Loss is in the air in Cleveland.
There was the June City Club speech by lawyer Jon Pinney, who questioned the economic viability of our renaissance and proclaimed the city “dead last” economically.
Then LeBron James left for sunny Los Angeles. That glorious banner came halfway down, then it rained. If that isn’t a metaphor for how we’re feeling, I don’t know what is. While our spirits were riding high over the last few years, recently, it’s felt like we have all paused for a breather.
Yet that trepidation isn’t new. A bumper sticker from the late ’60s is still relevant today: “Pray for Cleveland.” Now, as then, Cleveland isn’t about to give up. Calls to shake up our economic development paradigm show as much. But fighting the good fight isn’t the same as plotting a way to victory.
Cleveland has been saying all the right words about talent attraction, bidding for Amazon and building stadiums, casinos, vistas and apartments. But all cities build stuff and say they are going to attract talent. That isn’t a vision rooted in what makes us unique.
Pinney’s speech has spurred many interesting questions, but one stands out: What could our vision for the future look like?
We can envision that city by beginning with one thing — health.
It makes more economic sense than you might think. A 2005 Federal Reserve Bank of Cleveland report studying 75 years of economic data offers a good place to start.
Higher- and lower-earning states are diverging, it says. Three factors separate the leaders from the laggards: concentration of a college-educated population, the industry mix of a region and levels of innovation.
Peeling the onion further, another Federal Reserve study out of New York says that one thing ties those three factors together — the concentration of research and development.
Cleveland is a so-so R&D city. While it leads Ohio in federal R&D expenditures with $315 million in funding in 2017, select peer cities are galloping far ahead, including Pittsburgh ($658 million), Philadelphia ($837 million) and Baltimore ($931 million). Not surprisingly, those regions also have college educational attainment rates between 5 to 10 percentage points higher than Cleveland.
There’s little reason to trail other Rust Belt cities in knowledge production, particularly with assets such as the Cleveland Clinic. So if we want alignment, as Pinney says, we should align around that fact.
In a recent op-ed, Harlan Sands, the new president of Cleveland State University, acknowledged as much. Citing my economic research, Sands noted Cleveland State cannot be just a “consumer university,” but needs to be a “producer university” as well. The former focus is on graduating people with degrees, while the latter is about producing research that spurs new work.
Cleveland can focus on graduating all the locals it wants, but if there are few job prospects upon graduation … well, bye.
The tricky part is deciphering where to invest that research money. Technologies such as blockchain and the internet of things are two sectors garnering momentum locally. Both are useful tools, but are not in themselves a future vision. So where can Cleveland invest to differentiate itself and excel?
By tackling the paradoxes of success.
The nation’s top five most affluent regions in terms of per capita income are San Jose, California, San Francisco, Boston, Seattle and Washington, D.C. These regions are deemed winners in job growth, population growth, income growth — the whole nine knowledge economy yards.
But those cities also chalk up five of the six worst income disparities between white and black households in the nation. The most egregious is San Francisco, where white median household income is $126,729 versus $27,656 for blacks. If that’s success, it’s time for another bumper sticker: “Pray for the U.S.”
Importantly, the presence of strong anchor institutions in a city often exacerbates those disparities. “At the same time that leading universities help spur local innovation and startups — and perhaps because they do — they also contribute to increased local inequality,” urbanist Richard Florida wrote in CityLab recently. The more a city’s economy becomes high-end and global, the more distant it can seem for many locals.
Cleveland’s HealthTech Corridor is a testament to this damned-if-you-do damned-if-you-don’t conundrum. Inside the walls of our hospitals and universities are world-class health services and technologies. But outside, people are suffering.
Part of the problem is a lack of access to care. But a larger issue is what’s happening in the neighborhoods outside those institutions’ doors. Our society is sick — record levels of income inequality, a bifurcation of the labor market, a bifurcation of the housing market, and on and on.
Those structural divisions are manifest in the minds and bodies of the left behind. Simply improving access to care won’t be enough to change Cleveland’s health trajectory.
“Experts believe that health care access and quality only explain about 20 percent of differences in health outcomes,” clarifies Amy Sheon, executive director of the Urban Health Initiative at Case Western Reserve University School of Medicine. Social factors such as education explain about 40 percent of the difference, says Sheon. Behaviors like smoking explain 30 percent and environmental factors make up 10 percent.
Cleveland has some of the highest health disparities in the country. Life expectancy here varies by more than 20 years, depending on where you live in Cuyahoga County.
Those disparities create individual, economic and societal costs. “We all pay for the cost of health disparities in terms of health care costs that are borne by taxpayers in terms of lost productivity, and because we cannot benefit from the full measure of talent available in all humans,” continues Sheon.
While the talk flying around Cleveland’s economic development table is centered on brain gain versus brain drain, the real issue is brain waste. Remedying health disparities afflicting people who already live here won’t just help those in need. It will make Cleveland more economically competitive.
“Many people believe that knowledge is power,” says Freddy Collier, director of planning at the city of Cleveland. “That is true. But knowledge can also mean profit.”
Collier says Cleveland has been a national health care leader but that “it also has the opportunity to be a leader in reducing poor health outcomes by addressing neighborhood conditions, policies and structural factors such as race and class, which is at the root of the problem.”
Here, then, is where Cleveland should pivot its economic development attentions.
What if the time, attention and public investment spent on boondoggles to attract talent was instead poured into the region’s anchor institutions to nurture the health of people already here? That is next-generation regional economic development, where the product of Cleveland’s burgeoning global economy could be healthy local people.
For too long, America has buried its head in the sand, blind to the fact that costs to society need not equal the price of success. It makes us unable to see that Cleveland is not “dead last” just as San Francisco is not “dead first.” With forethought and planning, Cleveland can harness its knowledge economy toward health. To do so, we must resist the temptation to go toward the light of everywhere else, because that will only lead to the dark of other cities’ failure.
