Shuttered homes and businesses line a downtown Detroit street.
An excess of success
How did things get this bad? The tale, as told by Lyke Thompson, director of the Center for Urban Studies at Wayne State, is familiar: The automobile industry was so successful through much of the 20th century that it suffocated all other economic activity, turning Detroit into a one-industry town.
But that left the government and economy exposed when foreign competition and corporate mismanagement brought down GM and Chrysler.
Now, he maintains, Detroit's and Michigan's future hinges on encouraging emerging entrepreneurs through a co-ordinated municipal, regional and state industrial-investment strategy.
“We have to demonstrate some collective intelligence,” he said.
“You're not going to see a blossoming of hundreds of successful entrepreneurs in short order without a coherent strategy to support their investments.”
He rejects utterly the notion that the United States or any other advanced economy can abandon manufacturing.
“An economy that stops making things and that relies instead on providing services, from taking in each other's laundry to lending each other money, is a society doomed to impoverishment,” he said.
“You have to collectively decide to go after new manufacturing in new ways.”
Prof. Thompson sees some evidence of such coherence among governments, universities, medical centres, private foundations and the other potential engines of diversification. “But we still have a long way to go.”
A car drives past the remains of the Packard Motor Car Company which ceased production in the late 1950s.
The way out
Must Detroit fail? Has it declined too far to ever return to prosperity? The answer, perhaps, can be found across campus, at a new engineering research centre, filled with robotics labs and clean rooms, where researchers are conducting experiments in alternative energy, nano-science and biotechnology.
This despite savage cuts to university budgets from a straightened state government.
“We have a brilliant faculty who are out there in the market … raising money for the College of Engineering,” said Ralph Kummler, Dean of Wayne State's College of Engineering.
It can be found at Tech One, housed in a formerly vacant building where the Chevrolet Corvette was designed, but which today incubates 98 entrepreneurial startups, including Asterand, which harvests waste tissues from hospitals and then makes them available for medical and pharmaceutical research.
It can be found at NextEnergy, a non-profit industry accelerator that works with businesses to develop commercially viable alternative-energy products.
Vice-President Joe Biden visited here earlier this month, part of the Obama administration's rollout of $2.4-billion (U.S.) in grants for electric-vehicle research. More than half of that money, $1.3-billion (U.S.), will flow to Michigan.
Keith Cooley, president and CEO of NextEnergy, is confident that the foundations of a new economy for Detroit and Michigan have already been laid.
“It's going to take a little while to get wound up, but it will,” he predicts.
There are even signs of life in the downtown. The Eastern Market thrives with local farmers on weekends. A few developers have taken over abandoned industrial buildings and turned them into loft condos.
According to one study, 83 per cent of new arrivals to Detroit have a college degree or higher.
Michigan remains a global leader in automotive-technology research, with a large pool of highly skilled engineers. The challenge is to use that resource to reinvent America's manufacturing base, and to make sure that enough of the jobs that flow from that reinvention remain in Michigan to restore the state's economy, along with a more confident sense of its future.
“In 10 years you will see a dramatic renaissance in Michigan's economy, driven by a renewable-energy environment,” Keith Cooley at NextEnergy predicts.
Michigan's future, and possibly Ontario's, depends on him being right.
