The Fast and Fleeting Nature of the Digital Economy

When your city invests in technology, make the most of it -- and quickly. Today's new idea is tomorrow's old hat.

Editor's Note: Over the weekend, Ron was inducted into the College of Fellows of the American Institute of Certified Planners. The honor put him in a reflective mood about his life's work.

Like most midsized and larger cities, my city, Chattanooga, has an Innovation District. It was established with all the dreams that such a fun and funky place can muster. The hope is that by setting aside a specially designated zone, creative minds will gather, interact and spark new creativity. It is intended to be an environment of energy and entrepreneurialism to replace the lost factory jobs of the industrial past and launch the community into the future. Caffeine and adrenalin are replacing coal and steam. Coffee shops and bars are the meeting places for the skunkworks of today.

As often featured in stories about the emerging digital economy, Chattanooga was among the first cities in the United States to achieve a completed high-speed fiber optic network. Having fiber in every home and business throughout a 650-square-mile area has caught the attention of the world. The result has been constant media focus and a continuous flow of pundits, planners and the occasional politician coming to see how it was accomplished. Chattanooga now markets itself as "Gig City" -- as in gigabit, the speed of the digital network (though it can actually go up to 10 Gigs). 

Recently, a news team from the BBC in London came to Chattanooga. I took them through neighborhoods still bearing the stark skeletons of Chattanooga's industrial past -- abandoned mills with crumbling brick walls that once housed the giant furnaces that melted iron. We traveled to Chattanooga's riverfront and the revitalized downtown. I told them how we shamelessly stole successful ideas from other communities: The Tennessee Aquarium is based on similar projects in Baltimore and Boston; the Creative Discovery Museum is based on similar places in Indianapolis, Charlotte and Birmingham, and so on.

As we continued to ramble about the city, I could not help thinking about an article from the online platform, The Verge, called "Life and Death in the App Store." The article tells the story of the trials and tribulations of an innovative company with a small, creative and determined staff trying to make it in the modern digital age. Pixie was a company that was at first very successful and then suddenly very unsuccessful. It's an old story, but it serves as a fresh and continuing example of how the economy and the world works. Most importantly, it serves as a warning. Things are moving so fast it's easy to forget today's new idea will be tomorrow's old hat. It is, as the article notes, "a perpetual cycle of boom and bust.”

What does this have to do with the revival of an old industrial city? Like others before, my visitors from Great Britain were interested in seeing the physical effects of Chattanooga's digital success -- the shiny new structures employing hundreds, if not thousands, of well-educated workers with middle-class incomes. They were aware of Chattanooga's recent success in securing the nation's only Volkswagen assembly plant employing over 2,500 people and a regional Amazon fulfillment center employing thousands more, but they wanted to know about the effect of the gigabit infrastructure and the Innovation District.

What I had to remind them is that income disparity is an issue everywhere. Chattanooga is like many of their industrial cities in England that once had thousands of well-paying factory jobs – jobs that disappeared and are most likely never coming back. When they asked if such jobs will be replaced by new jobs of the digital economy, I had to answer honestly that I  don't think so -- at least not painlessly and not in the near future. Unlike those old factory jobs, the new jobs can't be filled by workers with little formal education. When they asked whether Chattanooga can continue to innovate and capitalize on its brief lead in digital infrastructure, I could only answer hopefully but not absolutely.

I'm a city planner -- a profession that likes to believe we can predict what new infrastructure will accomplish. In this case, I cannot predict the future, but can only hope it will be bright and promising. This I know from history: Ideas and opportunities are fleeting things -- sometimes with very short useful lives and (in any case) easily moved and sometimes stolen. If the new digital economy is to have a meaningful impact on our urban civilizations, it can't be based simply on video games and interesting but nonessential computer applications. The great unfinished work is the need to address income disparity. The great unanswered question is: How do we offer hope and opportunity to those still trapped in poverty?

In Chattanooga, and soon in many more cities, we have the gift of an exciting new technology. It is up to us to move quickly and with determination to make the most of it.  

Ron Littlefield, a former mayor of Chattanooga, Tenn., is a senior fellow with the Governing Institute and its lead analyst on the City Accelerator initiative. A city planner by career, he also consults to government through Littlefield Associates.