The Metropolitan Revolution: A Conversation with Bruce Katz

Bruce J. Katz is a vice president at the Brookings Institution and founding director of the Brookings Metropolitan Policy Program. He is also co-author of The Metropolitan Revolution, a distillation of his work on the emerging metropolitan-led “next economy.” Katz regularly advises federal, state, regional, and municipal leaders on policy reforms that advance the competitiveness of metropolitan areas. After the 2008 presidential election, he co-led the housing and urban issues transition team for the Obama administration and served as a senior advisor to new Secretary of Housing and Urban Development Shaun Donovan for the first 100 days of the administration. In 2006, he received the prestigious Heinz Award in Public Policy for his contributions to the understanding of the “function and values of cities and metropolitan areas and profoundly influencing their economic vitality, livability and sustainability.” Katz is a graduate of Brown University and Yale Law School and a visiting professor at the London School of Economics.

The Metropolitan Revolution advises metropolitan areas to focus on and leverage their unique competitive advantages. Is there a smart way for a metro to diversify without shifting away from their productive strengths or conceding on growth? 

Developing strong long-term economic growth begins with focusing on distinctive advantages. A metro should start with a particular set of initiatives that respond to its presence in advanced manufacturing, life science, or whatever the particular sector or cluster may be. Ultimately, developing these advantages will require certain strategies around infrastructure, human capital, and the formation of an ecosystem of innovation. Once a strong competitive foundation is set, the metro can then broaden its scope and iterate its economy in very productive, innovative, and inclusive ways.

Your book is a bold statement on the shift of political power and responsibility from the federal government to governors and mayors. Yet you don’t discount the idea that the federal government still plays a key role in metropolitan success. Could you highlight some of these key areas? 

The federal government should do what cities and metros cannot do. One fundamental role for the federal government is to provide a safety net for the elderly and disadvantaged in the country. This includes support for programs such as the Earned Income Tax Credit, Supplemental Nutrition Assistance Program, healthcare, and Unemployment Insurance. It is also essential that the federal government establish a common market around areas such as financial oversight, environmental regulation, and civil rights. If every city had to address these issues on its own, there would be enormous distorting effects on our economy and society.

From an investment perspective, areas such as basic science and applied research, infrastructure, and education have all been financed at some level by the federal government. Part of the challenge with the growth of the federal government since the 1930s is that many governments have become confused about their responsibilities. There are responsibilities that, due to the differentiated nature of the economy and the power of the metropolitan areas as economic engines, should be devolved from the federal government to cities and metropolitan areas. This has been underway for some time, we just haven’t recognized it because of the megaphone that the federal government has when they talk about issues such as infrastructure and education. The largesse and visibility of the federal government obscures how much cities, metros, states, and their private and civic allies are already financing these activities in the first place.

The Metropolitan Revolution highlights the role that anchor institutions play in economic development. However, many large US research universities’ main campuses are outside of core metropolitan areas. What advice would you give to universities to leverage their knowledge assets in the metropolitan economy? 

Many advanced research institutions across the country are becoming unmoored from their original locations. Cornell and Technion are building a state-of-the-art technology campus on Roosevelt Island in New York City. Carnegie Mellon is building a media and design technology campus in the Brooklyn Navy Yards. The University of Washington has moved its medical research into South Lake Union, near downtown Seattle. Just because a university has been founded and was historically established at one location does not mean it needs to be solely located there in perpetuity.

As states move forward, there needs to be a much more rigorous discussion as to where the advanced research elements of universities are located. Placing research strategically in cities and metropolitan areas could potentially leverage up productive growth because of the concentration of firms, entrepreneurs, and infrastructure that would interact with and commercialize it. It could also have a profound effect on improving education in low income communities and linking low income workers to decent jobs given the central location of anchor institutions.

We both attended Techonomy Detroit this past fall where you were a panelist. You shared your view that Detroit is really a tale of two cities. On one hand, a broken government is being shuffled through the largest municipal bankruptcy in US history. On another, a post-industrial city is seeing the greatest private sector growth and urban transformation in more than half a decade. Could you explain your outlook for Detroit and the involvement that Brookings currently has with the city?

In close collaboration with local and state leaders, Brookings is currently working on an investment prospectus for the core of the city. Detroit is very similar to other US cities in that a large proportion of its assets and employment base are located in the downtown and midtown areas, which is soon to be connected in Detroit by M-1 Rail. Most US cities are developed through strong downtowns and midtowns, where a small proportion of land accounts for a large proportion of the innovative employment base.

Detroit has “solid bones” in the core that can support the overwhelming shift in the spatial geography of innovation to dense, livable, walkable, transit-connected, and anchor-situated places. Essentially, the core of Detroit has an “embarrassment of riches” with tremendous opportunity. There is a real potential in the near-term to significantly grow local firms off the base of the anchors and tech clusters that are emerging downtown. In the long-term, Detroit should focus on its competitive advantages and talent pipeline to attract out-of-state and international firms and investors to the city. The seven square miles of downtown is going to be the vanguard of Detroit’s revival. 

Your book is a statement to the present condition of metropolitan areas in the United States and a glimpse into their future. If you were to write a follow-up to The Metropolitan Revolution ten years from now, what might it say in regards to the ideas presented?

City and metropolitan areas are being co-governed and network-driven by private, philanthropic, and government leaders in a participatory democracy. A decade from now, instead of cities and metropolitan areas reporting and responding to the state and federal government, it will be the states and the federal government responding to cities and metropolitan areas.

US metros are currently undertaking game-changing initiatives to grow more productive, inclusive and sustainable economies using innovative finance, new ways of service design and delivery, and initiatives around human capital formation, infrastructure, and the spatial geography of innovation. In some cities this is being catalyzed by an institutional evolution. The Great Depression led to Federal Housing Administration (FHA), the Securities and Exchange Commission (SEC), and new programmatic vehicles like Social Security. The revolution happening within metros is leading to institutions like World Business Chicago and Greater Portland Inc., where political, business, and university leaders are all represented and connected through common goals.

Bottom line, cities and metros will not only be the engines of economic growth in the US but also the vanguard of innovation in public policy and private sector action.

Feature Photo: cc/(Noel Kerns)