It’s no secret that Illinois, like the rest of America, has been suffering in this economy. It also has the dubious distinction of probably being in the worst fiscal shape in America. llinois Gov. Pat Quinn appointed a group called the Illinois Recovery Commission to examine the state’s future, who recently issued their final report. As is mandatory in this genre of document, the commission devoted a lot of ink to creating a “culture of innovation” in Illinois and putting it in the forefront of new economy businesses.
Illinois may exists as a political geography, but it certainly doesn’t exist as an economic one. Thus any report that purports to offer a statewide strategies is to some extent doomed. I can appreciate the political difficulties here, but thankfully I’m free of them. So I’m going to focus on metro Chicago.
The Innovation section makes a number of recommendations such as having the state pension fund invest in startups. Rather than a line by line analysis I want to home in on one idea they had around picking strategic industries for the state. I don’t believe in central planning or that government can pick winners and losers. But, the government and private sector organizations can do a lot to create fertile environments for certain types of industries to thrive. Your city can’t be all things to all people. At some point you’ve got to take a stand.
So with that, let’s take a look at their sample recommended sectors. Drum roll please…..
- Information Technology
- Biotechnology
- Alternative Energy
- Medical Technology
- Advanced Materials/Nanotech
- Communications/Wireless
I don’t know whether to laugh or cry. The best Chicago can do is a warmed over me-too list of the hot sectors du jour that every other city and state are already chasing? While I’ll give them the benefit of the doubt that this might possibly have been intended as illustrative, Chicago needs a lot deeper and more serious thinking than this.
Chicago is a huge, tier one city in America and the only interior city with truly global reach. This is a city with real capabilities and advantages it ought to look to exploit. I don’t believe it is in such a weak position that it needs to fall back on the equivalent of momentum investing and chasing the crowd. Sure, Chicago can get a “fair share” of those industries, but is this the best it can do?
In that light, I’m going to do some preliminary analysis of where Chicago really can build unique offerings. This is based on the competitive advantages that can be derived from Chicago’s unique structural conditions. As with anything, some of these can cut both ways. The key is to turn them into assets. Some of those unique structural conditions are:
- Centrality
- Regional Capital
- Bottlenecks
Centrality
Lots of places are in the middle of the country, but if you think about it, Chicago is the only tier one, really urban city in the middle of the country. All of the others are on the coasts. This provides, and has provided, Chicago with enormous advantages.
The American interior has been dismissed as “flyover country” but this gets at the heart of the dilemma. It is very painful to fly from coast to coast. Flying from NY to LA takes like five and half hours and crosses three time zones. You lose a day doing it. If you need to travel all over the United States, you sure don’t want to be based on the coasts. This is where Chicago ought to look to play.
The first step is to do an industry scan to look for ones where Chicago could successfully exploit its centrality advantage. The characteristics are:
- A significant number of employees who need to fly about the country
- Not an industry already clearly established in clusters elsewhere
- Industries that could take advantage of Chicago’s unique urban environment
The last one is important because it is the only thing that really distinguishes Chicago from say Dallas. Both are big cities with lots of talent and big airports. But Dallas is a lot cheaper. So look for things that leverage the urban environment and other unique characteristics of Chicago. Here are some examples.
1. Professional Services 2.0. Chicago has long been a hub of professional services. I believe it can continue to be so, but that industry has experienced change that has hurt Chicago and puts its future at risk here. After the exchanges, there is no more important plank in Chicago’s economic future than making sure it continues to be the dominant location in America for general professional services. That’s why I even put it in the title. I don’t see anyone even thinking about this issue though.
Let’s take a step back in review some history. Chicago was the traditional interior business capital and always had a large professional services presence. Arthur Andersen started his company here, so it was the HQ of that huge business. While AA itself is no more, its old consulting arm, now called Accenture, is still huge in Chicago, as are many other services firms such as some of America’s top law firms. We can define professional services in many ways, but I’d say the core sectors are management consulting (e.g., McKinsey), technology consulting (e.g., Accenture), IT/business process outsourcing (e.g., TCS), accounting (e.g., KPMG), and law (e.g., Mayer Brown). You could draw a broader ring if you wanted, though.
I recommend that you review my post “A Better Tomorrow” for more details, but two huge macro-forces converged to Chicago’s benefit in these industries in the 1990’s. One was the digitization of business and the other was the nationalization of business.
The 90’s were really the core of the technology revolution. We went from a mainframe dominated world in 1990 to the internet dominated world of 2000, with many waves of change in the middle: client/server, PC and mobile phone ubiquity, Y2K, ERP, etc. These drove enormous demand for technology consulting and also business expertise to embed this technology into the fabric of business and organizations. Similarly, the nationalization of business driven by deregulation led to rollups of many sectors like banking, utilities, and retailing, all of which required fundamentally changing the operating paradigm of these entities.
Both of these generated enormous benefits to Chicago. First, demand for professional services to help companies with the change led to a big expansion in a sector where Chicago was already big. Second, the services firms themselves transformed, becoming national or global to match their client base and organized around industry verticals to reflect the new demand for domain specific expertise. Where once these firms were organized around local office geographies, they were now national or international practices based on industry. This meant their employees weren’t primarily serving local but national clients, which of course meant they flew to where ever the client might be.
An explosion of aggregate demand and the need to fly around a lot fit Chicago’s value proposition like a glove. Chicago, and also cities like Dallas and Minneapolis, benefited hugely from this massive demand for professional services. Chicago was simply the best place in America for professional services over staffing. That is, it was the best place to hire more people than you needed for the local market, with the idea that you’d send them around to other places to fulfill demand there.
Then another change set in, this one not so good for Chicago. The dot com bust and scandals like Enron set off a transformation of the industry, as did the rise of globalization. First, the digitization of business and national industry rollups were largely completed. This reduced demand growth and even total demand. Also, clients got a lot smarter and a lot more savvy, both in doing things themselves and in working with and getting value out of professional services firms. A significant amount of the work became commoditized, like ERP installations. And most importantly, there was a rise in offshore competition, particularly in the IT/outsourcing sectors. This shook those businesses to their core as most traditional players couldn’t adapt in the face of the onslaught of newcomers. And this isn’t quite done yet. Law is now going through it as clients become more sophisticated in deal making, work becomes commoditized and offshoring looms. (How long will most Chicago law firms maintain their entire back office operations in the Loop, for example?) These all I believe drove a contraction (or at a minimum reduced growth) in professional services employment in Chicago in these sectors. In the 90’s there was massive growth and it was all onshore, with a lot of it in Chicago. In the 00’s, the growth was still huge, but all of it was offshore.
My hypothesis is that this professional services story arc explains a lot about Chicago’s economy in the last two decades. In a piece earlier this year where he asked “Has the Chicago area lost its mojo?”, Chicago Fed economist Bill Testa noted that:
The Chicago area economy and its central city experienced a surprising revival from the late 1980s through the 1990s. The revival led many local leaders to believe that the region had begun a new improved course of growth and development…..Chicago’s turnaround following the 1980s was remarkable in that a fundamental restructuring supported it. Specifically, though the metropolitan area shed much of its manufacturing base, its work force shifted increasingly into professional and business services….Chicago’s performance in the current decade looks much less sanguine….Chicago’s lagging post-recessionary recovery earlier in the decade can also be traced to its hefty professional and business services sectors.
Read the entire thing for full context, as he did not write that piece to make my point, but my explanation of the rise and fall of professional services helps explain a lot of his charts. This would be easy to validate with a market survey. Simply make a list of the major firms in all those sectors I outlined. Ask them what their Chicago based employment was on January 1, 1990, 2000, and 2010. The results would be illuminating.
This notion of broad-based professional services also explains why Chicago’s GDP per capita and such is lower than other tier one cities. Those cities I suspect contain more specialized functions. Now Chicago has some of those too, ranging from the exchanges to the design of supertall buildings. But its bread and butter has always been more general services like IT and accounting. This is a very good thing to some extent. I’d rather have one broad based firm with a couple thousand employees producing pretty high value output than a 200-person shop with super-duper high value, for example.
It also explains Chicago’s high standing in global city rankings. The GaWC study, for example, is among the most famous. It ranks cities based on whether or not they have a branch office location of one of a specific list of professional services firms. Because Chicago is a professional services capital and dominant interior city of the world’s largest economy, one too huge to service from a single capital like New York or Washington, it has lots of these offices so ranks very high on lists that use methodologies like this. But that doesn’t make Chicago a sophisticated mega “control node” of the global economy. I’ve long believed that Chicago’s global city status is vastly overrated and this is one big reason why.
My core recommendation to Chicago would be to focus on next generation professional services, or “Professional Service 2.0.” Its leaders must ensure that Chicago remains the dominant capital of professional services in the future, and the next generation of that industry. This would involve understanding industry dynamics, the status of Chicago and other Chicago players, and how to position the city as the favored location for staffing. The macrotrends are about low-cost right now, and that works to the advantage of places like Dallas, so Chicago has work to do. How can Chicago beat Dallas? It has to be sure that it’s transportation environment, business culture, tax/regulatory schemes, etc are advantaged to this industry. Also, it needs to be able to position its unique urban environment. I give one example immediately below, but superiority in talent recruitment might be another advantage.
Here’s one indicator. I looked up on their web sites where the Chicago office locations of some key Indian IT/outsourcing players were. Infosys is in Lisle. Wipro is in Oakbrook Terrace. Tata Consulting Services is in Naperville. I don’t know how many people these companies employ in Chicago, but if I were the city I’d make it my business to find out, and to make sure that they view Chicago has their key domestic hub, particularly as they move up the value chain. I have no beef with business in the suburbs. I want Chicago’s suburban business centers to prosper, but this is not Chicago’s competitive strength. Clearly these businesses are not taking advantage of Chicago’s unique urban environment, which leads me to believe this isn’t their core growth center of the future. These are some of the firms of the future, so time to get to work.
Chicago is a city that has been a success in professional services and has the unique characteristics that give it the platform to be an even better success tomorrow. What’s more, unlike a typical internet startup, these businesses still scale with people, and have the potential to be large scale employers with lots of high talent people and high value jobs – and even high tech ones in a sense. And the very nature of having to constantly renew their revenue base makes them act like traditional “corporate citizen” type businesses that invest back in the community. Owning a good chunk of the future of this industry is job number one for Chicago. But the city is going to have to fight for it. Other places aren’t just going to hand over the keys.
2. Corporate Showplace. Various companies, including those aforementioned consultancies often set up laboratories or centers of excellence or demo centers or whatever you want to call them to bring in customers and show them the cool new stuff they are working on. This is another space Chicago should dominate.
Think about it. Again, it’s easier for national customers to get to Chicago. People want to come to Chicago – certainly a lot more than they want to go to a meeting in Dallas. It’s a great place to entertain people. In short, these are the same factors that drive Chicago’s convention business. These operations are like mini-convention centers, only have the added benefit of being paid for by private entities. Chicago should make sure it is the best place in America to locate these facilities.
3. Sales. Clearly, sales is another are in which Chicago excels. Not as glamorous as high tech perhaps, but often high value. Chicago’s culture of hustle, of being, as my friend put it, “a city that runs on testosterone” fits perfectly with an aggressive sales culture. Clearly Chicago is already the regional sales center, but looking to beef this up somehow would be a plus. It also fits with the above corporate showplace idea.
These are relatively straightforward extensions. Actual research would need to be done to develop further target areas, but I believe there are many possible ones.
The other key here is to make sure flying from Chicago stays convenient. That means completing the O’Hare Modernization Program of course. But the terminals are in dire need of upgrading. Unfortunately, some of them are relatively new, but weren’t designed with today’s travel realities in mind (e.g., international terminal T5). Contrast O’Hare’s terminals with the new ones in Indy and Detroit, and there’s a big difference. If Chicago wants to be a world class city, it needs a world class airport, and whatever the architectural merits of Helmut Jahn’s United Terminal (which I like), O’Hare just isn’t it. The city needs to replace its entire terminal infrastructure. The OMP has something on this, but the push for a dubious new western terminal complex makes me question whether they are on the right track.
Regional Capital
Chicago is also relatively unique in that it is a regional capital. Chicago is clearly the main city of the greater Midwest. The only analogous situation is that of Atlanta, a city that I believe is very similar to Chicago in many respects. One might consider Boston the capital of New England, but it exists in the long shadow of New York, and outside of greater Boston itself, New England just isn’t that big.
One might think this would be something Chicago would want to take advantage of. Unfortunately, the opposite is the case. Chicago seems to see being the capital of the Midwest as baggage it would like to get rid of. That’s one key difference versus Atlanta. Atlanta self-consciously sees itself as the “Capital of the New South”, a clearly Southern city, but one transformed and reinvented for the 21st century and ready to lead a transformed region forward. That’s true whatever my reservations about their current performance.
But Chicago seems embarrassed about being the Midwest. It seems to view being the capital of the Midwest in the same way it does its old manufacturing heritage. If you read the rest of the recovery report, or pretty much any other document about Chicago, you’ll see lots of obsession over (and self-congratulations about) making Chicago a “global city”. It’s global, global, global, global. Now, Chicago clearly is a city with global reach. And no doubt the global agenda is an important plank in the city’s future success strategy. But the idea that Chicago can simply turn its back on the Midwest is a mistake.
For one thing, Chicago’s economy is still dependent on the Midwest to a greater degree than it might want to admit. Back to the Testa piece:
It is more difficult to draw the conclusion that the Chicago area had successfully restructured its jobs base away from its surrounding region to become a global city. Whether Chicago had become more of an interconnected global financial and business center, such as New York or London, is still an open question. As seen above, for much of the 1990s, the Chicago region’s per capita income made little if any gains on the Great Lakes region. Rather, by way of explanation, the surrounding Midwest region was also experiencing a comeback of the same degree…The Chicago regional economy continued to restructure toward high-skilled service provision, but its linkages may have remained somewhat parochial. That is, the Chicago area’s own growth appears to have been achieved through the provision of professional and transportation services to its traditional Midwest business partners.
As you might be gathering, that Testa piece is a must read for any Chicago leader.
I’m not totally sold on the idea that Chicago’s 90’s rise was attributable to regional comeback. But clearly Chicago is still linked to the Midwest in ways it doesn’t like to acknowledge. Richard Florida has talked about how local professional and business services got rolled up into these regional centers like Chicago. Clearly, providing services to the surrounding region is a part of what makes Chicago tick. Chicago can’t thrive as the only regional atoll that doesn’t get swallowed up by rising sea levels. Just like Ann Arbor can’t get away with pretending it’s not in Michigan, Chicago has to recognize that it is where it is and make the best of it.
And there’s no shame in being a regional capital. It’s not bad to be like Barcelona. By the way, Barcelona has global aspirations too. It just hasn’t sacrificed its Catalonian ones to get there. In fact, it realizes that in a world of ever more generic global cities, its Catalonian language and heritage are an asset. Chicago should take notes.
The first step for Chicago is to start taking its role as regional capital seriously again. The second is to start caring more about the fate of the greater Midwest. The third is to figure out how to take advantage of greater collaboration with this region.
In recent major Crain’s piece on Mayor Daley’s tenure as mayor, Paul O’Connor, formerly head of the regional economic development agency World Business Chicago said, “So we get the headquarters of the windmill company, and Indiana gets the jobs building the windmills. Why?” This is the type of zero-sum thinking that is killing this region. That scenario might not sound so great if you want the whole pie for yourself. But consider an all too easy to imagine alternative scenario: Sunnyvale, CA gets the headquarters and Guangzhou gets the factory. The Midwest division of labor seems a lot more attractive seen in that light.
I’ve did an extensive four part series on this previously called “Reconnecting the Hinterland” that talks about this. Re-establishing something of a regional hierarchical division of labor, if such a thing is possible, is something we should be looking at. I noted in that series that Chicago has among the steepest cost gradients in America. That it, costs plummet the minute you get outside of Chicago. It’s just a quick South Shore train ride to South Bend, Indiana, for example. And only a three hour drive to Indianapolis, the cheapest major housing market in America. Most other tier one cities offer nothing like this to exploit. (DC does have some limited advantages here with nearby Richmond, as someone pointed out to me).
You can read my previous series with some starter ideas on extended labor markets and professional services collaboration and onshore outsourcing. (Hint: remember those discussions with Infosys, Wipro, and TCS I said the region should be having?)
Bottleneck
Chicago is a transportation bottleneck. It’s famous for the length of time rail traffic takes to make it through town. O’Hare is famously congested. It’s expressway traffic is famously bad. It’s just an overall famous bottleneck.
Today bottlenecks are considered bad things but in the past they were often good things for cities located near them. In fact, bottlenecks often drove the very creation of cities. Louisville was founded at the Falls of the Ohio. Chicago itself was located at a gap separating the Great Lakes and Mississippi River watersheds, and is also located at the tip of Lake Michigan, which blocked east-west travel.
So why don’t more people try to figure out how to use being a bottleneck to their advantage? I won’t claim that it would be easy. The world has changed a lot and there are generally options to by pass bottlenecks. But that means we have to think harder, because even with things like the CREATE rail plan, the bottlenecks aren’t going way.
One obvious idea to me is that Chicago ought to focus on transportation innovation as one of its target industry segments. Chicago is the transportation hub of America, and is clearly a major center of distribution, even though lacking a major port.
I think about this in the most broad sense, ranging from urban street design to intelligent highways to financing approaches to operating practices to governance, etc. There’s plenty of high tech in here, which gives lots of potential angles for Chicago to establish businesses in that sector.
Unfortunately, I don’t see a lot going on here. The Skyway deal was a home run, showing some leading practice applied domestically. So good news there. Chicago used to be in the forefront of American urban cycling infrastructure, but no more. Chicago had widely deployed ITS systems when I first moved to Chicago in 1992, but hasn’t done much in the space since. Today it is Boston opening up its transport data and letting its tech developers create the most leading edge applications. New York is America’s urban transportation infrastructure leader. Los Angeles is leading the way on things like computer optimized traffic lights, HOT and congestion pricing, etc.
Of all my recommendations, this is the most speculative, since there’s little of it in Chicago today and it will require a big mindset change. I’ve constantly pointed out the low quality of design of things like Chicago’s street lights or the bus shelters. These aren’t per se bad, but they are conservative, backwards looking, and frankly suburban. It’s hard to make the mental leap from forward looking design and high design aspirations to matters like transport innovation. But the reality is that the mindset that makes the banal design possible is the same one that has caused Chicago to lose some of the leadership in transport innovation it once had. You want to build a culture of innovation? Start here.
This is one where, in the city at least, with a mayor who can make things happen if he simply wills it, Chicago is positioned to shine. Chicago should be looking to make itself into the transport innovation center of America. Particularly in a state strapped for cash, this is a must.
Hopefully these ideas spark additional and more serious thinking about where Chicago should be positioning itself for the future. Again, this is a city with vast resources and a lot of unique structural elements that could play to its advantage. There’s no need for Chicago to pursue a me-too strategy when it had a lot more scope to step up, seize control of its own destiny, and set the agenda that other people want to follow.
Thank for your thoughtful post.
I would offer only this criticism: Isn’t Chicago an economic colony of lower Manhattan where the creation of wealth is secondary to the manipulation of wealth which only benefits the manipulators?
And isn’t this true of most of the rest of the nation?
Thanks for the comment.
Ed, I know that’s a popular sentiment these days. I don’t think it applies to Chicago though. Even if you don’t like speculation, real value gets added here. Those professional services firms I mentioned aren’t getting paid by their clients for delivering nothing. I worked for a large consultancy in Chicago and can tell you that I am very proud of the work we did on behalf of our clients. I feel like we played a positive role in generating real value for those businesses and their stakeholders.
Also, Chicago is still one of America’s top heavy industry clusters. Northwest Indiana is America’s leading steel producing region to this day. Oil refining, automobile assembly, chemicals, etc. And its huge distribution related industries too. Chicago still does a lot of physical things.
Aaron,
This is a great post – lot’s to digest here. More of a technical question: for any of the recommendations you listed here, who would you turn to in order to implement them?
I know it’s likely to be some combination of government, business, and civic groups, but is there any organization in the city that you could see taking the lead here? Especially since Mayor Daley appears to be (slowly) losing some of his power, I’d love to know who you would turn to.
I know you mentioned Dallas, but going forward one of the Texas metropolis’ could certainly give Chicago a run for its money, which of course comes back to the idea that Chicago’s success in ineluctably connected to the overall vitality of the Midwest. If Texas and the rest of the South Central part of the country continues to outpace the growth of the Midwest heartland, Chicago will have a much harder time than Dallas or Houston in making a play for continued international prominence.
Excellent piece.
The one area you mention, but underplay, is the potential competition for O’Hare traffic from DFW, particularly with more and more traffic going south. (Remember Fedex chose Memphis because of its centrality- package flows tells you something about where modern business is.)
The two are very much on the longitude lines, and if cities around DFW are smart, they’ll start doing more value-add on the packages that pass through them. That was historically Chicago’s role, to gather the grain and then turn it into biscuits before it went elsewhere. Today that value-add is assembly or modification of things made everywhere and nowhere.
I think you are also on strongest ground when you talk about sales. These are the people who are the road, or rather air- warriors who really care about connect times, and their companies care about whether they are going out for the day, or will have to spend for a hotel.
I don’t agree on the consulting. Tata and the Indian companies are there because there are some things you can’t do a half a world away, that require face-to-face. Yes, the big IT jobs might be moving to the web, or much of the integration may be going on overseas, but there is still a need for high level problem solving, and that requires a relatively high level of both education and cultural understanding that is American.
Don’t forget, too, that Chicago has historically been home to many of America’s packaged goods companies. For better or worse, these are the companies that create our crackers and frozen dinners. The worse side is that Chicago’s mainstream and insular qualities have kept it behind the food trends like those cooked up in the Bay Area. The better side is that this is where the test kitchens are, where the food researchers determine how to give Brach’s candies a shelf life of 500 years.
The last thing that I think really needs noting is Chicago’s sheer urbanity, and this is where it is different from the rest of the Midwest. This is the place where you can really live in the city, and enjoy what happens when a lot of smart people cross paths. Dallas can’t compete on this count. Neither can many other places in America. Go Chicago!
Aaron, if you want to help the Illinois red team with its economic master plan, tell them to read this link and it’ll answer most of their questions:
http://www.zompist.com/jacobs.html
It’s the cliffs notes version of You Know Who’s “The Economy of Cities” and “Cities and the Wealth of Nations.”
It’s the essentials of those two books that can be digested in about 10 minutes.
For instance, you wrote “Illinois may exists as a political geography, but it certainly doesn’t exist as an economic one.”
Evidently, the same problem exists in New England. Zompist writes: “For instance, the southern edge of New Hampshire falls in Boston’s city region — a fact which exasperates New Hampshire officials, who naturally would prefer development to be spread evenly across the state. But the city region stubbornly refuses to reach that far.”
Chicago’s city region reaches into southern Wisconsin and northern Indiana, yet doesn’t strech farther south and west into Illinois.
I do have one remedy I’d recommend to them, but I don’t want to threadjack. Let’s just say it will cost billions of dollars, need tons of concrete and steel, merely speeds up what Illinois has plenty of, and would be a copy of what California is also trying to do.
Aaron, as always a very well-thought out piece. I’ve come around myself to recognizing Chicago’s potential, and its limitations. I think it is a global city largely because of the role it plays in America’s Greater Midwest. By the same token, it is unique in that it affords an attractive urban environment. That is what inspired me to help legalize sidewalk cafes 25 years ago. It enhanced that environment, but could not have had the impact is has without it. Growing up in this area, I don’t recall anyone thinking of Chicago as a “global city.” That is a relataively new phenomenon, brought upon by an increasingly interconnected world. Now in this global retrenchment, the dialogue you are fostering is timely and needed.
Thanks for all the great comments.
Chicago’s urbanity is the key strength. There is clearly nothing like it anywhere in the middle of the country. There are pockets of urban goodness about but only Chicago is the real deal.
Aaron, typically industry specific growth initiatives are undertaken via public-private partnerships, often through special purpose, corporate led organizations that are funded through a mix of corporate, foundation, and government funds. Look at the many high tech and biotech booster organizations around the country for examples.
Other things like transport innovation depend more clearly on mayoral leadership, at least in some areas. Pretty much everybody in transport circles in the US know that Janette Sadik-Khan is the NYC Transportation Commissioner and what is going on in New York transport circles. Can anyone in Chicago even name the Chicago transportation commissioner? I know I can’t.
Aaron…….Terrific amount of food for thought here, and I’m trying to digest it. A couple of comments:
1. Aaron Brown wonders if there’s any existing organization that is taking the lead here. He should see our report, “The Global Edge,” published by the Chicago Council on Global Affairs, now two years old. We plan an update and the Urbanophile’s thinking is going into the mix. But this report stressed the key roles of business services and transport, among others. So we’re definitely thinking along the same lines. In fact, on some of this, we’ve been taking the lead.
2. In your discussion on professional services, there seems to be a contradiction. Either they’re strong, with Chicago “a hub of professional services,” or they’re too weak to sustain Chicago’s ranking as a global city. If control is key, you may be right. If linkage is key, the global city folks are right. Both GaWC and Saskia Sassen lean heavily toward the linkage mode, and need to be taken seriously. So do that recent PricewaterhouseCoopers study and the older A.T. Kearney study (also being updated now), which put Chicago right at the top of the second tier of global cities, just below the acknowledged leaders — NY, London, Paris and Hong Kong. Might I suggest that being a global city is somewhat in the eye of the beholder, and we’re being beheld in a pretty benign light.
3. You’re too right that Chicago slights its position as the big apple of the Midwest (and the rest of the Midwest returns the favor.) This is a tricky one. On the one hand, as William Cronon wrote so powerfully in “Nature’s Metropolis,” Chicago created the Midwest and the Midwest created Chicago. But those links are fraying, as even Bill Testa has commented. Perhaps one reason is found in Richard Florida’s Atlantic piece, in which he noted that, in recent years, Chicago has simply been bleeding the rest of the Midwest dry — for capital, for talent, for business services, etc. As you know, there’s a great deal of resentment of Chicago around the Midwest, couple with an equal amount of envy and desire for ties. Schizo, in other words. Also, I’d question the ocmparison of Atlanta and Chicago — or rather, the comparison of the South and the Midwest. The South is a highly cohesive, self-conscious region — historically especially, but also culturally and economically — and so a “capital” of the South makes sense. The Midwest too is an economic and cultural unit, whether it sees itself as such or not — and mostly it doesn’t see itself this way. Getting Chicagoans or anybody else to see themselves as Midwesterners is an uphill battle, which we’re fighting daily.
Oddly, there was an article on the front page of the Tribune yesterday (or Saturday?) that the suburban population, for the first time in annual polls, has started saying better transit (rail, bus) developments should be put ahead of new highway or highway reconstructions. I’ve only been in Chicago since late 2004, but have been railing against the current transit system since. I moved here from London, with NYC, DC Columbus and Cleveland mixed in there before that. Of the four “global” cities I’ve had first hand daily commuting experience with, Chicago is by far the worst. Cleveland, while much smaller, is far more reliable and efficient and serves it’s user well (late night, suburban, express routes, cross town etc). Columbus only works if you are on the High Street corridor, are going to OSU or at normal hours, otherwise forget it.
Chicago has to get a N-S suburban rail line set up and needs to get a better system of E-W on the north side of the city, N-S on the west side of the city and improvements in every way on the south side, with the goal being the elimination of needed a trip through downtown to go back out again while getting people off of the plodding bus lines (which are the main impediment to people ditching cars), and onto a light rail, BRT or rail itself. For example, for me to get to a show at Lawrence or a friends in Andersonville from Logan Square, I either take a Diversey or Belmont bus to the Brown or Red Lines. But to get to those stations can take 30 or 45 minutes, and who knows how long the CTA trains will stand at Belmont. Routinely that trip takes about an hour. I ride my bicycle often in the summer, it can take 20-30 minutes, a cab 30 minutes and a whole trip on rail takes at least 45-60 minutes. To go just under 5 miles. It is faster in your own car, including finding parking, too. If Chicago truly wants to be a global urban environment, a 5 mile trip should never take that long anywhere within the urban core on transit, yet it routinely does, and forget it if you live further west out Diversey, Belmont, Addison etc, northwest or anywhere south of the Eisenhower.
“I want Chicago’s suburban business centers to prosper, but this is not Chicago’s competitive strength. Clearly these businesses are not taking advantage of Chicago’s unique urban environment, which leads me to believe this isn’t their core growth center of the future. These are some of the firms of the future, so time to get to work.”
Aaron, half (or more) of the working population wants to live in the ‘burbs…apparently to enjoy good schools, green lawns, and the ability to selectively partake of the advantages of urbanity (good restaurants, museums, theatre, music, shopping, weekend hotel getaways, festivals, major league sports, easy air travel, etc.).
I think the Chicago suburbs ARE part of Chicago’s competitive strength: Minneapolis or Indianapolis or Dallas suburbs are not an hour from The Loop. Chicago suburbs are.
In other words, I’m suggesting with a straight face that urbanists
(a) recognize the importance of good suburbs;
(b) acknowledge that suburbs offer things cities can’t or don’t;
(c) understand that suburbs attract people that cities don’t; and
(d) understand that a city will grab its share of regional success.
IOW, fishing in the limited pool of “urbanists” will not attract business decision-makers and their investment.
cdc, as you well know, I don’t hate suburbs. But if you are moving to the suburbs, then you’ve got to consider the suburbs of where. Places like Houston and Dallas offer robust economy with high quality suburban living at much lower cost and with much lower traffic congestion and such than Chicago does. Clearly, if you ride that train into the Loop to take advantage of what Chicago has to offer then great for you. Many suburbs, especially to the north, have maintained close ties to the city. But there are tons of people who far more rarely venture into it. For that group of people (and suburban based businesses), I just think Chicago has a tougher competitive road vs places like Dallas. Whereas on the urban side, it’s no contest at all.
Regarding professional services and global city. I will plan to do a clarifying post on this in the future, but I think it comes down to what those services are. People doing what I did, for example – that is, implementing technology enabled business change programs – aren’t really doing anything particularly global. Of course now it is coordinating offshore, so I guess in a sense it is true, but that is happening literally anywhere IT development is being done, and so is not unique to Chicago. These are just general services provided to American business. And they employ many thousands of Chicagoans. I would contrast with more specialized functions such as legal services associated with steel trading or some such which are much more specific and hard to get elsewhere (and thus harder to offshore or move to Dallas). The question of how much of what types of services Chicago provides is one I’d be interesting in seeing some research done one. I sense a 2×2 matrix forthcoming…
Higher education is a growth industry (I think) and a bit under-analyzed in this piece. One of the drivers of the South Loop’s transformation are our private colleges and universities (Columbia, Roosevelt, DePaul, Art Institute and Robert Morris). They also tend to attract the best human capital (or, if they are working well, make the best human capital).
Our Midwestern universities are also largely isolated. I won’t thread-jack either and talk about a new infrastructure investment to connect the Midwest, but tying together our major universities, perhaps with an academically-oriented Big Ten headquarters downtown that brings together the assets of the universities, would build off of our strength. I also think better integrating our major research universities (Chicago, UIC, Northwestern, Urbana-Champaign, DePaul, Loyola and IIT) into a network would generate similar returns. The Amherst, Mass region does this well, as does the Ponoma area in California.
You can’t really replace face-to-face interaction in higher education (no offense to the University of Phoenix). That’s a stable and growing industry that has already claimed the South Loop as its own (with significant city assistance). Our city ought to continue to vigorously embrace it.
“IOW, fishing in the limited pool of “urbanists” will not attract business decision-makers and their investment.”
Great suburbs haven’t saved Detroit or the Detroit Metro region despite the fact that many Detroit area suburbanites think that they can go without a healthy and successful core city. When the core city is going downhill, it’s a tremendous drag on everything around it.
I don’t know where Urbanophile gets the idea that Chicago isn’t coming up with ideas, even good ones, or is trying to shape its future.
Are you only paying attention to Mayor Daley? Fine, I’ll agree with you there–Daley and his cronies and the Aldermen who feed at the trough are surely incapable of new ideas.
But I believe you are by and large way off when you say (over and over again, ad nauseum) that the Chicago area is out of ideas, does not have the right plan for its future, and is a passive passenger in the global economy. There are a lot of business leaders and planners in the region coming up with innovative and broad-reaching plans not only for the center city but the region’s future itself. Look at Metropolis 2040, for example. Read the weekly editorials and Letters to Crains, for another example. I can really go on, but there is already a healthy dialogue of ideas in the Chicago region–make no mistake about that.
The biggest flaw in your overall critique, and the place where I disagree with you the most, is your point that Chicago’s problem is a lack of innovation and planning. Wrong. Chicago’s biggest problem is that a culture of corruption and essentially hopeless leadership bent on self-promotion is completely unable to implement many of the good ideas people come up with. The best public servants move up and out, while the cesspool of scavengers stay behind and fight over scraps.
Chicago became a great, global city despite its leadership. That has been Chicago’s story, and that will continue to be its story.
Agree with Richard Longworth, point #2.
Too many midwesterners from outside Chicago are using the worst economy in generations to pick apart its shortcomings. It’s unfortunate.
Aaron in his post and Richard Longworth both highlighted Chicago’s position as the leading Midwestern city. But isn’t the “Midwest” even less an economic region than Illinois? I suggest that Northwestern University Prof. Dirk Brockmann’s research on community structures may highlight where Chicago could more effectively focus on building regional links . The basic region isn’t surprising: the eastern two thirds of Wisconsin; Illinois outside of the St. Louis area; northern Indiana over to and including South Bend; and Berrien County in Michigan. I’d guess these areas would be more receptive to Chicago’s leadership than other parts of the Midwest because their leadership can come around to seeing the benefits to their communities in providing services (onshore outsourcing) back to Chicago. I am not convinced that such a view would play in Minneapolis or St. Louis.
Thanks for more great comments.
Dan, there’s no doubt Loop U has been a huge win for the city. I plan to write on it in the future. Also, better leveraging local and regional academic resources is a no-brainer. Where I might be concerned is if the city over emphasized that. Education is quasi-public sector. Too many downtowns have become dependent on government and related sectors like eds and meds. The difference of Chicago is that its core has remained a powerful commercial center. So as long as we don’t lose that, I’m good with more academic stuff.
Paul, good point. What I was trying to suggest is that you can’t take a single strategy like biotech and apply it to an area with very difference characteristics. You need to develop place specific strategies that deal with the realities on the ground. Part of that could, of course, involve how the places interact with their neighbors. I think it’s a hierarchy of related places.
I might suspect however that you’d find downstate Illinois is probably the least likely place to want Chicago’s leadership. From what I’ve seen, “in state hate” is the worst. I suspect downstaters dislike Chicago worse than those from out of state. Similar to how Hoosiers often resent Indianapolis. Within a state there is a sense of direct competitiveness for government resources that just doesn’t exist outside that framework.
TUP, do you think my suggested industry focus areas are wrong? If so, which ones would you suggest as an alternative?
I agree strongly with your spin although I’m not an expert on Chicago.
The midwest desperately needs a great centrally located trading center. Imagine how all of this would work if great passenger rail connections were rebuilt creating denser downtowns throughout the midwest.
This isn’t just about Chicago and Chicago can’t do it alone. I really agree with the kind of things Jane Jacobs said about the old South and the way it was dying in need of more real cities for commerce and trade.
I also think Chicago, can play a new role in the real organic integration of education back into the “real world” and away from the issolated ivory tower, Big Ten waste machines.
“Our Midwestern universities are also largely isolated. I won’t thread-jack either and talk about a new infrastructure investment to connect the Midwest, but tying together our major universities, perhaps with an academically-oriented Big Ten headquarters downtown that brings together the assets of the universities.”
This is a huge, huge, topic. So much of “brains” of the midewest and in most places has been separated from the real body of business and life where ideas can be tested and put into practice.
Yes, education is a “growth industry” but it’s also pretty clear that it’s also damaged and broken.
IMHO—a critical thing for Chicago’s future will mean pulling the central bulk of the state university assets in towards the core.
One way or another, this is likely to happen. The state is obviously in no position to fund the universities in the way they have in the past and likely private funders will take a harder at the cots vs. benefits of issolated schools.
“Aaron, half (or more) of the working population wants to live in the ‘burbs…apparently to enjoy good schools, green lawns, and the ability to selectively partake of the advantages of urbanity (good restaurants, museums, theatre, music, shopping, weekend hotel getaways, festivals, major league sports, easy air travel, etc.).”
Even if that is true, it’s really not the point.
Suburbs as they are classically known do not seen to be great places for many business functions and ceratinly have not replaced the “city” as central trading centers. Many also seem to be issues with what looks like massive structural infrastructure costs they can’t pay for.
A lot more has to be said about what works and what can be afforded and what doesn’t.
JOHN: Why do you refer to the Big Ten universities as isolated ivory towers? Is it because most of the major state nniversities are located in small cities away from the major urban centers?
Yes, if the bulk of jobs, businesses and issues of the future are tied to urban areas what is the point of spending vast amounts to ship kids away from them?
Try to get an internship while or soon after you are in school. Wise business people drop non local students to the bottom of the pile.
I’m not saying everything has to end up in central Chicago, but it’s got to be a lot closer. The whole mass campus concept on anything like the scale the Midwest does is just a broken model. Without the state, it would surely collapse and reinvent itself.
Here’s just one example. The big ten has lot’s of good or great MFA art programs. The University of Minnesota, Indiana Uniniversity, Ohio State and Michigan come to mind. Penn State, and WVU are also great if not big ten.
Honestly, I know very little about who is or is not good, cause I never can see the kid’s work.
Do you honestly think any even serious art dealer, curator, collector or just interested person has the time to fly or drive to each school to see their MFA shows? Perahps, people do that for Yale and that’s about it.
These kids are in hock for thousands and thousands of dollars and have likely completed the longest stretch of studio time they may ever have. Now, they desperately need people to see and react to what they are doing.
California, for a number of years has put together group university MFA shows like Supersonic, which bring together a bunch of big programs like Cal Arts, UCLA, Parsons etc.. into one big show. Dealers fly in to see them because it makes it practical.
Likewise and even better is the regional show of MFA work usually hosted by Hunter College in Manhattan which is seen by tons of people.
In fact, Hunter as a whole was never considered a great program, but now it’s near the top based likely on location alone.
JOHN: Undergraduate internships are not much of an issue. Companies recruit interns from all over the country and the world, just as they hire. This is well known…
The presence of a state university or large private universities in a large urban center is much more important for translational science and access to business and state government. A number “BigTen” universities have either their main or a major satellite campus in a dominant urban center of their state, including Indiana, Purdue, Wisconsin, Illinois, Ohio State, Minnesota, and Northwestern.
Is it really in doubt why, NYU gets so many more applicants than any other school and why they don’t need a big sports program to do it?
Yes, there are major satelite campuses, but the bulk of assets is still afr too tilted.
As to the number, of possible majors that would benefit from being closer to a big city, it’s likely 75% or more. All the arts and cultural degrees, business, law and obviously urban planning. Even something like engineering needs to be more in tune with what’s actually being built or fixed.
How does this all work? Suppose, you want an artist, or writer, or business person to give a lecture. In NY, they take the subway and ask for 100 bucks. Ask me to go to Bloomington and you have to compensate me for lodging and several days time.
I guess, that’s the way it works and the way the Profs like it. They are always right. They are the smatest people in the room and real world people or input is not wanted.
Face it, these schools are where they are, and have remained there for political and not practical reasons.
YEs, I know they have their roots as agricultural schools, politics is has controled their history.
I don’t say this out of bitterness and I wish rural areas well. However, we need to stop lying to ourselves about the real practical realities here.
Until the Star Trek transporter or something like is cheap, easy and widely available, the bulk of opportunities will tend to migrate towards cities.
This isn’t a conversation about people “liking” or not “liking” cities. They are a reality, period and the reasons they exist now are the same as they always have been. Yes, the single use manufacturing city based on bulk goods is fading, but the city as a place for continuous interaction and trade is as useful as ever.
Aaron, it’s a good analysis, again. There’s one kink, though, which is that Chicago is such a big city that its dominant industries should probably be among the biggest industries in the world. Niches don’t power a metro area of nearly 10 million.
Going with this idea, I’d say the regional capital is the most important thing for Chicago on your list. Professional services are nice to have, but they’re not enough. Sales are also a good strength of Chicago, but they’re an even better strength of New York. This means that the easiest way for Chicago to attract investment is to say “Start a branch here, for easy access to the Midwest.” It mirrors how New York got to be one of the top high-tech regions in the US without really trying. With this strategy, Chicago would focus on strengthening hub-and-spoke ties with the rest of the region (which is one of the few instances in which HSR would have visible economic benefit beyond transportation value…), to make companies want to relocate.
More aggressively, Chicago could try to seriously pursue the same things everyone else is pursuing. It already has some competitive strengths: it’s big, it’s lower-wage than peer big-cities in the US, and it has a large pool of universities. Those by themselves are not going to make the majority of companies relocate to Chicago, but you don’t need a majority; a large minority is enough.
Connecting better to the hinterland is always useful, but for leveraging the new growth industries, more than just HSR is required. To pitch itself as the natural capital of the Midwest, Chicago needs to have the rest of the Midwest agree to follow its lead. It requires a diametrically opposite politics from what’s implied further up in this comment: instead of poaching talent from other cities, Chicago would need to maintain good relations with the rest of the region, to avoid looking like a colonial oppressor. New York gets away with looking bad because people are in fact moving away from Upstate New York to the city; Chicago, which is growing more slowly than the rest of its region, does not have this luxury.
“Suburbs as they are classically known do not seen to be great places for many business functions and ceratinly have not replaced the “city” as central trading centers. Many also seem to be issues with what looks like massive structural infrastructure costs they can’t pay for.
A lot more has to be said about what works and what can be afforded and what doesn’t.”
Okay, I’ll say more about the one item on Aaron’s list that tripped the “suburban growth” switch and provoked my post.
Regional sales offices especially cannot justify (or even afford) downtown rents because the sales people are frequently not in the office. So they are a good fit for suburban office clusters.
Also, because regional sales office staff travel a lot, a location near the airport is better than one in the CBD.
Not a small thing: successful salespeople tend to want to live in the suburbs. So if you’re attracting regional sales offices, the people are most likely to live in the ‘burbs once they’re established…and they are unlikely to want to commute clear to the CBD.
Yet these are also the same people who want to (and have the discretionary income to) take their kids to museums, to go with friends to high-end restaurants, shows and ballgames, to have a boat. So which core city they’re near does matter to a degree.
“Regional sales offices especially cannot justify (or even afford) downtown rents because the sales people are frequently not in the office. So they are a good fit for suburban office clusters.”
There’s a lot of truth to that, but a real city that functions well has to have a lot more than options between the “downtown” and the office park and lots of price ranges in between.
American cities, often don’t but that’s a huge problem and not natural.
As for the proximity to the airport, this also is to a large degree a reflection of the poor center to center rail infrastructure. How many of these plane trips are actually pretty short?
I pretty much agree with everything Alon just said except he said it better.
This should be a win, win situation for the urban midwest and that’s how it has to be sold and done.
It’s pretty clear, Chicago’s problems becoming a dominant business center has a lot to do with the whole ambivalence that seems to prevail about cities in general.
This is an brainer problem. An hour with a history book would tell people of Chicago’s history as a rail based, centrally located trading center wonderfully located in a region that is both agriculturaly rich and surrounded by flat land. It can do things Denver never could.
But this reality, then faces the midwest’s general weird attitude towards cities, railroads (the prime mode of center to center transport) and trade in general. Better to fly over and just forget the whole place, perhaps?
John, what’s not natural about a decision-maker comparing Class B or C downtown or near-downtown office rent with Class A suburban rent, considering the time lost to commuting…and then choosing the cheaper, nicer location closer to home? That’s why we have suburban office parks.
This isn’t any kind of a “weird attitude toward cities” as much as the reality of bad city schools combined with an expressed Midwestern preference to live a little further apart than in the big Eastern and Western cities.
Better center-to-center rail infrastructure doesn’t deal with the diffuse nature of Midwestern metros and the lack of effective public transportation within metros.
“A real city that functions well has to have a lot more than options between the “downtown” and the office park and lots of price ranges in between.”
That’s what I said was wierd and it is. No city should be offering mostly just a choice between just those two options even though that’s mostly what’s going on or worse.
In the case of NYC, there should be choice, between Class A space in Lower Manhattan or in east midtown or west Midtown or a loft conversion in Chelsea, or the West Side, or Tribeca or Downtown Brooklyn Class A, or a conversion or class A in Long Island City (close to the airport)–etc… This of course could include office towers in Jersey City or Newark etc and so on.
Small firms might like Soho or now Harlem, or perhaps one of the four or five emerging donwtowns like Jamacia (near the Airport), Queens or Main St, Flushing.
NY actually still offers far too few choices. The fact that in so many cities one has a few downtown class A office buildings, a stadium, a few steak houses; a choice of three overpriced lofts, and an endless choice of glass boxes off the beltway is a sad reflection on what’s going on.
That’s all fine. People can do whatever they like, but they can’t escape the results which in most cases means far lower levels of economic growth and opportunity than might otherwise exist.
By the way, as a libertarian, I can suggest another alternative to poor quality public schools–school choice.
At decent density levels, it’s pretty easy to imagine lots of private school offerings to be available to average people if they didn’t have to fund public education. Almost, all cities with good density have those options and not surprisingly, this is also where support is growing for more choice, charter schools etc…
It’s in the low density suburbs where one size fits all schools must exist.
By the way, we all know that many low density areas are not rich and many have very poor schools.
CDC Guy, the one real advantage of suburbs over central cities is that they offer cheaper rents for a given floor area. The school thing is just a reflection of the fact that in the US suburbs are richer than inner cities (and is declining now that rich people are moving back to central cities, raising the tax base); in countries where the inner cities are richer, such as France and Israel, the inner cities have the better schools.
I hear you about regional sales offices, and maybe also storage – though even then, if your main sales are in the city or metro area-wide, you’d probably want to be in the city. But for big companies’ headquarters, the equation is not like that. Proximity to the workers usually works in favor of the most central location in the region – though you do see some companies headquartered in large suburban favored quarters.
Alon, I’d quibble a little on the proximity to workers question for a diffuse metro (i.e. a Midwestern one).
In Indianapolis, a metro of nearly 2 million, all 900,000 people in the core city-county live 10 minutes’ drive or less from a freeway interchange, and it’s probably not more than 15 minutes anywhere in the metro area. (I’ve studied this, because I have lived in two different quarters of the city very near the point that is most distant from freeways.) For someone in Indianapolis willing to commute up to an hour to work, the radius would actually extend to the second ring of counties outside the current metro.
The freeway-interchange office parks are now as convenient as downtown. I think all Midwest metros, including Chicago, are substantially similar (adjusted for size/scale).
Chicago is actually not similar to Indianapolis at all. It’s a very core-dominated metro area; it’s one of two large US metro areas where the CBD had an outright majority of metro area-wide office space, as of 2000. The highest-capacity transportation system, rail, is oriented entirely toward the Loop.
That’s part of why I think the Coasts/Midwest distinction you’re trying to make is spurious – it’s too exception-ridden. Chicago is core-dominated; Philadelphia is extremely diffuse. When you strip the exceptions, what you’re left with could be explained as big city/small city distinctions.
Good item, Aaron. Thanks for sharing it. I’ve thought similar things myself in the past, though less well crystallized. Chicago has some legacy and structural advantages that don’t ensure success. Being 6’8” doesn’t mean you’ll get a college scholarship either, but it does give you a leg up. I’m reminded of Warren Buffet’s strategy of investing in companies that have a “moat” around their brand; if I give you a billion dollars, you still can’t supplant Snickers or Gillette or Coke as a leader in their space. Chicago has something like this: it’s the most logical access-point to a region of 45 million people. It has connections to six of the seven largest railways in the country and six major interstates. It has access to the largest body of fresh water in the world. It has the second largest business district in the U.S. No hurricanes, no earthquakes, no volcanoes. So while your piece reads as spot on, those advantages aren’t really in danger, are they? Our major positives can’t be changed the same way we can’t change a significant negative, like the weather. Other than not screwing it up, what does Chicago need to do to take advantage of those, um, advantages?
I’m certainly not suggesting that the region rest on its laurels; failing to advance the O’Hare expansion and CREATE would be a mistake, but what else should Chicago do? Of course, leverage and perform the recommended maintenance on your structural advantages, but that seems obvious and easy. Those are the bonds in your retirement portfolio. What investments should Chicago make that are equivalent to the small cap stocks? What are the weaknesses can we eliminate and how do we do it?
I’m late to the conversation, but obviously suburbs have some non-trivial advantages: If an activity requires a large parking lot, or if one’s mental health depends upon a lawn, it’s difficult to have that in an urban area. Suburbs, however, are still an emergent property of a city. You can always go *someplace* to plant a lawn. You can’t create a city wherever you feel like having one. You can have a city without suburbs; you can’t really have a suburbs without a city. So sure, suburban health is important, but clearly secondary to and depending from urban health.
Regarding suburbs and the labor force, well city-living and city-working both have a clear advantage over the suburbs unrelated to urban lifestyle choices. I have several friends who live in Chicago and work in the suburbs. When their job moves from Naperville to Rosemont, they don’t have to sell their homes. My friend living in Wilmette whose commute changed from Schaumburg to Tinley Park has had a rough 18 months. As a counterpoint, I have friends in the North Shore suburbs who have changed jobs in the Loop several times with no impact on their lifestyle. I happen to have a job that requires lots of travel and one reason I live in Chicago is that I have easy access to both Midway and O’Hare from the near west side. It’s a tautology to say that a city center is at the center, but I guess this is sometimes overlooked. Obviously, this is one big advantage to locating your home or business in a city.
I may be somewhat of an exception in terms of who I know in Pittsburgh, but reverse commuting out to jobs seems pretty common here. I know about six people who do that out of a pretty small group of friends. All of them are making a lifestyle choice and would never consider living in the the areas they work.
Eric, those are the benefits. Chicago isn’t in danger of losing them. But considering the region bled over 200,000 jobs in the last decade, it is hard to say that Chicago is really taking advantage of what it has. My argument is simply that Chicago needs to focus on and find ways to put these items to better use for economic development purposes.
Alon, clearly Chicago differs from Indianapolis in scale; it’s far larger. However, all of Cook County has 2.3 million jobs, just over half of the combined metro area’s 4.25 million. That’s pretty diffuse.
Concentration of office space in the CBD doesn’t correlate to employment centrality in a metro. Chicago is just like the rest of the Midwest: close to half the jobs are outside the core county.
Concentration of office space correlates to employment value centrality, on the assumption that higher-value functions will seek more office space per worker.
But regardless, compare Chicago to Philadelphia or Dallas, and you’ll see a huge difference. Looking at all of Cook County is a mistake, because in Chicago the employment is either in the CBD or in out-of-county edge cities; it’s not like, say, Houston, whose biggest edge city is within city limits. When you break things down as CBD/secondary downtown/edge city/edgeless city, 50% of employment is a lot.
“The best Chicago can do is a warmed over me-too list of the hot sectors du jour that every other city and state are already chasing?”
Well said. It’s sad to see so little creative thought put into these economic development campaigns.
cdc guy, I honestly find you thinking very simplistic.
Mostly, you provide a false choice between classic edge city suburb, exurb and hyper dense apartment, office city.
I’m sure you are aware of the neighborhoods like Park Slope, Forest Hills, Kew Gardens in NY or Shadyside and Squirrel Hill in Pittsburgh that offer a decent level of both apartments and single family homes. I think Arlington, Virginia would be another good example of this.
In fact, one of Pittsburgh’s “suburbs”, Mount Lebanon has fairly dense apartments and shopping near the main street. All of these areas show good demand for all housing types.
“Smart Growth” is not really a myth and there are ways to design places that are popular and fuctional for broad segments of the housing, retail and office market.
Not sure why you put Park Slope (a.k.a. Brooklyn’s version of the Upper West Side) in the same category as middle-class Forest Hills and Kew Gardens.
Well, just a mix of building types and densities. No it’s not high in single family homes.
Not all of Forest Hills is exactly middle class.
We can come up with endless variations and comparisons, mostly what I mean is that many places are somewhere in between the “city” and the “suburb”. cdc guy very much implies big city living involves no trees, no grass and no parks.
I think, most people consider the West Side to be pretty dense and apartment oriented. Park Slope is more a mix tilted towards brownstones.
It’s just that most of cdc guys comments are built on a false assumption–that “most people want” to live a very particular type of suburban life.
Take for example San Fransisco, which is all as a whole in a kind of midrange density. I think for years there has been demand for more construction of more apartments near the downtown, where SFMOMA is etc… which ahve been prevented by nimby type issues. Few people doubt that demand exists. Reverse commuting is pretty common there, meaning that in fact that many people prefer to live in the denser area.
John, it is not a “false assumption” to look at what people actually do with their money and their lives as expressions of their desire. More people live in suburbs than cities today.
Some urbanists seem to have significant trouble in accepting this as a fact, instead wishing for an alternate world that doesn’t exist. Most suburbanites will not be drawn to rehabilitated cities or urban density any more than you or I will be drawn to a grotesque 4-bedroom, 3-car garage McMansion on a half-acre in a development. The Big Sort is real, if regrettable in a civic sense: there is a clear and growing urban-suburban divide.
I also think you’re having the trouble with “false assumptions” and/or oversimplifying the things I write into straw man arguments. I write from the more-subtle perspective of someone who grew up in the suburbs but has lived an entire adult life in multiple locations within the city limits (in the case of Indianapolis, always within the pre-UNIGOV “old” city limits). I raised kids in the city, and owned neighborhood businesses in the city. And today I devote my professional and volunteer lives to revitalizing urban neighborhoods.
I’m well aware of the variety of “city” living environments from high-rise apartments to low-rises to townhouses to duplexes and single-family homes. My last two city homes have been on deep and narrow lots with grass and trees, where the neighbors’ houses have been no more than 10 or 20 feet from my front and side porches. I chose my present house in part because of its location near one of George Kessler’s greenways and a major city park. The immediate neighborhood has a population density of about 5600/sq.mi. (not counting the park), definitely mid-range urban density by Midwestern US standards even though it’s 4 miles from downtown.
CDC, no question that A LOT of people choose a suburban lifestyle for valid reasons.
However, this doesn’t mean that every suburban area is the way that it is because of the preference of its residents. Many suburban residents would prefer a nice home in an urban area with good schools but can not afford it. They are making a choice based solely upon a cost-per-square-foot or difficult school decisions, not on lifestyle issues. If the cost of an urban lifestyle is too high, this suggests that the demand is greater than the supply–there is an unmet need for walkable urban areas. This doesn’t mean that suburban lifestyles are necessarily bad.
There are several reasons why urbanity is in short supply:
-Cities were needed to make stuff. You had to bring goods to one place to assemble it and workers needed to live nearby. People were also tied to a city because there really weren’t any good mobility choices. Once this was no longer the case, a major source of support for cities was removed, making them less attractive for decades. This condition is stabilizing.
-Government mandates minimum parking standards in almost all areas. This means that higher density development is prohibited in most areas, even if everyone but the current residents want it. Current residents are the only ones who vote.
-The mortgage tax deduction and the Federal Highway Programs were nearly direct subsidies to suburban-style developments. If those resources were invested in urbanity instead of sprawl, there’s no doubt that development patterns from the 50’s on would look very different than they do now.
-Cities are net losers in when it comes to tax distribution. Exurban areas receive a disproportionate amount of tax investment.
-It is cheaper, but inefficient in the long term, to develop green-field sites over re-using land in a developed area. Developers reap short-term benefits from building on farmland in the periphery, but it has long-term costs to the region.
I don’t think any urbanists are against small town life or the existence of suburbs. I like Evanston and Berwyn and Forest Park and Oak Park. I also like Satellite cities that are connected to the region my train, like Racine, South Bend and the like. I think urbanists aren’t against suburban living but simply want to see walkable, human-scale developments everywhere. They want to see regulations and zoning changes and investments that don’t force development in a direction no one really wants.
I think if you look at you comments, they tend very much towrd a black and white line.
For example the comparison between the box off the beltway near the airport vs downtown Class A space in the most prime location omitted a huge number of options in between.
What about all the factory loft office conversions we so commonly see?
Do you think there was no more demand for high density living in say San Fransico? It’s pretty famous for proposals shot down by Nimbys. NY is an even more extreme case.
Here in Pittsburgh, the same thing is happening on The South Side.