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Business Impact

A Tale of Tech Cities

A spirit of technologically driven renewal prevails in many urban centers.

Cities across the country are marrying technology and urban revitalization to an extent that the old political bosses and real-estate developers could never have imagined in their wildest dreams.

In San Francisco, planners are putting up “smart” office buildings and rewiring school rooms to make them computer friendly. New York City is replacing brooms, dust pans, and scrub mops for its welfare-to-work trainees with modern street and subway cleaning equipment-and teaching them how to use it. Developers in Milwaukee, Cleveland, and Seattle are setting up local area networks to link small manufacturers and service providers with bigger companies to engage in computer-assisted joint product design and to better monitor quality.

In one meeting after another with city councils, economic development departments, and corporate executives, I am hearing story after story about a technology-driven “new urbanism.” For example, geographic information system (GIS) software is dramatically transforming even such staples of the typical mayor’s responsibilities as management of the police force. GIS software helps track the location and spread of incidents of crime, down to recording at which fire hydrant or in which alleyway a suspect was last spotted or where recovered weapons were stashed. The cleanup and restoration of rivers and lakes, which has contributed enormously to the growth of the lucrative tourist industry, would be impossible without the advent of commercially affordable chemical solvents and processing machinery unknown a decade ago.

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Technology, in short, is radically improving the quality of urban living, and not only by the direct application of innovations. The design, production, testing, and marketing of these new processes, products, and systems has itself become a growth industry that is turning around the fortunes of once-ailing cities and regions. The companies-some of them startups, some established lions in their sectors-create jobs, add to the tax base, and contribute to the upbeat spirit of renewal that even a casual visitor encounters these days in so many places.

Moreover, the presence of these high- tech players is shoring up the sagging fortunes of the typical city’s older industries-a feat once thought next to impossible. I have toured older factories and warehouses that are becoming customers for the systems and services that the new technology firms are selling. Where resurrection of older operations is uneconomical, savvy architects are seeing opportunities to buy up the properties and convert them to company headquarters, labs, or residential quarters for the software engineers and analysts who are the lifeblood of the revival.

If there is a downside to all this good news, it is that the benefits of the new urbanism are not reaching all residents equally. Workers of color, in particular, continue to experience higher rates of unemployment, underemployment, and poverty. And it’s not just a matter of who does or does not have the requisite education and skill. Yes, the most poorly schooled residents will have a hard time in the new economy.

But the conventional wisdom is off the mark here. Economists David Howell and Edward Wolff have used data from the U.S. Bureau of Labor Statistics to show that plenty of good jobs flowing directly or indirectly from these technical developments have quite modest skill requirements-from hospital lab technician to diesel truck mechanic to telephone/modem cable installer. Moreover, consortia of neighborhood-based organizations and community colleges are getting steadily better and more competent at training the residents of even the toughest neighborhoods to get and hold jobs in the new economy.

The new urbanism of the mid-to-late 1990s owes part of its good fortune to the long-lasting national economic expansion, now into its seventh year. But only part. Creative government has surely made a difference, as has a new spirit of collaboration and civic-mindedness among a new generation of managers in the private sector.

Most of all, to a far greater extent than I (along with those old big city machine politicians) might once have imagined, an amazing array of new technologies, technologists, and clever companies may well be ushering in a new era-one of urban economic growth and development that just might, as they say in show business, have legs.

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