My latest piece will be in this Sunday’s Philadelphia Inquirer but is already available online now. It’s about the nascent revival in Philadelphia over the past decade, and its relevance, or rather lack of relevance, to many other struggling cities in Pennsylvania. Here’s an excerpt:
In many ways the city has been ideally positioned for new economy success. The Philadelphia metro area is a very large region of 6.1 million people in an era in which larger cities have been growing faster.
Philadelphia has a highly educated population, with nearly 38 percent of people over the age of 25 in the region having a college degree. This is critical in a knowledge economy era, when biomedical research, high-tech and digital business, creative service and health care are in high demand. While not quite at the most elite levels, Philadelphia’s share of adults with a college degree is significantly above the national average.
Philadelphia is also one of only a handful of cities with a major urban transit system and extensive commuter rail network. It has geographic proximity to much more expensive New York and Washington, and is well connected to them via rail. It has a strong local vernacular culture, and also stellar high culture institutions.
For people looking for a high quality, authentic urban experience at a reasonable price, Philadelphia is one of only a tiny number of places that qualify.
Click through to read the whole thing.
If local “assets and attributes’ explain a city’s fortunes, doesn’t that imply that cities aren’t simply pawns to “larger macroeconomic and cultural trends”? I see a contradiction in this analysis.
Aaron M. Renn says
First, the marketplace is now favoring these assets in ways it did not previously. Second, these assets are essentially all legacy. That is, they are a product of the past of the city and would be impossible to duplicate. They weren’t consciously created with the idea of reviving the city. I do believe that, if you have conditions that are in favor in the market, you can take actions locally to try to boost that. But if you don’t have what the market wants then you face a very uphill battle to create it.
Not exactly a ringing endorsement of economic development efforts, though I understand that telling leaders of struggling cities that “they face a very uphill battle” doesn’t make them want to fork over money for the services of economic development consultants. A city is successful because people who are not in that city value it. Your argument suggests that making the locals happy is not the answer. The politics of successful cities have to be able to withstand the defensive attempts to preach to the choir and to reject outside money, people, and ideas. Appealing to outsiders who have money, ambitions, and experience IS the answer. HOW to do that is the question.
P Burgos says
I think that there are some cities that are successful, or at least more successful than they have a right to be (in some regards), because people who live in that city value it. I suspect that Milwaukee might be a city like this, which compared to someplace like Philadelphia, doesn’t have the same legacy assets (universities, medical centers, subway, high concentration of high paying insurance/finance jobs). I suspect that there are a lot of cities in the Rust Belt, Midwest, and Greater Appalachia that would be able to attract a lot more high paying, white collar professional jobs if more of their college bound kids decided to stay in the metro where they grew up.
For an example of this,there are a lot of jobs in Durham, NC, that could just as well be located in Greenboro, NC, a city that is only an hour’s drive west of Durham, and which has substantially more affordable housing. But all of the kids in NC want to go college at the state’s flagship schools: UNC Chapel-Hill (liberal arts and basic sciences), or NC State University (engineering/applied science and business/finance), or, if they can afford it, Duke University. Then they all want to either remain in the Research Triangle, move to Charlotte, or move someplace like NYC, Atlanta, DC, or head to the West Coast.
Given that Durham and Greensboro aren’t really that different (similar housing stock, similar urban form, schools aren’t really different, Durham just has a few more breweries, hip restaurants, and more frequent live shows, and the huge Duke Medical-Industrial complex), there isn’t really a whole lot of rhyme or reason why more back office work doesn’t go to Greensboro, other than that it is easier to get white collar professionals to agree to work in Durham. And some of that is that there are more white collar jobs in the Research Triangle already. But if more of the front row kids in NC from Greensboro and Winston decided they wanted to live in Greensboro, the dynamic of where companies put their offices would change very quickly (esp. considering the Piedmont Triad is a metro with 1.6 million residents). Even a small change in the flow out of talent, say 1,000 kids a year, over time would make a big difference in building an ecosystem of employers and employees.
Chris Barnett says
Among its other assets, Philadelphia has a high concentration of regional medical centers (including a top children’s hospital), medical schools and medical/biomedical research, as well as a large undergraduate university sector.
Regionally, the education sector includes one of the eight Ivies (Penn) and another within long commute range (Princeton). The metro has two leading engineering schools (Penn and Drexel), a large general state university (Temple), numerous well-regarded liberal arts colleges (Haverford, Bryn Mawr, LaSalle, St. Joe, Villanova), and the leading undergraduate+graduate business school (Wharton).
In view of the long-time eds and meds advantage, the city’s revival is unsurprising, if a bit behind its large-old-city cohort.
P Burgos says
But why Philadelphia and not Baltimore? Is it just that Philadelphia is bigger and hence has more legacy assets and industries on which to build?
Baltimore is so close to DC, it’s virtually become a suburb the nation’s capital. Too little of what happens in baltimore is decided in Baltimore. It’s been colonized by DC.
P Burgos says
But you would think that would mean Baltimore should be doing better than Philly, and my impression is that Philadelphia is actually doing better than Baltimore. And I don’t think that Philadelphia has a more effective police department or better schools, although perhaps I am wrong about that, especially the police department.
It’s not just the presence of money, it’s how capital investment is organized and by whom. Aaron’s article suggests that Philly’s resurgence has something to do with its internal structure…that its economic organization has value to outsiders. Baltimore is just a convenient value play for what has become an incredibly expensive and competitive real estate market swirling out from DC. This means that Baltimore is purely a value proposition for DC money. Philly is an attractive proposition for reasons that go beyond it’s relative cheapness and location as Aaron describes. Successful cities have deeper and broader access to capital. Baltimore only has access to DC capital. Aaron’s article suggests that Philly has access to more streams of capital and its elite isn’t able to keep it out and to control Philly in the way that Baltimore’s clannish local elite was able to keep out outside capital so that it could keep Baltimore for itself (much like in another city we will not mention here). It was only the overwhelming power of a globally important metro like DC that was able to force Baltimore’s doors open, but it did so on its terms not those set by the Baltimore elite. Philly had more doors to open such as eds/meds, media, art/culture, business services than Baltimore. It’s harder to monopolize an economy the more complex it is. That made it harder for Philly’s elite to squeeze every last drop of money and power from the city that it possibly could as did the incestuous elites of Baltimore and its sister cities at the ‘bottom’ of american metros like Cleveland, Detroit, St. Louis, Buffalo, and The City That Shall Not Be Named.
I think that Philly does offer an useful example to other cities of the value of openness versus the internecine battles of local clans fighting to the death for their patch of dirt. Economic development begins at home. Global capital is more willing than ever to consider new markets. Philly shows that even quite troubled places can be one of those markets.
Chris Barnett says
Never discount the presence of an Ivy university. Especially in Philadelphia, Penn has long contributed to the city’s business and political elites, though not to the exclusion of the other local universities.
More of the recent mayors have been Penn grads, though there was a big swerve into populism (John Street) following Wilson Goode and Ed Rendell (Penn men). Street was succeeded by another Penn guy, Michael Nutter.
I’m not discounting everything. Just the opposite, I’m saying that everything counts. The totality of a city’s offerings explain its fortunes.
P Burgos says
Thanks for the response; that makes a lot of sense to me and suggests that size and complexity both probably work in favor of cities, and that because of that places like Houston, Dallas, Atlanta, and maybe places like Phoenix, Minneapolis, Charlotte, Orlando, Tampa Bay/St. Pete’s, San Antonio, Austin, Denver, and the NC Research Triangle will have strong economic futures, because they will reach, or have reached, “escape velocity” in terms of the size of their population and the complexity of their local economies. Probably true for Seattle and Portland as well, and maybe even Salt Lake City.
Chris Barnett says
Partly the education part…when my friends were applying to med schools, Philadelphia had five of them (since reduced by mergers). Besides Johns Hopkins, can you name another Baltimore school with a national reputation?
Partly the inertia part…Philadelphia is even older and bigger than Baltimore and had more large corporate players, especially in finance, banking, and insurance.
Partly history, too, I’d speculate, contrasting Baltimore and Maryland’s foundations as a (southern/slave-owning) Catholic colony versus the multi-cultural history of Penn’s colony that included ending slavery just after the founding of the Republic, as well as Philadelphia being the founding place of the American republic and its first capital.
I think it’s the willingness of a place to make room for outsiders…to appeal to their ambitions and desires. Cities rise or fall on their ability to function, not their physical form. Cities need to produce wealth. Being dense and urban doesn’t in itself produce any wealth. It’s how that urban density is used. It seems to me that Raleigh has shown that it can produce wealth for investors, while Greensboro has not. The ball is in Greensboro’s court to show that it can allow investors to produce profits.
What if “producing profits” increasingly means nothing but setting up predatory firms whose only activity is asset stripping? I am less sanguine about this laser focus that claims the only point of a city is to extract wealth-especially if the extraction is poisonous.
The postwar suburban industrial complex was built to “extract wealth” from land that for-profit investors could not figure out how to make money from without subsidized public infrastructure.
True. But in the postwar era these investors at least built something (even if it was mistaken). In the modern era the only thing our “Kings of Finance” do is load companies up with debt and fees. What exactly did the Ayn Rand-quoting Vampire Squid who ruined Sears contribute to Sears or the overall economy?
Chris Barnett says
Alas, Wharton contributed graduates to the financing machine that fueled those debt-ridden buyouts, starting with Tubby Burnham and Michael Milken of Drexel Burnham and Saul Steinberg of Leaseco/Reliance Insurance.
To return this thread to its origin: unfortunately, other than donations to universities and other nonprofits, Philadelphia didn’t really participate in the LBO world after Saul Steinberg suffered a stroke and Reliance Insurance drifted and failed. But Saul’s name is still on the main undergrad Wharton building. 🙂
The many millions of square feet of new real estate built in many American cities in the last decades is real. This large and genuine increase in space in which Americans can live and produce, are most definitely “something.” Don’t romanticize the postwar suburban industrial complex. An “urban industrial complex’ could just as easily have produced the large and sustained economic growth within cities without expanding into forests and fields. The success of the new urban economy is reminding us of this.
David Drasin says
This is a little late to the discussion, I was in Philly through university (Temple), and have lived in the Baltimore area for the past 40 months. I think infrastructure is a big difference between the two cities, there is nothing like the Philadelphia subway/elevated/rail network here, other than the MARC rail between Baltimore and DC. At least in recent times, public transit is controlled by a state agency, and a few years ago the GOP governor Hogan killed the red line which was designed to allow direct connections between the poorer west side and the center + Johns Hopkins area. Accessibility to the waterfront seems much pleasanter in Baltimore than in Philadelphia, Baltimore has a lot of potential. But bad recent history, political, police, etc. Even one of the two big medical complexes in the city (U Maryland) is in the middle of a major scandal involving the board, the (recently-resigned) major, etc. In addition to Hopkins, there are many professional schools of the U of Maryland in Baltimore, and the Baltimore County campus is close by (as the crow flies, not convenient for humans because of poor transit and old, crowded roads.