10 Mar Rust Belt Cities: So Uncool They are Cool Again
We all know the how the narrative goes: manufacturing is dead, and those old cities known as industrial centers are as well. It is not a hard case to make it if you take a quick tour of places like Pittsburgh or Detroit in the U.S., or maybe Windsor, Ontario in Canada. What were once the hubs of cutting-edge activity are now aptly named rust-belt cities – right?
Well, maybe but maybe the rust belt is starting to shine again. That’s the case that The Economist magazine is making in this article that sums about the recent state of a ‘rust belt revival’. They cite three reasons why the old industrial cities are on the rise.
The first is simply that new processes have lifted old skills to dazzling heights. Take the example of tire-capital Akron, Ohio. By utilizing polymer technologies (the city houses a Polymer Training Center at the University of Akron) they have changed the manufacturing process for tires and given the industry new life. There is a similar example of textiles in North Carolina.
Second, and to me much more important, is that the old rust belt cities have something that cool tech hubs can only dream about: cheap housing. Sure, Seattle and San Francisco and Vancouver and Toronto offer jobs and cosmopolitan delights, but a quick look at a real estate section in the newspaper leaves many gasping for air. Setting up a business in one of these places means attracting labor and paying them enough to live close by. Educated young professionals may not yet be willing to head for Detroit in droves, but there is evidence that they are looking at the older, industrial outskirts of larger towns (Southie in Boston or Seattle’s twin city of Oakland) as potential places to live and work. In Canada, former steeltown Hamilton, Ontario is now seeing a surge in economic activity, particularly in its residential housing market.
And what happens when you have new technologies and places to try them out? Startups of course. The Economist cites the economic boost from startups as the third factor boosting rust-belt cities, suggesting that things like Crowdfunding makes it easier for small businesses to get a start. Maybe, but on that one I am a bit skeptical. For real, sustained startup activity to take root, real, sustained capital is going to have to come from actual old-school lenders. With worries about the broader economy still out there, that one might be a little slow to take place, but chances are good that it will eventually.
It is how it tends to happen: things get so uncool they are cool again. The places that Bruce Springsteen used to sing about have reached bottom before and risen up again in the past. This time their resurgence may happen a little differently, but there are signs that it is happening just the same.