Cities are Reaching Their Limits
“We are about to repeat the amount of city-building we did in the last 200 years, but this time we will do it in just 40 years”
What Matters: What’s the biggest limit on city growth? (Hint: it's not steel or cement)
Source: McKinsey
The world is in the throes of a sweeping population shift from the countryside to the city. Underpinning this transformation are the economies of scale that make concentrated urban centers more productive. This productivity improvement from urbanization has already delivered substantial economic growth and radically reduced poverty in countries such as China. The growth of cities has the potential for further growth and poverty reduction across many emerging markets.
However, we are now seeing cases where the growth rates of some large cities have begun to slow. In addition, the increased complexity of large size can overwhelm the ability to manage. When this happens, cities can become disastrous mixtures of slums and gridlock, raising the question of whether there is a maximum size for a workable city. The view of the McKinsey Global Institute (MGI) is that there is, in theory, no limit set by technology or infrastructure to how big or how fast cities can grow — but only if business and government leaders are able to manage the increased complexity that comes with bigger city size.
CEOs for Cities Announces the Talent Dividend Prize
Source: Next American City
Cities across the nation are in a brutal race to produce jobs and get people back to work, while slashing municipal budgets to match plunging tax revenues.
Every mayor is expected to have a three-point plan that is the magic elixir for economic development, usually headlined by “Attract new industry.”
Bagging the buffalo may sound like a good plan. We can all hope for the best. But hope is not a strategy.
What ought to headline every local economic development plan is not sexy. It doesn’t generate headlines. No consultant can trademark it. But it is the one strategy that is a sure winner, and it is a strategy that makes not just one city richer but all of America richer.
The strategy? Increase college attainment rates.
(I told you it wasn’t sexy.)
Here’s why it works. It turns out that 58 percent of any city’s success as measured by per capita income can be explained by the percentage of college graduates in its population. (And that’s conservative. Some economists calculate the impact at 80 percent.)
Why? Because every one percentage point increase in college attainment is associated with an increase of $763 in per capita income. That’s not just a result of moving a certain number of people over the four-year college finish line, but of shifting the entire education distribution curve forward.
Increasing college attainment rates isn’t easy. But it is easier than we think. It turns out that millions of Americans started college. They raised their hands and said, “I want to go to college.” They got in to college. They paid for classes. They earned college credits. They just didn’t finish.
And finishing is what counts.
Amazingly, even in this lousy economy, Americans with college degrees have an unemployment rate that is almost half the rate of those who attended but did not complete college. The median annual salary for a college graduate is $20,000 more a year than someone who started college but didn’t finish. So the financial impact finishing college has on families and on cities is significant.
That’s why CEOs for Cities, with the support of the Kresge Foundation and Lumina Foundation for Education, is launching a $1 million prize competition today to drive increased degree attainment in America’s major metro areas.
The Talent Dividend Prize will be awarded to the metropolitan area with the greatest increase in the number of post-secondary degrees granted per capita over a four-year period.
Indianapolis Must Reinvent Itself Again
Source: The Urbanophile
Indianapolis has often been referred to as the “Diamond of the Rust Belt,” but its performance goes far beyond just being the best house on a bad block. Yet despite outperforming not just the Midwest, but America as a whole, long term challenges facing Marion County put the region at risk.
Few seem truly aware of how impressive metro Indy’s performance has been. Compared other large metros in the greater Midwest, Indy was #1 for population growth from 2000-2009, growing almost 14%, or close to 60% faster than the US as a whole. It also had positive net domestic migration – people moving in minus people moving out – of over 70,000 people while virtually every other Midwest metro was bleeding people. That’s like the entire population of Fishers packing it up from where ever they lived and moving to Indianapolis. People are voting with their feet in favor of Indianapolis.
Indy was also #1 in job growth, adding 19,000 jobs in that same period while the US as a whole lost them. It is #2 in GDP per capita, the basic measure of economic output per person, trailing only the Twin Cities. It even outranked Chicago, showing that far from the stereotypes of a low end economy, metro Indianapolis is in fact a high value economy.
But despite this great regional story, all is not rosy. In particular, Marion County as a whole is now starting to show signs of the urban struggles we typically associate with the inner city. For example, while its population has continued to grow, it has slowed to a crawl. It lost more than 50,000 people to migration in the last nine years. And it lost almost 60,000 jobs – a huge number. A report commissioned by Mayor Ballard early in his administration noted that three of the four largest townships in Marion County have declining assessed valuation. And the township school districts now largely trail those in the collar counties for graduation rates.
“64 of the top 100 most populated cities in the U.S. experienced increases in traffic congestion levels in early 2009.”
