Spreading tech innovation

A new report from the Brookings Institution highlights how "Superstar Cities" — Boston, Seattle, San Diego, San Francisco and Silicon Valley — captured nine out of 10 jobs at the headwaters of advanced industries from 2005 to 2017. (See the coverage here and here). And it offers an ambitious plan to spread tech centers to "loser cities" in what is mostly considered flyover country.

An interesting footnote: One of the authors of the Brookings study is my friend Mark Muro, who worked at the Morrison Institute at ASU in the early 2000s.

One can't argue with this reality, particularly set against rising inequality and four decades of mergers that took away the economic crown jewels of hundreds of American cities. But some context is also necessary. In addition to these headwinds, many of the "loser cities" made their own fate.

And I'm not talking about Detroit or Cleveland. A better example can be found in Phoenix. Despite being the nation's fifth-largest city and 13th largest metropolitan area, Phoenix punches well below its weight. And no outside force has done this to Phoenix as much as Phoenix has done it to itself.

For example, fewer than 28% of adults have bachelor's degrees or higher in Phoenix (and 29.7% in Arizona). That compares with 43.6% in Seattle (36.7% in Washington state) and 52.9% in Silicon Valley (34.2% in California). These educated people, especially in STEM, are foundational to building tech hubs. In Arizona, paying for tax cuts has meant repeatedly slashing funding for higher education, including the worst reductions since the Great Recession.

The most coveted tech talent gravitates to cities with real downtowns, cool urban neighborhoods, tolerance, and welcoming immigrants (this goes back to Richard Florida's seminal book The Rise of the Creative Class).

Arizona is known for SB 1070 and suburban sprawl. Coastal "winners" invested in the amenities, infrastructure, quality of life, and dense urban innovation centers (e.g. South Lake Union in Seattle) to draw and retain the best advanced industry jobs. Density draws talent, sparks "creative friction" where the best ideas are generated. Arizona continued to position itself as a cheap destination for retirees; those who care for the retirees; call centers, data centers, and back-office operations; and people from inland California cashing out their properties.

To be fair, the city of Phoenix itself is different, with blue islands in the central core, a reviving downtown and Midtown, and light rail (WBIYB). But it was enough to take advantage of the tectonic "back to the city movement," where top talent and companies moved into authentic downtowns. This phenomenon has especially benefited places such as Seattle, San Francisco, and Boston. Two of Big Tech's five giants are headquartered in the Seattle area, including Amazon downtown, along with Starbucks, F5 Networks, Nordstrom, and Expeditors International. Phoenix has no major companies headquartered downtown beside Freeport-McMoRan, a mining giant.

ASU is among the largest universities in the nation and continues to rise in stature under Michael Crow. But it leaves metro Phoenix facing a problem akin to Pittsburgh's with Carnegie Mellon University, where top graduates don't stay. Phoenix is the largest city with only one real university (and branches of UA and NAU). Nor has the Downtown Biomedical Campus fulfilled its potential compared with the world-class biosciences cluster in Seattle with the University of Washington, Fred Hutchison Cancer Research Center, Seattle Cancer Care Alliance, and Allen Institute.

Also, the "Superstar Cities" are unusually outward looking, with an emphasis on trade and welcoming highly skilled immigrants. Phoenix is inward looking. "It's a blank slate! You can do anything! (as long as it's connected to real-estate development) Cheap — and sunshine and championship golf — can't make up for this. As Edwardo Porter wrote in the New York Times:

Even skyrocketing housing costs have not stopped the concentration of talent in a few superstar cities. High-tech companies that seek cheaper places to set up beyond their hubs often go to Bangalore, India, rather than Birmingham, Ala.

“They keep the core team in Silicon Valley or Seattle but put the other stuff in Shenzhen or Vancouver or Bangalore,” (a study author) said. Shenzhen, China, may not be much cheaper than Indianapolis, he added, but Shenzhen is already a tech hub in its own right.

The same problem could be said for Phoenix.

Again, this is not the result of bad luck — Phoenix had long had the wind at its back, at least in population growth. It's not the result of the historic racial polarization that hobbles such cities as Detroit, St. Louis, Cincinnati, and Cleveland. It is the consequence of deliberate policies focused on adding people at all costs and sprawl real-estate development, while putting the accelerator to the floor on right-wing ideology at the state level.

Read the Brookings report by all means. Its recommendations are worth consideration and to my mind implementing. But they can't overcome the local and state policies and mindsets that hobbled these cities further as their fortunes changed — or in Phoenix's case, crippled its ability to compete at the highest level when it had every opportunity.

 

 

 

 

 

 

 

 

 

 

 

Comments

[Phil Motta]

Jon, another well-expressed, well-substantiated analysis. The critical problem Phoenix has historically faced is conservative public leadership. That's why education spending is subpar. It's why infrastructure planning and spending is non-competitive. It's why all the pieces which are in place in the the progressive, high-tech cities of the West are lacking in Phoenix. Conservatives do not support the public good. They support personal advantage - mostly to the already advantaged. Phoenix is strapped by being in Arizona.

[Cal Lash]

"Phoenix is strapped by being in Arizona"
You certainly got that right, Phil.

[drifter]

Excellent as usual Rogue!

[Bill Pearson]

The Brookings Institute report and recommendation is fascinating, but don't hold your breath. We can't even agree to deal with our massive infrastructure problems with roadways, bridges and utilities.

Jon is spot on, AZ has long measured success with population growth and new development. With each new sub-division, our problems grow. Moving further away from Phoenix, developers subsidize the infrastructure and when they leave the buyers find themselves buried with massive utilities costs.

They turn to the ACC and expect them to fix it by consolidating districts. Developers reap the rewards of cheap land, AZ gets to crow about growth and we get stuck with the cost of them buying in the middle of nowhere.

The shortsightedness of the conservatives running AZ has been painfully obvious. As much as i love living here, i find myself tuning out how foolish they function. The Rogue has been one of the bright spots in focusing on solutions that make sense.

Unfortunately, those elected to serve are far removed from finding any real solutions.

[EP]

This really stood out: For example, fewer than 28% of adults have bachelor's degrees or higher in Phoenix (and 29.7% in Arizona).

Until we fix our educational system, it's going to be very difficult to draw these upper tier businesses.

[Cal Lash]

Good post Bill.
However i take umbrage with the word "conservative." There use to be "conservatives" in Arizona. They more resembled my frugal Scottish ancestors.
Those calling themselves conservative today are for the most part greed merchants, religious other world seekers and politicians that border on insanity providing us with delusional bull shit.
Plus we have crazed bigots destroying the borderlands. Walls are bad!

[Ruben]

What cal said.

Plus, "The Rogue has been one of the bright spots in focusing on solutions that make sense". That sentence contains the main reason why I started following Jon while he was at the Republic. AND I must have been as naïve as a country hick to have thought the decision makers would have followed his lead. I should have known better. It's about money in the pocket NOW.

[Y k]

If it's called handicapping. And if we're Neva winnas I'm not sure if it's worth a hit of this drug hairizona and maybe I won't be able to Get a good job anyways unless call center shake down street called I'm calling mom this lady spoke to inline sounds indignant about needed customer services in this financials industry maybe we'll jus sell her out of her houses for free Blue Cross Blue shelild us from hineywells abusive management styllee. It's poetries sorry thanks Jon boy it's been a long one

[Bill Pearson]

Couldn't agree more Cal. Labels are counter-productive to any real discussion these days. Oddly, i am a Minnesota born Humphrey democrat and i start every morning reading two right if center websites; The Bulwark and The Resurgent.

Both have some true-conservatives clinging to the values of the grand old party. More the Bulwark than the other, but i enjoy looking at both sides of the coin. Neither party owns the truth and sadly neither seem to care about those who elected them.

I suspect that is what makes Rogue/Jon so enjoyable to read. Whether we are to the right or the left, he remains true to his values. There's certainly not enough of that going around these days.

Like most on here, we know words matter and loved your use of "umbrage." Powerful, compelling and needing a response. Thanks for the gentle push.

[Mike Doughty]

I have decided not to vote for anyone I wouldn’t buy a used car from.All the rest is bs.

[Cal Lash]

Evan Mecham

[Mike Doughty]

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
John Kenneth Galbraith

[Cal Lash]

"Growth for the sake of growth is the ideology of the cancer cell."
Edward Abbey

[Cal Lash]

Reverse technology
Luddites
Hunter/Gatherers
The first 15 mintues of the film 2001

[Roger]

Simply put, Arizona is an extraction state. The state exists to extract wealth from it and send that wealth elsewhere.

"Growth for the sake of growth is the ideology of the cancer cell."
Edward Abbey

Cal, that's the best quote I've read in a long time. Arizona needs some Monkey Wrench Gangs.

[Cal Lash]

Roger for xmas buy yourself the dvd's,
"Wrenched and a Voice in the Wilderness"
Probably have to get them from
Ken Sanders Rare book store in Salt Lake.
Dogs willing and the Arroyo's dont rise, heres to 2020.

[Cal Lash]

Growth and sprawl.
See Arizona news for State Environmental Quality faces biggest cuts in the country.
Maybe them ole timers sitting on the courthouse park benches, saying "glad i dont have to stick around much longer," had a point?

[Roger]

Thank you Cal. I found a free stream of A Voice in the Wilderness online. I do want the DVDs and will look for them.

ADEQ is going through a "lean initiative", where the Governor hired 'efficiency experts' (think of the Bobs in Office Space). These people are paid more than those who do the actual work there and their jobs are to lay off as many people as possible. Oh, that's not what they say they do, but people I've talked to say that's exactly what they do.

How can we be in the biggest boom cycle in the nation's history and yet we are gutting our government institutions? The answer lies in something something robbing the treasury something or other.

[Cal Lash]

Roger, happy you found a stream?
How was the water? Current ly Trumps land managers and the land rapers have taken back control of Arroyo's for sand and rock mining purposes.

Downsizing: Yep back in the early 90's the state hired me to do just that.
I quit when the State didnt keep their end of the deal. Reporting commercial criminal activity in the news and locking up owners.

At 80 (from conception) i have moved away from Ayn and closer to Bernie.

The Mountain waits my arrival.

[Sanjeev Ramchandra]

Restructure the Arizona University System to provide greater accessibility, affordability, and accountability to a public university education for many more Arizonans:

http://PSUandAzTech.blogspot.com

[Cal Lash]

The San Diego plan for streets to parks might work in Phoenix from Jefferson to Van Buren and 3rd street to 3rd Avenue.
It's nearly impossible to drive a car in that area.

https://www.sandiegouniontribune.com/business/growth-development/story/2019-12-13/downtown-roads-will-be-converted-into-parks-starting-with-this-east-village-street