Saturday, June 21, 2008

Cleveburgh Update

The Youngstown press reports (here and here) on what I would characterize as the first formal meeting of the Cleveburgh regional initiative. I wish I could have been there, but I'll have a chance to meet some of the stakeholders when I visit the area this July for the Rust Belt Bloggers Summit in Erie. I hope to spend the bulk of time in Youngstown and get a firsthand account of the vibrancy beginning to foment there. But I may need to schedule a visit to Cleveland as well:

“I believe as leaders and practitioners in our various fields — whether it be in universities, city government, business or nonprofits — that our collective goal is to create healthy, resilient and sustainable cities and metropolitan regions,” said Bobbi Reichtell, senior vice president of planning for Cleveland-based Neighborhood Progress Inc., which sponsored the event.

I'm delighted to see Cleveland leading the way for Cleveburgh. I'm still not sure how the NEO folks feel about the interstate focus I'm advocating. Pittsburgh has its own regional initiative and I would anticipate some territorial concerns. Cleveburgh might be seen as unwelcome competition or even a destructive diversion.

I tend to understand Cleveburgh as more of a grassroots approach, instead of the clearly top-down Pittsburgh Regional Alliance. I won't try to characterize Team NEO because I don't know much about them or their history, but it strikes me as distinct enough from what is going on with Cleveburgh. The Cleveburgh effort would seem to have a niche in regional economic development.


The Urbanophile said...

The problem with this approach is that it's a "dinosaur's mating" situation. Rolling up a bunch of weak players in an attempt to create a strong one rarely works in business, and I don't think it will work here. While I think Youngstown is a national leader in coming to terms with its situation via its shrinkage initiative, it is still a struggling place.

I looked at that Team NEO site. It appears to be a typical marketing oriented booster club. Their economic analysis is all about making the region look great, not taking a hard look at things like Cleveland's extremely low educational attainment rates.

What's more, other than exchanging ideas, it's hard for me to understand what it means for cities like Pittsburgh and Cleveland to collaborate. What would they collaborate on and how? Scale logic is typically based on things like amortizing fixed costs over more units, additional specialization and division of labor, and purchasing efficiencies. What does this Cleveburgh thing mean from a practical perspective?

Also, keep in mind that in the corporate world, there is typically a "conglomerate discount". Smaller, more focused, nimble companies are often viewed as better than traditional diversified corporate behemoths.

Jim Russell said...

I'm not looking at this from an economies of scale perspective. Furthermore, even weak players have certain strengths. The idea is to make sure that existing talent find each other.

Serendipity is all well and good in a superstar city. But generating critical mass in a shrinking city is a tall order.

The geography of the proximity problem or rule (my spin on Richard Florida's Spiky World retort to the The World is Flat) puts the weak players in an unmanageable hole. But there are exceptions to this rule and I see Cleveburgh as a step in this direction.

For example, networks such as TiE allow venture capital to break free of the proximity rule (aka 20-minute rule) and increase the range of opportunity. There is a cultural cohesion in the Cleveburgh Corridor that will make something similar to TiE possible.

Regardless, your characterization of Pittsburgh as a weak player isn't accurate and I think Youngstown's value to the relationship is as a geographic urban frontier. What they lack is enough human capital to leverage that advantage. Cleveland and Pittsburgh can help on that count.

The Urbanophile said...

I can understand your attachment to the hometown. I have spent very limited time in Pittsburgh myself, so don't have the best first hand knowledge. But it seems to be a wonderful city in many respects.

But the key health indicators I look at aren't that great. Pittsburgh has both net outmigration and natural decrease. The metro area is shrinking. It's international migration is extremely anemic. It's college degree attainment at 27.1% is nothing to write home about. It has a pretty poor brand image nationally. There is an incredible fragmentation of government there. (Whether that's bad or not depends on who you read). And the financial position of the city doesn't appear that healthy.

It might not be the dying steel city of yore, but I don't see how anyone would call this a strong metro.

I'm also confused by one thing. You say you aren't looking for economies of scale, but they say it is about critical mass. What is the difference? As I gather, you are trying to link the intellectual classes of the cities together in order to provide richer networks for idea exchange. I won't fault that at all and think it is probably a good thing.

I'm a believer in regionalism, but think it breaks down once you try to span metro economic zones. To me the local unit of a region is something like a BEA economic area.

Jim Russell said...

Please don't take my assessment of Pittsburgh's prospects as the usual defense of one's hometown. Pittsburgh isn't my hometown. I was born in Erie, PA and left that city around the age of 8, the bulk of my childhood spent near Saratoga Springs, NY.

I've chosen to champion Pittsburgh because I see the makings of a winner. To be sure, Pittsburgh has a host of problems that indicate a strong drag on the future of the city. However, I think few people appreciate the demographic plight. That worm is turning and the MSA is doing relatively well during the current economic downturn. In fact, I've noticed a number of cities looking to Pittsburgh as a model of how to turnaround from the usual list of Rust Belt woes.

But if you are married to the metrics you list as indicative of weak players, then I'm not all that inclined to sway you otherwise. I'm happy to agree to disagree.

Concerning the difference between economies of scale and critical mass ... Critical mass is the minimum amount needed to catalyze a reaction or change. The metaphor is often used in social science, but is distinct from economies of scale. The classic definition of economies of scale that I encountered is how farming spread over substantially more acreage can increase margin per acre because of the various fixed costs (e.g. combine, tractor, etc...).

The value of regionalism, take Louisville as an example, is to spread out the fixed costs of government over the greatest area possible. That's surely an economy of scale. But critical mass? Well, you do have more people "in" Louisville, but not really. Regional consolidation doesn't necessarily generate critical mass.

Perhaps my perspective was lost in a long-winded and poor explanation. I'm actually ambivalent (at best) about regionalism. I prefer the urban hinterworld model developed by Peter Taylor (Globalization and World Cities project). But if that is still vague, how would you explain Silicon Valley innovation spilling over into Bangalore, India?

That's a long way for economic development to travel and is something the regional model fails to capture.

Janko said...

When three of us Youngstown bloggers made a trip to visit the leadership of Braddock PA a few months ago, we learned about the facets of their urban gardening initiative.

Since then, I've been wanting to take more people involved in Youngstown's urban gardening efforts to visit Mayor John and Jeb and learn from them.

Fast forward to this C+Y+P conference - the organizers announced they are distributing $5,000 in grants ($500 each) to community groups to assist "learning visits" from one community to another.

It may be a small monetary amount to many, but if we are successful in attaining some of these grants, maybe it would be a first step in the right direction of building partnerships, and at the least meeting our counterparts in these other cities.

Even if in aggregate, all three subunits of the mega region are struggling in their own unique way, there are still diamonds that exists out there that we can connect.

An extra bonus to me for the conference was meeting some the Pittsburgh bloggers face to face. Some of them even took us up on our offer for a walking tour of downtown youngstown.

Biology has shown us that there are wonderful examples of adaptive evolution throughout time with new uses and best practices pop up - even for the dinosaurs out there.

The Urbanophile said...

Jim, thanks for the perspective.

I do prefer quantitative measures versus anecdotal or case study approaches when considering cities. At some point if a city is doing well, the metrics have to turn positive. Population growth, migration, educational attainment, per capita income, productivity growth, job growth, etc.

Now there's certainly a more social side to the situation, one that is arguably more important. (See "Why the Garden Club Couldn't Save Youngstown", for example). But ultimately these should be reflected in the economic performance of the region.

I think I see what you are getting at with critical mass. It's sort of what I refer to in my day job as "minimum efficient scale". That is, how big do you have to be to take something on yourself versus outsource it. I think there's something to this. To me the minimum efficient scale for a metro area is probably something like 2.5 million. Below that and it is hard to sustain and build all the myriads of things a place is expected to have in order to retain its club membership in the major city group (e.g., pro sports, major cultural institutions, transit systems, etc). And there are the human capital effects as well.

Can you perhaps include some "greatest hits" links to previous blog posts outlining your case for Pittsburgh? I'd like to understand more about it, and the types of things you think other cities should be emulating there. What's the unique Pittsburgh advantage? The burgh has been a bit outside of my radar. Cleveland I've never visited, but have followed extensively and it would appear from an outsiders view to be arguably the most dysfunctional major metro in the Midwest.

Thanks for the clarification on your origin.

Jim Russell said...

I crafted a post today for your consideration:

If your interest is still piqued, I'll cobble together a greatest hits along this theme. I would include a complete demographic analysis which will explain why I think the worm is turning.

The Urbanophile said...

I saw that post. It was interesting. The most compelling piece to me is the jobs statistic, which is not stellar but pretty strong versus the cities I cover. (Indianapolis added 5,400 jobs in May, and I know places like KC have been doing well too, but most cities seem to be shedding jobs).

It would be good to see a post or collection of previous postings highlighting the case for Pittsburgh.

I agree that the demographic situation almost has to improve. If nothing else Pittsburgh probably won't stay in a nature decrease situation forever.