Will Our City Just Fade Away?
The election is on top of us now and Covid dominates the news as well. But I’m trying to think about the long game here for a minute.
The title of this post is the question for lots of lovely, small, seemingly livable Rustbelt places whose populations have declined to a point of no return. (They are sometimes called “Main Street towns.”) What’s the fatal low number here, below which you’re not coming back? 20,000? 10,000? Fewer? Indiana, like quite a few states, has literally dozens of such places.
I know this because I read the columns of my friend Morton Marcus, a retired Indiana University economist who writes perceptively about this state’s business and demographic conditions with (for an economist!) an amusing style.
I learned, for example, what happened to the population of Indiana’s 547 incorporated cities and towns between 1970 and 2017, 454 of which (83%) are home to less than 5,000 people each.
Some tiny towns of 1970 grew dramatically over those 47 years. Fishers had 628 people in 1970 but ballooned to 91,800 by 2017. It was one of the 191 of those 454 small towns that grew in population (adding 370,900 people, or one-quarter of the state’s population increase over those years).
By contrast, the 258 towns under 5,000 only lost 41,300 persons. Which, as Marcus points out, averages out to three or four persons per year, per place.
At the other end of things, our two biggest cities, Indianapolis and Ft. Wayne, together grew by 203,600 (18%). But here’s the challenge. The next eight cities all lost population. Muncie lost the fewest — 460 — and Gary the most — 99,400. South Bend, Hammond, Evansville, East Chicago, Anderson and Terre Haute together lost another 99,800 over this period.
Taking South Bend specifically, it ranks neither as a Main Street (i.e., smallish) town nor a metropolis. It is a small city, arguably both “big enough” and “small enough,” as Ryan Blaske’s recent doc film described it. But for what?
Here’s what I want to claim. First, South Bend fits the profile of a type of Rustbelt city whose decline is looked upon as practically inevitable, given the realities of the financialized/technologized global economy today. The future is not small cities, we are told by numerous experts: it is the metropolis. (Channeling Ed Gleaser here.) Or the megaregion. (Channeling Joel Kotkin.) It is us, the cool people seem to be arguing: it is no longer you.
Not that South Bend and similar places haven’t heard these messages. We are by now convinced we need to cultivate a “creative class”, that alchemical trick by which you encourage entrepreneurial energies in a particular neighborhood or section of downtown. (You too can be Portland!)
We recite, mantra-like, the word “innovation” as often as possible, even if the number of tech (or new manufacturing) businesses launched locally doesn’t make much of a dent in the area’s unemployment problem. (You too can be San Jose!)
Not that everybody from former Mayor Pete on down hasn’t been working on building up the startup ecosystem, creating incubators, hosting shark tank-style events, and promoting this dubious idea with the unpronounceable French name, entrepreneurship. (More on why it’s dubious in a later post.)
Let me play the provocateur here and argue for a new mantra: let’s recite the word UN-novation and see what happens.
By unnovation, I mean low-tech, bread and butter, non-exportable, and mostly smaller businesses. Dry cleaners, bars, auto repair shops, cafes, motels, gas stations, health clinics, grocery stores. Places like this classic South Bend barber shop.
These businesses employ the majority of people in this country, given that most tech companies — for all their multi-billion dollar valuations — tend to have very few employees. (Twitter has only 300 employees, Automaticc/WordPress has 75, Skype has 500, Craig’s List has 30, etc.)
Our financialized and technophiliac economy tends to ignore these unnovative businesses primarily because of one big reason: their profit margins are boringly small. They don’t bring big multiples when the owners or the venture capital fund finally decide to sell one off. They are categorized as “lifestyle” businesses rather than “aggressive growth” opportunities. They are not prime customer prospects for most bankers, CPAs or attorneys.
Nonetheless, South Bend has some great assets that the innovation fanatics typically overlook. If we deploy them well, there’s no reason South Bend will fade away. I’ll talk about them in the next post here.
