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Detroit, Hollywood and the Next Innovation Opportunity

With the Foundation’s mission of promoting vibrant and sustainable communities in mind, I can’t help but follow with great interest what’s going on in the US economy right now.  For us planners, things like land consumption, taxes, cost of housing, demographic shifts are the usual targets of concern.  But two stories from off-script have caught my attention recently, giving us, I think, a very clear look at the current state of the traditional American economy, and, perhaps, the future of American society.

The first is the decline and imminent fall (save for yet another possible US government bail out or merger with non-US firms) of Detroit and the Big 3.  I was struck this weekend by the piece in the NY Times Week in Review about how 30 years ago Iacocca and his cronies, from both management and the unions, demanded the Japanese build factories in the US or face further import restrictions.  Thirty years later, the Japanese have not only complied, but thrived, and not because state after state wooed them with tax incentives, etc., but because (a) they build a far superior product and continue to innovate with technologies like hybrid engines, safety systems, etc.; (b) the product is responsive to what most consumers want: fuel efficiency, good design, low operation and maintenance costs, etc.; (c) they pay their workers upwards of $25/hr.; (d) some, like Honda, take maverick stances on issues like emissions caps, building a constituency among progressive consumers, even while they build big gas guzzlers like SUVs and pick ups.

Japan accepted the challenge 30 years ago and is now, as the Times piece put it, driving all the way to the bank.  A pillar of American industrial and economic might, still standing (and only because of their sheer force of 50 years’ worth of momentum), is crumbling before our eyes.  It’s about time. . . .

Turn the page to the Business Section in Monday’s Times and we read about yet another keystone American institution, Hollywood, our principal cultural engine and major economic driver.  What’s the news?  The headline says it all: “More Than Ever, Hollywood Studios Are Relying on the Foreign Box Office.”  Hollywood, it seems, can no longer depend on domestic sales to turn a profit.  For a variety of reasons, Americans are declining to buy what Hollywood has to offer.  One of them, for sure, is the quality of the product which, in a word, sucks.  How interesting, then, that Hollywood has turned to export as a solution (a page from Detroit's playbook?). 

So what’s the connection here between Detroit and Hollywood?  Well, it’s not that there’s a movie called “Cars” currently on the big screen.  It’s that what these sacred cows of the American economy and culture have to offer is increasingly being rejected by the American people, on quality grounds, and these institutions seem ill-prepared, if not unwilling, to do anything about it, save for scapegoating, exporting or simply buying up the competition.  Arrogance combined with incompetence.  Deadly.

OK, so what?  Why should we, in the planning business, care? Because I think Detroit and Hollywood’s loss could be our gain.  Yea, there’s a ton of leading edge, world class innovation still happening in the American economy/culture, especially in the technology realm.  But it seems to me we should be celebrating our (relatively) open economy and society and its embrace of foreign companies who choose to build factories here and employ our workers, even if it comes at the expense of their US counterparts.  Likewise, if Hollywood can’t make the pictures most of us want to see, let’s let Netflix and, perhaps, Bollywood, Italy, Britain, et al. do the talking for us.  Perhaps Hollywood will eventually respond, or perhaps not, which, according to Chris Anderson’s “Long Tail” theory, is perfectly OK.  The marginalia is becoming ever more accessible to the average consumer.

The real opportunity, it seems to me, lies not in American economic innovation (whose potential is still significant) but in civic/social innovation.  I think the next frontier of American leadership/hegemony  (if I might be so provocative as to use that term) is in devising new social mechanisms and institutions to enable our increasingly global, pluralistic and post-industrial cities and towns to govern themselves in a way that takes the fullest advantage of the new technologies, tastes and temperatures (i.e., global warming) that are coming to define our age.  From wave-energy farms to green/modular affordable housing to internet-retail in rust-belt downtowns, how can/will we develop the civic will and means to build this new order, literally and figuratively? How can we use technology and good ol' American ingenuity to create and implement new models for community and economic development?  How can we take advantage of the turn toward dispersed, distributed and decentralized strategies for energy production, capital formation, economic/cultural development, etc. to build new, bottom-up, regional systems of governance that leave our cities and towns less dependent on the big, clunky old institutions and more in control of their own destinies -- economic, cultural, environmental?

To dispute GM's Chevy ad campaign, the real new American revolution is not the Chevy Malibu but, like the original, governance.  What will be the new constitutions, laws and policies that lead us to the new frontier?  As in 1787, we need innovators who can build these institutions, with a strong constituency in tow.

The train is already leaving the station.  The question is, will we, as a people, communities, country get/stay on board and help direct where it goes, or will we cling to what we've known, a now-degenerative pattern of survival for survival's sake.

OK, hyperbole notwithstanding, the future is looking ever more interesting, if not challenging.  An exciting new Age of Civic Innovation is dawning. . . . 

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