At the core Basile – a private sector knowledge-based employer – affirms two central beliefs of ours: 1. That it is talent – not taxes or big government – that matters most to enterprise success. 2. That talent is so important and in such short supply that knowledge-based employers will move to where the talent is rather than the other way around. Conventional wisdom is people move to where the jobs are. In a knowledge-based economy there is growing evidence that enterprises move to where talent is concentrated.

Unless we get thought leaders and policy makers to understand both we have little chance of getting our agenda debated, let alone enacted. And the best way to get them accepted is from employers. What is so unique about the Basile email is that he put what many employers have said to me over the years off the record in writing and then allowed me to distribute widely what he wrote.

That brings me to the push back. Two main items

1. The firm should be in Detroit. Obviously I would prefer that it be in the city. But I do not believe if it were that it would change their recruitment challenge. Are there a small number of young professionals that won’t take a job unless they can walk or bike to it, probably yes. But not at any scale. So I don’t think where a firm is located has much to do with the ability to attract talent. Before the Great Recession I heard the same story for years from knowledge-based enterprises in the city. Available jobs, not enough qualified applicants, applicants not wanting to live/work in the region. Microsoft, along with many Seattle knowledge-based employers are in the suburbs. The outbound commute in Seattle is as crowed as the inbound commute. The notion that the company has to be in the city (or walkable suburb) to be attractive to young professionals does not appear to be the pattern across the country. Central cities are increasingly the new bedroom suburbs where a segment of talent wants to live, not necessarily work. That is what is missing here –  vibrant neighborhoods where talent wants to live, not work – plus the ability to commute by rail.

2. If they would market our assets better talent will come. This is the one critique I didn’t expect. That some of us believe that we have a competitive quality of place today. Should our firms do a better job selling the city/region to their recruits? Absolutely. I’m convinced most employers don’t know the assets to showcase. But if they did would it change at any scale talent’s willingness to move here? Highly unlikely. I agree with Basile when he writes “We don’t have a perception problem, we have a reality problem.” We have a region, in Chris Leinberger’s terminology, which is dominated by driveable suburbanism, not walkable urbanism, in a market where an increasing proportion of mobile talent wants/demands walkable urbanism.

The second is really interesting. It is from Concentrate Media which covers Ann Arbor online. The article is written by Kate Rose who has been a regular contributor singing the praises of Ann Arbor and Michigan as a great place to live and work. But now she has moved to California and she writes about why. It is quite insightful on what Ann Arbor has to offer and what it is lacking. Her agenda for Ann Arbor:

1. Job diversification. I didn’t want to “dump” Michigan. It had so many qualities that I was looking for in a homebase — save one. Selfishly, that turned out to be my career growth. As Gen Y’ers figure out their next career moves, we need to encourage a range of businesses with an enticing array of jobs. Easier said than done, but if this is a wish list, economic livelihood tops it.

2. A dynamic downtown. We lack discovery of new places, and I don’t think the fact that Ann Arbor’s a small town is an excuse. Give us something to explore and keep the chains out. Create more opportunities for innovative and surprising businesses, organizations, events, and entertainment to take root. If Ypsi can hold a puppet-hosted mayoral debate, surely A2 can too.

3. Knock off the “Us vs. Them” development wars. Before I left, I participated in a few meetings where young people discussed development issues coming before council. The tone was hopeful, but felt combative. The general sentiment was that older residents liked how things were, just as they are, and had the time and resources to fight like hell to keep it that way. We need to open the discussion — that’s right, “discussion’, not “argument’. A stronger acknowledgment from city government that young professionals’ interests are being considered would be a welcome start.

Good advice. Jobs and place. Both matter.

The article is worth reading. It’s largely about a middle class African American women who lived in Detroit for years because of her loyalty to the city, despite the urging of her friends to leave as they had. But ultimately she too left, driven out by repeated crime and the absence of police to do anything about it. Police that claim to have enough staff only to deal with violent crime, not the repeated break ins and ultimately arson that drove her out. Pretty depressing!

As we wrote in our Revitalizing Michigan’s Central Cities report there are some basics that cities must do if they are to grow. Particularly retain and attract residents which in our view is the key to city revitalization. Quality basic services – starting with public safety – is one of those basics. Without it nothing else will work. Middle class residents –which are the foundation of successful cities – will not live in neighborhoods/cities that are not safe. Nor should they.

Once again, it’s not hopeless. Crime rates in cities across the country have plunged over the past decade. New ways of policing, use of code enforcement as a public safety tool (as was pioneered here by Mike Duggan when he was Wayne County prosecutor) and new ways of organizing prosecutor offices and probation are making a real difference. If others can do it, so can Detroit.

Detroit desperately needs a growth agenda. Without it, shrinking will not be a one time priority, but a permanent feature of the city. That growth agenda needs to start with the basics. Public safety – more of it, but also delivered differently – needs to be at, or near, the top of that agenda.

I believe that the University of Michigan is a better asset than UW Madison. By creating a quality of place that is more attractive place to live they have leveraged their assets better than Ann Arbor.

We use Madison as a comparison for both Ann Arbor and Lansing/East Lansing both because of the major research university and to take cold weather off the table. Lots of folks think Michigan can’t compete for talent because of the weather, don’t believe it. But in terms of development policy a better model is Portland, Oregon. They have developed the playbook for land use.

Their four decade long strategy has three anchors: a greenbelt to control sprawl, a high density/walkable central city (particularly in their downtown and near downtown neighborhoods) and transit. The result: a city that is both regularly rated one of the “greenest” in the country and a talent magnet. (See this Wall Street Journal article on Portland still attracting young talent even in a down economy. It’s not just jobs that attract mobile talent!)

In environmentally conscious Portland you see high density (yes even tall buildings) development everywhere in and around the downtown. They understand if you want both to be kind to the environment and economic growth the recipe is to limit low density suburban/exurban growth and encourage a high density central city. It’s the way to get folks out of cars and to make transit (particularly rail) financially feasible.

Ann Arbor seems to have convinced itself that it’s good for the environment to restrict growth both outside the city and in the city. But then the only way you can grow is if new workers demanded by new and growing enterprises live further and further away from the city. Which means longer commutes all by car. So much for being kind to the environment.

That assumes that new workers want (or will accept to get the job) to live further and further away from the city. The evidence is an increasing proportion of college educated adults – the workers most needed by the knowledge-based enterprises that Ann Arbor wants to attract – don’t want/won’t accept that kind of low density/long commute living. The trend nationally – that Brookings has labeled bright flight – is a preference for central city living, particularly in high density, mixed use, walkable neighborhoods with transit. That is why vibrant, dense central central city neighborhoods is central to economic growth. Without a larger pool of talent Ann Arbor won’t get the economic growth it wants.

The State Journal piece goes through our five point agenda and demonstrates how on each the state has been moving in the opposite direction. From supporting higher education to creating welcoming, vibrant places where mobile talent wants to live to developing new leadership that is about moving to the future rather than trying to recreate the past Melot argues that we have come up short.  Worth reading!

The Gazette editorial is just as right on. It makes the case, using data from our report, that for Michigan to be prosperous again central cities matter – particularly Detroit. As they write: “It’s important for residents here and across Michigan to understand that investment in our core cities, east and west, is an investment in a prosperous future for all of us in the years to come.” Central cities – as too many in Michigan believe – are not a part of a long gone past, but of current and future success. That’s because mobile young talent increasingly is concentrating in vibrant central cities of the nation’s big metros. Where they choose to live and work will go a long way in determining which states and regions are prosperous in the future and which are not.

The Press’ article is part of their terrific Michigan 10.0 series. That the issue of retaining and attracting recent college graduates is now on their short list of agenda items that will determine how well Michigan does in the future is in and of itself a sign of real progress. Believe me, five years ago it was on almost no list of important issues facing the state.

As you know, we believe the question “what does Michigan need to look like so our kids choose to live and work here after college?” is one we believe should be asked of every candidate this year. Because that is the agenda the state and it’s regions should be working on as an economic growth priority.

Both articles assert that place matters along with employment opportunities. And that the place that matters most to young professionals is the central city. We couldn’t agree more. A central conclusion of all our research is that talent is what most determines whether a state is prosperous or not and the states that are the most prosperous are characterized by even more prosperous big metros anchored by vibrant central cities.

1. David  Olive wrote a fascinating column for the Toronto Star on Detroit as a model. That’s right a model for Toronto. His point: Detroit has recognized it has to change to prosper and is beginning to do the things necessary to position itself for future success. Boy what a different take on Detroit than we get here in Michigan where everything is about its presumed permanent collapse.

2. Our new report will once again chronicle the accelerating trend towards a knowledge-based economy. The NY Times has an important article on the costs to many of that transition. Folks who have lost a good-paying job permanently. As they write: “For the last two years, the weak economy has provided an opportunity for employers to do what they would have done anyway: dismiss millions of people — like file clerks, ticket agents and autoworkers — who were displaced by technological advances and international trade.” The article goes on to chronicle the consequences of occupations disappearing. The loss in standard of living and the inadequacies of our support system to help people prepare for new occupations.

3. The Times also has a terrific magazine article on school reform in the Obama Administration. How the President has courageously taken on the education establishment – including teachers unions – to get big changes in how schools are operated. It’s a fascinating read on the political power of a movement built around providing largely poor urban kids with a quality education. Quite encouraging!

4. Finally in this season of college graduation a couple of articles that challenge the conventional wisdom that college students leave Michigan because there are no jobs. Both were written during the current downturn. One from the Times on Iowa, which at that point had labor shortages. Employers having trouble filling jobs that require a four-year degree. The other from the Wall Street Journal on Portland, Oregon with the opposite characteristic. High unemployment and yet a magnet for young professionals. The evidence is clear quality of place is an important consideration for graduates as they choose where to live and work after college. If jobs mattered most, college grads would be flocking to Iowa, not Portland. They aren’t!

Leinberger is best in describing the changing patterns of consumer demand for housing and neighborhoods. As he would describe it from driveable suburbanism to walkable urbanism. He cites data that housing prices have fallen far more in outlying areas than near central cities in the current downturn. And that change in demand is likely to continue, probably accelerate.

He makes the case that rail transit is what makes these neighborhoods work. As he writes: Urban spaces of the kind that people want today feature mixed-use zoning and lots of stores and parks within walking distance. But most of all, they feature good public-transit options—usually rail lines.

Rail transit is a key ingredient to creating the kind of walkable neighborhoods consumers are demanding. And it’s those neighborhoods that are key to retaining and attracting talent that increasingly is the asset that matters most in growing a knowledge-based economy. In the article Leinberger has some interesting out-of the-box ideas on providing incentives to developers to pay for rail transit. Worth thinking about.

But so is a change in state transportation policy. Away from either letting our transportation system crumble (our current path) or more and more funding for new roads (the current proposals) and towards transit along with walking and biking. With an emphasis on rail. Hard to imagine our regrowing a prosperous Michigan without these kind of public investments.

Clearly one barrier to making Detroit’s growth a priority is that most Michiganians don’t believe the city’s success is important to their future. We have not learned the lesson that it’s highly unlikely that we can have a prosperous state economy without metro Detroit working and for metro Detroit to succeed we need a vibrant city of Detroit. The other barrier which may be tougher to break through is, even for those who understand the centrality of Detroit to the region’s and state’s success, there is a prevailing sense that it can’t work. That the disfunction of the city is so bad that it is beyond repair. This pessimism about Detroit’s future is overwhelming outside of the city, but deep seated in the city as well.

So we end up with shrinking the city as the priority. Too much land, too few people, too little demand – now and in the future – for that land so we need to turn large sections of the city into open space or farms. Shrinking the city may be necessary, but not as the goal. Rather as a means to a very different end.  A way of freeing up resources to invest in the actions that will grow the city.

Detroit’s problem is not that there is no demand for central city living. The last two decades have seen a rebirth of urban neighborhoods that were written off as dead across the country. They have largely been revitalized by a combination of immigrants and college educated households – mainly young and without children. Detroit’s problem is that it has not participated at any scale with these trends. Detroit needs an agenda to take advantage of the renewed demand for city living.

We will explore in future posts in more detail what a growth agenda for Detroit should look like. As we laid out in our Revitalizing Michigan’s Central Cities report in 2003 the pillars of the agenda need to be a culture that is welcoming to all, the delivery of high quality basic services and being development friendly. None are strengths of the city today.

As Walsh points out they are the city’s three largest non governmental employers. And growing – adding employees and making big investments in their campuses. Health care and higher education are growth industries across the country.  They are a major part of the knowledge-based economy that Michigan and metro Detroit needs to grow to return to high prosperity.  It’s a hard lesson for Michigan to learn but health care and education are key growth sectors – not drags on the economy.

Beyond their direct economic impact on the city the three institutions – in part because of their close proximity to one another in Detroit’s Midtown neighborhood – will be key drivers of creating the kind of urban neighborhoods that the city needs to retain and attract young talent. They are working with the Hudson-Webber Foundation and other funders on a comprehensive strategy to attract 15,000 additional young professionals to the area by 2015. That would roughly double the number of young professionals living in the city.

It’s not pie in the sky. As Walsh points out they are working with a team from Philadelphia that was involved in the transformation of the West Philadelphia neighborhood led by the University of Pennsylvania. Walsh quotes Omar Blaik the team leader: ”The ingredients are here. Now we’ve got to cook the dish. … While everybody is looking at Detroit today and saying, ‘Oh, thank God we are not Detroit,’ I say many people in America are going to wake up 10 years from now surprised that Detroit is rewriting the new chapter of what an American city looks like.”

If he’s right it will boost not just the city but the entire state. A vibrant Detroit is an essential ingredient in recreating a high prosperity Michigan.