Memphis and Shelby County need an intervention, and it will take the bully pulpits of the mayors to lead it.
Like all interventions, this one begins by facing facts:
* The federal government describes Memphis as “severely distressed”
* Memphis region is taking twice as long to recover from the recession as other regions
* The unemployment rate hovers near 10% and has been climbing; Memphis MSA unemployment rate is #5 highest of 50 largest metros
* Of the 100 largest metros, Memphis MSA is #95 in private jobs growth since 2009
* Memphis had 6,500 fewer people employed in 2012 than in 1992 (even with annexation)
* The labor force is down 6,400 people and total employment is down 7,900 from 2012-2013
* Shelby County has 5,150 fewer 25-34 year-olds in 2010 than in 2000
* The poverty rate in Shelby County rose 25% from 2000 to 2010
* Memphis MSA is #49 in population over 25 years old with four-year college degree (of 51 largest metros)
* Memphis is a national leader in families living in poverty, families headed by single parent, and children in poverty
* The Gross Metropolitan Product is essentially the same as a decade ago
* Earnings per job adjusted for inflation is essentially the same as a decade ago
*Memphis’ grade in economic security is D, compared to A for Little Rock, B for Nashville, and C for Birmingham
*The #1 source of new residents in Nashville is Memphis
* Memphis MSA – among 51 largest MSAs – is #45 in venture capital, #48 in entrepreneurship, and #49 in small businesses, and #51 in percentage of creative workers
* Income inequality is growing – the Gross Metropolitan Product equals $83,000 per person but the average per capita income is $21,397 in Memphis and $25,470 in Shelby County
Fresh Thinking Needed
If one thing is clear, it is that whatever we are doing isn’t working. That’s why fresh thinking is needed about the way economic development should be practiced, what its goals should be, and how we compete in Memphis and Shelby County in a transformed economy.
We need to move the conversation past simplistic ideas of tax competitiveness and to the subject of economic competitiveness and opportunity. We need to move the conversation past threadbare policies based on cheapness and pursue an agenda anchored in quality. We need to move the conversation past “how much do we have to pay you to love us” to how can we develop a community where companies want to locate and expand because we have the right fundamentals for them.
For way too long, we have had an overreliance on tax freezes, and it now has a trend line that would waive almost $1 billion in taxes over a decade. It should be obvious that the current tax waiver program (PILOT) is a race to the bottom, unsustainable, and the most self-defeating aspect of our emphasis on being cheap. That said, the most liberal tax freeze policies in the nation are only a symptom of the underlying failure of our community to have a logical, coordination, interconnected economic development plan.
The message from the negative trend lines for our languishing economy is that we have been slow to adapt to a rapidly changing global economy. Because of the recession, there is a new normal, and we believe a key reason for our continuing negative indicators is that we have not come to grips with the structural problems of our economy and developed hard-nosed plans to correct them.
Quicker and Smarter
Successful economies in the future will be those that can adapt quicker and better to the realities of the new economy. The first step toward that future is to reverse the present trends and to relinquish the past to pursue an economy that is more knowledge-driven and entrepreneurial-directed. A primary reason that our economy is lagging is because of slow growth in dynamic, high-wage sectors of the knowledge economy.
Meanwhile, our energetic battle for talent needs to be backed by real money and a substantive plan of action. The good news is that so many organizations are intent on attracting and retaining talent, but talent is still not central to our economic development policies. There is a lot to talk about talent, but there is no real comprehensive, detailed agenda that involves all economic development entities – public, private, quasi-public – into a campaign to increase the percentage of workers with college degrees (which determines 60% of a city’s economic success).
In this context, it’s worth remembering that our school system is essentially in the talent business, and with an anomalous bulge in the percentage of the population that are students (when compared to the 51 largest MSAs), the national rhetoric about the importance of our children is a fact of life in Memphis: the future of our economy is indeed being written in our classrooms today, and the results in getting them ready for these jobs will set the course of our community.
And speaking of talent, so many successful stories about cities these days are also often successful stories about universities. University of Memphis remains the major source of college-educated workers in our community, but its full potential has hardly been recognized, much less supported, as an essential element of an economic development plan. Most of all, high-quality research in all of our universities are the seedbeds for economic innovation.
A Playbook Is Needed
Higher education institutions are the most important assets in Memphis becoming competitive in the knowledge economy. In addition, there is a crucial role for our community college to play in its ability as a full partner in workforce development.
There are a number of things that should be done immediately to assemble an economic development that abandons our traditional economic development policies, approaches, and thinking and sets an ambitious course for the future. Two mega forces – technology and globalization – are transforming our economy, while we continue to emphasize old school economic policies.
There is one thing from our past that is worth repeating. We need once again to set clear targets for economic growth in areas like new jobs, and we need to be honest with ourselves. The recent layoffs at FedEx wiped out all of the jobs gained with Mitsubishi and Electrolux, but without the jobs goal and a report card, we can hypnotize ourselves into thinking that we are making progress.
There was a time when we yearly creatied 15,000 net new jobs was a regular accomplishment, but these days, achieving 3,000 jobs is reason for high fives. We have to elevate our ambition, develop an aspirational view of a future in the knowledge economy, and we have to find roles for everyone to play.
Much to be Done
In this kind of plan, there is indeed room for everybody. That’s because quality of life is one of the fundamentals for economic growth, and in a world going greener by the day, we need to set out to create a green city known for its public investments in green assets and private investments in green systems, processes, and products.
There are people – local and national – who question whether we can change the trajectory of this community, and there’s nothing that can have more impact than sending an unexpected message to the rest of the country – and most of all, to the talent we need for economic success – that Memphis is not what they think it is.
That’s why there’s nothing that we can do as part of our economic development program more important than to send a city brand that is more about green than grit.
There is so much that needs to be done – from creating a modern philosophy to higher goals with specific measurements and the tactics to achieve them. They begin with an attitude that demands success, and that’s something no one can do as effectively as the city and county mayors.
In addition, we need someone who sees and understands the global framework to help us and set out our goals for the future. This global perspective needs to be disciplined about creating an understanding about how important cultural sensitivities, understanding, and tolerance is to our future and establish a network of formal and informal connections that can be leveraged for economic advantage.
Our success is tied to shifting from the old and embracing the new. These are just a few ideas, and in the next few posts, we’ll explore others. If you have any suggestions about the economic development agenda for the future, we hope you will share them with us.
SCM-
Yikes! The statistics presented are pretty damning but perform the necessary job of accurately describing the local and regional picture. One very specific point for improvement I would request would be for the “EDGE” to be more honest about local employment statistics. To read their statements and self-congratulatory press releases, one would think they are guiding the region through an economic renaissance with tens of thousands of new jobs created. A more honest reporting on their part to balance those numbers with total employment figures on an annual or even quarterly basis could be instrumental in better relating the urgency of the situation to more leaders in the public and private sector. Even more honest would be to accurately report “jobs retained” as a figure separate from “new jobs created”. Painting rosy pictures for those who are already inclined to wear rose tinted glasses does nothing to support the need to drastically alter the region’s current course.
Although it might be political suicide to even mention the concept, the time appears right to begin to discuss how the metropolitan area might initiate the process of intelligent contraction in a manner similar to the Pittsburgh model.
You cannot make young people stay when they want to leave. That is the basic problem. And no plan for “renewing Memphis” is going to change the minds of those young people, particularly Black young people, who cannot wait to leave and have no intention of ever returning, The establishment of the new Shelby County Schools (and the exit of the suburbs into municipal districts) is only going to further these attitudes, as will the continuing increase in crime and Memphis’ obsession with race and the past. I have come to the conclusion that we are past the point where Memphis can be turned around, sadly.
After listing sixteen points that point to a deteriorating quality of life in Memphis you tell us we need to project a positive – less grit and more green message. The grit message reflects reality. The reality of a city that only afford to re-pave its streets every 70 + years.
What should give us hope that our city and country Mayors are going to wake up tomorrow and become forward thinking progressive leaders for this community? What gives us the impression that they have a global prospective? Sorry but a former country sheriff to lead a region is the mark of an electoral rural mindset.
We are still stuck in the past. From my vantage point I don’t see anything changing. Good thing Nashville is so close.
Urbanut: Thanks for the comments. As usual, we agree completely.
John: No city can “make” anybody do anything, but in being intentional about what kind of city you are trying to create and the kind of economy you are pursuing, you can attract people, especially young workers, who want to be part of something important. We don’t share your pessimism about turning Memphis around. We have assets that we need to maximize (think water in particular), but we are not doing the basics of economic development that leverage them into something that defines us by our quality and not by our cheapness. It’s worth remembering that 40 years ago, the people in Portland were saying that their city was doomed and look what they did in the intervening years. We can do the same, but first, we have to be honest with ourselves and find the disruptive innovations that can change things. Like Portland, we need to quit looking to government and take charge ourselves.
PS: It’s not that we can only repave our streets every 70 years, but it takes 70 years at the current level of funding to get to all of them. This is another indication of the underfunding that takes place in city services because of the overfunding of fire and police. We’ll write about this in the coming days, but first we have several more posts about economic development to come.
In other cities the local corporate base funds local efforts to become “world class”
http://www.bizjournals.com/milwaukee/news/2013/08/13/kohls-donates-2m-to-milwaukee-art.html
In Memphis our local corporate class can only get behind professional sports and has no desire to use the arts to transform our city.
I would welcome a SCM piece about the lack of both our local corporations and CEOs to help build the institutions that help attract a creative class.
Nashville’s Frist Center, Atlanta’s High Museum both were built by a local wealthy donor base. What have the CEOs of FedEx, Auto Zone and IP done to transform Memphis into a center for creative professionals.
SCM – Why dont you run for local office?
PS: Extremely valid point about the involvement of the business community to create a culture of art and creativity and ensure the civic assets that drive progress. Hopefully, that’s the goal of Duncan Williams who is raising money now from major businesses with the purpose of having more involvement and more impact.
SCM-
I for one am looking forward to articles regarding police and fire funding. I am tired of these organizations holding the safety of local citizenry hostage during every budget cycle. Of course, I also am highly dubious of Armstrong’s abilities in light of his comments regarding the use and application of the Blue Crush initiative to everyday policing of the city.
As a teacher, the one thing that breaks my heart is when I hear young, smart, talented students tell me how they can’t wait to get out of Memphis. In fact, I don’t believe I’ve ever talked to one of these students who has said how they can’t wait to grow up and make this city a better place. The focus is all on the perceived negatives associated with Memphis.
These students are the people we need to target. I believe that it’s going to be tougher to attract young people from outside Memphis to the city than keep those we educate here. I would be very interested to see any programs or initiatives that other cities have implemented to focus on keeping its young, homegrown talent.
As a newer younger Memphian, I am continually dismayed by how little this city offers in the way of urban amenities that support the needs of the educated upper middle class. If you want these folks to stay in Memphis, you have to provide services they want! The transit system is abysmal, it is difficult to get around by any mode other than car, services are spread out, there are very few parks in good repair that feel safe to use, good public school choices are few and a lack of comprehensive planning, economic or otherwise, doesn’t make it better. The cost of living here ends up being more for us because now we need two cars to get around, and rental prices in better neighborhoods are very expensive. We are very educated but very middle class people. We probably won’t stay in Memphis. Memphis doesn’t serve us well. These may be first-world problems in a city full of poverty and serious social issues, but if this city wants to build and keep a population of smart young people, these are problems none the less.
SCM, I hear your point with regard to Portland. But Portland had a number of advantages that Memphis does not. Portland was (and remains) the largest city in the state of Oregon. The largest city in Tennessee is Nashville, which is also the state capital. Portland is also not a predominantly-Black city as Memphis is, and even if it had been, Oregon is a relatively liberal state and does not have the animus and bias against Black people that is common to the South and unusually prevalent in Shelby County. I cannot point to a single predominantly-Black city that has had any success in revitalization (with the possible exception of New Orleans), and I do not claim that has anything to do with lack of leadership or bad governance, but rather with the majority culture’s pejorative attitude toward African-Americans and the places where they live. And I don’t see how Memphis can work past that, but I haven’t left yet, and I am continuing to try to be part of an effort at renaissance.
@Memphiswhat !
Gee I don’t blame you or anyone else in their early professional stride and life who doesn’t want to waste their time for Memphis to catch “fire”.
The fact is it’s not going to anytime soon in YOUR professional careers as a younger person. So why wait another 20-25 years ?? That’s crazy too, when there are other available dynamic options ? Young people aren’t hanging around, period.
Anybody who is on the ball is leaving it seems. Not all, but a lot. And who in their right minds already stable in a solid career in another dynamic city is going to drop what they are doing, drag their family to a place 20 years behind where they LEFT ? I wouldn’t advise anyone to do that.
If you think it’s your mission in life to save any failing, slow, backward city, then by all means Memphis is just the city for you, or you can go to other god forsaken places such as Montgomery AL, or Birmingham, or Jackson Mississippi just down the road. Plenty of work to do with the laggards. If making laggards into gems is your thing, have at it. If you rather spend your personal, private, family and professional life in a more fulfilling,, intelligent, and rewarding environment, there are many choices out there.
BTW, CEO’s in Memphis have really never been active in building the Arts or really anything else out of their own pockets. If that had been the case, Memphis would have more to show for it. It doesn’t sad to say.
The metrics and the facts speak volumes. Really they do. If you’re really smart, you’ll see the facts for what they are and decide your own individual course of action and plans for your own life. I assure you, not much is going to happen in a lousy ten years. Ten years out of your OWN life is too significant to dismiss. Move on if you wish. No one should be blamed.