It may seem early to talk about Detroit’s rebound, with the city’s recent bankruptcy filing on July 18th, but the fact is this city is ripe for renewal. Its much-needed fiscal reset provides an opportunity to return to a real growth strategy, one that can serve as an example of how to bring any city back from the brink.
This renewal is already blossoming in Detroit’s core—a 4.3 square mile section of the city that bridges Downtown and Midtown, encompassing just 3.1 percent of the city’s landmass, but with 36 percent of its jobs. In this core, employment grew by over 4 percent between 2009 and 2011, while the city as a whole saw jobs decrease nearly 6 percent.
So what is the core doing right?
For one, it is home to Detroit’s key anchor institutions, which are driving investment and innovation. Places like the Henry Ford Health Center, Wayne State University, the College for Creative Studies, and Detroit Medical Center are tightly packed in the Midtown neighborhood. Together, these institutions account for $1.7 billion in goods and services purchased and $300 million in research expenditures annually.
Just two miles down Woodward Avenue, Detroit’s Downtown is also benefiting from growing investment. In recent years, several large firms have brought jobs back into the city, leaving behind suburban office parks in favor of urban office buildings: Compuware has brought in over 4,000 workers since 2002; Quicken Loans relocated 7,000 employees since 2007; and Blue Cross Blue Shield added 3,400 employees where it already employed 3,000.
Following these jobs are new residents—pushing housing occupancy rates in Midtown and Downtown to the stunning figures of 95 and 97 percent—numbers that anyone reading about Detroit’s travails would hardly expect. Meanwhile, new small businesses are reviving the streetscape. The renewal of the corridor will be capped by the upcoming arrival of light rail to Woodward Avenue: the M1 line, funded mainly by private investment, will link Downtown and Midtown as soon as 2015.
These developments are the result of a network of public, private, and civic institutions coming together in the absence of a functioning city government. In Midtown, Sue Mosey, president of the community development organization Midtown Detroit Inc., is spearheading an effort by local stakeholders and anchor institution leaders to funnel investment into the community. The revival of the Downtown is powered by companies such as Blue Cross Blue Shield, Compuware, and Dan Gilbert’s Quicken Loans that are bringing back jobs, and groups like the Downtown Detroit Partnership and Live Downtown that are working to attract new businesses and residents to the neighborhood. Uniting these efforts is a constellation of philanthropies, business groups, and civic organizations—including the Kresge Foundation, the Detroit Economic Growth Corporation, Invest Detroit, and the New Economy Initiative—that are focused on restoring prosperity to the city by investing in and promoting its core.
Reshaping the geography of innovation
The success of this corridor is not an anomaly; it is indicative of a broader trend. The revival of Detroit’s core is aligned with major economic, demographic, social and technological dynamics reshaping the geography of innovation everywhere.
We are witnessing the rise of ‘innovation districts’ that cluster anchor institutions and established cutting-edge companies with smaller entrepreneurial firms, mixed-use housing, office, retail, and 21st-century amenities and transportation.
This is a seismic shift in how we build our major cities and where innovation-intense industries are located.
In the 19th and early 20th century—in places like Manchester, Torino, the Ruhr Valley, and the American Mid-West—we built industrial districts, characterized by a high concentration of industrial enterprises commonly engaging in similar or complimentary work.
In the mid-to-late 20th century—in Raleigh-Durham, Silicon Valley, and suburban Washington, Boston, and Seattle—we built science and research parks and corporate campuses. Spatially isolated, accessible only by car, these parks put little emphasis on quality of place or on integrating work, housing and recreation.
But today, the downtowns and midtowns of cities like Detroit, Cambridge, Philadelphia, and Atlanta are seeing growth in startups paired with residential and commercial growth around their existing base of advanced research universities, medical complexes, and clusters of tech and creative firms.
Innovation districts reflect a new vision of where innovative firms want to locate and where talented workers want to live and work. They respect the growing penchant for companies to practice “open innovation,” to collaborate with networks of firms, universities, and supporting institutions. They provide the physical and social platform for entrepreneurial growth—incubator space, collaborative venues, in-person social networking, product competitions, technical support, and mentoring.
The rise of Innovation Districts in the U.S. reflects a shift not only in the pattern of development, but also in the process. Innovation Districts are driven from the ground-up through the actions of local actors. Federal and state governments are followers, serving rather than setting the vision.
Sustaining momentum in Detroit’s core
While local leaders have carried the revival thus far, sustaining momentum in Detroit’s innovation district will require action from multiple actors and levels of government. Strategies addressing housing, infrastructure, small business development, innovation, and opportunity all need to coalesce around a central vision for the district.
The good news is that local leaders are working together to:
- Create a dense and vibrant residential environment in the Innovation District, using M1 transit nodes as a catalyst for development;
- Increase the number of small and mid-sized businesses to serve and fuel an increase in residents, workers, and visitors;
- Upgrade infrastructure and public spaces to enhance public safety, eliminate blight, and serve residents and businesses;
- Realize the full potential of emerging clusters in digital and creative industries, health, and small batch manufacturing by ensuring they have the space and talent they need to grow;
- Expand the number of gainfully employed city residents through an expansion of jobs in downtown and midtown.
Now is the time for the federal and state government, joined by private and civic investors from outside the metropolis, to participate in Detroit’s revival.
We cannot let the city’s fiscal challenges obscure the fact that it has tremendous assets and that there are plenty of opportunities for worthwhile investment.
Bruce Katz is a vice president at the Brookings Institution and founding Director of the Brookings Metropolitan Policy Program. He is co-author, with Jennifer Bradley, of “The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy,” which deals extensively with issues facing Detroit. He is a speaker at the Sept. 17 Techonomy Detroit conference.