New Economy/Livable Communities: Linking One to the Other

It is often said that the "Information Age" will allow people to detach from their physical community in favor of virtual communities of like-minded people. But some argue the opposite-that instant communication will lead to greater physical interaction and more tightly-knit communities. TPR is pleased to present this excerpt from "Linking the New Economy to the Livable Community" written by Collaborative Economics and published by the Irvine Foundation.

The New Regional Economic Context

Growing concern about the importance of the regional context for New Urbanism has led to interest in articulating a "New Regionalism." Advocates of New Regionalism, as described by .... William Fulton, argue that "neotraditional neighborhood design goals must be reinforced by regional planning and economic policies to reshape the urban and suburban fabric" and that "New Urbanism will have a positive effect only if it is linked to a consistent set of policies and programs in all areas of metropolitan development." ....

[It is] time to consider the regional economic context in which the Livable Communities Movement must take hold. This paper describes the important implications of the New Economy for the Livable Community. It is intended to stimulate debate about the potential "fit" between the New Economy and the Livable Community. The paper answers the following questions:

The New Economy: What is the New Economy? Why is the region important for the New Economy? How is the New Economy changing the nature of work?

The Livable Community: What does the New Economy want from the Livable Community? What principles can places follow to succeed in the New Economy?

We see a growing fit between where the New Economy is headed and the aspirations of the Livable Communities Movement. The shift to a new type of knowledge economy and the accompanying social change.... provide a reinforcing rationale for building not only Livable Communities, but livable regions. Understanding the New Economy holds the promise not only of bringing new constituencies into Livable Community thinking, but of better grounding that thinking in [today's] realities ....

The New Economy

The regional economy isn't what it used to be. In the past, when we thought about the regional economy, we usually thought about either the large Fortune 500 corporations that shaped our future (often outside our control) or the small ....establishments that served us locally. But then the economic landscape began to change. First came the franchise chains that replaced the local retail firms. ....Then came the breakup, merger, or downsizing of most of the Fortune 500 companies that we once depended on for jobs. Net job growth of the Fortune 500 in the last decade has been zero!

What has happened to the economy? In the wake of fierce global competition and the rise of information technology, a New Economy has emerged. .... [T]he regional economy today [consists of] fast-growing, entrepreneurial firms whose names we've never heard of in place of the Fortune 500 corporations. We see an increasing number of home-based businesses, "tele-workers," and contingent workers who carry their "portfolio" of skills to different [work]places. We see growing [and declining] industries ....side-by-side as communities experience .... what Joseph Schumpeter called "creative destruction." We see networks of firms sharing a common workforce and collaborating around some projects while competing vigorously for other market opportunities. In short, we are living in a new economic era quite unlike the more stable and predictable world we once knew.


Principles for Linking the New Economy to the Livable Community

The New Economy is based on new ways that business operates and new ways that people work. Companies today compete on speed, quality, flexibility, knowledge, and networks. The same is true not only for high-tech businesses, but for most industries ....

People in the New Economy work in a variety of ways from a variety of places. They sell their portfolio of skills to multiple companies over .... time, or even simultaneously. People seek-and the New Economy makes possible-greater integration of work and home life. The New Economy stands in stark contrast to the mass-production industrial economy of the 1940s to 1980s.

The New Economy values a different kind of community design. [It] values:

• Economic regions that provide a habitat for clustering
  
  
• Distinctive quality of life that attracts knowledge workers
  
  
• Vital centers that offer lively amenities and opportunities for interaction
  
  
• Choice for living and working that acknowledges increasing diversity of problem for the region because of the projected growth in freeway traffic. Even with the Alameda Corridor, truck traffic is projected to grow on the 710 Freeway from the current 25,000 trucks a day to about 50,000 by 2006 or 2007. There is no doubt that the Alameda Corridor will contribute to the region's economic growth–because without it, traffic in the region would literally grind to a halt.

Let's turn to your plans for recycling land. In last month's issue of The Planning Report, Los Angeles Economic Development Corporation Executive Director Lee Harrington contributed an article which warned of the little understood consequences for industrial land-use that result from California's dysfunctional State-local fiscal relationship. He wrote that several area cities-L.A., Downey and others-are all proposing converting major industrial acreage to large blocks of retail. The ultimate outcome is too many retail establishments, too few customers and failed projects. How do you respond to his thesis, and how does your organization hope to help cities overcome the formidable obstacles to making land-use investments that are better for the long-term economic health of their communities?

Lee is right on the money. The one thing we don't need in this region is more retail space. The United States today has twice as many square feet of retail space per person than it did 20 years ago. And electronic commerce wasn't coming down the pipe at a tremendous rate back then.

Cities will stop trying to attract more and more retail only when the State stops rewarding them for doing so. Right now, it's the only way that many cities-particularly in this region-can stay afloat because they are low- or no-property tax cities.

We have to provide other ways to fund city government other than retail sales, because as long as we do that, it's going to skew how we make planning decisions.

Related to land recycling is brownfields. You talked earlier about the private sector's efforts to provide leadership in this area. I wonder how you see the various roles of the private and public sectors in redeveloping these properties, and if you've had a relationship with the EPA's National Brownfields Partnership.

We're really just getting started with this particular project, which grew out of my redevelopment project experience while working with Kaufman & Broad many years ago. Plus, we have the experience of Dick Powers, Executive Director for the Gateway Cities Council of Governments.

We both realize that the private sector can usually develop at a lower cost than the public sector. And we want to bring private sector approaches for real estate development to this problem.

We're bringing in the banking community because we want to create projects with less risk so bankers will be willing to lend.

Also, we need to create projects that real estate developers are willing to take a risk on. For that, we need to work in partnership with the public sector to eliminate or minimize risks and cut down on costs.

We will soon have a staff person, paid for by the Irvine Foundation, to work solely on finding funding sources for financing and cleanup. We haven't had that opportunity before.

A couple of cities have expressed interest in talking to our private sector team about getting help working through these projects.

Let's close by looking ahead. You seem to have a fairly concrete idea of the challenges before you, how to meet them and the order in which you will tackle them. If we were to interview you next year, how should success for the Partnership be described?

For our first year, we are focusing on the four initiatives I mentioned earlier. New ones will emerge as we move forward.

Success in workforce development will mean a regional education and training establishment closely tied to and responsive to regional industry. It must also provide the training that industry needs, not simply what our teachers have expertise in.

If we put 15,000 people from minority communities-who comprise the majority in our region-into family-wage jobs making $50,000 to $70,000 a year within the next few years, that will be another mark of success.

And if we successfully create 100, 150 or 200 acres of modern manufacturing properties out of old or dysfunctional brownfields sites-that will also be success.

From a marketing standpoint, we want people in the region to have a sense of what we are, what we can aspire to and what we can be proud of: We're a manufacturing center of the highest order, and we have the best logistics system operating in our ports. We want to be known around the nation for those two things.