How can networks help modernize a manufacturing economy?

The Metropolitan Revolution: Northeast Ohio


This story is adapted from The Metropolitan Revolution book and iPad app by Bruce Katz and Jennifer Bradley. View other stories on Medium.

A Quiet Crisis

For the better part of two centuries, Northeast Ohio was a manufacturing powerhouse. It was a regional identity that worked—until suddenly it didn’t. A series of steel mill closings erased more than 10,000 jobs in the late 1970s, and in 1978, Cleveland became the first major city since the Great Depression to default on its municipal loans.

By the 1990s, many Northeast Ohioans thought the bad days were over. A building boom produced amenities like the Rock and Roll Hall of Fame and Museum, the Great Lakes Science Center, and three new professional sports arenas. Cleveland was widely hailed as a “comeback city.” In 1995, in an article titled “‘Mistake by the Lake’ Wakes Up Roaring,” the New York Times declared, “Clevelanders are cheering for a new downtown, built in the latest fashions in tinted glass and exposed steel.”

These glamorous projects were often mistaken as proof of a flourishing city. Unfortunately, they simply obscured the reality that the region’s key economic indicators, such as manufacturing employment, had failed to keep pace with the rest of the country for more than two decades.

Manufacturing Slowdown: Northeast Ohio lost manufacturing jobs faster than the U.S. from 1980 to 2005. (Source: Brookings analysis of Moody’s Analytics data. Data available for 100 largest US metropolitan areas. Employment indexed to 1980. Northeast Ohio includes Akron, Cleveland and Youngstown metropolitan areas.)

In 2001, the Cleveland Plain Dealer and Ideastream, the region’s largest public radio and TV station, coined a phrase to describe the region’s true condition: “quiet crisis.” A series of stories in the newspaper put the region’s anemic economy in the spotlight.


The Post-Hero Economy

When telling stories of transformation and turnaround, it is tempting to shape them into personal heroic narratives. A charismatic visionary steps up and starts an irreversible cascade of change. But this search for the superhero is often misguided.

Metropolitan areas are so big, so complicated, and so diverse that they don’t need heroes, they need networks.

In 2003, with the warnings from the “quiet crisis” series still resonant, a handful of people at foundations in Cleveland, Akron, and elsewhere around the region started talking about how local philanthropies could play a bigger role in rebuilding the economy. “We all had the sense that we had to do something,” says Brad Whitehead, who would be the head of the Fund for Our Economic Future, which foundations would establish to address economic challenges.

Over subsequent meetings, eleven foundations became seventeen, and then twenty-three. The network began to understand that help wasn’t going to come from anywhere else—they were going to have to kick-start Northeast Ohio’s revitalization themselves. A galvanizing memo circulated to all of the region’s foundations observed that:

Traditionally, the responsibility for economic development has been left in the hands of the government and the corporate community. In current times, however, government budget cutbacks and dwindling corporate resources are placing the traditional model under extreme stress.

The Fund

Around twenty-five foundations committed to the newly established Fund for Our Economic Future and vowed to raise a $30 million pool of jointly administered money to support small business, entrepreneurship, workforce preparedness, manufacturing competitiveness, and promotion of the region. As word of the Fund spread, the number of foundations involved grew past fifty. A policy of “one member, one vote”—whether a group contributed the minimum of $100,000 over three years or $10 million, as the Cleveland Foundation did in the first three years—ensured that smaller organizations would have a meaningful voice.

Brad Whitehead: “The Fund became this common place where we could pick a handful of priorities and lift them up.”

Perhaps foundations could be both catalyst and connective tissue—providing critical funding to help new organizations and connecting disparate economic development efforts in a way that would benefit the region as a whole.

Or so the vision went. The difficulty would be converting theory to practice.


Thinking Short- and Long-Term

Fund members wanted to make grants—that’s what philanthropies do. But no grant, however big, was going to reorder a $178 billion regional economy.

Leaders at the Fund felt that creating a strong, shared, regional identity would have to precede the development of a shared agenda. After all, getting more than fifty institutions and organizations to agree on a vision and codify that vision would be a significant undertaking.

Some of the Fund’s more ambitious projects—such as Voices and Choices, a project to develop an economic competitiveness agenda—would take years to unfold. However, they had the immediate positive impact of helping regional foundations and community leaders understand the potential power in working collaboratively.

Brad Whitehead: “In retrospect [Voices and Choices] was one of the greatest things that we’ve done, but at the time it was extraordinarily controversial.”

To address Northeast Ohio’s most pressing economic needs, though, the Fund couldn’t afford to wait. They needed some immediate solutions.

The Fund provided critical financial support to regional economic intermediaries like BioEnterprise, NorTech, and JumpStart. These organizations supported networks of entrepreneurs, each one concentrating on a different growing field.

By investing in networks, the Fund created an ecosystem in which firms worked together to strengthen the region economically. In the first nine years, the Fund’s grantees helped add 10,500 jobs and $333 million in payroll. This supportive ecosystem gave Northeast Ohio a new reputation as a destination for entrepreneurs from beyond the region.


Keeping Networks of Networks Thriving

Networks have proved over and over again to be the key to success in moving Northeast Ohio’s economy forward.

Jake Orville: “[BioEnterprise] ushered me through the process, introduced me to not just the inventors but also early stage investors.”

Some philanthropies that had traditionally focused on social issues began to broaden their mission and, through the Fund, direct money toward initiatives that led to commercializing new products, spinning off new firms from university projects, and attracting relevant companies. After a few years, the Fund began insisting that grant recipients connect with one another and collectively set broader goals for the region’s economic competitiveness. These sets of decisions strengthened the network as a whole and allowed the region to better work together and take on bigger challenges.

Networks of Networks: The Fund is able to support companies throughout the region through intermediary networks.

By 2012, a huge consortium of universities, businesses, and non-profit groups in Northeast Ohio, Southwest Pennsylvania, and West Virginia was collaborating to compete on a national level. The Fund and other philanthropies spent $425,000 over four years to facilitate meetings, organize grant application reviews, conduct relevant research, and generally do what it takes to hold dozens of partners together.

Rebecca Bagley: “If there’s an opportunity that’s presented, we’re able to capture that as a network.”

These efforts paid off in a big way in August 2012, when the region won a $30 million federal grant to start a new center in additive manufacturing, also known as 3-D printing, a technology that could revolutionize manufacturing. This grant is giving Northeast Ohio the boost it needs to once again become a thriving manufacturing hub.

“The Fund put $25,000 in to buy the donuts,” says Chris Thompson, the Fund’s director of regional engagement, “and we got a $30 million return on investment.”

Thompson’s quip is funny, but it points to a larger truth: Consultants who advise non-profits and others on how to build and sustain networks say that food and drink are important tools to bring people together to work on common problems.


Reversing the Slide

Nine years into the Fund’s efforts, signs of a turnaround have emerged. In a specific set of R&D-rich industries, Northeast Ohio gained jobs faster than the national economy between 2010 and 2012.

The region still has far to go to replace the tens of thousands of manufacturing jobs lost in prior decades. But the recent gains look like the beginning of a new direction—one in which existing skills in production marry a strong base of research to invent and build new technologies.

Northeast Ohio’s advanced industries span a wide range of research- and engineering-intense sectors, including those shown above. Advanced-industry employment grew faster in this region than the nation as a whole from 2010 to 2012.

These efforts to revitalize Northeast Ohio’s economy and reverse the “quiet crisis” are still a work in progress—almost everyone involved in the Fund uses that phrase. The effort is already a success, according to the Gund Foundation’s Bob Jaquay. Before the Fund, he noted in 2012, “we had four or five philanthropic organizations making economic development investments. Now we have sixty-five funders…. We’ve got hospitals, companies thinking more about collaboration and how to work with clusters than ever before. Our work has revived a moribund pipeline of entrepreneurship and created a robust network that is thinking more about what it takes to run a company.”

“When we come together…and work at this metropolitan level we can roar with the best of the lions.”— Brad Whitehead

The Takeaway

  1. The economy depends not just on firms, but on networks that include investors, inventors, entrepreneurs, manufacturers, and advanced research institutions.
  2. In Northeast Ohio and other recovering economies, this network has to be carefully tended to and nurtured. Someone has to convene and connect people and “buy the donuts”—meaning that they tend to the network itself, rather than specific elements.

This story is adapted from The Metropolitan Revolution book and iPad app by Bruce Katz and Jennifer Bradley. Story presented by the Brookings Metropolitan Policy Program. iPad app, including the graphics and videos in this story, produced by Melcher Media and designed and developed by Crush+Lovely.

Learn more about The Metropolitan Revolution at http://www.metrorevolution.org