Detroit-Warren-LivoniaFinal Report and RecommendationsApril 9th, 2012 SumeetAhluwalia Rikki Bennie Brett Henry Graham Macdonald
City of Detroit History • Located in Southeast Michigan • Directly across Detroit River from Windsor, Ontario • Detroit-Warren-Livonia region is comprised ofLapeer, Livingston, Macomb, Oakland, & St. Clair • Location has been a key advantage throughout its history • Traditionally a shipping and manufacturing sector The Automobile • History is inextricably linked to the automobile Ford Motor Company center of American car industry wealth
Era of Decline • Following 1950s post-war wealth & infrastructure development, population and development has • “the White Flight” • 2009 MSA population was 4,403,437 • in automobile manufacturing • Global Recession • Subprime mortgage crisis • Focus & reliance on one industry Struggling city within a region of significant geographic importance However…Sources of Innovation • Wayne State University • Automotive Industry • Federal Funding
Benchmark Regions • 170 miles southeast of Detroit • Part of Great Lakes cluster • Prospered in late 19th, early 20th century • Also suffered from ‘flight’ Cleveland-Elyria-Mentor, OH • Traditionally centered on steel • Collapse of steel adaptation of high-tech • Home to major research institutions Pittsburgh, PA • Furthest outlier in terms of geography • Growth was based on industrialization • Suffered similar fate of deindustrialization Baltimore-Towson, MD • Close proximity to Canada • Prospered from trade; transportation hub • Undergone high-tech transformation • Considered ‘most wired’ in U.S. Buffalo-Niagara Falls, NY • One of the largest MSA’s in the benchmarks • It is made up of 28 counties and has a distinct southern African American culture Atlanta City, GA
Population by Year for D-W-L • Experienced growth from 1990-2000; decrease in population from 2000-2009 • Overall, population growth was positive over 20 year span • Similar pattern to Cleveland-Elyria-Mentor • Buffalo-Niagara Falls & Pittsburgh regions experienced negative growth Source: US Census Bureau, 2009 Population Estimates, 2000-2009
Job Growth • Number of jobs available in D-W-L region decreased substantially • This was the largest drop in available jobs among benchmark regions • Baltimore experienced an increase in the number of jobs (3% increase) Source: <http://research.stlouisfed.org
Per Capita Income Growth Source: <http://research.stlouisfed.org • Detroit-Warren-Livonia region experienced the lowest per capita income growth from 2000-2009 • Consistent with our analysis that Detroit experienced booming years in the 1990s, followed by more recent busts
Firm Growth • Number of firms in D-W-L region decreased by 8% • Not entirely surprising, given recent dismal situation in business environment • Other regions – Pittsburgh, PA, Cleveland-Elyria-Mentor & Buffalo-Niagara Falls – also experienced decreases Source: http://www.census.gov/econ/susb/
Current Context • Detroit-Warren-Livonia has exhibited substantial hardships in respect to their population trajectory and employment figures • There is opportunity for the region given that there is: • Strong figures for the number of patents filed • High tech location quotient comparable to national average Detroit has the potential to leverage its current good fortune with investments in technology and wise policy decisions.
Patent Growth • D-W-L has relatively high patents per 1000 people • Significantly higher than benchmark regions • Pittsburgh, Cleveland-Elyria-Mentor, & Buffalo-Niagara Falls all experienced negative patent growth from 1990-2008 Source: <http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports_cbsa.htm>
Technology Recommendations • Ford’s innovations in fuel-efficient hybrid technology has led to a fifty fold increase in hybrid patents for the automobile manufacturer, which takes it close to holding five hundred patents for the technology. • Car technology is steadily merging with that of information and communication technologies • Ford intends to open their research and development lab in Silicon Valley this year • While it is a wise decision for Ford to settle into a cluster in Silicon Valley where the thought leaders within this industry all reside, this doesn’t help increase the attractiveness of Detroit-Warren-Livonia and improve their Technology standings
Technology Recommendations Detroit-Warren-Livonia relies heavily on Ford’s technology, innovation and patents. It is essential for them to incentivize Ford and others competing in the automobile industry to keep their work internal to the business within their home base. Suggestions 1. Tax incentives • May be an option for Detroit-Warren-Livonia in swaying Ford’s strategy in favour of keeping all of their work local 2. IT Boot Camp • Unique partnership between Wayne County Community College District and Infosys Ltd • The boot camp program will use methods developed at the Infosys Leadership Institute, Education and Training Center • With Detroit as an emerging Information Technology hub, Infosys selected Wayne County Community College District as its educational partner to launch training in southeast Michigan
Context Detroit is well suited for the following industries; • Emerging Technology (life sciences) • IT • Advanced Manufacturing • High Tech (primarily in the automotive industry) • R&D • Architecture • Engineering Within the Detroit region, there are many universities and colleges The Detroit Workforce Development Department provides employment, growth sector/high demand training and educational services to promote economic self-sufficiency and supply talent to businesses
The Creative Class & Super-Creative Core • The Creative Class • People who add economic value through creativity • Consists of 2 components:
Composition of Labour Force, 2010 • Methods used to Determine Detroit’s Creative Class: • Occupational Groupings defined in “The Rise of the Creative Class”
Brain Drain / Gain Index High School Education • A region with a BDGI above 1.0 is a brain gain region • A region with a BDGI below 1.0 is a brain drainregion • Detroit-Warren-Livonia has an index of .65 • Relative to the six benchmark MSAs evaluated, Detroit-Warren-Livonia ranks 4th
Population 18+ Enrolled in College • Detroit ranks at the bottom of our analysis (10.22%) • US average is 9.97%
Post Secondary Teachers, 2010 • Detroit-Warren-Livonia ranks higher than Cleveland and Buffalo in terms of faculty with 6,217 with similar patterns at the city levels as can be seen in the chart above • Detroit City ranks at the bottom of our list – along with Cleveland
Talent Recommendations • Challenges: • Few faculty members, in comparison to other regions as well as to the United States in general • Relative lack of creative thinking in the region • Solutions • Have leadership at the various universities increase the attractiveness of the universities to professors by encouraging opportunities for innovation, creative and thought leadership • Rights to patent s (i.e. University of Waterloo) and presenting these to potential members via a new public relations campaign This will the calibre and appeal of these universities to new students, and this will, in turn, the number of creative thinkers in the region
Talent Recommendations • Challenges: • High brain drain due to the fact that other regions and cities have greater amenities and opportunities, and as such are far more appealing • Solutions: • A task force to determine why there is such a disconnect between the number of college graduates and those students who remain within the region • Improvements need to be made to enhance the opportunities available for creative thinking • Significant need for a public relations campaign to highlight assets in region
Tolerance in Detroit-Warren-Livonia • Detroit has a long history of segregation • Little ethnic diversity beyond black and white populations • both groups combined account for ~90.5% of the total MSA population • Low integration and immigration levels will have to be overcome in order to further foster Detroit’s positive economic development.
Gay and Lesbian Index Looking at the map of the United States, we can see that Michigan does not have a high percentage of Gay/Lesbian couples relative to other states.
Gay and Lesbian Index • Detroit-Warren-Livonia is in last place, with an index of 0.16. • Gays are underrepresented
Gay and Lesbian Index • We also looked at the cities themselves to evaluate how Detroit proper compared in terms of its representation of gays. • Detroit city was also last place relative to the benchmarks assessed.
Explanations • Underreporting is a big problem • The State government’s stance on gay rights • The State Constitution banned gay marriage and civil unions • However, there are some initiatives underway… • The HOPE Fund • Wayne State University as an ‘epicenter’ for LGBT advocacy and rights
BohemianIndex • Regions in which these “bohemians” are over-represented possess a culture that favors openness to creativity and artistic expression. • Relative the benchmark MSAs, Detroit-Warren-Livonia falls last.
% Foreign Born • Foreign born population makes up 8.56% of the total population. • Relative to benchmarks, Detroit-Warren-Livonia ranks among the top three. • Over half of the foreign born populations are naturalized citizens, meaning that most cannot support their interests by voting in local or national elections.
Integration Index • Compared to the benchmarks, Detroit-Warren-Livonia region ranks second • Detroit suffers from segregation or a lack of integration among the racial/ethnic groups. • Livingston County: 97% of the population is comprised of whites • Detroit City: African American’s comprise over 83% of the population. • Buffalo-Niagara Falls, NY ranked the lowest with an integration index of -0.093. • The lack of integration among the Detroit-Warren-Livonia region is certainly something that they will need to work to improve going forward.
Challenges • The Detroit region is relatively weak compared to other regions in terms of tolerance of gay/lesbians and bohemians • Opposition to gay marriage and civil unions is a barrier for attracting and retaining individuals
Recommendations • Propose a city ordinance to protect LGBT communities • Attract art students with scholarships and bursaries to study at WSU • Attract Canadian students • Scholarships and bursaries to study at WSU • Form partnerships with the University of Windsor more joint-degree programs • Establish general cultural diversity curriculum at all levels of educations and provide foreign language training programs • Continue to establish relationships with more sister cities in Southwest Ontario that provide education and work opportunities • Encourage large businesses to have a diverse workforce • On the local level, create a Detroit Mayor’s Office of Global Affairs • Create and support an EB-5 Investor Visa Regional Center • Encourage participation of visible minorities and women in city governance and politics.
Territory Assets • Despite being hit hard by the recession, Detroit does have several territory assets • Contributes to its quality of place • To be discussed: • Environmental assets • Housing • Institutional assets • Cultural amenities • Crime • Transportation
Environmental Assets • Detroit’s January temperature mean: • Detroit’s July temperature mean: • The average temperature between all benchmarks are similar – given their proximity • Atlanta, however, has higher temperatures 26 degrees 74 degrees • Detroit averages 6,855 persons per square mile • Baltimore has the highest population density with 8.058 persons per square mile
Housing • Housing is quite affordable • Detroit median housing price • MSA average housing price • This low cost of living is an asset • 49% of housing is renter occupied; 51% is owner occupied • Both the city and MSA lack a strong mix of housing options • 69% single detached houses at MSA level • 64% single detached houses for Detroit city $54,000 $124,000
Age of Housing Stock in Detroit • Approximately 60% of housing stock in Detroit proper was built before 1949 • Since 1970, relatively little stock has been added • Echoes our findings of population decline