Detroit — Innovation City?

I'm writing this on the plane, returning home to San Francisco from Michigan where I gave the keynote speech at the D Brand Summit, yes, "D" as in Detroit. I had been looking forward to the event with anticipation, although folks in the office reminded me that I had written in Innovation Nation that America risked becoming "the Detroit of nations." Some suggested that I bring a catcher's mask to deflect any stray flying objects in the lecture hall. I was not deterred.

My previous visit to Detroit occurred in the late 1980s when I zipped into town for some meetings at GM, which I remember as being quaintly situated in a downtown that looked like a case study in urban redevelopment via neutron bomb. Like many of us who don't hail from Detroit, my view of that city has been formed by a montage of images: inner city blight, white flight, talent flight, muscle cars, GM's famous 10th floor. So what was this about the Detroit brand?

Turns out that there is a lot to like about what is going on Detroit, although in my view the jury is out on whether the city can pull off a profound transformation to being a 21st century competitor. Certainly, if human capital is a lynchpin of the innovation economy, then Detroit has that box checked off. I found the people in Detroit to be as nice and concerned a group of citizens as you'd want to meet. But if you're looking for dismal facts, 70% of the youth of Detroit do not think a college education matters. Why? Well, because they think they can get a job in the automobile industry like their parents. And then there's the not so minor detail of a 50% literacy rate in the inner city.

Don't forget, though, that Detroit gained its preeminence in the 20th century by being very good at the prevailing industrial business model. As a country, we used to be productive in making things to an almost unfathomable degree. Now you can feel the hum of this 20th century American skill with a visit to the Henry Ford Museum, where my hosts staged a dinner right in the middle of an astonishing collection of steam engines and vintage aircraft. It turns out that the original Mr. Ford was a latterday Charles Foster Kane when it came to artifacts of innovation. His museum, covering 12 acres, starts with a full-sized replica of Independence Hall in Philadelphia and carries through a faithful reproduction of Thomas Edison's original Menlo Park research lab. Throw in a DC-3, Rosa Parks' bus, Bucky Fuller's original Dymaxion House and, of course, cars, cars, cars (not to mention those steam engines) and you get a sense of the collection. It is a vast treasure trove of what made America great in the past — a set of capabilities that has since flowed across the Pacific Ocean to the lands of cheap labor.

Yet the conversation at dinner was all about transformation, not the past. For example, how to repurpose the capabilities that go into making the contemporary car, competencies that have been honed to a razor's edge such as the engineering of the propulsion system, the materials that go into its construction, the digital network and software that now reside in the latest car, to say nothing of manufacturing efficiencies and logistics, supply chains and marketing prowess. Detroit houses a vast treasure trove of knowledge that awaits repurposing to other sunrise businesses. That this concentration of talent, technology and know-how is considered valuable is validated by non other than the competition. Toyota — the world's biggest corporate R&D spender — has a large research laboratory right in the middle of the Detroit scene.

I also met the leaders of the alternative energy movement in Detroit, people with new non-manufacturing business models. Representatives of Detroit Renaissance, a business group involved the city's transformation. The town even has its own e-business poster child — ePrize — which recently announced to much civic pride that it was locating right in the downtown area.

So I began to see Detroit as a microcosm of sorts for what is happening in the US as a whole — nice people, noble legacy, BIG innovator's dilemma — now pausing to consider where the future sources of value are coming from, how to be global, how to overcome highly dysfunctional attitudes towards education, pondering how to create a vibrant hub for talent — in short, trying to figure out how to be an innovation city.

Predictably Detroit has a number of initiatives to look at the future of the city that are as yet somewhat scattered. The city needs a strategy, it needs a vision of how it can turn itself into a 21st century city, attractive to talent, with a critical mass of R&D and a revitalized approach to education, fresh thinking. It needs to go for the brass ring — incremental innovation will not save it — nor will the four casinos and other tourist amenities that have been put in to make the city a tourist destination. Only a fresh re-thinking of the strategy, the sources of future wealth and the willingness to make the investment of time, treasury and effort will see the city through.

And herein lies the full drama. If Detroit can effect its transformation, then there is hope for the rest of us. I see three scenarios — continued decline, middle of the road via tourism and entertainment, or the high road — nurturing the roots of a true Detroit Renaissance. Much food for thought.

Comments

[frankp37]

They used to have the chair Lincoln was shot in. I never noticed the irony that Kennedy was in a Lincoln. Of course, Greenfield Village is not in Detroit, nor is Ford Motor. Greenfield Village used to be a city itself (now part of Dearborn) and is not really even a suburb. Anyone knows Detroit is a basket case and the Detroit school system is nearly gone. More than 90% of students go to schools in the suburbs and 3/4 of the population lives in the suburbs also. Even less people work in Detroit than lives there. If you're going to write about Detroit you should know these basic facts. My ancestors actually founded Detroit but they were under no illusions that it was a nice place. It was a swamp located strategically at the mouth of the Great Lakes. People who moved there in the last century were under no illusions that it was nice. It was a working town where things were made cheaper and faster than anywhere else. It will never be nice, but it will be cheap and fast again.

[swift goat pet for truth]

Innovation in Detroit!!!

I will believe it when I see it. Right now, there is talk.

[jackpinesavage]

Thanks for the props, sir.

Detroit has a long way to go. But if you look at American history, Detroit and Michigan have a pretty good argument for being the canaries in the mineshaft. We knew all about lost industrial jobs long before NAFTA came along. And some of us Michiganders figured out that the old saw about what's good for GM being good for America went dull a long time ago...it wasn't good for either in the long run.

But there is a lot of work to be done. The city government is corrupt and incompetent...Michigan's state government is not much better. Too many people are hoping that the jobs will come back, but McCain was right...they aren't. We need to build new jobs and new industries. Unfortunately, the auto industry may be the biggest impediment to that.

We are not experiencing a one state recession, we are just (yet again) on the leading edge.

[researcher]

its over get over it. they have had their day. worked with the big three as a consultant. no hope they still dont get it.

people want more than looks they want quality and reliability. quantity over quality is the big three motto. they buried themesleves and continue to do so.

look at the 2007 consumer report for 10 years reliability. then you will get the picture.

[January]

"Much food for thought"? Where? OK. The petrochemical age still has a bit of a run left in it, even while the dark clouds can be seen past the silver-lining hype. Innovation? All by itself, it says nothing. How about "When in danger, when in doubt, run in circles, scream and shout."

I did appreciate the information that Detroit kids think assembling automobiles will secure their future, even while half of them are not interested in advanced education. That's what needs to be overcome. And a society that worships the leisure class cannot cut it. No way. Never. Who do we listen to? Detroit peddlers? American management that "managed" to lose world leadership in the auto industry?

Too bad you didn't have the guts to tell them the truth. They did not want to hear it. So you gave them what they wanted rather than what they needed. I guess that's what people get when they pay for it.

[hank48188]

The Thomas Edison Menlo Park lab is NOT A REPRODUCTION, Ford moved the real thing to Dearborn. They were big time friends and vacationed and hung out together. I think Ford, Edison and Harvey Firestone had a complex together in Florida as well

[HollywoodBill]

Yup. It's the real thing. Henry Ford collected "firsts" and "final" things and assembled them in Greenfield Village-- a Utopian town from a bygone era. The Wright Brothers Bicycle shop has been moved there. The Edison Menlo Park lab has another curiosity: Supposedly the final breath of Edison in a jar. The story goes that he had someone put a vial up to Edison's nostrils at the end and then sealed it up. Supposedly witnessed and all.

There is also the only automotive museum in the Greenfield Village complex. Somewhat surprising considering its location near the Ford Headquarters. Another oddity on display: The Lincoln Continental that Kennedy was assasinated in. The auto was leased to the White House and extensively rebuilt and armored after Nov 22, 1963. Anyone expecting bloodied upholstery or some conspiracy clues will be disappointed. But it is the Assasination Limousine.

[almoguy]

It was Edison's son who held the vial to collect Edison's last breath...it might be one of the wierdest, hence one of my favorite objects in the Museum. What Ford did was he collected every example of mechanical systems available in his time-- For example he has every sewing machine made. For gearheads it is the ultimate freak show.

[realitytrumpsbull]

'Education' is that magical process that takes place when a pupil capable of absorbing and making effective use of a given piece of information is then provided or otherwise exposed to new information in a coherent, organized, and factually accurate fashion.
Everything else is a sideshow.

[StephenSmoliar]

I am more than a little amused at how this complements what I wrote about Detroit today:

http://therehearsalstudio.blogspot.com/2008/02/is-hollywood-next-detroit.html

[hank48188]

Detroit is making a comeback, at least GM is. Their sales went up 7% last month and i think toyota went down about 7%. Check out the news cars from GM, next year they have a $100,000 Corvette with 620 HP, the CTS-V will have 550 HP, a good match for the M-Class from Benz. And don't forget the new Hybrid Chevy tahoe with a advanced two-stage hybrid system that Benz and BMW will also be using soon. This a a hybrid system that makes sense for Americans, how many people want to drive a little Prius, only the folks trying to impress their friends and project an image with their nice green ethic. The Prius is the ONLY hybrid that sells big, all the rest look just like a regular car, who would be able to tell?

[realitytrumpsbull]

I want a GM car that'll tie the 73 Honda Civic on mileage. Leave the carpet out if you have to, and put milk crates with seatbelts in it, but achieve that mileage standard. The NEW Civic has a slammy-nose standard, no accident there, they didn't leave it in the paint booth too long, they just sat down and did some Most Excellent design work there.
No, wait, I want a multi-engined Mudhammer9000,
that gets 4GPM, has a 68 Plymouth Fury station wagon welded to the back of it sideways, and load 2 tons of coal in the bed for good measure.

[AdamDenison]

Hi Hank,

Thanks for the GM plug! Actually, our sales were up about 2 percent and Toyota's went down about 2 percent for 2007. While 2 percent isn't a huge number, 2007 was actually the second largest year in sales for us in our 100-year history!

John,

Great post on the city. I moved to Detroit in May and the city doesn't live up to the bad reputation it gets. True, she has her rough areas, but things are changing for the better.