In The New Localism Bruce Katz and Jeremy Nowak call for culture busting among city leaders who want to find new solutions to pressing problems. One of the challenges we face is that in general, the public doesn’t understand governance well. We operate with set ideas about what governance is, who sets rules and regulations, and the roles that private companies, local community groups, and formal government agencies play. In the future, as problem solving becomes more local and as we try to tackle major challenges we will need to get beyond these simple models from our high school civics classes.
This is what Katz and Nowak call culture busting, “culture busting is a form of risk taking and a fundamental shift in understanding that many responsibilities in a city and metropolis lie with the community broadly rather than with the government narrowly.” The role of government, the role of businesses, and the role of everyday citizens needs to change if we are to truly address the big problems in our societies. If we want to tackle climate change, if we want to reduce healthcare spending, and if we want to spark economic development, we have to realize how interconnected all of the challenges we face are, and we have to develop a community focused action plan to make the necessary changes. Thinking that problem solving is the role of government or that economic development is purely a free market phenomenon will not help us jump to be dynamic leaders in a globalized economy.
Part of what culture busting calls for is more education around governance and part of it is a reemergence of community action. A major failure of suburban life is that we drive from our homes to our places of work or commerce, and rarely interact with anyone else along the way. We let others deal with problems unless they happen to be unavoidably right in front of our face. We might get out for a sporting event or a conference, but otherwise we are just as content to watch Disney+ at home. Culture busting replaces this individual isolation with networks that want to see real change and are willing to own part of that change.
Culture busting requires that we re-imagine what is possible for governments and redefine the role of businesses and civic organizations. It requires that we think about the challenges our communities face, and ask ourselves what resources and advantages do we have that we can use to make a difference. Rather than waiting for government to make a decision, it requires civic and private energy to clear the path and display a public will for government to direct resources in the direction that the populace already wants to move. It shifts leadership from government back to the people and aligns actors to make the community a better place.
In the United States, we have a myth about the power of private industry. We believe that the private sector is robust, efficient, and always provides the correct and stable equilibrium needed to solve problems and provide us with innovation. We see free-market competition as the only legitimate way to advance and grow, with popular TV characters expressing ideas such as, “Capitalism: God’s way of determining who is smart, and who is poor.
Public action, on the other hand, is downplayed and typecast as an incompetent, greedy villain. Accepting aid from a public agency is seen in some ways as a cop out, or only as something that is acceptable for a short period of time as long as you are deserving of assistance by working hard, trying to be smart, and following all the rules that others lay out.
For those who have achieved success, this model fits nicely with the worldview that they would like to see and believe. It elevates them while framing poverty or economic distress as a moral failure.
As we move forward as a globalized society that is able to adapt to technological changes and new institutions, we will have to realize that this myth does not reflect the reality of public programs or the private sector. In The New Localism Bruce Katz and Jeremy Nowak write the following about their idea of dynamic new approaches to policy and governance,
“Successful network governance models show the complex and varied interplay of the public, private, and civic. The models eviscerate the cartoon version of an efficient private sector taking the place of an inept and incompetent public sector. Rather, network governance combines the entrepreneurial capacity and capital of business and philanthropy with the legitimacy and broader concerns of local government.”
Government and public institutions have an authority and responsibility that is hard for the private sector to replicate. Because government agencies don’t have a profit motive, they are able to focus on public priorities and concerns in ways that businesses cannot. However, because businesses have private capital available for investment, they can take risky bets and make investments that public sectors could not. Finding ways to merge the strengths and weaknesses of public and private sectors is crucial to develop networks that have the appropriate capacities to invest in the future and implement changes to help regions grow and advance.
Simply claiming that the private sector always provides the best outcomes or that the public sector is slow and bloated does not help us think about what is really needed for economic growth and development in the 21st century. Both sides need to be understood clearly and appreciated for their strengths and unique features. Future governance models will combine aspects of both the public and private sectors to get stuff done.
One idea from The New Localism by Bruce Katz and Jeremy Nowak is that states and cities should not be looking to attract companies simply by offering tax breaks and by promising to streamline permitting. Bringing companies that can be enticed by these types of handouts is a good way to generate short-term positive headlines, but it is unlikely (especially on its own) to attract the kinds of companies that will help develop a city or metropolitan region into an attractive hub for other companies. For Katz and Nowak, what is more important than just getting a few companies to move in with tax breaks is engaging the business community that already exists, and working with civic and private sector leaders to invest in place-making.
A general problem we have faced in the United States over time is sustained disinvestment in localities. This has taken different forms at different times and has had serious conflicts for people living in disinvested places. For years, urban centers were ignored as people moved to outlying suburbs, and the result was a crack epidemic and a hollowing-out of many great American cities. Today, we are disinvesting in our suburban small towns and in former manufacturing hubs in the Midwest. The result has been an opioid epidemic and a spike in suicides. Simply convincing a company to move to an area that has been disinvested with some tax breaks won’t help solve our underlying problems and won’t help cities and people adapt to a dynamic globalized economy. What we are more likely to see in this strategy is the attraction of companies who are able to implement exploitative labor strategies that burn-out the people who have faced disinvestment and desperately need jobs.
“Networks must now ensure that their education and workforce development systems produce locally grown talent with the specialized skills that align with local advantages,” write Katz and Nowak. On its own, this advice is not very helpful. But when you think about what a network is and how cities can invest in existing networks within a region, you see that this advice is actually quite practical and represents a shift from the traditional thoughts of attracting companies to a region to produce jobs. Cities have to consider their advantages, such as ports, transportation lines, physical space, or educational institutions, and find ways to connect local business leaders, engaged civic actors, and other organizations in a way to get stuff done. Engaging to talk about problems and starting action for just a few months is insufficient – leaders need to be engaged in long term place-making – a committed effort to improve the region in a “rising tide lifts all boats” type of approach.
Katz and Nowak continue, “And they must also create quality places that not only attract and retain workers and companies with a rich set of amenities, but also provide a platform for the seamless and collaborative exchange of ideas.” The organizations and groups brought together in these networks cannot remain in individual silos. They need to be connected through new co-governing institutions that have the power and authority to make real decisions that generate meaningful investments in the places where businesses operate and where workers live. Without such long-term and permanent planning that gets stuff done, cities will meander along with incremental changes, or worse, will continue on a path of disinvestment that leaves their citizens vulnerable to despair and exploitation.
A great myth among the American populace is the myth of compartmentalization. We (or at least people who don’t study a specific area) tend to think that things are separate and distinct. The reality however, is that things are much more connected than we believe. I’m going to approach this idea from the standpoint of public policy, government, and the private sector, however we see this myth of compartmentalization in the way university departments are set up or in the way we want to have sports/entertainment separate from current political and social affairs. In the world of public policy, we like to think that there is government, and then there is business, and they are separate from each other.
This myth is slowly being dismantled in the United States at the level of local leadership in cities, businesses, and civic organizations. In The New Localism, Bruce Katz and Jeremy Nowak write about the new transformations we are seeing in local leadership and governance. They write,
“The current suite of supersized challenges and de facto devolution of responsibilities demands new models of networked governance and fundamental re-framing and refocusing of the leadership class in cities. The most effective local governance occurs in places that not only deploy the formal and informal powers of government but also create and steward new multi-sectoral networks to advance inclusive, sustainable, and innovative growth.”
Governance is no longer simply a government agency separate from the rest of the world. Businesses and public agencies are becoming more connected as the challenges, problems, and complexities of society increase. It is not enough for rules and regulations to be set in a compartmentalized way by a supposedly separate and outside agency.
Katz and Nowak continue, “The logic is incontrovertible: if cities are networks of institutions and leaders, then institutions and leaders should co-govern cities.” Leaders from business and civic organizations need to help govern alongside the agencies that set regulations. Government and business cannot be compartmentalized, and different sectors of business and public services cannot be compartmentalized. Cities are interdependent, creating networks that rely on each other to succeed. The risk here is that agencies will be captured by businesses and industry, establishing protectionist policies that help the business at the expense of the larger ambitions of cities and metropolitan regions. Katz and Nowak include suggestions in their book for new forms of quasi-governmental institutions which can translate the desires of businesses into public policy in a way that mediates the concerns of public agencies, businesses, and civic groups, helping further the inclusiveness of the decisions, rules, and regulations being put in place.
I’m a fan of the research and work that comes out of the Brookings Institute, a generally center-left think-tank in Washington DC that I believe does a good job at looking at politics and policy holistically, and is able to get beyond the partisan rhetoric that dominates most of our political landscape. An area of interest for many of the writers and policy experts at Brookings is the area of economic development in metropolitan areas, particularly as related to sports and business retention. Two Brookings experts, Bruce Katz and Jeremy Nowak look at how Indianapolis used sports to help jump-start the city’s economy, but present the information in a way that shows that reliance on sports alone is not sufficient to develop a thriving middle class and robust regional economy.
“A sports-based development strategy,” they write, “can take a city only so far. Sports attract tourism and visitors. Game time enhances demand for lodging and restaurants. Name teams may have an intangible effect on the attraction and retention of innovative firms and talented workers. But in the end, the sports industry thrives on low-wage jobs and does not represent a model of economic growth for a city or metropolis. Beer and hot dogs are not the stuff of a sustainable middle class.”
In their book The New Localism, the authors talk about the efforts that Indianapolis took to attract and retain an NFL football franchise and also to attract the NCAA headquarters. They go on to further explain how Indianapolis was not content to simply rest on being a sports headquarters and reinvested the energy and revenue from sports to drive and build new sectors. Sports teams can help be a support for a local economy, but they will never be a major driver, and on their own don’t appear to be worth the enormous tax breaks and stadium construction assistance that many cities and states seem eager to provide.
As Katz and Nowak stated, sports can have intangible benefits for communities like city pride and can serve as a hub for local events. But cities need to provide other attractions and benefits for their citizens. The people need additional higher paying jobs than can be found in a stadium and need real innovation to keep pace in our globalized world. If cities and states over-invest on the sports side, they may miss out on developing and investing in the factors that can make cities dynamic and competitive in the long run. Ultimately, sports teams can be a good attraction and can serve as a spark for energy and investment in making a city a good place to live and do business.
In The New Localism, Bruce Katz and Jeremy Nowak discuss the elements needed for cities to continue to grow as economic engines of modern economies. The United States currently has a handful of dynamic cities across the country which are powering the national economy. San Francisco (really the Bay Area as a whole and Silicon Valley) is powered by tech companies, Houston is powered by oil giants, Boston is driving medical and biotech engineering, and New York City continues to be a powerful financial hub. While each of these metro regions is a model for the resto the country, they must adapt to globalized economies moving forward and must find ways to embrace new innovations to keep diversify and strengthen their own economies.
Katz and Nowak write, “the critical element is collaborate governance across networks of public, private, civic, and university institutions and leadership. No one sector can alone power a city and metropolis forward in today’s complex and competitive economy.” A single sector is not enough to reliably and consistently sustain an entire city or region. New innovations in diverse fields that share common foundations is required for economic well-being today. In order for cities to diversify and develop new industries in new sectors, a confluence of public institutions, private businesses, involved philanthropies, and cutting edge research universities is key.
The public sector has to be able to adapt and adjust laws, rules, regulations, and oversight in a world where every competitive advantage matters. Government must continue to protect the public interest and safety, but needs to allow for the organization of structures that can make real decisions timely. Private sector leaders also need to be involved and commit to place-making, developing the cities where they are located and bringing something beyond “jobs” to a region. Civic organizations and groups can fill the gaps between these actors and help provide funding and leadership initiatives to related to place-making and oversight.
None of these efforts will succeed if an intelligent and motivated workforce is not available to connect with the agencies and organizations involved. Research universities play a role in new economies by connecting students with relevant research and helping to get innovation out of the lab and into the private sector. Connecting students with real companies that are taking real steps to make their communities better will build the energy and excitement necessary for an educated and motivated workforce to make economic growth, innovation, and development possible. Some of this I recognize is “pie in the sky” thinking, but it is necessary for future growth. Pushing companies to become Public Benefits Corporations and rewarding more civic minded and responsible organizations is a small and necessary step to move in the direction I described, otherwise, there is nothing to convince companies to make greater investments in place-making rather than just finding a nice place to move to.
In The New Localism authors Bruce Katz and Jeremy Nowak quote Matthew Taylor of the U.K.’s Royal Society for the encouragement of Arts, Manufactures, and Commerce by writing, “it’s necessary for a city to think like a system and act like an entrepreneur. Thinking like a system requires taking a long and broad view of the regional economy.”
Cities cannot just assume that people will move to them, that current businesses will stay, and that a market will pop up on its own to make the city thrive. Cities need to consider all of the elements, from education and workforce development to infrastructure development, that are necessary to create regions where people want to live and work. They need to look at their regional economy and identify the areas (not just a single area) where they can be competitive and have unique advantages from institutional capital like universities to geologic benefits like attractive rivers or easily accessible ports. Cities have to figure out what it is that they can maximize and offer to people, and work with local groups and organizations to rebuild and promote the things that make them so attractive.
Acting like an entrepreneur requires that cities think about innovations and opportunities to invest. This is a challenge for cities because investments with public dollars that go south can be a reason to vote leaders out of office and can draw criticism from local residents who view their tax payer dollars as going to waste. With that in mind, cities, like any entrepreneur, must be able to cultivate multiple streams of funding for the plans they adopt and projects they take on. This requires working with organizations outside the formal city government to co-invest in projects that benefit the entire city. It also requires networking and building support systems with groups that can lead and groups that can provide the necessary assistance to get things done.
When cities adequately assess their economic prospects and develop networks to share risk and coordinate progress, real problem solving and real action can be taken. Cities can help provide the infrastructure and social capital needed for firms to move in and for organizations to feel connected to the places where they are located. This benefits the cities and provides a reason for companies to stay and invest locally by further developing the institutions that make the city an attractive and competitive place.
One of the case studies presented by Bruce Katz and Jeremy Nowak in their book The New Localism is Pittsburgh, PA, which has merged academic research institutions with business industry and supportive public policy. Pittsburgh has two major research universities within a block of each other, The University of Pittsburgh and Carnegie Mellon University. Experiences from Carnegie Mellon in the past are fueling the city’s reinvention and powering new industry as research is getting out of the institutions and into new businesses to drive the economic engine of the city.
What Pittsburgh does so well, explained by Katz and Nowak, is merge diverse industries and fields to create new innovation. They write, “A convergence economy emerged: a fusion of academia and industry with electrical and mechanical engineering, computer science, and multiple other fields. When disciplines collide, magic happens.” The idea of a convergence economy is crucial to New Localism. Academic institutions have been learning valuable lessons by creating more crossover between their divisions and fields. Bringing together academics who would otherwise rarely communicate is driving fields that previously had stagnated. With two leading institutions in the city, Pittsburgh has taken this lesson out of the academic fields into private industry.
Academics on their own don’t have a lot of great business sense or experience, but do have a good sense of where innovation is heading and what might be possible with new technology. Combining their expertise and knowledge with people who understand business and have connections with funding agencies can help lead to scale and commercialization of innovations. This cannot happen without something that creates a convergence between disparate entities.
Hospitals today are creating incubator labs to help get new medical advances out of the research lab and into industry. Universities are beginning to merge with private industry to find ways to get innovation out of the academic hallways and journal articles into factories and business. Governments are helping back quasi-governmental networks to share the risk of new innovation and find new ways to fund local developments in technological innovation. Pittsburgh is leading in this field, and cities across the United States are following by finding new ways to engage their academic institutions and industries.
A lot of work from both the Brookings Institute and from the Mercatus Center at George Mason University comes across my radar. Oftentimes the perspectives of the two think-tank centers differ quite a bit, but one area where they align is on local economies. Brookings (a center-left think tank) and Mercatus (a Libertarian leaning academic quasi-think tank) both agree that local economies depend on dynamic innovation and thriving centers where people actually want to be. Both agree that attracting competitive companies and driving innovation requires investments in placemaking, not just tax breaks and financial incentives for firms.
Bruce Katz and Jeremy Nowak (both from Brookings) write, “A globally dynamic economy requires that any locality that wants to thrive must invest in the qualities of place that attract and retain residents and firms, in human capital, and in an enterprise environment that enables innovation and business growth.” Mercatus also suggests that places focus on infrastructure and development to attract firms and encourage people to move to them. Mercatus is likely to encourage this growth in an organic invisible hand manner, while Brookings is more encouraging of using the state to intentionally develop infrastructure and systems for growth and network development.
The important lesson is that economic growth and development require meaningful investments in infrastructure. Human capital is the heart of networks and the key to innovation and growth. In order to attract people and to attract companies that can compete in a globalized world, cities need to make themselves livable and attractive to young and dynamic people. Tax incentives are not enough to attract companies for the long term. A company that is willing to move for a simple tax break, is not a company that is in it for the long run. Stable companies that want to grow and develop in one place will want places that are interesting and offer the amenities needed for a thriving 21st century lifestyle. Companies that are looking to make long-term and winning investments need human capital, and in order to attract human capital they need dynamic places where people want to live and set roots.
The first time I heard about globalism was in an English class as a freshman in college. Since that time, globalization has gotten a lot more attention and has come to represent people’s fears about automation and job loss, but also people’s ambitions as new markets across the world become more accessible to trade and innovation. Whether we like globalization or not, we must acknowledge the way that markets and societies are changing so that in our own minds globalization doesn’t remain the mysterious boogeyman that it so often is today.
In The New Localism, Bruce Katz and Jeremy Nowak discuss globalization and how our cities and metropolitan regions, as opposed to our states or federal institutions, are the most well poised to adapt to an increasingly globalized market and supply chain. The also ask what it means for civil institutions to adapt and change to globalization writing, “The connection between globalization and localism as an arena of enhanced civic action has not been as well explored as the general theme of global economic change and populism.”
Since 2016, we have been asking ourselves why a global wave of populism seems to have overtaken normal political processes in the US and UK. Why authoritarian leaders have seemingly become so well entrenched in Turkey and Russia, and why so many people across the globe are willing to protest traditional and seemingly rational governments. What we have not looked at as closely, is how local level leaders can make a huge difference on a global scale and how cities and metropolitan areas can shape policy that influences people’s lives at a greater scale than what we see with movements by populists and authoritarians.
Individual states in the US are reversing marijuana policy against the will of the Federal Government. Individual cities are designing their own immigration policy contrary to the demands of the Federal Government. And industries clustered in metropolitan areas are not waiting for new laws and regulations to make decisions that will impact people living within the US and across the globe. The scale of action is local, and that means that cities are the ones who set the agenda for globalization, rather than the larger state governments or federal institutions. How this will ultimately change those larger civil institutions is still a mystery, but in my opinion, local action can dismantle the energy and grievances of populists and authoritarians. Local action can drive economic performance and growth, pacifying the unrest we see at national levels. Globalization might be a phenomenon that connects networks and places all over the Earth, but its effects are felt locally, and good local management and innovation can help make globalization a positive and constructive force.