Sunday, January 22, 2012

Kodak Is Dead

Long live Rochester! Kodak's bankruptcy is clouding perceptions of Rochester. It's another Rust Belt gloom and doom story. For a more nuanced perspective, I turn to the Democrat and Chronicle:

Other company towns whose companies went through decline — steel-making Pittsburgh and auto-producing Detroit, for example — have suffered far more acutely than Rochester has. Displaced workers here founded smaller companies. They stayed and they worked. Local unemployment never went above 10 percent and has fallen to 6.9 percent compared with the nation's 8.5 percent.

Rochester just kept going, though the shadow of Kodak never vanished. Rochester Mayor Thomas Richards said recently that Kodak's gradual denouement, including its ongoing transformation of Eastman Business Park into an industrial area populated with growing companies, has eased the economic landing for the community.

Steel and Pittsburgh. Cars and Detroit. Cameras and Rochester. I add rubber and Akron. The companies that dominated Rochester and Akron left both communities with a wonderful legacy. See "Searching for Silicon Valley in the Rust Belt: The Evolution of Knowledge Networks in Akron and Rochester":

Until the 1980s, Akron, Ohio was the “tire capital of the world.” Today, not a single tire is today produced in the city. Yet, many of the companies—or at least parts of them—remain located there and have shifted emphasis to advanced polymers, the general class of materials which include synthetic rubber, fibers and engineered plastics. Economic development efforts in the city have been based around attempts to build a new community of innovation around these technologies. Rochester, New York was home to several internationally prominent companies in optical-electronics. In the 1980s, these companies moved significant parts of the production process elsewhere and shifted investments in an effort to diversify portfolios. Similarly, they have also made an attempt to transition from a dependence on mass produced consumer opto-electronics to higher technology areas including lasers, semi-conductors and photonics.

Neither Rochester nor Akron did the fail like Pittsburgh did. Detroit finally did the fail and the future looks dark. You dig beneath the oxidized surface and you see starkly different histories.

Kodak's demise reminds me of the US Airways hub in Pittsburgh. In 2004, the airport was downgraded from hub status. The moment of shock was many years (decades) in the making. It was (still is) more a matter of wounded civic pride. But the bad news reinforced the mesofact of Pittsburgh as a dying city.

I'll give the Rochester newspaper the last word:

But Kodak's story is no longer Rochester's story, at least in terms of how the economy performs. Rochester is moving on from the downsizings at Kodak — though, to be sure, some of the new growth is owed to the engineering and managerial talent nurtured at Kodak as well as at Xerox Corp. and Bausch + Lomb Inc., the others in the region's traditional Big Three.

Just last week, the Brookings Institution ranked 200 metro economies around the world based on their 2010-2011 growth rates for employment, income and output of goods and services. Rochester ranked 46th on a list headed by Shanghai, China — but was third-highest among the 57 U.S. metro areas evaluated, trailing only Houston and Dallas and outperforming metros such as New York City, Boston and Washington.

Brookings, a Washington-based public policy organization, said Rochester especially stood out because of its growth in output, 3.3 percent compared with the U.S. rate of 1.8 percent, and employment. The region is growing jobs at an annual rate of 2.5 percent compared with the nation's 1.3 percent.

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