Monday, June 15, 2009

Setting a new tone

A friend put me on to this article in the New Yorker that explores how "the culture of money" among doctor who see themselves as entrepreneurs led to the overuse of medicine and significantly higher costs in McAllen, TX.

But I was struck by this paragraph about how key employers set the cultural tone for business in some areas:
Woody Powell is a Stanford sociologist who studies the economic culture of cities. Recently, he and his research team studied why certain regions—Boston, San Francisco, San Diego—became leaders in biotechnology while others with a similar concentration of scientific and corporate talent—Los Angeles, Philadelphia, New York—did not. The answer they found was what Powell describes as the anchor-tenant theory of economic development. Just as an anchor store will define the character of a mall, anchor tenants in biotechnology, whether it’s a company like Genentech, in South San Francisco, or a university like M.I.T., in Cambridge, define the character of an economic community. They set the norms. The anchor tenants that set norms encouraging the free flow of ideas and collaboration, even with competitors, produced enduringly successful communities, while those that mainly sought to dominate did not.
A friend observes the same thing about cities like Seattle. Where once it was Boeing, now Microsoft sets the economic tone.

Living in Western North Carolina with a withered textile/furniture manufacturing base - one that sorely needs reviving - the idea of attracting anchor-tenants as a way of setting a new tone for manufacturing investment deserves attention.

Greenville, SC had seen its textile-based economy wither in the late 1960s and early 1970s. Building on the strength of the statewide technical school system, Democatic Governor John C. West lured Michelin Tire Company to Greenville, SC in the early 1970s, "anchoring" the area's transition to a mixed manufacturing economy. Republican Governor Carroll Campbell built on that momentum in attracting BMW and Fuji Film to the area in the late 1980s.

Downtown Greenville, SC was boarded up and dying in the 1970s when Mayor Max Heller began promoting his plan to narrow Main Street, widen sidewalks and create a European-style downtown.

Heller convinced Hyatt to locate a new hotel at the north end of Main Street (rather than on a nearby interstate highway) to "anchor" the downtown redevelopment and set a tone that downtown was a place to invest. Decades later, downtown is thriving, lined with shops, restaurants and outdoor cafes. In the most Republican area of South Carolina, in downtown Greenville there stands a bronze statue of Austrian Jewish refugee, and Democrat, Max Heller.

The anchor-tenant concept could be used to revive manufacturing in Asheville/Buncombe. What name-brand company do we want to attract as an anchor-tenant?

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