What is in this article?:
- From Rust Belt to Brain Belt: How Older Manufacturing Cities Are Remaking Themselves
- Q: Is workforce training a key to success for these Brainbelt cities?
A new book looks at how cities like Akron and Albany have built on their historic manufacturing strengths to be successful in the modern era.
Sixty years ago, Akron, Ohio’s rubber industry employed more than 50,000 people. But in the 1980s, as three of the four major tire companies left the city, most of those jobs disappeared. Times were dire for years, but gradually the region began to capitalize on its existing strengths—the material science expertise of its research universities, its workforce of engineers, scientists and tradespeople—and reinvent itself as the center of the polymer industry. According to statistics from the city’s website, upwards of 35,000 people in the Akron area are now employed in approximately 400 polymer-related companies.
Other Rust Belt cities, too, such as Albany, N.Y. and Pittsburgh, are re-emerging as new forces in manufacturing and technology, write Antoine van Agtmael and Fred Bakker, authors of the new book The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation. This is happening in Europe as well. Eindhoven, Holland, a former company town for Philips and DAF Trucking, has established a collaborative research institute, Holst Centre, and remade itself as a center for wireless sensor technologies and flexible electronics.
The future looks bright, the authors argue, because these “Brainbelts” have what emerging markets don’t: a skilled manufacturing workforce, a well-developed system of research universities and a culture of innovation.
This growth is facilitated by connectors—dynamic leaders who dream big and bring together people with seemingly disparate interests, getting them to build on their strengths to create a new model. In Akron, the connector was Luis Proenza, now the president emeritus of the University of Akron. In Albany, it’s Alain Kaloyerso, president of SUNY Polytechnic Institute.
The book—which does have a bit of a flyover feel with the authors popping into cities for quick tours that highlight bustling areas, not eyesores—had its beginnings when van Agtmael, an economist and former CEO of an emerging markets equity firm, heard something surprising on his world travels. David Ku, the chief financial officer of the Chinese semiconductor company Mediatek, confided that he was worried about American competition. Ku said the R&D at competitor Qualcomm was so far ahead that he was worried Mediatek wouldn’t survive.
Bakker, the retired editor-in-chief of Holland’s major financial newspaper, Het Financieele Dagblad, heard similar rumblings while traveling through Mexico, Indonesia, South Korea, and Turkey.
“The low-cost labor advantage” in those countries “was losing power,” the authors write. “Making things cheap to gain an edge over high-cost Western companies just wasn’t cutting it anymore. The days of the low-cost advantage were essentially over.”
Van Agtmael said in an interview that initially, he and Bakker were looking at “whether manufacturing is coming back. And what we realized is that it’s not your father’s manufacturing coming back. Something very new was happening.” Old manufacturing cities “were becoming very innovative again. We had learned the trick of sharing brainpower very effectively, not just within academia, but between universities and startups and big companies.”
The other trick was building on old industrial expertise with advanced manufacturing methods like robotics and 3-D printing.
It’s not earth-shattering to anyone successful in manufacturing today that technology has reshaped the industry. But van Agtmael and Bakker take a closer look than most at what gels—what the factors are that can transform a Rust Belt City into a Brain Belt city.
Van Agtmael spoke with IndustryWeek during a tour for the just-released book.
Q: When I heard about the book’s premise …
A: You were skeptical.
Q: Yes. I thought, why hold up Akron as a model? It has a lot of potential, but the poverty rate is still very high—over 40% in the city—and the labor force is lower than it was in 2010.
A: When you have your back against the wall and have real, real problems—what I call a life-threatening situation, you don’t get out of it in a year or two. The results start to show really in ten plus years. So they’ve started to [show results] now. But it takes time. Rather than being down in the dumps as some of our presidential candidates on the left and right would like us to be, if you see there actually is a future, then things look different. … Northeast Ohio is now a leader in polymer in the United States, and for that matter in the world. It makes a difference.
Q: Reading the book, I can’t help but thinking that Rust Belt cities that haven’t made this sort of turnaround—Cleveland, which was just named the most distressed city in the country by the Economic Innovation Group, comes to mind. They have some of the elements of success, like a good technical university or a specialized workforce, but lack a connector.
A: To be a connector, number one, you have to have vision. Number two, you have to have conviction. Number three, you must be in a position like a university president, or a mayor or a former head of a major corporation, where you know people and where you have learned how to persuade. This is all based on sitting down with people and getting them to working together, not on telling people what to do.
Connectors are also energetic. This takes hard work; this takes disappointment—Proenza has his detractors. And you have to be able to push through critical masses.