North Christian Church, Columbus, Indiana. Photo Credit: Greg Hume, CC BY-SA 2.5
I want to share a few additional thoughts on Columbus, looking at the question of whether things really could have been different in the Rust Belt with different policies. I believe the answer is Yes, with caveats.
First, it’s undeniable, as I’ve written many times before, that macroeconomic change drove much of the Rust Belt collapse. Rust Belt challenges spanned many different states, red vs. blue political environments, etc. It’s also true that the Columbus model may not have been applicable or worked in the same way elsewhere, particularly in branch plant dominated cities.
However, the way things played out was not inevitable and I believe could have indeed been moderated. I’ll briefly discuss two items: labor relations and a comparison.
I think to a great extend Miller’s biggest accomplishment locally may have been avoiding the toxic labor relations that bedeviled much of the Rust Belt, something overlooked in the focus on architecture. Possibly this was in part because his company bloomed later than some other industries that saw massive strife in the prewar era. Nevertheless, Columbus and Cummins were examples of how to build a better management-labor union relations model.
Keep in mind, one of the factors affecting the Rust Belt was a relocation of factories to the Sunbelt to escape unions. People who aren’t old enough to remember the strikes of the 70s or before – my hometown of Louisville was known as “Strike City” – and know only an era when unions have been drastically reduced in influence perhaps have difficulty relating to this. Even today, the South continues to be a preferred domestic location for factory expansions. Columbus is something of a Sunbelt extension in this regard.
We see this particularly with foreign direct investment. While Cummins is clearly the 800lb gorilla in Columbus, the city has attracted a large number of foreign manufacturers, particularly from Japan. According to the city’s economic development organization, there are 24 Japanese enterprises in the city, along with others from Germany, France, Canada, China, Switzerland, and Saudi Arabia. A document I saw from a few years listing all Japanese businesses in the state of Indiana had Columbus second in the state after only much larger Indianapolis.
I do believe that had the Rust Belt had a better labor-management model, it would have remained much more competitive economically.
Secondly, although Cummins’ continued success (in contrast with say Studebaker in South Bend) is clearly critical for Columbus, I think it’s interesting to contrast Columbus with Peoria, home to the massively successful global firm Caterpillar. Cat also manufactures diesel engines and much, much more. I believe Cat employs about 15,000 people in Peoria and until very recently had its HQ there. It’s about 2x the size of Cummins in sales I believe. Cat has also faced bruising labor battles with the UAW over the years. Peoria is also home to Bradley University. Columbus doesn’t have a college, only a couple satellite programs.
Peoria certainly is not among the rustiest of Rust Belt cities. I’ve visited it and consider it a fine city. But is experiencing a number of challenges. It’s bigger than Columbus to be sure, so not an exact comparison, but it’s hardly a gigantic city either. Clearly Peoria and Columbus have been on different tracks.
If there had been clones of J. Irwin Miller in every city or running every major industrial concern, perhaps not all of them would have been saved, but I suspect many of them might have ended up in a much better place than they did.
The Rust Belt may not have had to happen, but Columbus, IN doesn’t provide an useful example in making that argument. The Rust Belt wasn’t just formed by industrialization. Baltimore, Birmingham,AL, and Newark aren’t the Rust Belt despite massive industrialization. The Rust Belt isn’t just the Midwest. Minneapolis, Omaha, Indianapolis aren’t the Rust Belt, either. The Rust Belt was something more specific with a particular geography, history, and culture. It’s initial stage in development was the migration of people from New England into the Great Lakes. They brought a culture of activist government and unified social structures to the region’s development. This was followed by the use of the region’s water access to create an internal transportation system that could move more people and things more cheaply than anywhere else in the North American interior. This allowed the emerging capital markets of New York to identify a clear focus to finding investment opportunities in the American interior. That is, instead of spreading their capital across all the expanding regions of American settlement, they could maximize the scale and return on their investment by investing in the Great Lakes creation a unique system of true industrial capitalism, activist government that both supported public investment in infrastructure, education, and public services necessary for sustaining industrial activity and industrial labor forces. This was followed by the migration of Eastern and Southern Europeans taking advantage of this developing system. This created ethnic working classes residing in a society with ideas of large activist government and voila…you get labor unions and the politics that come with large and influential unions. Without any part of that dynamic, the Rust Belt would have been very different.
Columbus’s history is different. Columbus isn’t an exception to some larger rule of North American industrialization. Columbus’ development was part of a separate history. Southern Indiana’s settlement was a mix of people from Pennsylvania, Maryland, and Virginia. They brought a more individualistic culture with more limited ideas about what government should do and what society should be. Columbus, therefore, developed with less ability to support industrialization. It developed at the same time as New York capital was , understandably, focused on the Great Lakes. Columbus didn’t have the cultural ideals to industrialize nor the access to capital to do so even if it had. That made Columbus’ slower and more modest growth follow a different path. Columbus isn’t the Rust Belt. It’s part of a region cultural historians variously call the ‘Lower Midwest” “Cultural Appalachia” or a transition zone between the Midwest and the Upper South. It was different from the Rust Belt on day one. The only way the Rust Belt could learn an example from it would be to return to 1800 and rerun the last 220 years of history differently. Or put another way, culture is upstream from economics.
A lot of this sounds right, particularly that Minneapolis, Omaha, and Indianapolis are not the Rust Belt. But it seems to me that Baltimore, Birmingham, and Newark do share a lot of the Rust Belt features despite being geographically outside of it, so I’m not sure where this leaves the explanation. (Also, where do Cincinnati and St. Louis fall in your typology? They’re part of the industrialization around inland waterways, but they weren’t primarily colonized from New England.)
Baltimore, Birmingham, and Newark have suffered the effects of deindustrialization but they didn’t do so in states that were dominated by the culture of New England settlement or the economics and politics of previous eras of industrialization. Their paths to industrialization were different creating different cultures and institutions. They didn’t suffer the same regional systemic decline as the Rust Belt. Therefore, they couldn’t bend the will of their regions states to serve their interests. They had to accept the terms set by other interests in their states and adapt. Baltimore is surrounded by a prosperous highly-educated state, for example. Maryland can let Baltimore ‘go’ and still sustain it’s public finances, infrastructure, and move toward a post-industrial economy. It can largely thank the money flowing out of DC for that. Post-industrial Baltimore can’t dictate terms to Maryland the way Detroit did for so long.
St. Louis and Cincinnati are not the Rust Belt. Their settlement was by the river system, not the lake system. Their industrialization began earlier and was financed locally by people who did not have ideas of expansive democratic institutions. They did not rise in the way the Rust Belt rose and did not fall in the way it fell. Both Cincinnati and St. Louis have real problems, but neither had anything like the relatively rapid and comprehensive falls that Detroit, Cleveland, and Chicago’s southside had from the 1960s onward. Their rises were slow and long and their falls have been as well. They have intact, if comically incestuously and ineffectual, local elites and middle and working classes. They don’t have the ethnic working class politics or powerful unions of the Rust Belt. They have more diverse economies created over long periods and traditionalist cultures in which people do not expect government or hegemonic employers to provide lavish benefits. None of this is really ‘my’ model. Regional cultural models have existed for a long time…though it doesn’t seem to serve the interests of the professional classes to acknowledge them.
Linguistic patterns, for example, persist in america and are indicative of the persistent power of culture generally, I argue. This map of American linguistic use is a good place to start.
https://aschmann.net/AmEng/
https://www.nytimes.com/2018/07/30/opinion/urban-rural-united-states-regions-midterms.html.
Columbus is an interesting example of a small city that simply did not engage larger economic forces and cultural models that dominated areas to its north in the century after the Civil War. It did this because it was following another example, the cultural model of independence and limited government brought to it from the Chesapeake, Appalachia, and Pennsylvania and settled by the interior river system, instead of those settled by the interior lake system that created the Rust Belt. The geographic patterns reinforced cultural patterns which, in turn, reinforced economic patterns regionally.
Aaron thinks he has an exception to the rule of midwestern development in Columbus. Instead, he has an exception that demonstrates a larger rule of midwestern development…namely, that there really isn’t a ‘Midwest” at all. That’s why the term didn’t even come into use until well into the 20th century.
On a percentage basis, St. Louis city has lost more population since 1950 than Detroit. I wish I could tell you why it doesn’t look as bombed out. They have a pretty strong Italian Catholic community, and the region’s often classed as an outpost or appendage of Inland Northern English, the mother tongue of the I-90 Rust Belt. They’re our weird country cousins at the very least.
Look behind the superficial stats and you’ll see two very different metros. You can always cherry pick to make whatever point you want, but the histories of places matter. The southern half of metro St. Louis is vastly more functional than any part of metro Detroit. That’s because Detroit’s economy and political institutions are very different from Detroit as are those of Missouri versus Michigan.
A red brick architectural vernacular helps, versus the quickly turning shabby wood frame prevalent in Detroit.
See: Chicago. Sure, there are bombed out areas, but the brick and stone building language helps the City immensely.
I think Matt underestimates the degree of decline in North St. Louis, East St. Louis, and many of the disfunctional and balkanized North County towns (like Ferguson). Sure, there is prosperity in Clayton and West County (more than South), but there is also prosperity in northwestern metro Detroit as well. Is St. Louis the CENTER of anything? Versus Metro Detroit is still DETROIT.
As a someone born and raised in Michigan, I’ll chime in late here and take Matt’s side on Detroit vs. St. Louis. St. Louis is more functional. In Metro Detroit, cities and counties turn into walled fiefdoms the second the auto industry takes an inevitable nosedive. There’s a mad scramble to hoard what’s left of this good times within the confines of your community. Neighboring towns become enemies, fighting over a shrinking pie.
Relations improve during auto industry booms, but the fractures never heal fast enough. Then the auto industry experiences another recession and the region is back to square one.
That sort of “us vs. them” paradigm happens all over the US, but I’d argue that Metro Detroit takes it to the utmost extreme.
It does appear that Greater St. Louis is having a rough decade. The trends aren’t as good as you’d like to see. The Great Recession opened up some gaping wounds. But from 1980-2010, it functioned much better than Metro Detroit, and I’d argue that it’s still in a little bit better shape now.
Columbus is about where Appalachia meets the Midwest culturally and linguistically, although it’s telling that the ARC never defined any part of Indiana as legally Appalachian. (The 1/3 of Ohio that’s very similar in culture and immigration to Southern Indiana IS legally Appalachian.) That Appalachian-Midwestern line weaves and bobs around Central and Southern Indiana. There is a significant Appalachian population in Indianapolis but nothing like, say, Middletown OH.
One of the things you neglected to mention is that while other industrial cities to the north in Indiana (Indianapolis, Kokomo, Anderson, Muncie, South Bend, Gary) gained significant African American population in the Great Migration, Columbus did not.
Note that Bloomington is just a short drive to the west (under an hour), home of one of Indiana’s two flagship B1G universities.
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The Lincoln family illustrates how far-southern Indiana was settled: in some measure from Kentucky (which, I admit, was part of Virginia until it gained statehood during the first term of the first President). There are also descendants of lots of Germans who floated downriver from Western PA after crossing the Conestoga Road in the 1800s.
There is a whole scholarly literature on the settlement of areas based on the river system. Appalachian does not refer to physical landforms in cultural studies, but to a culture that had important formative experiences in the mid-Appalachian Mountains of southwest Pennsylvania and what is now West Virginia. The point is that Columbus, IN and say Toledo came from separate and parallel settlement systems. Their coexistence in what Americans casually think of a single region is not historical.
Yes, why ISN’T there a large black population industrial cities of the Upper South/Lower Midwest? If industrialization is industrialization, then that shouldn’t have happened. It’s because the popular and institutional cultures of the Upper South weren’t willing to make a place for blacks, who they viewed as poor ‘immigrants’ from the rural South. The Rust Belt’s much larger businesses and industries took in black workers in the way they took in Poles, Italians, Hungarians…because their industrial system required such massive numbers of workers. Their cultural legacy of large and activist government created a force in the Rust Belt for blacks to enter, even if on strongly discriminatory terms. Slower growth in smaller companies in a region without ambitious ‘progressive’ ideas about what society can and should be had no economic, social, or cultural reason to make a place for blacks and thus didn’t do so.
This is a key aspect of your hypothesis that you left out initially, and in the case of Columbus it is probably a “tipping point” argument.
It counters an almost equally strong argument that JI Miller was in fact the very sort of cultural Northeasterner and a paternalistic boss from a long line of wealthy ancestors that you posit as a prerequisite to modern Rust Belt cities.
His roots and influences go back way more than 40 years.
Some cultural studies models would characterize Columbus as a ‘border’ region between the Upper South/ Appalachia and the ‘Midwest.’ In a space without one single dominate cultural system, there may be greater space for individuals to exercise influence. The Rust Belt was most definitely a space characterized by a single dominate cultural system where culture, geography, and economics were tightly bound in a single structure encompassing the whole society. That’s what set the Rust Belt apart.
One of the great books on the history of industrial America is “The Reckoning” by David Halberstam, a comparative history of Nissan and Ford that came out in 1986 or 1987. He has a lot to say about the relations between management and labor, and how, during the late 1960s, the two basically conspired against the consumer to produce shoddy products for a captive domestic market. While nominally about the auto industry, the book is really a profile of how America became domnant industrially after WW II, when all of our international competitors were rebuilding and essentially out of the market.
Don’t forget the impact the mob had on many of these cities. Organized labor and the mafia were cozy for many years. So cities like Detroit, Cleveland and Youngstown not only had labor strife, they had corruption to deal with. BUT they didn’t have other industries like finance to provide a counterbalance that effect, like New York and Chicago did. They also didn’t have the scale that those cities did, either.
They didn’t have finance because they were created by financial interests in New York and later Chicago. Columbus was not part of that system and thus sustained a different and separate model of economic development. These things developed over many decades, not just the last 40 years.
I’m not sure that the American manufacturing model established by Henry Ford could have made for good labor-management relations. Assembly line workers were essentially robots performing complicated physical actions, but nobody was using their minds. Modern manufacturing requires the ability to program a machine, fix it when it breaks down, understand the materials passing through it, and write up a job report to create a history for the next shift. For next-generation/semi-custom/small-lot fabrication, the tech/ machinist is actually part of the design process. Mid-century mass production laid no basis for this, and then there was certainly no pay-off on the factory floor for the kind of education that would have laid the foundation for this kind of work today. Northern Europe and Singapore train their people for this kind of work, and countries are creating real wealth from the value added by their workers. We add value in this country through initial product design, but we leave it to other countries to translate those designs into production. We are losing a lot of that “translational” value.
Central and Northern England and the lower Rhine valley of northwestern Germany developed in many of the ways that the American Rust Belt did. England’s ‘rust belt’ developed in regions with the strongest Quaker, and other non-Anglican dominance, in England. Germany’s “Ruhr” developed in a region connected by the Rhine River with good access to the financial markets of the Low Countries…continental Europe’s equivalent to New York and London in the 17th, 18th, and 19th centuries. The Rust Belt isn’t unique in the world.
Ford’s paternalism was indicative of the particular development of the Rust Belt. The Pullman factory/worker housing complex on Chicago’s southside is another example from this period and region. Ford provided a work pattern and services for his employees that created a pattern of employers providing broad sets of services for industrial workers on a scale to match their industrial production. Worker expectations in smaller companies, industries, and cities were less. Those lower expectations, in a place such as Columbus, were both created by a different model of society with pre-industrial roots and reinforced that model by narrowing the stakes in labor relations. Anyone who knows the midwest knows that the popular culture of Flint is very different from that of Columbus, IN. The paths of development that made that so are much older than the last 40 years.
How would you distinguish Ford’s paternalism from JI Miller’s?
I’ve never heard of JI Miller. What’d he do?
Read Aaron’s two previous posts.
I didn’t recognize his name!. I guess it’s clear that I’m not a fan of the ‘Great Man’ school of history! So I don’t really fell comfortable describing his actions or their importance…because I don’t think any man matters that much. Ford did what he did because he could. He was in the midst of the Rust Belt dynamic that encouraged him, even supported him, in doing what he did. Ford also set up an early radio station to tell everyone about the threat of the Jews and accepted an award from the Nazi Party in the 1930s. His workers, executive staff, and customers didn’t follow him in that respect revealing the fallacy of ‘Great Man’ dynamics.
This is always hard to parse out if failure (or success) is a result of a series of cascading individual desicions or the result of the macro environment.
Aaron has been arguing for years that individual decisions on the municipal level do matter and are culmalitive. Furthermore Aaron advocates a method that revolves around seeing what works, playing to your strengths and understanding the numbers especially those relating to finance and demographics.
Matt like many others look at the widespread failures in the Midwest, espiacilly in the Great Lakes Region, and sees deeper causes that transcend the ability of civic minded leaders.
There is really no contradiction in saying both are correct. Forward thinking leaders as late as the early 90s could have made General Motors, Motorola and Sears world class success stories contributing civic mindedly to the Midwest. However macro conditions have changed in the past 50 years and it is no surprise that all 3 companies are hollow shells of their former self.
The frustrating thing is that we have been waiting for years for a new Midwestern/Industrial economic model to appear – Perhaps an automation revolution or a new (possibly green) industry. At the start of 2020 this transformation looks nearly as far away as it did 10 years ago. So in the end the Midwest has to rely on its leadership making above average choices. I do not see any other options
Bingo. The leadership culture of a city or region matters.
I am not advancing a “great man” argument. It is the opposite: these big changes don’t happen if only one person is “leading” and no one else is contributing.
Perhaps Columbus is an anomaly in that Miller and other leaders applied a more Northern/communitarian approach at the gateway to “Greater Appalachia”.
Not unlike Bill Hudnut and Dick Lugar and their business elites 50 miles north in Indianapolis.
The real question is why the people of Columbus followed him. I’d suggest it has to do with his approach. He didn’t use formal institutions or couch his agenda in moralistic terms. If he’s suggested that he represented something ‘right’ or ‘correct’ most in Columbus would have been put off. Instead, he was seen as helping the ‘community’ not the local political or economic powers. Appalachian culture puts legitimacy and authority in the individual or household, not political or economic institutions. His actions apparently were not seen as threatening to the established social structure of individual/household authority.
Are you suggesting Appalachian cultural origin makes a place more likely to succeed? It would appear to be exactly the opposite.
Columbus is not especially Appalachian. Bartholomew County’s ethnic background is 28.5% German, 12.4% English, 12.2% Irish, and only 10.7% “American”.
I’m not suggesting that anything causes success or failure. I leave that to others. The Rust Belt was enormously successful for generations. Why? I’ll leave that to others. Ethnic identity and regional cultures are completely different things. You have to set aside modern ‘woke identity’ issues entirely to understand how culture really works. What people think about their identity and how their society actually works are world’s apart. When I describe Appalachian culture I’m not describing an ethnic identity, I’m describing a working society. If use of a term associated with a physical landscape confuses things, call it the “Upper South”. Here’s a linguistic map. Language is powerful and indicative of culture more broadly. Columbus isn’t an exception to the pattern shown here. It fits it well. https://www.ling.upenn.edu/phono_atlas/maps/MapsS/Map1S.html
Here’s a more general dialectic map that is indicative of American regional cultures. https://knowyourmeme.com/photos/165765-regional-dialect-meme
Who here has limited “Appalachian” to a geographical construct? I think you’re setting up a strawman argument. I specifically pointed out that the ARC never saw fit to include any of Indiana within its “region”; I think it’s clear I understand that some of Indiana SHOULD be included based on culture.
However, I think in your zeal to run away from the “great man” extreme, you’ve put far too much stock in “culture” as deterministic.
I understand the tendency; as an economist by training, I always tend to follow the money. But there is no such thing as a “grand unified theory of everything” to explain the broad sweep of history.
Culture is an ‘operating system.’ It’s ever present. You can create neo-fascist online forums with an operating system, or communist ones. But, the operating system structures your interactions. There is no ‘value neutral’ operating system. Every system is created by people and people always have cultural understandings that come from their experiences. Those cultural operating systems are what you need to understand to understand Columbus’ economic fortunes or those of anywhere else. Miller is an effect, not a cause. The cause is the cultural understandings of those in Columbus who accepted his proposals and leadership. Miller learned how to gain the trust of people who see large organizations and formal organizational structures as threats to their individual and familial authority…as opposed to Rust Belters who see, or at least saw, large corporations and activist government as supportive of their values and personal and family lives. Rust Belters supported unions because they thought that unions supported the larger society from which they draw their sense of authority and legitimacy. Columbusers support unions only if unions support them in their individual personal autonomy. The moment unions start to proclaim a larger vision for social change and become important centers of power themselves, they threaten the authority that individuals and households have established, those well to the south of the Rust Belt. The answer to questions about labor relations lay entirely outside of the formal structures of labor relations.
Matt, I disagree fairly strongly with your reading of Columbus’ culture based on my time going to school there in the 60s and working there in the 80s. Even decades ago, it was not insular and its culture was not Appalachian. As Aaron points out, today the biggest Census-defined national origin is “German”, which points to Catholic and Reformed Protestant people…culturally pretty much the opposite of Appalachian Scots-Irish.
In Miller’s day, there were two Fortune 500 companies headquartered in a city of (far) less than 50,000 people. EVERYONE had friends, neighbors, or relatives working for one or the other. Arvin’s gone now, but it was also at least partly unionized.
Even though HQ staffs were smaller and less highly paid in those days, many of the people in those jobs were not natives, especially Cummins’ many engineers. Each company had significant operations elsewhere, and there was a flow of people in and out based on transfers and growth hires.
Matt, economic systems are also “operating systems” that undergird everyday life and frame individual choices.
Economic systems are only part of a larger cultural operating system. Culture is upstream from economics.
We’ll continue to disagree on that one; the two coexist and one is not a subsidiary of the other. For example, there are significant variations in regional culture in the US, but the economic system is the same nationwide.
“The economic system is the same national wide?!” The entire point of Aaron’s post is that Columbus economic system is UNLIKE many other industrial cities. I really can’t understand what you mean by such a statement.
Really? The point of Aaron’s post is that Columbus’ economic RESULTS are unlike other industrial cities’.
Not sure why you don’t understand. The same banking laws, property laws, tax laws, and monetary system are in effect in the rest of Indiana, and the majority of those things are in effect everywhere in the US. Columbus didn’t have to secede from Indiana or the US in order to make things happen…they worked within the existing economic system. The operating system.
As Rod Stevens points out elsewhere in a comment, Littleton Colorado also didn’t have to secede in order to implement its own different solution within the same operating system.
Economic results are caused by economic structures. Therefore, different economic results are caused by different economic structures. Thus, explaining different economic structures becomes the question.
Just looked at the abstract for “Why the Garden Club Couldn’t Save Youngtown” for which the basic theory is networks need to be both dense and diverse. The net has to cover a lot of territory and be able to stretch.
I have no experience of Columbus, IN. I may not understand it, but I don’t believe in exceptions. Two places 50 miles apart can be very different. If we see something as an exception, it’s because we don’t understand the larger patterns. If Columbus hasn’t followed the economic trajectory of other industrial cities, it’s because it is somehow not like them. Again, the german, or other, ancestry of people has nothing to do with the cultural system within which they live today. Very few people in New England today have English ancestry, but the the region’s high-tax and high-regulation government with high levels of political participation and activist governments are all expressions of a regional cultural built on the English Puritan cultural model begun in the 1620s. Each place has a particular culture. That’s the point of culture, to allow societies to function. Columbus’ culture may not be Appalachian, but it’s not Rust Belt/Great Lakes either. It can’t function as an example to Toledo, Youngstown, or South Bend. If something looks like an exception, it means you don’t understand the larger pattern.
Seeing “what works’ and knowing WHY it works are two completely different things. Context is everything. I know that’s not convenient for economic development consultants to acknowledge, but I’m not an economic development consultant. I’m an historian.
The basic premise here is that if there had been more people like Miller in the region, more communities would have survived economically. Miller was a good leader, but how many truly autonomous and independent leaders, both in industry and government, were there in any given place?
Littleton, CO provides an alternative example of how a place survived when the major employer left. There Martin Marietta closed down a missle division in 1987 that employed 8700 people. Many of the engineers wanted to stay, and the city pioneered “economic gardening”, providing them with business counseling and business intelligence that allowed many to start up new businesses. The result has been economic growth several times that of Colorado. Today Littleton has many, many small businesses whose employees are highly skilled and export around the world.
The Midwest challenge is that power and skill were so highly concentrated in a few people and places. “Place” undoubtedly kept many highly skilled managers in Columbus, and maybe the Japanaese moved in to hire them, an alternative to the Littleton model. The important thing in both places may be economic diversification that creates a number of relatively autonomous and more independent-thinking managers, not only in the private sector but the public and civic sectors as well.
Speaking from a West Coast perspective, we may have many strong private sector leaders out here now, but our governments are not necessarily strong in diversifing the economy. Software and biotech grow so strongly on their own, as the auto industry once did on their own, that government leaders do little to diversifty the economy. Their jobs are mainly providing the infrastructure and supply of developed land necessary to support companies like Amazon. They are not trying to create places for other kinds of companies to grow. They don’t really know what new kinds of startups are in their midst or what they can do for those companies to help them grow.
One strategy I have yet to see tried is marrying entrepreneurial support to place making. The Kauffman Foundation does the former, but it so glorifies the individual that it misses the potential support of community and good government. My question about Columbus is how truly entrepreneurial it is today? Columbus, Ohio is clearly more institutional. Have some of those midlevel engeerins in Columbus, IN made it a more entrepreneurial place, based on their desire to stay?
Yes, why weren’t there more people like Miller in the region?
There were many, and that’s why I suggested it isn’t a “Great Man” story.
In the 80s, Arvin also had an Ivy-educated CEO (who had married into the founding family of the company). He guided the company for about 20 years.
There was also a family friend, a doctor, who started a bank, and made a chunk of money in the first natural gas boom of the 70s/80s. He served on the school board.
An acquaintance (supplier, child of immigrants) built up a regional manufacturing company and funded a family foundation with profits and then with an endowment from its sale to non-family owners. He was big on the well-being and advancement of his team members, and did several stints as a Chamber and economic development board member.
And, of course, the Pence family.
Every place as an elite. It’s a matter of what kind of elite, how that elite is formed, and how they operate.
Speaking from a West Coast perspective, we may have many strong private sector leaders out here now, but our governments are not necessarily strong in diversifing the economy. Software and biotech grow so strongly on their own, as the auto industry once did on their own, that government leaders do little to diversifty the economy. Their jobs are mainly providing the infrastructure and supply of developed land necessary to support companies like Amazon. They are not trying to create places for other kinds of companies to grow. They don’t really know what new kinds of startups are in their midst or what they can do for those companies to help them grow.
Interesting argument, but I might respond somewhat that you are speaking very much about core Bay Area and Seattle counties. Certainly not the only focus of economic development in outer Bay Area counties (like Solano) where distribution/logistics, support for the wine industry, and food and beverage manufacturing are a major focus. And yes, that means in our case a big focus on infrastructure (especially water).I would venture that other parts of the State do try to look for other types of startups. Sacramento/Davis and its ag-related industries tied to UC Davis for example???
The siren song of software as the be all and end all of economics does pop up in odd places. Should FRESNO be pushing to become a software hub like recent industry media suggests? But then, I am the “tech skeptic” on this here board, so I would question that. 🙂
In response to David’s comment on 1/7, I believe the Midwest new industrial model already exists. But it doesn’t fit easily into the current Midwest or national economic narratives, so no one seems to notice.
As an adult over the past 40 years or so, I’ve been fascinated by and closely followed the evolution of many the major manufacturing companies that exist in Milwaukee and southeast Wisconsin. It’s now been approximately 40 years since peak manufacturing employment in the US, which was followed by deindustrialization and declines in US (and Milwaukee area) manufacturing employment. The companies that survived this period of “decline” in general are now fully evolved, highly sophisticated, global businesses (Johnson Controls, Harley Davidson, GE Medical, Kohler Corporation, Johnson Wax, Milwaukee Tool, etc.), with revenues in several instances that are 20 times or more greater than in 1980. The local manufacturing jobs at some of these businesses have largely disappeared, but have in some cases been replaced by an even greater number of professional jobs. Milwaukee Tool is probably the most local compelling example, having laid off its last local factory worker 15 or so years, but having since increased Milwaukee-area employment by 700% reaching an all-time employment high as its annual revenues have grown from around $500M to $5B. A few weeks ago, it closed on a vacant office building and land for a planned second Milwaukee-area campus that can accommodate up to 2 million SF of office space for anticipated future growth.
These companies are joined by a host of smaller manufacturing businesses that have had even greater success (i.e., increasing revenue 40-50 times during the era of US manufacturing decline), while still performing most of their production in the US, with significant “factory jobs” in Wisconsin. Some examples include Quad Graphics, Charter Steel, Johnsonville, and Generac Corporation, all of which have grown into $1B-$5B revenue companies, with a key part of the growth seeming to be a focus on employee empowerment. Johnsonville has perhaps the most sophisticated employee empowerment model of these businesses (with its own name – the “Johnsonville Way”) and a company goal years ago of becoming the best sausage company in the world while making its employees the most highly compensated. It claims that its primary focus is “growing people” and its new goal (having become the largest and best sausage company in the world) reportedly is now to become the best company in the world by its metrics.
There are numerous smaller ($100M-$1B annual revenue) locally grown manufacturing businesses in the area that have had significant success as well. One of my favorite examples is Husco Int’l, owned by a local Hispanic entrepreneur who has invested $70M to build a private charter school on Milwaukee’s south side that when complete will accommodate 2000 students.
I think that the “decline” of many areas in the Midwest could have been greatly reduced if there were better leaders at many of the legacy manufacturing companies, with a commitment to their employees and communities and not just to their stockholders (or their personal stock options). Fortunately, there seems to be new generations of leaders with a more far sighted business model that recognizes the long-term benefits that can accrue from empowering employees and treating them as business partners. Dozens of variations of better labor-management models are being used by these successful manufacturing companies today.
Excellent post, David! Being from the Midwest a long time ago, I still think that companies that make something other than “aps that allow one to see what a (Chinese made) couch looks like in your living room” is a vital part of any balanced economy!
When looking at labor battles you need to ask if the company has embraced modern manufacturing themes like :just in time” then or not. When the going gets tough and the factory is still running full bore you need the union to go on a long strike to clear out the backlog of built but not sold product. Once you have modern manufacturing you cannot afford a strike because you customers who need the product today will go elsewhere.
Of course union members don’t realize this and still wear the “fight for your rights” shirts as if the fight was about their rights and not about management objectives. (to be fair management has done lots of evil things against workers and it isn’t clear how much is historical even though modern schools of thought is treat people right and they return the favor )