Struggling Cities and the Promise of Inclusive Competitiveness

Entrepreneurs are busy in our increasingly multicultural urban landscape, but they're not creating many jobs. That could change if we invested in them.
by | August 8, 2013 AT 11:00 AM

When Detroit filed for municipal bankruptcy, no one seemed surprised. After all, dozens of cities across the nation are seeking to stave off financial disaster. Yet Michigan Gov. Rick Snyder expressed optimism that the bankruptcy process will produce "a stronger, better Detroit and a format to grow the city."

Indeed, governors and mayors across America are likely cheering for a quick rebound for the Motor City and watching closely to see how it responds to this economic crisis. And there is good news for the salvation of many struggling metropolitan areas in census data: Rapid growth in entrepreneurship is occurring among the nation's black and Hispanic populations -- 60 and 44 percent, respectively, from 2002-2007. In Detroit, the growth among black entrepreneurs over the same time period was 71 percent, more than four times the national average.

Those numbers, unfortunately, don't paint the whole picture. Detroit, with a black population of more than 80 percent comprising about a quarter of the region's population, produces less than 2 percent of the gross regional product. All of that growth of black entrepreneurship has failed to attract the kind of investment that would stimulate significant job creation.

What is becoming clear to many is that the historically segregated foundation upon which the 21st-century private-equity investment ecosystem was built is an obsolete base for global competitiveness in today's multicultural paradigm, America's historic economic apartheid has been the norm for so long that it may be our largest economic blind spot. Yet it may also point the way to a sustainable solution.

America needs a new economic religion. As more cities move toward increasingly multicultural populations, they are confronted with a similar, unrelenting challenge: the need for demographics-driven economic inclusion and competitiveness.

Cleveland faces common challenges with Detroit. It's exploring the visionary framework of "inclusive competitiveness" -- policies and practices that improve the performance of diverse populations in innovation ecosystems, clusters and emerging industry sectors -- advocated by the framework's architect, Johnathan Holifield.

As part of a group of regional thought leaders at the turn of the century, Holifield helped Cincinnati develop its thriving technology-based innovation ecosystem when he launched CincyTech. Now Holifield, co-founder of the America21 Project, leads the strategic thinking around economic inclusion at NorTech, a technology-based economic-development powerhouse guiding economic cluster development strategies in 21 northeast Ohio counties.

Holifield's vision of inclusive competitiveness was key to helping regional leaders grasp the challenges they face: A June 2012 report produced by PolicyBridge in collaboration with Cleveland State University, documented that 20 percent of the northeast Ohio population was contributing less than 2 percent to the overall gross regional product.

Promising leadership action has emerged in response to the challenges described in the PolicyBridge report. An Inclusion Committee and a Core Cities Subcommittee, for example, were added to the Fund for Our Economic Future's Regional Economic Competitiveness Strategy effort to ensure that inclusion is prioritized. And inclusive-competitiveness concepts and objectives were incorporated into the Fund's report, "What Matters to Metros," which examines 115 metropolitan areas while focusing specifically on northeast Ohio.

With the White House leading the way, initiatives targeting technology inclusion and economic competitiveness are accelerating. Inclusive competitiveness is not just a vision that may offer economic salvation for Cleveland, Detroit and other struggling cities and regions. It could also be a foundational framework for the global economic competitiveness of a multicultural America throughout the 21st century.