Rethinking
Richmond
Greg Wingfield wants to shift Richmond’s
economic development focus
from
corporate investment to human capital. The
strategy
will require
a drastic shift in regional
priorities.
The
Greater Richmond Partnership has earned its spurs as
one of the top regional economic development groups
in the country. Between 1994 and 2001, the
organization assisted 270 companies investing some
$6 billion in the
Richmond
area. Despite extensive downsizing by old-line
industries, the metro region saw employment surge by
72,000 jobs over the same period. The Partnership
has won numerous kudos from Site
Selection magazine and other site location
publications.
“If
it ain’t broke, don’t fix it,” would be the
motto of most groups with a track record like that.
But you won’t hear those words from President
Gregory H. Wingfield. Rather, he sounds the alarm.
“The old economic development model,” he says
candidly,
“isn’t working anymore.”
Last
year was a bust. A handful of manufacturing
expansions – Philip Morris, Waco Chemical, noodle
maker Maruchan – kept the economy afloat, but the
yield from new companies recruited to the area was
meager. Says Wingfield: “At the end of the day,
without the local expansions, we would have been
sucking wind.”
An
optimist might write off last year’s poor
performance to a prolonged downturn in capital
spending after the 2001 recession. But Wingfield
questions whether outside investment will snap back
when the economy picks back up. He fears that
powerful economic forces are rechanneling the flow of
corporate investment. Companies aren’t making the
wholesale moves they used to, he observes.
Recruiting industry to central Virginia
will only get harder. To prosper in the future,
Wingfield says, Richmond
needs to rely more upon its own resources.
It’s
a lesson that all regions of Virginia
should take to heart. As
Bacon’s Rebellion
has argued since its inaugural edition, the United
States
economy is warping and buckling as the economies of India
and China,
containing some than 2.3 billion people, are
integrated into the world trading system. China
is morphing into the world’s manufacturing
workshop while
India
transforms itself into the world’s back office. To
keep their cost structures competitive,
U.S.
businesses are outsourcing business functions
wholesale to these two emerging giants.
In
this new world order, the business functions in
which the U.S. remains most competitive are those
requiring a high level of education and training:
R&D, product development, branding, marketing,
finance, deal-making and coordination of global
activity. Increasingly,
U.S.
regions like
Richmond
will prosper only to the extent that their
companies, their entrepreneurs and their workforces
are capable of moving to ever higher levels of
productivity, creativity and managerial
sophistication.
The
global economy poses much the same challenge to
every U.S.
community. But each region must develop its own
strategy, built on its unique mix of assets. By
assets, I’m referring not to hard infrastructure
like roads, airports, water lines and fiber-optic
cable – mere
entry tickets into the economic development carnival
– but to its industry clusters, human capital and
supporting institutions such as universities and
research centers.
Wingfield
sees the Richmond
region scaling back its traditional emphasis on recruiting
outside corporate capital and doing more to support
existing business, stimulate entrepreneurship and
upgrade the skills and education level of its
workforce. That means paying more attention to
general business conditions and quality-of-life
issues than ever before. “As we move forward,”
he says, “we’ll be looking more inward.”
The
first step is developing a consensus among
Richmond’s
civic leaders on a new approach to economic
development. The Greater Richmond Partnership held a
retreat a couple of months ago in which the board
and investors endorsed the need for change. Later
this month, Richard Florida, author of The
Rise of the Creative Class and a leading
theoretician of the new economic-
development
model, will address the Greater Richmond Chamber of
Commerce’s 6th annual economic outlook conference,
exposing an even broader audience to the new way of
thinking.
Long-term,
Wingfield hopes to retool the region’s economic
development for the 2005-2009 strategic plan. The
process of rethinking priorities and strategies is
only beginning, but it’s clear that focus will
shift from luring corporate
capital to developing human
capital. A region with a creative and
entrepreneurial population, Wingfield argues, will
create its own businesses and prove attractive to
outside companies.
Austin, Texas,
was one of the top-performing economies in the
country in the 1990s, and it achieved its growth
with very little economic-
development
outreach. The region offered an inviting quality of
life and openness to a diversity of lifestyles that
attracted bright, creative people. It got great
“buzz,” Wingfield says. The region didn’t have
to convince business to locate there – companies wanted
to be there.
That’s
what Wingfield wants for Richmond
– good buzz. And he really thinks Richmond
can get it.
I
agree
with
Wingfield’s prognosis, and I think
Richmond
can
make
the leap to
a human capital-driven model of development. But it
won't be easy, and it's not a transition that we can
take forgranted. I
say that as a resident of
Richmond
for nearly 17 a years, as someone who loves the area
and proudly calls
it home. If the solution were as easy as upgrading
workforce skills, stimulating new business creation and building
Virginia
Commonwealth
University
into a world-class research institute – any one of
which would be a significant achievement -- I
would have no doubts.
But
moving towards a human capital-driven strategy
entails more than raising money and cobbling
together public-private partnerships. It requires a
massive reordering of community priorities – and
perhaps even a rethinking of fundamental values.
The process will meet disbelief, incomprehension and
outright resistance.
In
The Rise of
the Creative Class, Richard Florida explains the
economic-development syllogism at work today.
Regions prosper in the United States
by stimulating entrepreneurial activity and
new-business creation. Entrepreneurial activity
arises largely from the energy and ideas generated
by the so-called “creative class” –
researchers, educators, artists, techies,
professionals, managers and others who grapple with
complex issues.
Members
of the creative class are drawn to regions – San
Francisco, Boston, Manhattan, Austin – that are
open to newcomers, tolerate a diversity of cultures
and outlooks, and offer the kind of amenities, from
biking paths to a vibrant music scene, that cater to
their lifestyles and workstyles.
In
Florida’s
economic development model, communities need to
create an environment hospitable to the artists,
techies and others who drive the
economy forward. If Richmond can nurture a climate attractive to
these people, they will settle here and create their
own business activity. They will generate new ideas,
launch new ventures and find expansion capital.
Eventually, the big corporations will locate here to
be near the action.
Richmond
has many of the attributes that the “creative
class” values. Core city neighborhoods like Church
Hill, the Fan and Jackson Ward have history,
architectural integrity and what Florida
calls “authenticity” – a deep-rooted and
distinctive sense of place, in contrast to the bland
uniformity of suburban development. For a midsized city,
Richmond
also has a vibrant arts and cultural community and a
competitive cadre of professional services.
But
Richmond’s
greatest attractions for luring human capital are
barely acknowledged as economic-development pluses for economic development at all.
Repositioning the Richmond region as a hip, creative
place begins with recognizing the region’s unique assets and building on
them, a process that has not yet begun. I will list a few that
spring readily to mind.
The
Virginia
Commonwealth
University
School
of the Arts.
With programs in dance, theater, photography, painting, graphic art and more, this highly regarded
institution brings a host of creative young people
to Richmond,
many of whom settle here and contribute to the
vitality of the arts scene and the local advertising
profession. By raising the incidence of tattoos,
spiked hair and nose rings, the School also adds a
diversity of lifestyles to an otherwise button-down
region.
The
music scene. Richmond
supports a netherworld of musicians – a number of
them with a following around the U.S.
and even in Europe
-- that’s all but invisible to the power brokers
along
Main Street.
Richmond can hardly claim a distinctive “Richmond
sound” comparable to Seattle and punk, but it does
have a vibrant music scene, which, as Richard
Florida observes, does far more to attract young
creative professionals to the region than heavily
endowed symphonies and operas.
Shockoe
Bottom.
Most of the city’s nightlife can be found here.
The “Bottom” is rude, it’s rowdy, but it’s
got character and critical mass –
Richmond’s
answer to Washington’s
Adams Morgan. It’s a place where young singles
congregate after midnight
to interact with others like themselves. No city has
a prayer of being hip or happening without a
nightclub district like this.
Carytown.
People just love Carytown, with its eclectic but
family-friendly mix of restaurants and boutiques and
its vibrant street traffic. Remarkably, this poor
man’s
Georgetown
enjoys a great word-of-mouth from as far away as
Washington, D.C.
The
James. Richmond
has one of the greatest urban rivers in the country.
The James has white water. It has islands. It has
wildlife. Cutting a swath of green riverbanks and churning
water through the middle of the city, it has the
potential to become one of the great urban recreational
amenities of the U.S. Quality development along the visually arresting
riverfront also could create one of the truly coolest
places in the
Eastern
U.S.
to live and work.
These
lifestyle assets are a far cry from the airports and
highways, the convention centers and baseball
stadiums, that usually preoccupy the thoughts of
civic boosters and consume the resources of
philanthropists and taxpayers. But they are the features that make
a region attractive to creative, entrepreneurial
people. Unfortunately, the Richmond region seems committed to
a pattern of low-density, subdivision/strip mall
development that extinguishes any recognizable sense
of place from its fast-growing suburbs. Richmond's
myopic view toward the pattern and density of
development will have to change or the cool
urban core will be swamped by suburban sameness.
Richmond
has other challenges to surmount. The region has an
enduring reputation as a stuffy, insular, old-South
city. Admittedly, the national media has hyped the
image by playing up race-tinged controversies over
symbolic issues such as the Arthur Ashe statue and
the Robert E. Lee floodwall portrait. But there’s
an element of truth to the stereotype as well.
Marketing gurus frequently use
Richmond
as a test market for new product roll-outs: If a new
product can be introduced successfully in a region
so conservative, it can be sold anywhere!
It’s
tough for outsiders to break into the nexus of power
and influence of this closed community. It takes
years for most newcomers to insinuate themselves
into the informal networks through which business
relationships are maintained. Furthermore, with its
conservative social values, the region is not
especially hospitable to gays and other bohemians who, in
other cities, contribute disproportionately to
urban vitality. The very social cohesion that makes
Richmond
so comfortable once you’ve become a part of it
makes the region forbidding to outsiders.
“Openness”
is not an attribute that can be created by floating
a bond issue or launching a fund-raising campaign.
It goes to the heart of how a community defines
itself and what its citizens value. The question
that Wingfield and the Partnership board must ask
themselves: How far is the region willing to go to
transform itself into a center of creativity? By
embracing cultural and intellectual diversity to
make the region welcoming to outsiders, will
Richmonders lose what they value most?
It's
a tough question. Wingfield is a brave man for
jettisoning the old economic development formulas at
which he excelled to seek a new vision for the
region's future. Richmond's answer to the challenge
he raises will tell
the tale of its growth and prosperity in the 21st
century.
--
January
20, 2003
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