Bruce J. Katz is the co-author (with Jeremy Nowak) of The New Localism: How Cities Can Thrive in the Age of Populism and (with Jennifer Bradley) of The Metropolitan Revolution: How Cities and Metros are Fixing Our Broken Politics and Fragile Economy. Both books explain why cities and their networks have emerged as the world’s leading problem-solvers.
Katz’s experience extends to policy-making at the national level, as well. He was chief of staff for U.S. Housing and Urban Development Secretary Henry Cisneros during the Clinton administration and was the senior counsel and then staff director for the U.S. Senate Subcommittee on Housing and Urban Affairs. After the 2008 presidential election, he co-led the housing and urban development transition team for the Obama administration and served as a senior advisor to the new Secretary of Housing and Urban Development, Secretary Shaun Donovan, for the first 100 days of that administration.
Katz left government employment to join the Brookings Institute as vice president and founding director of the Brookings Metropolitan Policy Program. From 2016-2018 he was the Institute’s first Centennial Scholar, focusing his research on the challenges and opportunities of global urbanization.
He is now a Distinguished Visiting Fellow at the Lindy Institute for Urban Innovation at Drexel University and the co-founder and inaugural director of the Nowak Metro Finance Lab. Also a visiting professor at the London School of Economics, he regularly advises global, national, state, regional and municipal leaders on public reforms and private innovations that advance the well-being of metropolitan areas and their countries.
In 2006, Katz received the prestigious Heinz Award in Public Policy for his contributions to understanding the “function and values of cities and metropolitan areas and profoundly influencing their economic vitality, livability and sustainability.” He is a graduate of Brown University and Yale Law School. He was generous enough to speak with me at length by phone. – Leslee Goodman
The MOON: What is “the new localism”? What’s so new about it?
Katz: The new localism is the way we solve problems in the United States and frankly, in a growing number of countries around the world. In the mid- to late-20th century, the way we used to solve problems was to look to higher levels of government. Our problem-solving was top down. It also tended to be very specialized. If you had a transportation problem, you looked to the transportation department. If you had a housing problem, you looked to the housing department. Our approach was compartmentalized and bureaucratic, and government was the prime agent of change. Public problems were considered the realm of the public sector.
In the 21st century, however, we’re finding that leadership is coming from the cities, metropolitan areas, and to a lesser extent, the states. Our problem-solving has become bottom up and multi-sectoral. The government still has a large role to play, but now there are more players and partners—public, private, civic, community, nonprofit, university, etc. This new approach is also interdisciplinary. If you have a transportation problem, for example, particularly congestion problems, some of the best solutions may have nothing to do with traditional transportation investments such as widening the road, or adding commuter rail. It might have to do with where you locate your jobs and housing; or with telecommuting or other technology. The whole way in which we solve problems has changed dramatically. That’s what “the new localism” is about.
The MOON: You describe the new localism as a way around the impasse in Washington. Please explain.
Katz: Washington is mired in partisan rancor and ideological polarization and has been for quite some time. The new localism, to some extent, has filled a vacuum left by a departing national government and frankly, by many governmental policy mistakes with cities and metropolitan areas. The new localism relies on networks, not governments, which means they can’t really be hijacked by partisanship in the same way a government can at the national or state level. Plus, the new localism is creating the new structures we need for problem-solving. Many of the challenges we face really do require solutions that are multi-sectoral and interdisciplinary, and cities are just better at doing that. It’s the way they co-govern and co-lead.
The MOON: Why? Why are cities better at it? Please explain the difference between a network and a bureaucratic approach to problem-solving.
Katz: If you come to Washington to visit the federal government, you will find separate, siloed, stovepipe government agencies. There’s the Department of Energy, the Department of Transportation, the Department of Housing and Urban Development. I was Chief of Staff at HUD under President Clinton and Secretary Henry Cisneros. These different departments tend to have fairly hard walls and to operate within their own cultures.
When you go to a city, however, you may sit at a session with the head of a local philanthropy, the head of the chamber of commerce, the mayor, the county executive, the university, the hospital, the unions, and various interested community groups. Obviously, there are differences between these people and their institutions, but they tend to roll up their sleeves and problem-solve together. They’re close to the ground, with a stake in solving the problem at hand, which impacts them more directly than whether they identify as “red” or “blue.” They can focus on “how can we create more affordable housing,” or whatever the issue is, and how can we create them here, now, with the resources at our disposal? This points out the difference between government and governance. At the federal and state levels we have governments, while cities practice a form of governance that cuts across sectors and disciplines and areas of expertise.
The MOON: But wouldn’t large cities tend to have their own kind of hard-walled silos? Might they be prone to being just as territorial and not wanting to cooperate or collaborate as larger governments?
Katz: Absolutely. I think to a certain extent local governments, whether it’s the city or the county, copy and mimic the national government in many respects. Because in the past, we’ve really worshipped expertise, specialization, and bureaucracy in many respects. But even given that, successful cities are able to take these vertical silos and lay them horizontally. For example, if you’re dealing with a crime problem, you’ll often find the law enforcement community—the police and criminal justice system—working very closely with community groups, churches, schools, and other sectors of local society to solve the problem. It’s what people always say locally: education is too important to be left to the schools by themselves. Law enforcement is too important to be left to the police by themselves. You would never hear that comment at the federal or the state level because they still operate in these stovepipes. We’re practicing a different kind of problem-solving locally because local leaders understand that the best way to find solutions that work and can be sustained over time is to involve more of the players on the field and create more collaboration across these multiple groups.
The MOON: Great. So, how is the new localism different from the old populism, or the provincialism, typically associated with local governments?
Katz: That’s a really good question. I think that at its most basic level, populism is focused on exploiting grievances; the new localism is focused on solving problems. (There have been some positive attempts at populism, nonetheless: public banks in South Dakota, for example, and some pieces of agrarian populism.) I understand that we have a lot of legitimate grievances. I don’t think anyone would dispute that there’s a level of economic insecurity in the United States because of economic restructuring and the failure of wages to keep pace with the cost of daily living. And the future looks even worse for the very existence of jobs in many key sectors of the economy because of the threats of automation and other technological advancements. But stirring up anger and hatred doesn’t get you any closer to a solution.
Plus, to some extent, you don’t see as many populists at the local level, where you don’t get rewarded for obstructionism or hyper-rhetoric; you get rewarded for accomplishing something. At the national or state level in the United States, you’re either on the red team or the blue team, and you get rewarded for conformity to your team more than for action, so you adhere to the party line. There is not such a hard party line at the local level; there’s just pragmatism and problem-solving. Many times, you don’t even know what party your local leaders belong to.
The MOON: How can the new localism stand up to multinational corporatism and downward pressure on wages and working conditions?
Katz: I think the best way for communities to proceed is to try to be the very best 21st-century version of themselves they can. We say this in the book very directly: every community has the potential be a quality place—whether you’re a truly urban city, a suburban city, or a rural town or community. Increasingly, people want to live where there’s vibrancy and vitality in the colocation of business and housing and amenities like parks or public spaces. Every place has the ability to create that. Some of this thinking goes back, literally, to Jane Jacobs’ The Death and Life of Great American Cities, a book that was written in 1961 when highway expansion and urban renewal was at its height.
Since then, we’ve learned a lot about the granular feel of cities that attracts people and grows local entrepreneurs and business, which reduces reliance on major corporate employers. Ultimately, if you’re successful, perhaps global companies decide they need to be where you are. The other piece of the equation—which matters more than ever today—is helping your residents keep pace with technological change by offering education and skills that equip them to participate during these disruptive periods. In the book, we describe two cities, Pittsburgh and Indianapolis, which understood their unique assets—the sectors of the economy they were in, the kinds of technology they could innovate and deploy—and invested heavily and consistently in their own strategy for success. A large number of communities have the ability to do that. They can create a quality community by investing in their own homegrown economic development strategy that builds on their distinctive assets and competitive advantages. They can upgrade the skills of their workforce while they’re making these investments. There’s no substitute for local leadership in this world. The local and the global have converged in many respects, but there’s more pressure to get it right and to learn to collaborate to compete. Collaboration is essential; it’s really the principal, ubiquitous element of the new localism.
The MOON: But can a local employer—even a university or tech company—pay higher than the prevailing global wage—which globalism and outsourcing have tended to depress?
Katz: I think there’s a premium for being a first-mover. A place like Pittsburgh that has a Carnegie Mellon, and a University of Pittsburgh, along with the University of Pittsburgh Medical Center, has the ability to be a leader in next-generation technology. And yes, if you’re in that position, you can definitely pay higher wages because what you’re inventing is going to become a product or a process that the rest of the world wants. Cities who define their leadership role and competitive advantage, and who invest accordingly, create an ecosystem of continuous invention and innovation. They can afford to pay a premium for the people who fill this ecosystem; in fact, they can’t afford not to pay a premium if they want to maintain their leadership position.
However, there’s a broader geography of innovation potential in the United States than has been realized. We’re just beginning to see it now because investors are finally starting to understand that Silicon Valley, or Boston, or New York, don’t have a monopoly on innovation. Innovation can thrive anywhere it is activated and supported.
There’s another great book (I know, I should be encouraging people to read The New Localism, so please go out and buy this other one [laughter]), by a friend of mine, Ross Baird, called The Innovation Blind Spot. Ross basically describes how we’ve allowed traditional forms of venture capital to focus on certain kinds of innovation—the next super app, or the next Uber Eats—when, actually, there’s very profound innovation that happens on a pretty regular basis in communities all over the country. It just doesn’t quite fit the model that might be pursued by traditional venture capital.
So I actually think that most cities in the United States, even those cities that have achieved some level of downtown revival or engaged in vibrant place-making, have probably achieved only a portion of their potential, particularly with regard to sharing prosperity and building wealth for a broader segment of their citizenry.
The MOON: That’s a perfect segue into the next topic, which is inclusivity, which has been a challenge for provincialism. It doesn’t seem to be a problem for the new localism, however, which to my eye seems to celebrate diversity. Can you talk about why inclusivity is important and how communities can increase it?
Katz: We’ve obviously been in a period of growing income inequality. And perhaps even more important is a lack of social mobility: a large number of people who “played by the rules” and did “the right things to be middle class by middle age” and then help their children achieve the same are being left behind. The “American dream” is not working. That’s partly because of economic structures, but also because the national and state governments have not been responsive to very disruptive trends and really aggressive competitiveness as India and China and other countries have entered the global economy and workforce. So cities have increasingly tried to understand their role in sharing prosperity: sharing the benefits of technology and advancement and also enabling a broader portion of their citizens to realize their full human potential.
This is quite interesting because education is highly localized in the U.S., where schools are funded by a combination of state and local funding, with little federal involvement. In most countries, though, education is nationalized. The national government is responsible for schools in Denmark or Sweden or Germany. As states and the federal government have failed to deliver quality education, we’re seeing more and more American cities recognizing that they can take responsibility for upgrading the skills and education of their residents; they can support entrepreneurs throughout their community; and that by doing so, they’re building wealth in multiple ways. They’re also enhancing social mobility and community cohesiveness by enabling more people to feel that they’re part of the prosperity of their community: that they’re both contributing to and benefiting from it.
The MOON: One of the theoretical problems I have with all this feel-good talk about solutions (and believe me, I’m happy to engage in feel-good talk for a change), is that we’re always talking about economic growth. Is this sustainable? Can we have a continual growing economy on a finite planet?
Katz: A large portion of the new localism is about growing a sustainable economy. You see this in northern Europe more than you see it in the United States. Amsterdam and other Dutch cities, Hamburg and other German cities, Copenhagen, are committed to becoming carbon-neutral—not just in their footprint; they’re also committed to developing the products and processes that could be adapted and scaled all across the world. Their vision is that, as African or Asian cities are growing, they’ll be adopting Danish or Dutch or German products and processes, so that they too can become carbon-free. These cities have the backing of their national governments, which cities in the U.S. haven’t got, of course. National governments in northern Europe actually believe that climate change is real [laughter]. In an urban world, which, in the metropolitan century, ours has become, change happens partly because of traditional policy set at the national level and partly because of models and solutions that are developed locally and then scaled nationally and globally.
Too, cities are reinventing what growth means. Whereas in the last century, growth might have meant urban sprawl, destruction of farmland and wildlife habitat, along with skyrocketing energy consumption, today growth is more concentrated and co-located. Urban cores may have more people living in them but actually use far less energy. They might grow their own food instead of import it. I actually think that growth can be sustainable and inclusive as well as innovative and highly beneficial in this new paradigm. It’s not “growth at any cost” or “let’s grow a lot of tax revenues by inducing Amazon or another big company to come our way.” The new localism is really about authenticity and confidence in your own local capabilities and a commitment to a different kind of end-goal.
The MOON: Please tell us more about this new growth paradigm.
Katz: I think the first principle of the new paradigm is that communities harness and design their own futures with greater emphasis on their own distinctive possibilities. What we don’t want is every city just mimicking every other city, utilizing the same growth model. That’s what we’ve had and it’s why so many American cities look the same: one strip mall after another. Frankly, Pittsburgh and Phoenix have radically different assets and, therefore, they should have radically different strategies to arrive at different futures. We want cities to own their distinctiveness.
Second, we want strategies that involve multiple sectors in designing, financing, and delivering on their new vision, not just waiting for money to trickle down from the federal government like manna from heaven. We need to recognize that a lot of wealth resides locally. Some of it might be in the form of land or buildings that the government or another civic entity owns, or it might be in the form of a university endowment or a government pension fund. An entire chapter of our book describes the forms of wealth that might be hiding in plain sight, but that are being invested elsewhere through conventional wealth management mechanisms. One of the goals of the new localism is to encourage local communities to have the confidence to invest locally, with the patience to grow their own capital. That’s the Pittsburgh story in many ways. It’s also the Indianapolis story. Local capital was invested locally so that the local vision could be carried out, as much as possible, through local means and local resources. Then you can leverage natural and state resources, if and when they arrive, and bend them to your own will. The days of waiting for Washington are over. It’s obvious to anyone who lives in this country. The days of waiting for Whitehall in the United Kingdom are over post-Brexit.
I think some of the pain of our current moment in history is because it’s taken us a while to grasp that it’s up to us at the local level to create the future that meets our needs. We all grew up looking to national governments to be our leaders. There’s still a central role for national governments to play in all the areas that require national policy. But I think more and more of this century is going to be driven from the bottom up. The national government’s role will then be to reflect and disseminate the innovation that’s bubbling up. It’s almost as if we’re reverse engineering governance.
The MOON: I happen to live in a tiny town in North Central Washington where we’ve had back-to-back summers of devastating wildfires. But we also have this amazing, community that took charge of its own recovery. We were told not to wait for FEMA; that if we did, we might never recover. So residents began to act immediately. We do have some access to capital from wealthy Seattle transplants who are willing to invest here. One of the recovery organizations they created was a local investment network to provide loans to businesses that want to start or expand here. The community has also invested in art as an economic development strategy: concerts, theater, visual artists, crafts. Art and recreational opportunities, plus local food and beer, are the main attractions now—for visitors and residents. So instead of a dying town, there’s a vibrant community where there are more things to do every night of the week than you can possibly get to.
I do believe that one of the reasons so much has been possible is that housing is much cheaper here than it is in metropolitan areas like Seattle. And then access to capital has also been huge. Third, it seems that crisis is a catalyst for people to take charge of their lives, do you agree? Do you have any other examples of smaller cities—or even rural communities—that have embraced the new localism with good results?
Katz: The latest poster child from the new localism is Erie, Pennsylvania. I don’t think there is any city that’s been hit with more industrial shocks than Erie, Pennsylvania. But it’s a beautiful city, situated on expansive Lake Erie, with a post-Civil War downtown, and a fierce set of residents who are committed to place, as well as some large anchor institutions that haven’t left, such as Erie Insurance Company, Gannon University, and an outpost of the University of Pittsburgh Medical Center. What Erie is doing is recognizing that it has the ingredients—the spatial geography of the lake, an historic downtown, and several anchor institutions—to restore their urban core. Most, if not all, places that are prosperous have a strong center, which is an economic center, employment center, fiscal center, and also a cultural center. It’s a place where the city comes together—for food or culture or festivals or microbreweries. In fact, I think so much of what this country is yearning for is a sense of community again. We lived for generations with sprawling decentralization, dispersion of population and jobs, and it’s left us alienated and dissatisfied. Now there’s an intense desire to come back together in the center of our cities and metropolitan areas.
Erie is just one of many, many, many examples, which go from the small—like a community literally taking a parking lot and regenerating it as a public space for community gatherings—to the large, more transformative interventions. What Erie did most importantly is invest local money in a patient way in a downtown development corporation, a model that was also used in Cincinnati. That has given them the ability to acquire and renovate properties and begin to imagine a radically different future for a place that everyone had basically left for dead. And so the common story—your story, but also other stories—is of a place that experiences shocks—industrial shocks, economic shocks, natural disasters—and standing up and saying, “We have a purpose now, a raison d’etre. And if we work together in radically different ways, we cannot only come back, we can provide a platform for our citizens to realize their potential.” I think that common story is really one of just radical commitment and confidence in the reason for place.
The MOON: How has the new localism avoided gentrification?
Katz: The real issue is not gentrification but displacement. To some extent you want value to appreciate, because you want your tax revenues, your fiscal system, to become more robust and sustainable. Because when your national government has gone AWOL and your state governments can’t be trusted all the time, you want your cities and counties to be strong fiscally so that they can provide services for disadvantaged people. So you need for value to appreciate. What you don’t want, however, is displacement of vulnerable populations. With foresight, you can build into the new localism systems and mechanisms that not only grow a base of local entrepreneurs serving local residents, but that include wealth-sharing possibilities, such as lease-to-own, or cooperative ownership structures—so that when value does appreciate, it doesn’t just go to outside investors, but it’s kept locally. It becomes the gift that keeps on giving, helping a broader segment of your population to feel more stable and secure.
Sometimes people talk about housing and rental prices growing at rapid rates, when actually the issue is high unemployment, or even high poverty. It’s important for communities to be clear about what their particular challenges are. The hot housing markets like Seattle and Silicon Valley are an anomaly, not the rule.
The MOON: I used to live in San Francisco, where the South of Market area happened to be the low-rent district, which was also where many of the homeless population congregated. Then gentrification arrived to renovate South of Market and, of course, the homeless people—as well as a lot of low-income housing options—were moved out. Where should those people go if we’re going to build an inclusive community?
Katz: Having worked on homelessness issues in the past, I can say that it’s not as easy as just expanding the housing supply. For some segments of the homeless population, it is. But for others, the issues are mental illness, or drug addiction, or unemployment and poverty. Each of those issues requires a different approach—often a complex approach that might involve, for example, healthcare and housing. Again, we’re dealing with the consequences of earlier decisions—like closing many of our mental institutions; like underfunding mental health. So the homelessness issue, like many issues before us, is probably going to get resolved by innovative practices that start in one city and then are scaled to several other cities and ultimately, become a standard practice. We can’t wait for a federal program to be enacted. We’ve tried that; the program came with a bunch of rules and regulations and basically spawned a cottage industry of groups that used those resources—sometimes well, sometimes not so well. This time I think that those cities with the most pernicious homelessness problems—Seattle, Portland, San Francisco, Los Angeles—are going to vote themselves more resources. LA just passed a major bond referendum to this effect. Of course, the question will remain: how do you execute? How do we collaborate across healthcare and housing lines? Ultimately, they’ll create some new models and the best ones will get adapted and adopted. Maybe the federal government, too, will snap back into action, but we can’t really depend on it because of partisan gridlock and because of their own fiscal mismanagement, and so forth. Ultimately, I think the best federal policies will be designed from the bottom up, and homelessness could be an example of that.
The MOON: How has the new localism dealt with climate change?
Katz: I hate to keep coming back to the same city, but Copenhagen is on a trajectory to be carbon-free by 2025. They have a transportation pledge. More than 50% of residents bike to work or school, so they’ve taken the car out of the equation to a large extent. They didn’t do it overnight; they did it over decades and they supported the infrastructure it required. They’ve moved toward renewable energy, backed by pension fund investments. The first thing you see when you fly into Copenhagen is windmill farms off the coast. Denmark is a pretty windy place and their pension funds have become financiers of offshore wind. They’ve also implemented all sorts of innovations around neighborhood micro-grids, which reenergize the community through multiple means: solar collectors to power streetlights; others to run homes; and so on.
American cities, I think, are likely to innovate on inventions in climate tech, the financing of climate tech, and then the adoption of technological solutions—not just across the U.S., but across the world. To be a Copenhagen requires that, first, you have some national platform to build from, which we don’t; and second, you have high-capacity local government, which we don’t have, either, in most American cities. Our strength is having public/private civic collaboration and private finance. The Northern European strength is having innovative public sector responses coupled with financing that comes from pensions or public benefit corporations. We probably need both models to be operated on steroids to effectively deal with climate, but we’re going to see European cities move to zero net carbons faster than the U.S. However, I do believe we’ll see some really innovative technologies come out of the Carnegie Mellons, Georgia Techs, MITs or the Stanfords of this country. The combined effect of this could be quite dramatic. I can only hope.
The MOON: You mention public pensions as an asset—they’re financing windfarms in Denmark, for example. In the United States, public pensions are usually talked about as liabilities (except by pensioners, of course). What accounts for the difference?
Katz: Obviously, it depends on the state, and it depends on the system. But this is another difference between us and the Northern Europeans. In the U.S., we’ve often not kept current with our contributions to the large pension systems, which means that in some places, we have enormous liabilities. We also, though, have very large pension systems that have embraced this notion that to make the highest return on investment you need to send your capital to a hedge fund or a private equity fund or a wealth management firm or a venture capital firm far away from where your workers live, or where your university is located (in the case of an endowment), or where your corporation is located (if we’re talking about the balance sheet of a corporation). I wrote a piece in the Financial Times recently that was about how to funnel capital to the American Heartland. The insight of the piece was that a lot of Silicon Valley capital or Boston capital or New York capital actually comes from our Heartland—from high net-worth individuals, corporations, pension funds, and universities that export their wealth to invest in a few places in the U.S., or outside the U.S., on the theory that they will be earning the highest return on their investment. Actually, I think they’re undervaluing their own places and the potential for returns from local investments. That’s another part of what I mean about a new growth paradigm, or model. We need to think about a rewiring of capital flows so that more local capital can be kept local.
The MOON: When you say that public pension funds have not kept current with their contributions, is that because of unwillingness to raise taxes? Why have we not kept current with contributions to our pension funds?
Katz: It differs from one place to another, but obviously, there’s a level of fiscal mismanagement in some of these systems. Too many of them relied on the promise of fanciful returns for exotic financial products. In some ways, it’s hard to think about the United States as a traditional nation because we’re 50 states with thousands of cities and counties and we’ve tended to believe in local self-determination, for better or worse. I mean, when de Tocqueville traveled around the U.S. in 1831, almost 200 years ago, he found an enormous array of local, multi-sectoral governments. Obviously, the local government scene was different at the beginning of the 19th century than it is today, but in our DNA it’s our natural way of being, partly because we’re just so large, and partly because we’ve evolved with sectors intertwining with and collaborating with each other. It’s not like that in the rest of the world. We’ve given ourselves different kind of solution sets to build. I mean, in a network economy, a networked world, the U.S. emerges as a place that’s quintessentially networked, not just because of social media; it’s because of the way people from different sectors naturally engage with each other every day in the life of the city. That’s quite different in other parts of the world, where the public is kept distinct from the private. In the U.S., it’s all mashed up together and has been from the very beginning.
The MOON: Really? I didn’t realize that. My limited sense of other cities, for example in Europe, is that there is a strong sense of community.
Katz: Well, there’s a strong sense of community, but when you go to a place like Barcelona and say, “Who should deal with X or Y or Z?” Whether it’s an economic, social, or environmental issue, they’ll say, “Oh, the government should deal with that. That’s the public sector’s responsibility. That’s what we pay taxes for.” In the United States, I think more sectors of our society take responsibility for more solutions. That partly describes our philanthropic community, for sure, but it also describes to some extent, the corporate sector—as it does in Indianapolis or Pittsburgh. The university sector, too, often feels a genuine responsibility for both giving back locally and solving big problems. I think that’s what sets the U.S. apart. We are co-governed in many respects by different sectors and different institutions, and those institutions intertwine and intersect in many different ways than they do in other parts of the world.
The MOON: For people who haven’t (yet) had the opportunity to read your book, will you talk a little bit more about the Pittsburgh and Indianapolis examples?
Katz: Pittsburgh is a playground for invention, particularly in the technologically sophisticated realm, and that’s largely because of Carnegie Mellon, the University of Pittsburgh, and the University of Pittsburgh Medical Center. They are leaders in many of the next-generation technologies that are going to sweep across the world—whether we’re talking about artificial intelligence, or autonomous vehicles, or robotics, or high precision medicine genomics. Pittsburgh is a player in many of these technologies by sheer will and sustained investment in centers of excellence. When the steel industry collapsed in Pittsburgh, a core of corporate, university, philanthropic, and government stakeholders said, “The steel industry is not coming back.” But they didn’t pull up stakes. Instead, they redirected their investments. Particularly the Heinz endowments and the Mellon and Hillman foundations began making sustained future-focused investments that weren’t necessarily going to pay off for decades. The Pittsburgh example is about understanding that if you’re lucky enough to have universities of quality, you need to leverage the heck out of them to create next-generation technologies. That’s the way you build a place that will not just prosper for a few years but for generations.
Indianapolis is a different story. Indianapolis is the story of a 40-year commitment, again, by corporate institutions, philanthropies, universities, and local and state government. (As an interesting side note, the City of Indianapolis and Marion County consolidated in 1969 as a cost-saving, efficiency measure. The combined government is now called Unigov and operates without the fragmentation and duplication of effort that can so often characterize local governments.) Unigov and its partners were able to get about the business of restoring the core of the city, which they did by redefining it as a hub for amateur sports, which ultimately included Olympic trials, a professional basketball team, and has since expanded into biotech. They now have a Central Indiana Corporate Partnership that invests its local capital in making Indianapolis and Central Indiana a life sciences hub for the world. In fact, it is the second-biggest exporter of life science products after California. Year in, year out, Central Indiana Corporate Partnership is doing what’s necessary to stay one step ahead of the curve. Indianapolis has created a formal structure, whereas the Pittsburgh model consists more of a collection of sustained investments. But both models have worked.
The MOON: Didn’t Pittsburgh also invest in education so that they could grow the talent they were going to need?
Katz: In the last decade or so, as these long-term investments and next-generation technologies have taken off, they’re now making the kinds of investment in early childhood education, K through 12, and community college and skills-building programs to take advantage of all of this. You can’t say it was baked in from the beginning, but now, to a large extent, it’s being pursued. You need both. You can’t just grow the advanced portions of your economy without bringing more people along for the ride. You can’t just import all your workers, so more and more you’ll see these interventions being coupled and complimented.
This is another example of how the new localism is about people at the grassroots mobilizing to meet their community’s needs. For those of us who feel overwhelmed by the problems of the 21st century, it’s the most positive development at the most appropriate time. Yes, we could sure use the federal government coming on board and backing the process—or at least not taking us in the opposite direction—but it’s tremendously heartening to see people taking their future into their own hands.
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