Monday, December 01, 2014

Like Manufacturing Once Did, the Legacy Economy Will Usher in a New Era of Prosperity

The US geography of the Legacy Economy at Pacific Standard magazine.

Theme: Economic geography of globalization.

Subject Article: "Rochester becoming a hot market for foreign investors: Higher valuations attracting investors from around world."

Other Links: 1. "The Geography of Real Estate Markets Is Shifting Under Our Feet."
2. "A Global City of Eds and Meds."
3. "The Bad News for Local Job Markets."
4. "Innovation Economy Is Dying."
5. "MOOCs Are Going to Make College Even More Expensive."
6. "The Long and Troubling History of Penntrification in West Philly."
7. "San Francisco’s Detroit Moment."
8. "Legacy Economy: Pittsburgh Steel Crazy After All These Years."
9. "Cheap energy is the new cheap labour: For companies wondering where to locate, the world has turned upside down."

Postscript: When asked to define "geography" as a discipline, a fellow CU-Boulder graduate student went with, "The why of the where." Why is Rochester, Minnesota becoming a hot market for foreign investors? The Legacy Economy.


D Holmes said...

You are on to something big (at least from the perspective of a Midwest resident) with the concept of the Legacy Economy. I’ve been tempted to use the term “post-rust belt economy” to describe some of the same ideas.

I’m not sure whether Cleveland and Pittsburgh are destined to dominate this economy. I’d throw Milwaukee into the mix, perhaps with an area of domination being the manufacturing economy, which is still going strong in Milwaukee – with companies that have in most instances fully adapted to the global economy.

I think Milwaukee is further along in its physical transformation from the rust belt era. The brownfields (at least the major ones) have for the most part have been cleaned up and converted to higher and better uses. The physical landscape has been transformed, with >$5B invested in restoring the Milwaukee River and other waterways. The waterfront has been transformed in ways that would never be possible except in an industrial city where massive abandonment occurred at exactly the ideal locations and time for total transformation of areas that turn out to be the highest value properties in the urban area. The infrastructure has mostly been rebuilt – and thanks to the slow growth population dynamic – will likely not require another major rebuild for another 50 years. The concentrated urban poverty remains – but I’m not sure Atlanta, Dallas, Miami, or even Seattle are doing much better (and at least Milwaukee knows it has a problem).

It turns out that the manufacturing companies – by being the industries hardest hit by China and globalization are now the business sector that are most fully integrated with the global economy (at least those that survived). There must be 400 companies in the Milwaukee area with business operations in China.

Interestingly, I think the robber barron advantage still belongs to the legacy cities. Regardless of whether Forbes counts 2 or 3 billionaires as Milwaukee residents, there are probably close to 15 billionaires with strong ties to Milwaukee. We gained three NYC billionaires just as a consequence of sale of the Milwaukee Bucks (another legacy city asset).

Jim Russell said...

I'm still working out the manufacturing component to the Legacy Economy, which could prove to be a divergent boon for Milwaukee. I'm not sure. But we are on the same page regarding the "robber baron advantage".

Allen said...

While the UofM property could eventually be linked to downtown Rochster's ( MN; #rochMN ) skyway / subway system, all the other property's sold already are on it. It's not creating the demand but I suspect it's a big factor on why those lots and not going a block or three in another direction and paying a lot less.

Technically Titan's new tower wasn't on the skyway, but as we've seen since then they were wrapping up buying a property on the west side of Broadway that would enable them to easily connect to the existing network.