When authors Antoine van Agtmael and Fred Bakkergave gave a talk last week at the Brookings Institute about the economic future of Rust Belt cities in the United States and Europe, they broke from the conventional narrative in a very key way: they actually delivered good news.
Rather than decaying, Rust Belt cities are actually becoming centers of innovation, according to the writers of a new book, The Smartest Places on Earth: Why Rustbelts are the Emerging Hotspots of Global Innovation. They claim these cities are forming a new "Brain Belt"—Akron, Ohio, is becoming a center of polymer research, and Albany, New York, is a home for cutting-edge nanotechnology research—because of a paradigm shift. Companies have learned not compete not on price, since the can’t necessarily win against emerging markets (a term van Agtmael actually coined in the '80s working as an economist at the World Bank), but making things smarter. That smart innovation, says van Agtmael, is today's real competitive edge.
"When you listen to the rhetoric, it sounds like this country is running out of steam and running out of innovations," said van Agtmael. "And if you look in the rear-view mirror, yes, things look bleak. U.S. manufacturing employment is down 7 million people. But nobody is writing about the fact that we have 10 million people employed in high-tech manufacturing."
The old paradigm of aging manufacturing hubs, areas filled with outdated machines and legacy costs that make them uncompetitive in the global market, is being replaced by a new future on focused investment in future-forward technology. It’s a completely different narrative than what’s being said on the campaign trail this year. In many of the cities they cover in their book, universities are forming partnerships with private companies to create innovation hubs. It’s no longer closed but open innovation, van Agtmael says.
Self-driving cars, wearable devices, smart grid, smart farming: the combination of the physical and digital economy will revitalize these new manufacturing centers, which will eventually be able to bring back industries such as clothing because things can be made better here in the United States.
Van Agtmael used Akron, Ohio, as a case study, a city that was once tied to automobiles and the rubber industry, but has re-invented itself as a center of polymer research and innovations, thanks to cross-disciplinary development spearheaded by Luis Proenza, the President of the University of Akron, and connectors and innovators in the local economy. He says the new generation of small, innovative polymer companies is employing more people than the four big tire companies did in their heyday.
Profiling dozens of cities that fit profile of a Rust Belt city, the authors came to the conclusion that rather than being forced to compete on an economic playing field tilted towards low-cost work, these companies now have the opportunity to build a smarter, more innovative future for themselves with proper city planning and economic investments.
"The real concern is not that there will be no jobs," they write, "but that there will be a lack of trained workers to fill them."