A Confused Oligarchy Stagnated Innovation and Starved America’s Parasite Industries, Further Weakening Detroit

A Confused Oligarchy Stagnated Innovation and Starved America’s Parasite Industries, Further Weakening Detroit….

With such a tax base as afforded by the auto industry, Detroit offered the latest amenities of cities of the era and was called the “Paris of the Midwest”. The name implies that Detroit, at one time the fourth largest city in America, had the leading livability standards of the age. We know this was not the case for many of the underserved communities within Detroit, which led to a social cancer. Yet for others in Detroit, a booming city meant rising property values, good schools plus social and cultural benefits.

In the 1970s, even though domestic competitors were not a threat, foreign competitors emerged with a better mousetrap. With OPEC’s manipulation of high fuel costs, Japanese cars found an entrance into the U.S. market. Having established a foothold, they brought in better cars that competed against the Big Three’s higher quality vehicles.

What happened to Detroit’s innovation in the face of foreign competition? It seemed that the oligarchy was dazed by the machinations of OPEC and Washington’s tepid response. Prices would rise for a bit and then fall. Successive waves of price manipulations led to multiple calls for a national energy policy that never emerged, yet signaled confusion in the American industry. All the while, America’s love of big muscle cars survived the frustrating fluctuations in fuel prices. The confusion of Washington’s signals and America’s flip flopping sentiments left Detroit faltering in strategy.

The auto market eventually shifted, but in the confusion, Detroit lost its way, waiting to respond with real innovation and instead doling out body style and grill changes as substitutes for competitive innovation. U.S. buyers now perceived that true technological shifts were coming from foreign competitors, and the big three lost market share.

Detroit saw some of this impact, and the region surrounding Detroit suffered even more. All of America was impacted as the auto industries’ parasitic industries declined with autos. Detroit’s jobs fell, resulting in declining home values as people left. Taxes then declined, followed by a cut to city services, suffering city budgets, and higher crime, all exacerbating the flight to the suburbs, as the fall of Detroit spiraled on.

Could innovation have been a key to turning Detroit around? Yes, new businesses not tied to the falling auto industry, could have replaced the void if Detroit government was not so lockstep tied to the Big Three. While cities like Pittsburgh and Akron began to find ways to reinvent themselves, Detroit clung to autos in a mutual death spiral.

Innovation is a key factor but innovation comes from people, and people want to live in a city that brings to them a vibrant place to live. Thriving cities cater to innovators by fostering livability. Detroit has recently been given the “Un” honor of being the most unlivable city, the most miserable city in America. Therefore it has a severe innovator recruitment gap.

Detroit cannot go from the bottom of the livability scale to the top without enduring years working a plan for turn around. The beginning years will entail efforts to correct the cancers that are killing Detroit. They will also include years implementing a city plan that creates a land use of a highly livable city that can be Detroit 20 years from now.

The rebuilding will begin with a concerted effort to bring the right businesses to the right locations within Detroit as outlined in the 20-year plan. The right businesses will be those that can hire the right people with the level of education that exists now, plus those that can capitalize on the assets that Detroit has now. Detroit can then grow the city piece by piece back toward a Paris of the Midwest, if that is its vision of a livable city that can be enjoyed by all its citizens.