The unheralded success of flyover states

In the heat of election season, conversations about the U.S. “heartland” often revolve around red and blue: How will voters from the region—itself a nebulous, non-homogeneous collection of states—react to economic and social shifts, and how will their votes impact the rest of the country?

But a new report, State of the Heartland: Factbook 2018, released by The Brookings Metropolitan Policy Program and the Walton Family Foundation, ignores questions of red versus blue, instead characterizing the heartland by digging into economics and threading together the trends and challenges that unite this 19-state region.

As defined in the report, this so-called flyover country—a large swath of the country’s interior, from Minnesota to Louisiana, and Ohio and Tennessee to Plains states such as North and South Dakota—would, if it were an independent nation, be the world’s fourth-largest economy. While there are significant differences within this region—no surprise, since it covers nearly a third of the country—co-author Mark Muro says the picture of the heartland economy is actually brighter than many assume.

“I think the region and the interior is often a question mark for those on the coasts, which generate the narratives through the media,” he says. “After the last election, the meme machine went into hyperdrive, not just talking about flyover country, but using terms like American Carnage and manufacturing breakdown. We thought it was a valuable time to take a dispassionate look at the facts, at a time when there’s an awful lot of storylines flying around.”

Here are some of the big takeaways from the report, written by Brookings scholars Muro, Robert Maxim, and Jacob Whiton and Ross DeVol of the Walton Family Foundation.

Shutterstock

The region is a leader in advanced manufacturing

While the basic outlines of those flyover country media stories may be true—manufacturing has weathered many challenges and job losses, and many communities have suffered from shuttered mills and a changing economic landscape—the story of U.S. manufacturing is actually more complex. According to Muro, while basic good manufacturing is suffering, advanced manufacturing remains competitive and a backbone of the heartland economy, which itself has been steady, if not stellar. All 19 states in the report enjoyed increased standards of living since 2010, though they still lag behind the U.S. at large.

“This sector is where a huge portion of U.S. business innovation occurs. It makes a huge contribution to American exports, and these jobs offers a wage premium to workers,” he says. “It’s still really important, and anchors this region.”

It’s especially important to understand where and why manufacturing is doing well, Muro says, because it needs to constantly evolve. Training, innovation, tech investment, and education will be key to keeping this sector healthy. Solutions to manufacturing employment that don’t focus on the need for increased human capital may overlook what’s already working in what the report calls a “manufacturing super-region that outperforms the rest of the country on a number of core economic indicators.”

“As advanced manufacturing continues to grow,” he says, “the region will need to up its games when it comes to investing in technology.”

Shutterstock

Middle-sized and “micropolitan” cities are buoying the region

The idea that big cities bounce back has been a theme in economic discourse. The heartland shows that mid-sized, and even so-called “micropolitan” cities (defined as those with populations of 50,000 or less) can also be anchors for economic performance and growth. The report found that 31 cities in the region have performed better than the overall U.S. national average when it comes to economic growth over the last decade, with places like Madison, Wisconsin, Indianapolis, Indiana, Des Moines, Iowa, and Omaha, Nebraska, helped by thriving new tech scenes.

“There’s a strong constellation of mid-sized cities that are quite vibrant, and growing faster than some might expect,” says Muro. “They answer the question about where the region’s digital future lies.”

Cortex Staff

There are signs of tech growth, but the region is still playing catch up

Technology, and tech funding, is still clustered on the coasts. But numerous local, and even grassroots, programs have expanded the tech industry infrastructure in the heartland. Programs such as Cortex in St. Louis, which has built a startup ecosystem downtown, and the Central Indiana Corporate Partnership, which has helped Indiana land companies such as Salesforce, have helped turn an area of deindustrialization into a center for advanced industries.

“There are plenty of examples of places engaging in advanced cluster strategies over long periods of time, and that’s really delivering some benefits for a region that’s emerging as a more balanced and vibrant modern economy,” says Muro.

The bright spots shouldn’t blind anybody to the challenges this region faces. Despite the growth in advanced manufacturing and agriculture technology, the report identified significant shortcomings when it comes to measures of human capital investment, innovation funding, research and development funding, tech transfer from universities, and social equity and inclusion. The report looked at the number of jobs at young firms that have been in business for five years or less, and found the region underperforming on this metric, boasting 3.3 million such jobs, or 9 percent of total employment. The heartland needs to invest in its digital future, and explicitly make it one that’s attainable for everyone.

“As the overall global economy shifts more and more to digital activity, can this region find traction?” Muro asks.