigan’s governor-elect Rick Snyder has said, across the board cuts represent “a management failure because that means you don't know your job well enough to say, ‘This is more important than that.’”

In the current economic climate, governors and legislators have to articulate a vision of the future of their states that will guide their spending and their budget cutting decisions. That future should be driven by exports (to take advantage of rising global demand) powered by low carbon (to lead the clean energy revolution), fueled by innovation (to spur growth through ideas and deployment) and rich with opportunity (to reverse the troubling, decades long, rise in income inequality).

New governors who are getting ready to take office should start now to talk about a three-pronged strategy for state spending and, yes, cuts. First, states should invest in new ways to support the assets that drive the next economy. The next economy will be created through public and private interventions around the assets that matter: innovation, human capital, infrastructure, and quality of place. Making these investments requires significant policy reforms because current policies are out of sync with both the changing structure and metropolitan geography of the economy. Thus, states will likely need a new network of market-oriented, private-sector-leveraging, performance-driven institutions. These investments and institutions do not necessarily require new public resources, but they do demand that existing dollars be spent in a more targeted metro-aware fashion.

Specifically, governors can create jobs councils and jobs cabinets, or state infrastructure banks to spend state transportation dollars on smarter projects.

Second, they need to cut to invest to jumpstart the transition to the next economy. This includes shifting money out of legacy programs that lack accountability, do not focus on metros, or are not oriented to the next economy, and using it to support the assets that matter, such as education, innovation, and infrastructure. One place to cut: wasteful tax breaks and other giveaways for business recruitment. While governors fall all over themselves to poach businesses from other states, more than 95 percent of annual state job gains comes from the expansion of existing businesses (nearly 42 percent) and the birth of new establishments (roughly 56 percent). Governors may also need to turn to voters for new dedicated taxes or other new sources of state revenue, validated by voter referendums.

Finally, they must leverage their investments through metropolitan strategies. The benefits of state investments are amplified when they are aligned with the specific advantages of particular metropolitan areas, whether that is a group of interconnected firms in a particular economic sector, or strength in fast-growing service exports, or globally powerful research institutions or community colleges that develop customized job training. States can provide rich, comparable data sets to help metropolitan areas quickly understand market strengths. They can provide small investments in regional capacity, such as cluster grants. Perhaps most critically, states can break agency silos that no longer match economic or geographic imperatives and create cross-agency teams that focus on delivering what regions say they need to succeed. None of these efforts are especially expensive: Most of them aim to use existing resources in a more targeted and efficient way.

It sounds tough and responsive to advocate for more and more aggressive budget cuts, particularly if your audience is tea-steeped. But in fact what’s really smart, and really hard, is knowing what to cut and what to spend more on, so that a state can emerge from its fiscal crisis stronger, not just starved.

Authors

Jennifer Bradley

Publication: The Avenue, The New Republic

Image Source: © Frank Polich / Reuters

Delivering the Next Economy: The States Step Up

Jennifer Bradley, Bruce Katz and Amy Liu — Wed, 17 Nov 2010 09:33:00 -0500

In January, 37 governors, many of them new, will take office facing daunting challenges, including many immediate needs for which there is precious little time or money to meet. But at the same time, they have an opportunity to lead their states, and the nation, into the next economy, which must be driven by exports, powered by low carbon, fueled by innovation, rich with opportunity. An economy with those characteristics will also be metropolitan-led.

Leadership at the state level will be crucial, as the political environment in Washington, DC is very likely to produce little more than partisanship and rancor. We must instead rely on the kind of innovation at the state level that has so often propelled our federalist system.

Deeper budget cuts and more public sector layoffs will not re-balance and re-start our economy. Only wise, strategic investment does that. States should, therefore, do three things to revive their state economies and lay the groundwork for future prosperity:

1) Invest in new ways to support the assets that drive the next economy. The next economy will be created through smart public and private interventions around the assets that matter: innovation, human capital, infrastructure and quality of place. Making these investments requires significant policy reforms because current policies are out of synch with both the changing structure and metropolitan geography of the economy. Thus, states will likely need a new network of market-oriented, private-sector-leveraging, performance-driven institutions. These investments and institutions do not necessarily require new public resources, but they do demand that existing dollars be spent in a sharper, more targeted, metro-aware fashion.

2) Cut to invest to jumpstart the transition to the next economy. At this point in the state fiscal crisis, the simple cuts and program reorganizations have been made already. Now, new or incumbent governors have to make some tough, long-delayed decisions. This includes shifting money out of legacy programs that lack accountability, do not focus on metros, or are not oriented to the next economy, and using it to support the assets that matter, such as education, innovation, and infrastructure. Governors may also need to turn to voters for new dedicated taxes or other new sources of state revenue, validated by voter referenda.

3) Leverage investments through smart metropolitan strategies. The benefits of state investments are amplified when they are aligned with the specific advantages of particular metropolitan areas, whether that is a group of interconnected firms in a particular economic sector, or strength in fast-growing service exports, or globally powerful research institutions or community colleges that develop customized job training. States can provide rich, comparable data sets to help metropolitan areas quickly understand market strengths. They can provide small investments in regional capacity, such as cluster grants. Perhaps most critically, states can break out of agency silos that no longer match economic or geographic imperatives and create cross-agency teams that focus on delivering what regions say they need to succeed. None of these efforts are especially expensive: most of them aim to use existing resources in a more targeted and efficient way.

While the current political climate in Washington makes major reforms difficult there are some tasks that the federal government must take to help states and metropolitan areas move forward in the next economy. The federal government must modernize the tax code to stop encouraging consumption and instead fostering production. It should commit to new investments in transportation. And it could reprise a familiar bargain with states and metros: more flexibility to experiment in return for stricter accountability standards.

The next decade will be one of the most disruptive in American history, given broader trends of global restructuring, demographic transformation, low carbon imperatives and technological possibilities. For political, fiscal, and structural reasons, neither metros, nor states, nor Washington can rise to the complexities of the moment by themselves. But for these same political, fiscal and structural reasons, the states are best positioned to take the lead in bringing the nation into the next economy.

“The States Step Up” is the first in a series of policy innovation briefs that will be coming from the Metropolitan Policy Program in the months ahead. Future briefs will provide detailed recommendations on how states can wisely and cost-effectively support regional industry clusters; bolster exports; devise new approaches to infrastructure spending; promote advanced manufacturing; connect higher education and workforce development; repurpose urban land to spark an economic revival; and overhaul their patchwork of local governments. Over time, the series will address longer-term initiatives, highlight policy innovations that a particular state or handful of states have pioneered and that other states should endeavor to replicate, and explore ways that federal and state governments can coordinate their efforts to advance the next economy.

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Full Paper

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Publication: Brookings Institution

The Next Economy: Economic Recovery and Transformation in the Great Lakes Region

John C. Austin, Jennifer Bradley and Jennifer S. Vey — Mon, 27 Sep 2010 00:00:00 -0400

As the American economy works its way slowly out of the Great Recession, a consensus is developing among public and private-sector stakeholders that simply re-constructing our old economy, one based on highly-leveraged domestic consumption, would be a serious mistake. The nation must instead focus on building the next economy, one that is oriented towards greater exporting, powered by a low-carbon energy strategy, driven by innovation, and that creates opportunities for all.

The Great Lakes region, too long tagged with the misleading nickname, The Rust Belt, could show the rest of the country the way forward to the next economy. Although battered by decades of declining economic health, and particularly by the recession, the nation’s heartland still has many of the fundamental resources—top-ranked universities, companies with deep experience in global trade, and emerging centers of clean energy research to name just a few—necessary to create a better, more sustainable, economic model.

This is not to disregard the region’s challenges. Its major metros have neither the economic development strategies nor the transportation infrastructure in place to fully take advantage of their export generating capacity. Many have inefficient physical development patterns, hollowed out urban neighborhoods, and concentrations of energy-intensive industries, and thus remain the epicenters of the nation’s fossil fuel-reliant economy. They lack the early-stage capital and other supports needed to strengthen existing firms and encourage start-up enterprises. And many suffer from deep, entrenched poverty, and have low educational attainment levels compared with their peers nationwide.

With both the strengths and challenges clearly in mind, this report provides a roadmap to economic recovery and transformation in the Great Lakes region, powered by its metropolitan areas. It describes how federal, state, and local stakeholders can leverage the region’s substantial assets to create a more productive, sustainable, and inclusive economic future.

The report finds:

First—The Great Lakes region, particularly its metropolitan areas, has significant resources essential to creating the next economy:

Global Trade Networks —These networks, developed in large part by the auto industry, are critical to an export economy. Seven Great Lakes metros—Dayton, Detroit, Grand Rapids, Indianapolis, Milwaukee, Toledo, and Youngstown—are already among the country’s top 20 metro areas in terms of the share of their metro output that is exported. In particular, Great Lakes metros can capitalize on the growth potential of knowledge exports, as they have a concentration of top universities and associated medical complexes.
Clean Energy/Low Carbon Capacity — Industries and universities in Great Lakes metros have created the research capacity and manufacturing prowess needed to build a clean energy, low-carbon economy. They have an outsized ability to lead on wind and solar renewable component manufacturing, and to capitalize on the “green-blue” potential of the Great Lakes and their waterways. The region’s research and innovation infrastructure is already spurring the development of new products and processes: Michigan, Ohio, and Illinois are among the top states in terms of green tech patenting, focused on new technologies in battery power, hybrid systems, and fuel cells.
Innovation Infrastructure — Great Lakes metros have the industrial and institutional infrastructure necessary to power an innovation economy. The 21 largest Great Lakes metros alone are home to 32 major public and private research universities, which attract substantial federal research investment. The region produces approximately 36 percent of America’s science and engineering degrees each year. Between 2001 and 2007, an average of nearly one-third of the country’s patents each year were awarded to the Great Lakes states.
Opportunities — Like innovation, opportunities grow in the presence of a robust educational network, such as the one that exists in the Great Lakes region. In addition to its public and land grant universities—the latter created in the 19^th century to promote agriculture, science, and engineering—the region is also dotted with community colleges, which help the region’s workers develop skills and credentials necessary to secure jobs in the region’s industries, and in so doing maintain a pool of skilled employees to attract and support them.

Second — To realize the promise of the next economy, federal, state, and metropolitan leaders should join with the private and philanthropic sector to:

Invest in the assets that matter: innovation, infrastructure, and human capital
Devise new public-private institutions that are market-oriented and performance-driven.
Reimagine metros’ form and governance structures to set the right conditions for economic growth

Voices from the Region
As part of this project, a number of scholars, practitioners, and policy experts from Great Lakes metros, and beyond, contributed their recommendations for how the federal government could support the region’s transition to the next economy. These recommendations, discussed in a series of briefs, focus on a range of issues including workforce policy, manufacturing, higher education, transportation, and water policy.

The Federal Role in Helping Incumbent and Dislocated Workers Adjust to the New Economy » (PDF)
Randall Eberts and George Erickcek

Strengthening American Manufacturing: A New Federal Approach » (PDF)
Susan Helper and Howard Wial

The Federal Role in Leveraging America’s Community Colleges » (PDF)
James Jacobs

The Federal Role in Supporting Auto Sector Innovation » (PDF)
Thomas Klier and Christopher Sands

The Federal Role in Supporting Public Universities’ Global Missions » (PDF)
Lou Anna K. Simon, Richard M. Foster, and John C. Austin

Developing a National Strategy for Goods Movement » (PDF)
Robert Puentes

Leveraging the Great Lakes Region’s Water Assets for Economic Growth » (PDF))
G. Allen Burton, Don Scavia, Samuel N. Luoma, Nancy G. Love and John C. Austin

Additional Resources
Hubs of Transformation: Leveraging the Great Lakes Research Complex for Energy Innovation »
James J. Duderstadt, Mark Muro, and Sarah Rahman

Turning Up the Heat: How Venture Capital Can Help Fuel the Economic Transformation of the Great Lakes Region »
Frank Samuel

Facing the Urban Challenge: Reimagining Land Use in America's Distressed Older Cities—The Federal Policy Role »
Alan Mallach

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Authors

Publication: Brookings Institution

Cleveland Area Builds Foundation for Increased Exports and New Jobs

Jennifer Bradley and Bruce Katz — Sun, 08 Aug 2010 00:00:00 -0400

Should increasing exports be part of the solution to Greater Cleveland's -- and the nation's -- economic doldrums? Can export growth make this recovery job-filled rather than jobless?

That's a counterintuitive proposition, but one that is gaining traction in Northeast Ohio. Cleveland, Youngstown and other metros often see themselves on the losing end of globalization, as manufacturing has moved abroad and trade barriers and currency manipulations impede the entry of U.S.-made goods into foreign markets.

But exports bring tremendous benefits to workers, companies and the nation as a whole. Exporting companies tend to be more innovative. They pay higher wages across all skill levels. And they are a response to a new global reality: 95 percent of the world's customers live outside the United States.

Any successful export strategy, including the one that the Obama administration is developing, must start with where U.S. exports come from. Our major metropolitan areas are the nation's export hubs. In 2008, they produced about 64 percent of U.S. exports, including more than 62 percent of manufactured goods and 75 percent of services.

Northeast Ohio's major metros are leaders in exports, oriented toward global consumers in a way that most American regions are not. Exports contribute more than 12 percent of the gross metropolitan product in Akron, 13 percent in Cleveland, and a jaw-dropping 18 percent in Youngstown, compared to a national metro average of 10.9 percent.

Exports are also a source of much-needed jobs in these metros. As of 2008 (the most recent year for which we have data) there were 110,000 export jobs in the Cleveland metro and about 30,000 each in greater Akron and Youngstown. Every $1 billion in exports from the average metropolitan area in 2008 supported 5,800 jobs.

To leverage the powerful export activity already occurring in Cleveland and elsewhere, the Obama administration should connect its macroeconomic vision for export growth with the metro reality where the doubling will mostly occur.

For example, the president's export advisory council should include state and local leaders, and revamp export guidance and support to meet the needs of small firms, which find it hard to enter new markets.

But Northeast Ohio metros have their own work to do. The rate of export growth between 2003 and 2008 in Cleveland and Akron is lackluster when compared to the large metro average. U.S. companies dominate the global market in service exports, and the nation actually has a generous service trade surplus, but service exports' share of overall output in Northeast Ohio metros is smaller than the large metro average, and growth in service exports is slower.

Most troubling, Cleveland and its neighbors are underperforming when it comes to innovation, which is a critical ingredient for future international success. Metros that are manufacturing-oriented or export-intensive (or both) tend to create patents at a rate of just over five patents per 1,000 workers. But Cleveland, Akron and Youngstown fall short, with 2.8, 4.5, and 1 patent per 1,000 workers, respectively.

Northeast Ohio must accelerate its efforts to increase the region's innovation and export capacity, through regional organizations such as NorTech and JumpStart. Just as the president set an export goal for the nation, Northeast Ohio should embrace the opportunity to set its own aggressive export goals. Business groups, the Fund for Our Economic Future, universities and regional economic development organizations have made a start but need to devote more resources and collaborate to achieve those goals.

The region can make this happen. Organizations like the Manufacturing and Advocacy and Growth Network (MAGNET) and its partners, with support from the Fund and chambers, are working directly with companies to increase manufacturing innovation in Northeast Ohio, with increasing exports one of their major emphases.

For too long, the debate over export policy has been the exclusive domain of macro policymakers in Washington and a narrow clique of trade constituencies. It is time to include a larger portion of the business sector and, just as importantly, the places like Northeast Ohio, where exporting companies can thrive.

Authors

Publication: Cleveland Plain-Dealer

Divided We Sprawl

Bruce Katz and Jennifer Bradley — Wed, 01 Dec 1999 00:00:00 -0500

A call for a reinvention of the American city and suburb that would exploit the infrastructure of the one and mitigate the "frantic privacy" of the other.

By many accounts Baltimore is a comeback city. It has a beautiful piece of calculated nostalgia in the Camden Yards baseball stadium, which draws tens of thousands of visitors throughout the spring and summer. It has a lively waterfront district, the Inner Harbor, with charming shops and not snacks for sale every hundred yards or so. But although it may function well as a kind of urban theme park (and there are plenty of cities that would love to achieve that distraction), as a city it is struggling. For twenty years Baltimore has hemorrhaged residents: more than 140,000 have left since 1980. Meanwhile, the surrounding suburbs have steadily grown. The population of Howard County, a thirty-minute drive from the city, has doubled since 1980, from 118,600 to 236,000. The people who have stayed in Baltimore are some of the neediest in the area. The city has 13 percent of Maryland's population but 56 percent of its welfare caseload. Only about a quarter of the students who enroll in a public high school in the city graduate in four years.

And Baltimore is not unique. The image of America's cities has improved greatly over the past few years, thanks to shiny new downtowns dotted with vast convention centers, luxury hotels, and impressive office towers, but these acres of concrete and faux marble hide a reality that is in many cases grim. St. Louis, Cleveland, Philadelphia, and Washington, D.C., lost population throughout the 1990s. These cities are also losing their status as the most powerful economies in their regions. Washington started the 1990s with a respectable 33 percent of the area's jobs. Seven years later it had only 24 percent. The rate of population growth in the nation's suburbs was more than twice that in central cities—9.6 percent versus 4.2 percent—from 1990 to 1997. In just one year—1996—2.7 million people left a central city for a suburb. A paltry 800,000 made the opposite move. In the major urbanized areas of Ohio 90 percent of the new jobs created from 1994 to 1997 in the suburbs. Ohio's seven largest cities had a net gain of only 19,150 jobs from 1994 to 1997; their suburbs gained 186,000. The 1990s have been the decade of decentralization for people and jobs in the United States.

Not even cities that are growing—southern and western boom cities—are keeping pace with their suburbs. Denver has gained about 31,000 people in the 1990s (after having lost residents during the 1980s), but the counties that make up the Denver metropolitan area have gained 284,000 people—about nice times as many. In Atlanta and Houston central0city growth is far outmatched by growth in outlying counties. And these cities, too, are losing their share of the jobs in their respective regions. In 1980, 40 percent of the jobs in the Atlanta region were in the city itself; by 1996 only 24 percent were.

Meanwhile, the poor have been left behind in the cities. Urban poverty rates are twice as high as suburban poverty rates, and the implementation of welfare reform appears to be a special problem for cities. Although welfare caseloads are shrinking in most cities, in general they are not shrinking as quickly as they are in the states and in the nation as a whole. Often cities have a disproportionate share of the states' welfare recipients. Philadelphia County, for example, is home to 12 percent of all Pennsylvanians on welfare. Orleans Parish, in which the city of New Orleans is located, has 11 percent of Louisiana's population but 29 percent of its welfare recipients. This hardly adds up to an urban renaissance.

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Authors

Bruce Katz
Jennifer Bradley

Publication: The Atlantic Monthly