Sid Burgess

Seemingly everyone is now racing to get into the tablet game in the wake of iPad (and its strong early sales numbers) and a computer market that some analysts see shifting dramatically over the next few years.

Just last week saw the introduction of the Cisco Cius, which runs on Android, with other recent headlines suggesting we’ll soon see tablets from HP (running on webOS) and RIM, in addition to Windows 7-powered tablets (LG showed one off last month).

Also looming large in the tablet competition is the data deals that manufacturers strike with wireless carriers. Back in May, Google was said to be bringing a tablet to market with Verizon Wireless, though no official announcement has yet materialized.

In any event, it appears the second half of this year will be when we start to find out if there’s going to be some viable competition for the iPad. Stay tuned.

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I (heart) Taste of Chicago because it’s a street fest as well as an eat fest. To a lover of vibrant urban spaces, there’s nothing quite so sweet as the shut-down of a heavily-trafficked drag strip like Columbus Drive and its temporary transformation into a giant pedestrian mall. The rainbow of people (left) strolling in a car-free zone beckons every bit as much as the turkey legs and Polish sausages.

So with this year’s Taste coming to an end Sunday, I find myself asking: Why can’t Chicago close streets and turn them into lively pedestrian plazas more often?

Others, it turns out, have been wondering the same thing, particularly in light of New York City’s bold decision to make permanent the popular pedestrian plazas in Times and Herald Squares that required the closing of several blocks of Broadway (left).

When I asked readers of this blog last fall for suggestions on where the car-free New York experience could be reproduced here, the comment board lit up with ideas: Monroe Street between Michigan and Columbus, Rush Street, Taylor Street between Racine and Ashland, East 53^rd Street east of Blackstone.

Clearly, there’s a hunger out there for better public spaces, especially in the city’s neighborhoods. With his ubiquitous median planters Mayor Richard Daley has given us beautiful streets, but the commenters also want livable streets—places where they can gather, socialize, and catch a break from the relentless two-dimensionality of computer screens and mobile phones.

While closing chunks of big downtown streets, like Monroe, sounds great, such proposals won’t easily get past traffic engineers who will understandably argue that major downtown arteries are crucial to the flow of people and commerce.

Smaller streets, far from the Loop’s crush, may prove easier targets for car-free zones. Lincoln Square's Kempf Plaza, which is also called Giddings Plaza (for adjoining east-west Giddings Street), is the poster child for this sort of transformation (left).

On Friday morning, mothers with strollers ringed the edge of the plaza, as did outdoor diners at the adjoining Café Selmarie. The scene looked inevitable, like it had always been there.

In fact, it resulted from an enlightened, late 1970s infrastructure project that turned a single-block of diagonal Lincoln Avenue into a one-way street. At the street’s mid-point, where Giddings had intersected Lincoln, Giddings was transformed into a cul-de-sac, clearing space for an outdoor plaza.

At first, people complained that their two-way traffic was being taken away, but almost no one complains now, especially after later changes endowed the plaza with handsome paving, a performance platform, and a multi-tiered fountain whose geometric decoration was inspired by the exquisite ornament of architect Louis Sullivan’s former Krause Music Store just down Lincoln.

Kempf Plaza’s cozy atmosphere reminds us that Chicago can’t depend on its marquee public spaces alone. The lakefront is Daniel Burnham’s dream mostly come true, but it’s on Chicago’s edge and a vast grid of streets stretches endlessly--and dehumanizingly--westward from it.

Sure, the late 1970s State Street bus mall failed, but its downfall was caused by its vast scale, shoddy design and lack of connection to the Loop street grid. We still need nore intimate Kempf Plazas--a shortcoming that Lee Crandell, who writes the thoughtful blog, carfreechicago.com, would like to rectify.

Last year, Crandell wrote: “I’ve lived in Lakeview for six years, and while I love it, I’ve always felt that it’s missing a quality public gathering space….Most of the sidewalks are too narrow and there aren’t places to sit. I grew up near Annapolis, Md., which has a harbor with a plaza where people would hang out to talk, eat ice cream, drink coffee, etc. And Lakeview alone is almost three times the size of Annapolis, so we should be able to support a place like that.”

His idea, inspired by Kempf Plaza, is to turn Wilton Avenue, a small north-south street just east of the freshly-renovated Belmont CTA station, into a cul-de-sac with a public plaza at the cul-de-sac’s south end, facing Belmont. He even did a crude rendering (left) on his blog, imagining the plaza with a fountain and greenery—and new, street-shaping buildings on what is now a vacant lot next to the Belmont station.

But some Wilton residents are concerned that the proposed plaza would encourage loitering. One, 39-year-old Todd Shockley, told me he’s seen “transvestite prostitutes” on the street. He also worried that the change would cut down on the supply of curbside parking.

Crandell’s response: There’s still enough parking near Kempf Plaza and a vital public space on Wilton would drive misfits elsewhere. “I see [the plaza] as encouraging lingering and positive loitering,” he said.

It would be wrong to minimize such tensions, but it would be equally wrong not to explore new ways to humanize the city’s neighborhoods with smart street closures. If you doubt that, just head to Kempf Plaza for a taste of what the future might bring.

JULY 6th POSTSCRIPT: Last Friday, with a holiday weekend approaching, I was unable to find out the identity of the design team for Kempf Plaza revamp and therefore could not mention the names of the architects in the print version of this story. But since the project merited praise, I figured that someone would come forward to claim credit. Sure enough, an email came through this morning from the Lakota Group of Chicago. That firm was the urban designer and landscape architect for the project, which was dedicated in 1999. Lakota says it worked on the job with two other firms, Guardaro Associates and McClier.

It’s no secret the economy has been in a terrible state. How and when will it turn around? What will the future look like? When considering these questions, and looking at today’s economic trials and how to get beyond them, it’s worth a look back at how we got here. It was a three decade journey representing three major transformational waves that have profoundly transformed our economy at the macro and local level. The 80’s were the culmination of the Rust Belt Era. The 90’s were the Digital and Nationalization Age. The 00’s were the Globalization Age.

1980’s – The Rust Belt Era

The 1980’s in a sense represented the end of the post-war story arc. It opened with Volker’s sky high interest rates that broke the back of inflation and ended with the fall of the Berlin Wall and the end of the Cold War.

The 80’s started with an extremely deep, manufacturing-centric recession. While the metals industries and some others had struggled in the 70’s, along with pretty much the rest of the US economy, the rest of the manufacturing sector, ranging from autos to electronics underwent its most wrenching period of transformation. This saw the first major offshoring waves, as a large number of plants were moved to Mexico (or the Sun Belt). This legacy sill permeates the consciousness of the Rust Belt today, and if you talk to a blue collar worker in those towns, you’ll likely hear NAFTA (a 90’s construct, but clearly the continuation of the 80’s Mexican manufacturing migration) blamed for America’s industrial woes. Also, the US saw the first tough foreign competition in these industries in the form of Japanese auto and consumer electronic imports.

The cushy labor-management excess that characterized major American industry simply couldn’t hold up. I believe the early 80’s recession is what kicked off the large scale transformation of traditional American industry that is entering its final throes with the auto industry restructuring that is currently underway. When complete, the era of highly compensated industrial employment for low skill labor in the US will have largely come to an end.

The 80’s also saw the incubation stages of trends that would shape future development, such as the introduction of the personal computer and deregulation, notably the AT&T breakup in 1984.

The big trend kicked off by this was the increasing returns to college education. It was very clear even in the 80’s that if you wanted to attain a good standard of living and upward mobility, you should get yourself a college degree. It was a no-brainer. People with a high school diploma or less increasingly found themselves in a world of employment uncertainty, a financial freeze, and grim future prospects. This was stage one of the income gap problem.

1990’s, Part One – The Digital Age

The technology revolution was in many ways the signature development of the 1990’s. I’m very familiar with this because I lived it. At the dawn of the 1990’s, corporate computing was dominated by traditional mainframes. While PC’s were in use in business, it was not unusual for white collar employees not to have a computer at their desk. Laptops did not exist, nor did cell phones to any practical extent. The internet was a very limited government and academic tool. By 2000’s, new technology had not just transformed corporate IT, it had transformed business. Cell phones, laptops, and internet access were ubiquitous in business.

Consider the following technical cycles that hit during the 1990’s:

• The client/server revolution
• The Internet revolution
• The introduction of ERP (integrated Enterprise Resource Planning software such as SAP or Oracle)
• The Y2K retrofit
• The commercialization and widespread adoption of the internet
• The rise of competitive telecommunications and plunging network costs
• The large scale adoption of cell phones
• The introduction of consumer broadband technologies
• The ubiquity of computers in business and the large scale adoption of laptops

It is not surprising that this rapid change drove many economic changes. Firstly, the increasing centrality of technology to business led to an explosion in demand for technically competent people. This was the golden age for people working the technology and consulting industries. I’d suspect the technology consulting industry increased its employment at least five fold – all of it onshore. While traditional telecoms carriers shed thousands from their bloated workforces, startup telecoms hired in droves. This digitization wave reached its culmination of course in the dot com boom.

It was a good time to be a tech guy, I can tell you. People would routinely get raises of 50-100% when changing jobs. Even people who didn’t leave saw huge market adjustments in their pay. Stock options made many people millionaires. But it wasn’t just techies. Adapting this technology to business required a huge amount of business skill and savvy as well. There’s enormous change required in business processes, people skills, and organizations. As an aside I would estimate that a typical business change project underpinned by technology only involves about 20-25% of the effort spent on the tech itself.

All of this again produced enormous gains to people with college degrees. Companies such as my employer at the time were worried that the supply of college grads would simply be insufficient to keep up with projected growth. This reinforced the gap between college and high school educational attainment.

This technology and other change (regulatory, demographic, etc) also unleashed the fragmentation of the great American common culture, and ultimately perhaps the American commonwealth itself. In the 1980’s we all watched three networks on broadcast TV. In the 1990’s it was “57 channels and nothing on.” We see this today in the ever increasing array of specialty and niche products.

Terry Teachout is the best writer I know in discussing this fragmentation, and especially how it signaled the end of “middlebrow” in America, where the average middle class family consumed some culture that was, if not New York elite, at least intended to be edifying and enlightening.

I grew up in the Age of the Middlebrow, that earnest, self-improving fellow who watched prime-time documentaries and read the Book of the Month…When I was a boy, most Americans who didn’t care for high art still held it in a kind of puzzled respect. I doubt that Ed Sullivan cared much for Maria Callas or Edward Villella, but that didn’t stop him from putting them on his show, along with Louis Armstrong and the original cast of West Side Story…Just as city dwellers can’t understand what it meant for the residents of a rural town to wake up one day and find themselves within driving distance of a Wal-Mart, so are they incapable of properly appreciating the true significance of middlebrow culture. For all its flaws, it nurtured at least two generations’ worth of Americans who, like me, went on to become full-fledged highbrows…What’s really sad is that most people under the age of 35 or so don’t remember and can’t imagine a time when there were magazines that “everybody” read and TV shows that “everybody” watched, much less that those magazines and shows went out of their way to introduce their audiences to high art of various kinds.

Prior to the 90’s, when there were only three networks, where there were limited choices in arenas of all types, they had to appeal to a broad America. This a) forced people to consume them because they had no other choice and b) made those who produced them feel at least semi-compelled to produce at least some socially edifying and enlightening content. It goes beyond Teachout’s exposure to some high art. Think, for example, of the impact on racial views in America of the Cosby Show.

Today there is none of that. Marketplace fragmentation eliminated both the rationale and frankly the viability of this point. You can’t force people to eat their spinach when they other choices. This has led to what we’ve seen over and over in field after field – the hourglassing of America. You’ve got Wal-Mart at the bottom, Neimans at the top, with everyone in the middle getting crushed. This again reinforced the degree gap, as not only was the economic experience of those with and without bifurcated, there were also increasingly fewer common cultural touchstones. They increasingly inhabited different worlds.

I list this under the Digital Age, because clearly technology enabled this to happen. You need the technical capability to bring segmented offerings to bear on the market, and that’s what the Digital Age did.

1990’s, Part Two – The Nationalization Age

Everyone knows about the tech revolution, but there was a concurrent development that was in many ways equally important. This was the nationalization of business.

Think again back to the 1980’s in a mid-sized or small city. Your hometown probably had three or so major locally based, publicly traded banks. Your state probably severely limited their ability to open branches, so the market was highly fragmented. Your town probably had a couple department stores that were either part of local or regional chains. This might have been true of discounters or even fast food restaurants. The local gas and electric companies were locally based. Only Ma Bell pre-1984 was a national utility, and a heavily regulated one. In short, while may industrial businesses were national in scope, there were still a huge number of industries that were incredibly fragmented into local or regional markets.

The deregulation of the 80’s and 90’s ended that. The end of restrictive banking laws put us where we are today, with a handful of major nationwide banks like JP Morgan Chase, along with a few odd surviving “super-regionals”. Utilities have been sold off. Department stores merged out of existence, perhaps most poignantly illustrated by the rebranding of Marshall Field’s flagship store in Chicago as Macy’s. Macy’s is truly America’s department store now. Wal-Mart and Target, once regional chains, are now ubiquitous. So too Walgreens, CVS, Home Depot, etc.

In short, the business landscape of your city likely changed radically during the 1990’s, as large numbers of locally based businesses, businesses whose executives formed the leadership class of the community, were bought out. (I wrote about one implication of this in my piece “The Decline of Civic Leadership Culture.”)

This also, incidentally, transformed the professional services industry. In 1990 virtually all of these industries were city office based. To be the office managing partner of the biggest office or headquarters city was a huge deal. But in the 90’s, as business changed, and as the level business domain expertise required to integrate technology into business strategies, processes, and organizations became much, much higher, all of these industries restructured into national practices based around industries, with P&L responsibility resting with the industry sector leads. That’s one reason I spent so much time on airplanes in my career.

Of course, this disproportionately benefited large cities in the middle of the country with big airports, where you could base lots of people and fly them conveniently around. Two big winners: Chicago and Dallas.

With so many businesses now large scale, deregulation continuing in vogue, and a post-Cold War end of history euphoria in the air, the stage was set for future liberalization of international trade regimes. Your local bank or store probably didn’t care much about international markets, but Citigroup and Wal-Mart sure did.

Thus the 1990’s saw not just the oft-despised NAFTA, but the far more important Uruguay Round of the General Agreement on Tariffs and Trade that created the open global marketplace as we know it today. The WTO was a creation of this treaty.

2000’s: The Globalization Age

The digital revolution, nationalization of business, the end of the Cold War, and the resulting trade agreements, set the stage for the Globalization Area.

What’s different about globalization? What are some of its hallmarks and attributes? Here are a few:

• Connectivity. Virtually everyplace is now linked by extensive and reasonably priced communications and transport networks.
• Increasing international standardization. This includes the global internet, global financial standards and trade rules, the use of English as a global business language, the ubiquity of containerization, etc.
• Integration of previously closed economies into the global economy. The end of the Cold War meant the end of isolation of the eastern block, as well as the battles over the alignment of other nations. Also, the West made a fateful decision that, unlike during the Cold War, it would extend virtually all international privileges to any nation regardless of whether or not it was a democracy or conformed to basic western notions of the rule of law or human rights. Previously the US may have supported many undemocratic regimes, but it didn’t trade much with them and it didn’t invite them to participate in major international summits like the G-20.
• The virtualization of business. It’s not just about Japan exporting finished products to the US. It’s not just about moving manufacturing to Mexico. It’s about moving any function anywhere. Get your raw materials from Brazil, put your plant in China, your IT in the Philippines, your IT and HR operations functions in India, your R&D in Switzerland, and your finance in New York.
• Foreign champion firms. Where once it was only Japan or Europe with major champion industries that could take on American giants, today it is anyone, from South Korea to China to Mexico. One thing that characterizes these firms in many cases is their tight links with their home state government, which actively promotes them and protects them and does everything in its power to advance their interests. It’s not just China, it’s everywhere, though weaker in the Anglosphere. And I think if you look at virtually anyone who has an “oligarch” profile (i.e., a guy who nobody heard of a decade ago who became a billionaire through canny acquisitions), I think you’ll find few of them have records that would stand up to scrutiny.

What does this end up doing? I have written before on the forces of globalization. But the underlying consistent themes are mobility and speed. Mobility of production, mobility of service provision, mobility of information, mobility of money, mobility of labor. All of these are mobile, and they move at speeds that would have been considered unthinkable just a short time ago.

Implication: The New Bifurcation

What does this mean? Well, it means a lot of things. Importantly, as everyone knows, it has meant that previously non-tradeable items are now fully traded in global markets. This has particularly affected white collar work that was previously immune to offshoring, everything from IT to invoice processing to architectural drafting to call centers to HR operations.

This has upended the old college degree/high school diploma split. Now, just having a college degree doesn’t save you. You need to have skills and work in a field that is not subject to international labor arbitrage. One could argue that there’s a new economic bifurcation, this one not based on educational attainment, but the tradeability of skills. However, this really hasn’t changed the old split as much as adjusted its proportions. Few of the types of people who lost out in the 80’s and 90’s are faring much better today, but they are now joined in their misery by a new chunk of folks with degrees. In effect, globalization drove a wedge and split the educated into two groups, and threw a good chunk of them into the losers pile.

Implication: The Narrowing of the Economic Base

This split within the college degreed between those who benefit from globalization and those who are victimized by it has narrowed the US economic base considerably, and dangerously in my view. I’ll reprise my four facts about Silicon Valley that sum it up: Between 2001 and 2008, the San Jose MSA’s: a) real GDP per capita increased by 20.8% b) total real GDP increased by 25.9%, c) real GDP per job increased by 39.6%, BUT d) total employment declined by 9.4%. That’s America’s problem in a nutshell. Growth without job growth. Growth in economic output without growth in employment.

This economy simply doesn’t generate enough jobs to keep Americans employed. Perhaps in the 90’s, we could pretend that by simply getting more people through college, we’d be able to make the transition to a broad based Information Age. But not today. That’s why we had a “lost decade” in the 2000’s, and are facing a gigantic employment problem right now.

Even those who are currently prospering in the globalization age would do well to look over their shoulders. In the 90’s, people with college degrees could perhaps be forgiven for thinking that blue collar work was a far away industry of which they knew little. Today we know it’s a case of, they came for the factory worker…..

Implication: A Metropolitan Future

Back to the notion of tradeability in jobs, what jobs are these that aren’t tradeable? There are basically two kinds of these: occupations requiring face to face interaction or in person service, and those involving specialized skills that can’t be obtained elsewhere.

Occupations requiring face to face interaction can include things like school teacher or plumber or primary care physician. But some have argued that the nature of the global economy has created almost by definition a scarcity of face of face communications. To the extent that you can obtain a proprietary advantage through face to face contact, that by itself is worth something. Obtaining this generally depends on the number of people, their particular skills, the ease of interaction, and dense and open social networks. Specialized skills are often niches that are subject to agglomeration economics that are the basis of cluster theory.

It’s obvious that both of these work to the advantage of cities. They have more people, more skills, more opportunity for face to face contact, more openness to change and innovation as a general rule, and usually more open social networks. They are usually the places specialized skill clusters are found because you need a certain sized economy to support an ecosystem. (There are important exceptions to this, such as the Warsaw, Indiana orthopedics cluster). That’s one factor driving increasing urbanization on a global scale, and leading to disproportionate economic output in cities to an extent we’ve not seen previously.

This suggests that there is some critical mass of size above which you are more likely to be competitively advantaged and below which you are more likely to be in a rough spot. That doesn’t mean every place that’s big has it made, but size certainly matters. There’s great debate on where the line is. I think it is fair to say civic leaders in almost any place would argue they make the cut. I tend to draw the line lower than some, and I believe there are going to be any number of smaller places like Warsaw that do ok by finding a niche, but on the whole, cities of a certain size are where it is going to be.

Implication: A New Typology of Cities for the Global Age

Another thing this notion of specialization suggests is a typology of cities. If we think about specialization, we can think about it along a couple of dimensions. We can think about it in terms of economies that are diversified in many industries vs. those that are concentrated. And we think of an economy has having tradeable industries vs. non-tradeable ones.

I, of course, can’t resist turning this into a 2×2 matrix:*

This results in four typologies: Global City, Regional Business Center, Industry Cluster, and Rust Belt. Before discussing these, I’ll make them concrete with my mapping of four real cities into these types:

Global cities have a high diversity of industries with generally low tradeability. I wrote in an earlier post that many global cities were in fact the epicenter of some important 21st century macro-industry. But that doesn’t mean that’s all they have. New York is the paradigmatic example. Yes, it is the center of finance, but it is also the center of media, high culture, fashion, advertising, and many other things. In essence, one of the hallmarks of a global city is its diversity of specialties. This is one of the things that contributes to their resilience.

Regional business centers are diverse, but often predominantly feature tradeable industries. Atlanta is a good example here. These may be thriving places to do business in many respects – and there are many of them in America. But in some ways it seems their ability to generate economic value and wealth is eroding. Between 2001 and 2008 (the maximum range available), Atlanta’s GDP per capita actually declined by 6%. Its per capita personal income over that period declined from 109% of the US average to 95%, a stunning 14 percentage point drop that was the worst in the country among metros greater than one million in population. This is just more confirmation of what I said before, that Atlanta is a troubled region.

But beyond Atlanta, it calls into question the entire Regional Business Center model. Over that 2001-2008 period, 12 or 13 of the top 15 declining large metros on a PCI vs. US average method are ones I’d classify as Regional Business Center. Most of them have added jobs. Some of them even added a lot of jobs, like #2 Raleigh-Cary. But it seems they have increasingly lower end economies from a wage perspective and potentially a value one.

This should be setting off 911 alarm bells. This is where the preponderance of thriving American cities lie. These are America’s bread and butter cities, highly overlapping with what Brookings called “New Heartland” metros. If this model peters out as a success strategy, the results for the US could be catastrophic.

A Brookings writer sort of recognized this trend, noting that Atlanta had an income decline for “for reasons I don’t understand.” Well, people should start trying to understand it. Possibly one explanation is that the jobs they are creating, which are most of the new jobs in the country incidentally, are low wage due to their tradeability and thus are pulling down the average. If true, this means their core higher earning functions might be intact, but that America is drifting in a decidedly low wage direction. Whatever the case, we should figure out what’s really going on pronto.

Rust Belt cities are those that are concentrated in an industry that proved tradeable, like manufacturing. No surprise, places like Cleveland are hurting big time. Many of these places may no longer be technically concentrated in a legacy industry, but they still act like it. Their institutions, political systems, social structures, business practices and more are still often oriented around a legacy industry. Thus they behave as if they are concentrated even if they aren’t today.

Industry cluster cities are concentrated, but in an area that is not tradeable. Silicon Valley is the paradigmatic example here. But places like the aforementioned Warsaw, Indiana also count. It is obvious that if anything happens to the core industry of these cities, either it becomes tradeable or somehow obsolete or out of favor, these towns could be tomorrow’s Rust Belt burg.

A Better Tomorrow

Where does this take us? If we look at these trends, the future could seem rather bleak. But I prefer to be optimistic even I can’t predict how it will all work out. The endless debates over immigration reform show that America remains the place millions of people want to be. Clearly, people are voting with their feet in favor of the US, and that’s the ultimate endorsement. And if the last three decades have shown us something, it is that change happens fast. Globalization as it is currently practiced might end up proving to be just another decade long wave. In the 1980’s, many predicted Japan would displace the US as the world’s dominant economic power. It never happened. People have been betting on the decline of the US as long as I’ve been alive. But to date betting against the ultimate resiliency of the American republic has proven to be sucker’s bet.

Still, one lesson I take is that the forces unleashed in these waves have effects that are long term, and often not obvious. The early 80’s recession wasn’t just a cyclical downturn. It was a signal that manufacturing as we knew it was over. The forces of change unleashed then continue. They’ve finally taken down the auto industry, and perhaps in a short period of time the industrial restructuring will be complete.

Similarly, I’ve long drawn a parallel with between the 2000-2002 Rust Belt recession and the 2000-2002 dot com recession. There was a recovery from that, but I believe the signal is clear: technology as a macroindustry may be on the way out. It may take 20-30 years to get there, but I believe traditional tech employment is in long term secular decline. Those flush 90’s IT consultancies employ a lot fewer people than they used to (onshore at least), and probably will only employ fewer in the future. Dittos for corporate IT. While companies like Apple or nimble web startups might continue to thrive, mass IT employment for people without top tier tech or organizational leadership skill is going to suffer. I’m far from the first to suggest this. See also the famous piece, “IT Doesn’t Matter.” I could not in good conscience recommend that anyone in the US coming out of college go into IT today. (In India and elsewhere, it’s a different story). Similarly, there’s no such thing as the “green economy.” Within a decade, there will only be the economy. It will all be green and we’ll be right back to square one.

So while I certainly think these sectors are worthy of attention, we ought to be careful about them. Any “next big thing” gets absorbed into the system as it were, and becomes less of an industry in its own right. This means we should be careful about overly betting on specific sectors, particularly when those sectors have increasingly narrow employment bases.

We need to be aware of the forces and implications of the global age, recognizing that things will continue to evolve rapidly, but that nevertheless macro forces can transform us over a period of time in ways we don’t pick up from the cyclical ups and downs.

The first implication to address is the narrowing of the economic base. The signature problem of our time is to find a sustainable new model of both job growth and growth in jobs that provide a middle class standard of living with a realistic prospect of upward mobility. Without that, without a base belief by the broad public that there is economic security, progress and policy consensus on any other issue will prove illusive. The Great Recession will eventually end. But I’m not sure the secular forces that produced a lost decade will. We can’t let even a recovery lull us to sleep.

Going back to the 90’s, we’ve obsessed over how to generate more high skill jobs. Every city has programs around biotech, high tech, etc. I’ve written a lot about this myself. Clearly it is needed. Also, there’s been a lot of fascination with the urban transformation of places like New York or the ultra high value generated by clusters like Silicon Valley. Obviously places look at this and think they’d like to have some of that wealth generation for themselves.

The question is, how many cities will succeed at this, and to what degree? Also, how many jobs will this create? Probably not that many. Probably not enough to turn around even an entire metro area, much less the United States. Chicago has had one of America’s great urban core booms, but has hemorrhaged jobs.

Right now everyone is focused on foie gras, when what we really need is more meat and potatoes. I think that’s one mindset change that needs to happen. Joel Kotkin believes that the future is “vanilla.” I think there’s something to that. Yes, we need to continue focusing on wealth generating industries and high skill/high paying ones, particularly in places like the Midwest that don’t have many of them. That’s part of how you pay the freight for everything else. But we’ve also got to look at the everyday. Maybe, for example, we should put less focus on splashy downtown showcases and more on basic neighborhood services. Maybe less effort into biotech and more into creating a generally positive business climate for investment. We need better balance in our thinking.

We also need to recognize that our economic future is metropolitan, including cities and suburbs. This isn’t just an American thing, it’s a global trend. The notion of the yeoman farmer and the virtues of rural and small town life run deep in America. I grew up in a rural area and very much appreciate its values. I still hold them in many ways. We should respect them to be sure. But they aren’t our economic future. The future is in city regions with the minimum scale to compete. Our policies need to recognize that. You can be sure that other nations are very clear on this point.

As part of this we need to think about the new urban typology and how to make it work. I put one here, but there are many other ways to look at it, such as Brookings’ new take. Clearly, in a diverse America with diverse cities, one clear imperative is a diversity of strategies and policies to match. We need to think a lot less like a platoon of foot soldiers marching in unison and a lot more like a sports team where everyone has their own role to play.

I think the most important thing is to figure out how to make the Regional Business Center model work, and migrate more cities from the Rust Belt category into it. This won’t be easy. They’ve got the tough challenge of boosting incomes and maintaining job growth. Their low costs are an advantage, but a race to the bottom is a suckers bet. Much of the thinking about cities has been about America’s traditional urban centers. These places are simply too unique and impossible to replicate to serve as models. The “superstar cities” of America have an important role to play in our national economy as high value production centers. They really are foie gras, but they’ll never be the main course. We need to cultivate quality, prosperous workaday cities for the bulk of Americans to live and work. This means accepting that they are a very different animal from the tier ones.

Lastly, we need to forge a new framework for an American commonwealth. The great mass market is gone. Almost everything is fragmented today. The era where a one size fits all policy like the interstate highway system creates consensus is fading. Our nation is simply more diverse than ever on almost any metric. There are more versions of the American Dream than ever. We’ve got to find a way to make that work for us so that we can move forward. Lucky our federal system and tradition of local control give us the tools to do this. But it won’t be easy. Part of it I think will have to involve a more live and let live approach where we accept that other people simply have different values and preferences from us, that our desires and beliefs, no matter how deeply held, are largely not moral universals.

I can’t predict exactly where we’ll land. But America has long proven highly resilient and able to continually reinvent itself. It’s our great strength. I can’t say for sure how we’ll do it this time. But I believe it’s more likely than not that we will. We’ll know we’ve done it when we have an economic system that provides reasonable economic security and upward mobility prospects for the middle class, and in which a rising tide starts lifting most boats again.

* I didn’t do a quantitative analysis to map these cities, but it would be interesting to do one and see if the conceptual model holds up. And yes, I prefer to spell “tradeability” this way.

There has been plenty of discussion about how governments are using social media to engage with the general public and open up their vast amounts of data to collaborators. The interagency collaboration occurring behind government firewalls using wikis and blogs is also well-publicized. A topic that’s received less attention are the ways that social media and the principles of openness, collaboration, and authenticity are transforming how the government does business. How is social media changing the government contracting process? That’s the $500 billion+ question.

The world of contracting is one of the most important, complex, and least transparent within our Federal Government. From 100-page Request for Proposals (RFPs) to GSA schedules to organizational conflicts of interest to non-disclosure agreements (NDAs), the environment has long discouraged real discourse in favor of strict rules, processes, and policies. Too many companies of all sizes are frustrated and overwhelmed by the intricacies and red tape connected to doing business with the government.

But social media has brought about some positive changes. Here are three important ways it’s done so.

1. Getting Inside the “Black Box”

As Supreme Court nominee Elena Kagan put it, “bureaucracy is the ultimate black box of government … [it] is impervious to full public understanding, much less control.”

Five years ago, if a junior consultant wanted to talk with someone like Linda Cureton, NASA’s Chief Information Officer, about Spacebook, he would have to:

• Brief his manager on why he wants to talk with her
• Discuss his business objectives for the meeting
• Get his manager to contact a senior manager within the NASA account team and schedule a meeting with him/her to discuss intentions
• Discuss his business objectives with him/her
• Hope that this person would then have the time to reach out to Linda’s assistant to get on her calendar
• Attend the meeting with a NASA account representative (because a junior consultant couldn’t go by himself)

Those are six steps of red tape, all for a quick follow-up conversation with an acquaintance from a networking event. Unfortunately, the culture of the government contracting industry was one where everything, including everyday conversations, was heavily controlled and regulated. Nevermind if the conversation had nothing to do with a current procurement or new contract — it was just safer to avoid talking altogether.

Social media however, has allowed us access to this black box and the humans inside. According to a recent 2010 Federal Community Social Media study by Market Connections, 55% of respondents are using social media either formally or informally to communicate with their government audiences. I can now follow more than 30 government CIOs on Twitter, I can friend them on Facebook, and I can comment directly on their blogs. What used to take six steps now takes one direct message: “Linda, I’ll be down at NASA HQ for a meeting today – would love to talk with you about Spacebook while I’m there if you’re available.”

For me, the tipping point came when potential clients started contacting me on Twitter and my blog instead of calling the “official” points of contact listed on established org charts. Once we saw social media as a new way to actually conduct business, our legal and marketing teams went to work revising our communication and social media policies. While we’re still highly encouraged to involve the right people with the right expertise as we talk with our clients, the social networks of many of our junior employees are now rivaling the Rolodexes of some of our senior staff.

2. Smarter Bidding on Government Contracts

If you’ve ever done business with the Federal Government, you’ve probably encountered a process that is “challenging, complex, convoluted, and inconsistent,” and you’ve “encountered high barriers to entry, or didn’t get the communication you thought you needed or had to have.” That was the opening line of Mary Davie’s address at Tim O’Reilly’s Gov 2.0 Expo held in Washington, DC this past May. Davie is the Assistant Commissioner for the Office of Assisted Acquisition Services (AAS) in the GSA’s Federal Acquisition Service (FAS).

Disclosure: I was on the Gov 2.0 Expo Program Committee.

Yet we all accepted these struggles as the norm because “that’s the way the government works.” Government contracting is a $500 billion a year industry, involving thousands of people, thousands of companies, and just as many rules and regulations. The complexity of this problem has been exacerbated as government agencies all interpret these rules and regulations differently.

That’s where the Better Buy Project comes in. Developed as a joint project of the National Academy of Public Administration and the American Council for Technology in conjunction with the GSA, the Better Buy Project implements Uservoice to create a public platform where anybody can submit, view, and comment on ideas to make the government acquisition process more collaborative and transparent.

One of the implementations is the Better Buy wiki where anyone can ask questions and help shape future procurements in a transparent manner. The GSA is using Twitter to update interested parties on the status of active procurements. The Better Buy blog allows the public, the government, small business, big companies — anyone — to get new perspectives and expert viewpoints on making the acquisition process more open and accessible.

3. Turning “Enemies” Into “Frenemies”

What if the Federal Government, industry, local governments, small business owners, concerned citizens, and academia worked collaboratively to solve some of our nation’s toughest problems? It’s happening in the government contracting industry.

Thanks to social media, the walls that guarded against leaks of proprietary data have given way to conferences, meetups, and webinars where most participants subscribe to the “rising tides lift all boats” theory. At these events and sites, contractors, government staffers, media, and interested citizens gather together to talk about everything from the challenges of implementing open government to how government can better collaborate on issues related to the Gulf Coast oil spill.

Larger and more complex contracts mean many former competitors have now become collaborators. Government contractors large and small have recognized that instead of waiting for proposals and information, they can now work together to help define those requirements, saving time, improving quality, and increasing transparency.

Looking Ahead

These benefits don’t come without risks though. Complex contracting rules and regulations still exist and still apply. The culture of collaboration among the contracting community at events like the Gov 2.0 Expo does not decrease competition in the industry, but rather increases the quality of competitive submissions for billion dollar government contracts. The wiki that the GSA is using to bring more transparency and collaboration to the federal procurement process is leaving ethics officers, contracting officers, project managers, lawyers and technical advisers grappling with how to adapt to these new open and transparent processes.

Despite how far we’ve come over the last five years, there is still a long way to go before doing business with the government is as easy as doing business in the private sector. The Federal IT Dashboard is a great start, but it’s just the tip of the iceberg. Data transparency doesn’t necessarily lead to operations transparency.

Policies, regulations, and laws need to be updated. Contracting professionals need to learn new skills. IT security and privacy controls need to be adapted to protect confidential and proprietary information. Most of all, the people — the contracting officers, the project managers, the lawyers, the marketers, the proposal writers, and the IT specialists — need to stop talking about how difficult it is to do business with the government and instead focus on asking, “What makes this process so complex and what can I do to make it better?”

More Government Resources From Mashable:

- How Political Campaigns Are Using Social Media for Real Results
- 5 Things the Library of Congress is Archiving Online
- How Open Data Applications are Improving Government
- How Social Media is Changing Government Agencies
- 5 Ways Government Works Better With Social Media

Image courtesy of iStockphoto, Pgiam

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Once again we prove that we just don't get it. We need fewer cars and planes and a lot more trains. The solution is not the flying car. Maybe these flying cars (which are right out of Disney cartoons) can be parked at the new Disney McMansions?

American McNuggets (190 calories, 12 grams of fat, 2 grams of saturated fat for 4 pieces) contain the chemical preservative tBHQ, tertiary butylhydroquinone, a petroleum-based product. They also contain dimethylpolysiloxane, "an anti-foaming agent" also used in Silly Putty.

All McNuggets not created equal [CNN's The Chart]