Cities

Ensuring Cleveland's Future in 2015 & Beyond by Justin Bibb

By: Justin M. Bibb

Cleveland is at a critical crossroads. Over the past decade, the city has made tremendous strides in rebounding from the economic downturn that has plagued many post-industrial Midwest cities. More than $4.5bn has been invested in downtown Cleveland over the past five years. In addition, the city is emerging as a magnet for talent attraction as it has experienced a 68% increase in the number of 25-34 year old college graduates since 2006. Yet despite these promising changes, Cleveland faces huge challenges.

According to the Federal Reserve, the city has lost 40% of its population since the 1970s, and recent data from the U.S. Census shows that 34% of residents live in poverty. The city also has a massive skills gap. Currently, 66% of residents are functionally illiterate (having math, reading, or language skills below a 4th grade level); and some neighborhoods have a 95% illiteracy rate. Even more alarming is the fact, that Cleveland is still considered one of the most segregated cities in America with 55% of its population living in homogeneous zip codes.

These challenges will be even more compounded as major demographic shifts, falling revenues, and rising citizen demands have placed an unprecedented amount of pressure on the public sector.

So how can the city address these challenges to be competitive over the next 50 years?

The answer lies in adopting a new model of urban transformation focused on entrepreneurship, equity, and engagement:

Entrepreneurship in the classical sense is most commonly thought of as the process of starting a business or creating a product that generates economic value. Yet, what is often overlooked is the notion of entrepreneurship as a mindset. Entrepreneurs are resilient in the midst of failure. Entrepreneurs have the ability to exploit a perceived weakness as an opportunity. In nowhere is this mindset needed more than in municipal governments. Applying an entrepreneurial mindset to the challenges cities face will lead to policies and an urban service delivery model that is more user-oriented, efficient, and solution-oriented than one focused solely on politics.

Equity must be one of the main criterion for how we view public policy if cities such as Cleveland are to truly thrive. Fundamental to instituting an equity lens into urban revitalization efforts is the collective understanding, buy-in, and support of those impacted most severely by the conditions that have led to the vast socio-economic disparities undermining many American cities. To not meaningfully involve and engage diverse groups in regional and local change models that seek to impact their current and future wellbeing is to marginalize their assets and perpetuate the existing negative outcomes that persist.

Engagement is the last but the most essential element to this new model of urban transformation. Trust in government is at an all-time historical low and many residents living in the urban core feel the social contract between city leaders and citizens is broken. But, by leveraging civic tech and open data tools, governments now have the opportunity to engage residents in community decision-making processes by using publicly-held, trusted, and easily-accessible data to create solutions in their own communities. Encouraging citizens to be more engaged in the policymaking process also promotes high levels of trust and social capital, thereby impacting a city’s bottom line and promoting innovation.

Nonetheless, this new model of urban transformation represents a new playbook for Cleveland, and cities alike, to truly be competitive. It is my hope that 2015 can be known as the beginning of a new era where entrepreneurial, inclusive, and highly-engaged cities become the rule not the exception.

The Millennial City, Part 2: How to Sell Your City? by Justin Bibb

By: Justin M. Bibb & Ian T. Brown

Your city is on display right now. Your city is one startup at a bustling expo, pitching your idea to a crowd of venture capitalists. Your city is one food truck, parked with a dozen others in a once-unused parking lot, vying for the attention of lunch-goers. Your city is one dot on a spinning globe, hoping to catch the eye of entrepreneurs looking for a new place to call their home.

And I am your customer. I am one of America’s Millennials. My generational cohorts and I are moving from the suburbs back into the city at a faster rate than our country has seen in decades. We are in search of cities with 21st century job markets. We are in search of cities that embrace our active, educated, and socially-conscious sensibilities. Sell us your cities, and we will contribute to them, both economically and socially.

But how does a city sell itself? Cities sells themselves by carefully and deliberately crafting an image – one founded in their unique resources – that will ultimately attract the talent, entrepreneurs and visionary leadership that will drive global competitiveness.

Cities across America are poised and positioned to transform themselves. A few are already success stories. Take Seattle for example. Seattle has become synonymous with technological innovation, with coffee shops replete with its young residents, with dreary but generally tolerable weather. For the second year running, the Economist Intelligence Unit named Seattle to its list of 150 global cities that will shape the world in the coming years. Continuing to attract talent is one of the most important factors in Seattle competing at the global level. Talent drives innovation and makes a city more adaptable when faced with ever-changing world markets. Thanks to its highly-educated population, Seattle’s startups are on par with New York, San Francisco and Boston in terms of securing venture capital.

Austin is another city enjoying economic boom. Like Seattle, this boom has been fueled by 21st century jobs. While Austin benefits from a steady supply of state government and university jobs (making it somewhat recession-proof), it has also attracted numerous tech firms in recent years. As Forbes noted in 2009 – in the midst of America’s recession – Austin was experiencing a dramatic employment growth of 34% over that decade, way ahead of its other tech rivals. This means job opportunities for those graduates coming out of Austin-based universities that might otherwise have sought employment elsewhere. And the Texas policy climate – low taxes and low regulation – makes for a more business-friendly environment. But even more than jobs and policy, Austin has done all it can to preserve – and actively market – its quirky city character. In Austin, weird is still king. Recently, the city opened up a string of unused parking lots to Austin’s army of food trucks and overnight turned the area into a profitable hotbed for culinary entrepreneurs.

Seattle and Austin sell themselves. They have carefully crafted their images, and in doing so are attracting a steady supply of Millennial talent that will drive innovation and competitiveness for years to come.

Rust Belt cities also have a wealth of resources to position themselves as destination cities for Millennials. Excess land on the Great Lakes can be converted into word-class waterfront space. Under-utilized high-rises can be transformed into mixed-use residences that would put residents within walking distance from shops, cafes, and art galleries. Tap into your existing urban housing stock, preserving single-family homes that are within walking distance of hip urban streets. In short, make your urban core a cool place to be single and to raise kids.

And for those Rust Belt cities who moan that harsh winters scare away new residents, it isn’t just about weather. Anyone who had suffered through a dreary Seattle winter or a grueling Austin summer will tell you there’s more to their love of city than climate. And as the Economist argues, size doesn’t matter either. Factors such as good environmental practices, good institutions, and good education are more significant drivers to economic competitiveness.

Yet city leaders shouldn’t think of themselves in competition with just their neighboring towns. Or even just American titans like New York or Boston. Your city is in competition with cities all around the world. Cities are the new unit of global competitiveness, and cities leaders must proactively manage their growth strategies. Economic drivers once reserved for conversations at the national level (such as exports) are now being discussed at the city- and regional-levels.

So what does your city export? For one, it exports its image. Look at Cleveland. Once a symbol of urban decline, Cleveland is ambitiously trying to shed its rust belt and become more global and competitive. One way it is doing that is by looking to attract more international talent to its universities with the hopes that employing them in high-skill jobs will ultimately have a multiplier effect of the local economy. Some cities are referring to these as “welcome-world” campaigns, or campaigns organized to attract promising foreign nationals to their areas.

Cleveland can already claim a more international vibe. For the third straight year, the city will host 30-35 international Fulbright students for a “Cleveland is awesome” weekend before the students go on to their respective universities. And once again, Cleveland State University ranks second in the nation for producing Fulbright scholars of its own. Cities that choose to accept innovative and socially-conscious entrepreneurs – in whatever form or color they take – will ultimately be the best positioned.

Sell us your city with authenticity and vigor, and I promise you will attract the kind of talent, entrepreneurs, and visionary leadership that will help you build and sustain economic prosperity.

Cities Need a New Business Model to Compete in the 21st Century by Justin Bibb

By: Justin M. Bibb

To grapple with these challenges, municipal governments must improve the business model of how they operate. Mayors, city councils, and other municipal elected officials need to embrace the new normal and adopt strategies and frameworks to solve problems that aren’t always politically expedient. Working with their public sector clients, Accenture suggests that:

“Governing in the new normal demands that agencies rethink, reinvent and reinvigorate. This means continually and proactively challenging the status quo in everything they do—from administration and operations to collections and service delivery.”

Thus in the case of cities, the vision set by city leaders does matter. In an analysis of the budgetary decisions facing 13 U.S. cities, IBM found that 30% and 60% of the budget-balancing measures adopted by local governments represented one-time savings or revenue generating measures rather than permanent changes to cost structures. If city leaders adopted a new management approach to identify and root out inefficiencies in their operations, they could shed costs without significantly impacting service levels.  Key tools such as participatory budgeting, business process modernization, and technology could all be leveraged to improve the procurement of core services.

Barriers to Success

So what’s holding municipal leaders back?

1. Lack of Public Trust

Across the country, political gridlock and partisanship are at all-time high. Trust in government continues to decline, especially at the local level. According to a 2013 poll conduct by the National League of Cities, only 37% of voters trust their local government. This low level of civic trust makes it increasingly difficult for city leaders to galvanize the public around transformative ideas to drive critical policy outcomes.

2. Federal Disinvestment

Since the end of WWII, urban disinvestment has accelerated and been encouraged by federal policies that promoted suburban flight. This took place simultaneously alongside deindustrialization and automobile-oriented sprawl triggering massive job and population losses.  The federal government has the opportunity to play an important role in encouraging cities to be more entrepreneurial in how they govern. By leveraging existing federal resources and encouraging investment into distressed urban areas, the federal government can be a conduit to empower municipal leaders to pursue more innovative policies.

3. Leading with the Wrong Metrics

For most municipal leaders, they judge their success based on traditional measures such as the local unemployment rate, small business starts, and property values. Yet, rarely do we consider the driving forces that impact these metrics. Through their work in understanding community engagement, the Knight Foundation has discovered that attachment to place is driven more by factors such as diversity, community aesthetics, and wealth of social offerings rather than just perceptions of the local economy. If municipal governments developed and articulated their policies with this perspective, they could go a long way in creating more targeted policies aimed at addressing some of the root causes of urban decline.

Translating Better Municipal Management to Greater Urban Economic Opportunity

Putting these ideas into action isn’t a small task. Especially as falling revenues, demographic shifts, rising citizen demands, and new technologies continue to converge to create a complex environment for city leaders. While daunting, city governments can turn these challenges into an opportunity to seek higher performance; which can yield tremendous economic benefits to their citizens.

                          Mayor Pete Buttigieg, South Bend, Indiana

                          Mayor Pete Buttigieg, South Bend, Indiana

Specifically, transitioning into a more innovative operating model for municipal government could help create:

  • Government-wide collaboration around outcomes
  • Flexible and tailored service delivery strategies
  • Technology-enabled citizen participation
  • Open, transparent and accountable government

Across the country, there are already great models where city leaders are innovating to increase the economic opportunity of their cities. For example, Mayor Mike Bell of Toledo developed a successful public-private partnership with the local chamber of commerce to attract more than $6 million worth of foreign investment, a new metalworking plant, and an additional $200M commitment from Chinese investors to support local economic development efforts. “For little old Podunk, Ohio, it’s been pretty phenomenal what we’ve been able to do,” said Dean Monske, president and chief executive of the Toledo Regional Growth Partnership. In South Bend, Indiana, Mayor Pete Buttigieg worked with a local start-up, called EmNet, to became the first city in the world to migrate its sewer system to the cloud, saving them of $100M in future costs. For Mayor Buttigieg, his philosophy is “all about taking the value of data and shaping them into answers to help solve big problems.”

Through these examples it’s easy to see why now is the right time to develop a renewed commitment to encourage greater innovation in municipal government. Let’s hope American cities don’t get left behind.