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Saving
the Mill
Town
Globalization
is undermining the economies of small factory towns
across the South. Some say they’re doomed. If so, Danville hasn’t gotten the message.
I’ll
never forget a conversation I
had a couple of years ago with Donald Rataczak, the
oft-quoted director of the Economic
Forecasting
Center
at
Georgia
State
University. I
asked the economic guru if he held much hope for mill
towns like Danville
and
Martinsville,
which were suffering waves of layoffs at the time. Not
really, he said bluntly. Their main competitive
advantage was their supply of low-wage labor. But with
the opening of global markets, manufacturers could find
much cheaper manpower in
Latin
America
and Asia.
The
economic justification for maintaining small, scattered
manufacturing centers, which came into existence a
century or more ago to tap cheap and abundant labor
coming off the farms, no longer existed.
Judging
by the churn in factory jobs, below-average education
levels and limited fiscal resources, any objective
observer would conclude that the outlook for Virginia’s
mill towns is dire. But it's too soon to write them off.
The
state is investing heavily in rural economic
development, primarily through the distribution of
tobacco settlement funds, and, driven by adversity,
rural communities across the Commonwealth are engaging
in imaginative experiments to revitalize their local
economies.
In
Danville
and
neighboring Pittsylvania
County,
diverse initiatives are coming together in a particularly
promising way. The region is investing in higher
education. A Southside regional initiative
is upgrading broadband Internet access. The regional
airport is testing NASA technology that would make it
more hospitable to small aircraft aviation. And a new
research institute is bringing R&D to bear on
critical local industries.
“I’m
hopeful for Danville,”
Michael Schewel told me over coffee last week. “I find
Danville to be pretty inspiring.” As Secretary of
Commerce and Trade, Schewel has worked closely with city
fathers to recruit jobs and investment. They understand
the stakes involved, he says. They know the fate that
awaits them if they fail, and that makes them willing to
take risks. “Danville
has been the most innovative community in
Virginia
in
responding to the problems it faces.”
Danville,
suggests Schewel, is a survivor. The region has already
persevered through calamities that would have destroyed
less resilient communities. The textile-apparel
industry, once the economic mainstay of the region, has
all but disappeared. Dan River Mills, which employed
more than 30,000 in its glory days, has shrunk to a
tenth its former size. Simultaneously, sales of tobacco
leaf have eroded steadily. Once one of the largest
centers of tobacco warehousing and distribution in the
country, Danville has little left to show for its former
prosperity but empty brick buildings and the
headquarters of global tobacco trader Dimon
Incorporated. Yet, the city hangs on, having nurtured a
manufacturing base that is more diversified and less
vulnerable than before to the vagaries of one or two
industries.
The
skill sets of the Danville-Pittsylvania workforce are
best suited to manufacturing and, China be damned, there
is still manufacturing investment in the U.S. to be had.
Regional leadership is moving methodically to make the
community as attractive as possible in the competition
for that investment, says Schewel. "They've
planned. They have a strategy" -- and they've been
disciplined about executing it.
One
of the greatest problems facing the city is
geographic isolation -- it's off the Interstate, lacks
commercial airline service and could use better
broadband Internet connections. Danville can't do
anything about that Interstate connection, but it's working on
the other two.
The
Danville Regional Airport is the first in the country to
test the NASA-developed Small Aircraft Transportation
System (SATS), a cluster of technologies configured to
make it easier for small aircraft to take off and land,
around the clock and under most weather conditions.
Relying upon inexpensive satellite technology, SATS will
upgrade the capabilities of general aviation airports
without the necessity of making make multi-million
investments in ground-based radars, control towers and
other equipment. (See "The
Small Aircraft Revolution," October 18, 2004.) While
the local market is too small to support regularly
scheduled passenger service, the coming revolution in
small aircraft aviation may make it possible to serve
Danville's general aviation airport with flexible
shared-ownership or air-taxi services. It's a shrewd
move to position the city on the forefront of the Next
Big Thing in the aviation industry.
To
improve Internet connectivity, Danville and Pittsylvania have launched the eDan
initiative to deploy broadband connectivity throughout
the region. Plans call for building a fiber-optic spine
running parallel to U.S. 29, linking the main
communities in the region, creating Multimedia Services
Access Points in each community, and bridging the last
mile to customers with a mix of wireless and other
technologies.
To
Danville's economic development strategists, broadband
is crucial in two ways. First, manufacturing operations
increasingly require Internet access to integrate into
global supply chains. Secondly, broadband access allows small service
companies plug into a global network. As the eDan
website puts it: "In a
national economy that is producing most new jobs in one-
to 25-person organizations, e-entrepreneurs and
outsourced e-services providers can live in the Dan
River Region and serve a distant market."
Superior
aviation and broadband access will help Danville stand
out when vying for the ever-shrinking pool of
manufacturing investments. Meanwhile, the community
hopes to build on the existing business base. Critical
to this effort is the Institute for Advanced Learning
and Research. A collaboration between Virginia Tech,
Averett University, Danville Community College and
other local entities, this facility performs a number of
vital functions. Most obviously, the Institute offers advanced programs of study,
imparting skills in demand by local industry. But it
also serves as a focal point for eDan infrastructure,
and it
sets aside 15,000 square feet of research space to
pursue R&D projects that support local industry.
The
R&D component is potentially the most innovative and
far reaching aspect of the Institute, for it offers a capability found only at a
handful of major research universities in the state. Rather
than pursuing basic research, however, the
Institute is focusing its R&D efforts on projects
that can be applied to local industry.
For
example, the
Advanced and Applied Polymer Processing Institute -- an
institute within an institute -- is researching polymer pultrusion processes, of
interest to the local Goodyear tire plant, as well as composite fabrics and
membranes for the deployment in lighter-than-air
aircraft and blast-resistant and wind-resistant
constructions. The Virginia Institute for Performance
Engineering and Research, a partnership that encompasses
the Virginia International Raceway, is probing
vehicle dynamics and off-road mobility analysis in the
hope of making Southside Virginia more attractive to the
motor sports industry.
If
the idea of attracting high-tech industry to Danville
strikes you as phantasmagorical, think again. Earlier
this year, Luna Innovations, a technology incubator in
Blacksburg, invested $6.4 million to renovate an old
tobacco warehouse and set up a nano-materials
manufacturing operation. Admittedly, Danville didn't
pull off this deal all by itself -- it received a little
help from U.S. Sen. John Warner, not to mention $650,000
in state funds. But the deal was proof that Danville can
compete for more than semi-skilled manufacturing jobs in
light industry.
In
a related coup, Luna Innovations recruited Dr. Stephen
R. Wilson, a founder of a bio-nanotechnology company in
Houston, Texas, and a world-renowned expert in
fullerenes, and persuaded him to move to Danville to
head the nano-materials division there.
Enlisting
world-class scientists and executives is a must if
Danville hopes to transform its labor-intensive,
manufacturing-based economy to a knowledge-
intensive
economy. Danville is fortunate to have at
least two major companies -- Dimon and Dan River -- that
supports what Schewel calls a "depth of leadership" rare in a
small city. That executive cadre creates a demand for
higher-level housing stock and supports amenities --
from country clubs to coffee bars and clothing stores --
that appeal to
other newcomers.
Even
so, building the stock of human capital will be
Danville's greatest challenge. Danville
faces the classic rural condundrum: What's the incentive
to raise taxes and invest in education if young people
wind up moving to larger cities where they can put their
higher-order skills to work?
It's
an unfortunate fact of the early 21st century that
executive, scientific and creative talent tends to
migrate to larger cities that offer the amenities --
shops, dining, entertainment, schools -- that affluent
people can afford. Corporations, in turn, tend to
cluster where the talent is, which creates another
attraction for larger cities -- they're where the jobs
are. Dr. Wilson notwithstanding, it is very difficult for small cities like Danville
to compete for human capital against metropolitan areas that
offer better employment prospects and a wider range of
cultural and entertainment options.
Schewel
remains optimistic. "I find it hard to believe that
everybody wants to live in a metroplex," he says.
"I don't think you can say that the smaller-city
model is dying." Small towns,
in theory, offer people an alternative to the cosmopolitan
lifestyle: charm, intimacy, connectedness with other
people, and the satisfaction of
being able to make a difference.
Unfortunately,
Danville, like virtually every other small town in
Virginia, is squandering its greatest advantage in the
competition for human capital: its small-town charm.
A historical
city founded before the Civil War, Danville possesses a
number of charming older districts. But rather than
replicating the best of itself, Danville
has embraced the worst
flaws of the large metropolitan areas: the retail
strips, the cul de sac subdivisions, the scattered
shards of development connected only by the automobile.
From my limited experience with the city, Danville is creating
sprawling,
auto-centric development that not only is ugly but
destroys the social cohesion that makes small towns
special.
In
sum, Danville and Pittsylvania County are doing many
things right. They're developing the infrastructure of
the 21st century, and they're aligning those investments
with their existing business base. That makes the
Danville region more forward thinking than most mill
towns. But local leaders still need to confront the
issue of recruiting and retaining human capital.
And that means re-examining the scattered, low-density,
disconnected pattern of development that undermines the
region's quality of life.
Danville,
like other small towns, needs to reinvest in its urban
core. It needs to create clear edges between city, towns
and hamlets on the one side, and the countryside on the
other. It needs to create walkable,
pedestrian-friendly communities and a balance between
land uses within those communities. If it can address
quality-of-life issues with the same diligence it has
approached economic development, Danville can prove
Donald Rataczak wrong. There is a future for the
mill town -- not as a mill town but, transformed, as an
outpost of the knowledge economy.
-- November 1, 2004
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