URBAN PAPER SERIES 2014

CONNECTING THE DOTS FOR URBAN REVITALIZATION

LESSONS FROM DORTMUND, GERMANY

ALAN MALLACH

 2014 The German Marshall Fund of the United States. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the German Marshall Fund of the United States (GMF). Please direct inquiries to: The German Marshall Fund of the United States 1744 R Street, NW Washington, DC 20009 T 1 202 683 2650 F 1 202 265 1662 E info@gmfus.org This publication can be downloaded for free at www.gmfus.org/publications. GMF Paper Series The GMF Paper Series presents research on a variety of transatlantic topics by staff, fellows, and partners of the German Marshall Fund of the United States. The views expressed here are those of the author and do not necessarily represent the views of GMF. Comments from readers are welcome; reply to the mailing address above or by e-mail to info@gmfus.org. About GMF The German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit of the Marshall Plan. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 as a non-partisan, non-profit organization through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has offices in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, Warsaw, and Tunis. GMF also has smaller representations in Bratislava, Turin, and Stockholm. On the cover: Dortmund, Germany, skyline. Alissa Akins

Connecting the Dots for Urban Revitalization

Lessons from Dortmund, Germany
Urban Policy Paper Series January 2014

Alan Mallach1

Connecting the Dots: Defining Urban Regeneration . . . . . . . . . . . . . . . . . . . . . . 1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Economic Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Physical Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Dortmund Today: How Extensive has the Transformation Been? . . . . . . . . . . . . . .15 Future Challenges: Implications for U.S. Cities in Transition . . . . . . . . . . . . . . . . .19 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Alan Mallach is a senior non-resident fellow for the German Marshall Fund of the United States. In that role, he supports GMFs Cities in Transition Initiative. This publication is part of the Cities in Transition Initiative, a three-year project designed to build a sustained network of leading policymakers and practitioners in five older industrial U.S. cities: Detroit and Flint, Michigan; Cleveland and Youngstown, Ohio; and the greater Pittsburgh, Pennsylvania region. The initiative is generously supported by the Surdna Foundation and the Kresge Foundation.

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Connecting the Dots: Defining Urban Regeneration

What Urban Regeneration is Not Before discussing what urban regeneration is, it is useful to address briefly what it is not. It is not megaprojects, the so-called Bilbao effect notwithstanding; it is not catalytic events and it is not the statistical change reflected in a reversal of a population decline trend. Some facilities and events may further regeneration, and a reversal of population loss may be evidence of regeneration, but it also may not. One of the United States most distressed smaller industrial cities, Reading, Pennsylvania, has seen its longterm population decline dramatically reversed since the 1990s, and yet is poorer and struggling harder than ever (Mallach 2012). A recent study found no clear relationship at the metropolitan level between population growth and GDP growth (Martin Prosperity Institute 2013). An oft-cited example of an event heralded as a catalyst of change was the IRA bombing of downtown Manchester in northern England in June 1996. The bomb, which destroyed or severely damaged over 1 million square feet of retail and office space, triggered a rapid response from the citys political and civic leadership. Planning for reconstruction was underway before the end of the year, and by 2000, the entire area had been rebuilt, in turn spurring extensive redevelopment in surrounding areas. While Manchester was already showing important signs of change, there is little doubt that the reconstruction helped spark additional regeneration. Manchesters effective response to the bombing was no accident. For more than a decade, city government had been building its capacity and its partnerships with non-governmental entities, without which they could not have responded as effectively to the challenge of reconstruction. That sustained process, and not the bombing, was the essential precondition for change, which gives the lie to Chicago Mayor Rahm Emmanuels famous but erroneous dictum, you never want a crisis to go to

his case study grows out of the Cities in Transition initiative of the German Marshall Fund of the United States, through which close to 50 key planners, policymakers, and practitioners in five United States older industrial cities Cleveland, OH; Detroit, MI; Flint, MI; Pittsburgh, PA; and Youngstown, OH participated in a sustained knowledge transfer effort from 2010 through 2012 through site visits and conversations with counterparts in a number of European cities, including Manchester, U.K.; Barcelona, Spain; and Leipzig and Dortmund, Germany. The focus of the CIT initiative was not only to provide the U.S. practitioners with the opportunity to learn about and share specific projects and strategies, but to begin thinking more holistically about the larger issues associated with urban regeneration that they were confronting in their cities. Each of the three years of the CIT initiative focused on a different part of the urban puzzle: the first year on land use and redevelopment, the second on economic development, and the third on the alignment between workforce development and economic development. The phrase connecting the dots was used as a shorthand for the process of integrating the learning from the three years, which was the focus of the concluding workshop of the CIT initiative held in May 2013 in Detroit. Roughly two-thirds of the U.S. practitioners who had been involved in some part of the initiative were present at that workshop. The threshold issue in the workshop and for thinking about regeneration in general is to adequately define urban regeneration. In the next few pages, I will offer a framework for an integrated way of thinking about urban regeneration. I will then explain why a case study of Dortmund offers both a useful way of applying that framework and valuable lessons for the many United States cities that it so closely resembles in important respects.

Connecting the Dots for Urban Revitalization

waste. Unless the capacity to respond effectively to the crisis is already present, the crisis will inevitably go to waste in whole or large part. Youngstowns black Monday was as dramatic a crisis as the Manchester bombing, yet prompted no meaningful change.1 While factors outside the citys control were also involved, Youngstown lacked the leadership, partnerships, resources, or technical sophistication to translate the crisis into change. It is not the catalytic event that triggers change. The ability to capitalize on a crisis or a catalytic event is a function of the capacity and leadership already in place. The same is true of major facilities such as casinos, convention centers, and arenas, or for that matter, the Guggenheim Museum in Bilbao.2 Only to the extent that they are integrated into a larger strategy, which leverages whatever effects they may bring to bear, can they contribute meaningfully to a citys regeneration. Defining Urban Regeneration What, then, is urban regeneration? There is no generally accepted definition. The term is used in the literature in ways that vary from narrowly physical definitions such as slum clearance, to broader holistic ones that embrace societal indicators. Similarly, it is sometimes used to describe a process, as in one paper that defines urban regeneration as a process to improve the economical, physical, social, and environmental condition of an area (Mehta 2008), or as outcomes. While the process by which change takes place is of critical importance, the
1 On Monday, September 19, 1977, the Youngstown Sheet & Tube Company announced that it would be closing two of its area locations, the beginning of a decades-long out-migration of steel jobs and resulting economic crisis. 2

outcomes ultimately determine whether the process has been productive and whether the community (however defined) is better off for it. As an overarching definition, I would therefore propose that urban regeneration be defined as change to a citys social, economic, and physical conditions in a way that is both equitable and sustainable. That, in turn, suggests that regeneration should encompass three distinct pillars: Building a new export-oriented economic base in the city to replace the lost historic manufacturing economy; Changing the quality of life and the physical environment of the city and its neighborhoods to make them desirable to potential users, and competitive in the regional marketplace; and Improving the social and economic conditions of the people who live in the city, ensuring that they benefit from changes to the citys economic and physical environment and compete effectively in the regional marketplace. These three pillars should be seen not as separate goals, but as a package in which all three are needed to bring about sustainable urban vitality. Moreover, for a city to succeed in any or all of them it must recognize the extent to which it is integrated into the regional economy and the labor and housing markets, and focus on competing successfully within that regional market by identifying sectors where the city has an identifiable comparative advantage. This last point is worth stressing. Autarchy is not a recipe for economic success in todays world, particularly when applied to cities that are disproportionately poor and lacking in resources compared to their region or the nation as a whole. While import substitution activities, such as efforts to retain resident purchasing power by creating local retail hubs, may have some value, in the

Writers who claim that the Guggenheim Museum turned around Bilbao fail to recognize the extent to which that museum was only one part of a much larger integrated revitalization strategy; an example appears in an otherwise thoughtful book by Bell and de-Shalit (2011, p3), who write Frank Gehrys spectacular museum in Bilbao almost single-handedly changed the Spanish city from a declining industrial center into a mecca for tourism. For a more nuanced perspective, see Plger (2012).

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Figure 1: Cross-Cutting Relationships Between City Initiatives and Urban Regeneration Pillars Improving Social and Economic Conditions Competitive Local Neighborhoods
Making neighborhoods competitive by addressing physical environment, problem properties and quality of life A stronger local and regional economy increases the market base and level of investment in city neighborhoods Greater resident income and assets foster increased demand for and investment in city neighborhoods

Export-Oriented Economic Base

Making city a successful economic center and destination through property reuse and building on physical and historic assets An effective economic development strategy is needed to build new and sustainable economic engines More skilled workforce becomes major assets in creating new economic engines

Land Use

Improving the quality of life for the people who live in the city by addressing physical environment and problem properties Building job and business opportunities in a stronger local economy based on regional strengths Providing city residents with the job skills and educational attainment they need in order to compete effectively in the regional economy

Economic Development Workforce Development

final analysis they are likely, even if successful, to have more impact on residents quality of life than on the citys economic strength. As an unnamed pundit has been quoted as saying, You cant have an economy by taking in each others laundry. (Browne, 1986; Chicago Tribune, 2010) Returning to GMFs Cities in Transition initiative, the three elements that formed that initiative can been seen as three ways for operationalizing an integrated approach to urban regeneration; as Figure 1 shows, those three elements cut across the three pillars. While each contributes toward the overall goal of sustainable regeneration, that contribution is not automatic. It is easy enough for land use planners, economic developers, or workforce specialists to work in silos. Ensuring that they further an integrated body of goals, and that success in one area does not lead to unanticipated negative outcomes in another, happens only through intentional and integrated strategies. Implicit in improving the social and economic conditions of the citys residents is the larger question of social inclusion and equity. Any effort to formulate a strategy for success needs to explicitly

address the complex issue of justice as it cuts across all of the citys dimensions. The concept of the just city can be encapsulated in a triple proposition: that the city furthers democracy, diversity, and equity (Fainstein, 2010). As will be discussed at the end of this paper, this remains perhaps the single greatest challenge facing cities in transition. Why Dortmund? Although these issues can be explored further as general propositions, it is also useful to look at how they play out in a real-life context through a case study. In that respect, and in the context of the CIT initiative, Dortmund offers some significant advantages.3 Dortmunds historic dependence on heavy industry resembles many of the U.S. cities that participated in the initiative more than most of the other European cities that were the subject of site visits, and shares more of their challenges. Moreover, one can point to and evaluate system3

See GMF website for further information on the third-year CIT study tour to Dortmund, particularly the framing paper by Linda Fowler, available at http://gmfus.wpengine.netdna-cdn. com/wp-content/uploads/2012/12/Linda_Fowler_Framing_ Paper.pdf.

Connecting the Dots for Urban Revitalization

atic strategies that were pursued over an extended period of time in all of the areas that were highlighted above in the discussion of urban regeneration. Thus, it is possible to offer some assessment of the outcomes of those strategies and identify key remaining challenges. As will be seen, its achievements and challenges offer meaningful lessons for similar U.S. cities. The case study presented here should be seen as a sketch, rather than a full-dress study, of Dortmund and its strategies for change. It does not claim to be an in-depth analysis, but reflects insights and impressions from meetings with key participants and observers of Dortmunds revitalization and development activities and review of English-language papers and articles.4 Rather than provide detailed
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descriptions of those activities, it sketches them briefly in order to offer a framework for the discussion of issues and challenges and identify experiences and lessons that can be useful for U.S. cities.5

To my regret, my command of German is not adequate to allow me to access the considerable body of relevant literature in German, including by way of example a recent volume edited by Hermann Bmer and his colleages at the Dortmund Technical University, Stadtentwicklung in Dortmund seit 1945 [Urban Development in Dortmund since 1945] published by TU Dortmund in 2010.

As a result, it is likely to be subject to both errors of fact and errors of interpretation, for both of which I take full responsibility. A number of errors of fact and interpretation that appeared in the initial draft of this paper have been corrected thanks to the gracious assistance of Prof. Thorsten Wiechmann of TU Dortmund, who read and reviewed the initial draft.

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Background

ortmund is located in the southeastern part of Germanys Ruhr Valley, historically one of the most heavily industrialized regions in the world. An important city during the Middle Ages, Dortmunds modern history begins with Germanys industrialization during the second half of the 19th century. During that period, Dortmund became a major center for coal-mining and steel-making.6 Between 1850 and 1900, its population increased 11 times, to over 150,000 (Jackson 1997); by 1930, the citys population had risen to over 500,000. Today, Dortmunds population totals almost 600,000. Dortmund was badly damaged by Allied bombing during World War II; as Crouch and Herson (2010) point out, [British] observers can find it difficult to comprehend the full extent of destruction and disruption that afflicted Dortmund and other German cities at the end of World War II. Most of the inner part of the city was reduced to rubble, while the citys population dropped to 300,000. Dortmunds recovery from the destruction of World War II was unusually rapid, even by comparison to other German cities. The demands of German reconstruction, coupled with the rapid growth of the German economy during the 1960s, fueled demand for Dortmunds principal products, and coal and steel production were both ramped up substantially during the 1950s and 1960s. Population and employment both grew back rapidly; coal-mining employ6

ment peaked in 1956 at 40,000, while steel employment peaked in 1961 at 38,000. During this period, the citys population exceeded 600,000 for the first time (Crouch and Herson 2010). The city center was rapidly rebuilt, but as Kunzmann and his colleagues point out, The speedy reconstruction of the inner city in the 1950s is a heavy legacy and to a great extent it is responsible for the poor aesthetical quality of the city, a fact that contributes to the mediocre urban image of Dortmund and to its low profile as a target for urban tourism (Kunzmann, Tata and Buchholtz 2003). The combination of rapid physical reconstruction coupled with renewed post-war dependence on coal and steel as the economic base put off serious consideration of structural change for a number of decades; as late as 1976, manufacturing jobs still represented one-third of the citys employment base. By the 1980s, structural change was evident. Coal mining had been declining since the 1970s, and the last mine in the city closed in 1987. Steel production peaked in 1974, and by the 1980s, the industry was in crisis. Dortmunds population slowly tailed off after 1981, and it has since remained below 600,000. The citys population appears stable today; 2011 data indicates that while deaths exceeded births, in-migration exceeded out-migration, resulting in a net positive balance of roughly 500 people.7

As well as beer-making, which although far less significant as a source of employment or income, was an important part of the citys image in the rest of Germany. In contrast to coal, which has completely disappeared, and steel, which is limited to smallscale processing facilities, one major brewery still operates in Dortmund today.

This may be misleading; the just-released results of the 2011 German census, the first in many decades, showed that the national population tracking system had over-estimated the nations population by 1.5 million, largely, it appears, because of systemic under-reporting of out-migration by foreign nationals.

Connecting the Dots for Urban Revitalization

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Economic Strategies

lthough it would be unfair to suggest that no planning for a different economic future for the city took place until the 1980s, the strategies for economic development in place today did not emerge until the 1980s and 1990s. The Technologie Zentrum Dortmund [TZDO], or Dortmund Technology Center, was established in 1985, and the Dortmund-Project was established in 2000.8 These two closely linked entities have driven the citys economic development strategy for the past decade, and are likely to continue doing so in the future. This section will provide short descriptions of the activities of these two entities and briefly discuss the citys use of culture as an economic development strategy. The Dortmund-Project

The Dortmund-Project is designed to be a comprehensive model of economic development, organized around a series of key technology clusters integrated around four central elements: Area and infrastructure: creating the physical as well as organizational infrastructure to accommodate new industry in the key clusters; Innovative environment: fostering entrepreneurship and innovation through business start-ups; People and skills: increasing the pool of workers with the skills to participate in the emerging technology centers and reducing unemployment; and Capital: increasing access to both debt and venture capital. Four key clusters were identified as the focus of the Dortmund-Project:11 Information technology Micro- or nanotechnology Logistics Biotechnology In partnership with TZDO and TU Dortmund, the Dortmund-Project attempts to create distinct comprehensive support systems for both start-ups and existing businesses in these four sectors. This system is based principally on the competence centers comparable to U.S. incubators administered by TZDO and cluster staff within DortmundProject. Cluster staff are recruited from the industry sector itself, rather than being economic development or training generalists assigned to that sector.
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The Dortmund-Project is responsible for designing and implementing economic development strategies for the city.9 Though it operates within the citys economic development department, it is accountable to the mayor and to a public-private advisory board. It was established in 1999, when the initial strategy was designed under the aegis of a partnership between the steel conglomerate ThyssenKrupp AG, the metalworkers union IG Metall, and the city of Dortmund. This partnership emerged from the negotiations that took place as a result of ThyssenKrupps decision to close the Westfallenhtte, the last steel mill in Dortmund (Muhge et al 2006).10 The strategy was put in place for an initial ten-year period through 2010, and in the last few years it has been restructured to some extent.

This followed the expansion and conversion of the citys economic development office into an independent public corporation in 1997.

9 According to one informant, the Dortmund economic development department is the largest municipal economic development office in Germany. 10

ThyssenKrupp paid to hire McKinsey & Company as the principal consultants charged with designing the strategy, with support from staff seconded from ThyssenKrupp.

Dortmund-Project provides support services in a number of areas that are not formally designated as clusters, but that are integrated into their strategy, including the creative sector, broadly defined, and health care. One such area, production technology, also has a competence center in TZDO.

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In addition to direct support facilities and infrastructure, and its role as the developer of the Phoenix Project and other major projects, the Dortmund-Project sees two of its key tasks as building a climate of entrepreneurship and linking the workforce to emerging business and job opportunities. The principal vehicle for the former is the Start2Grow competition, a high-profile business plan competition, which draws between 200 and 300 competitors each year. With respect to workforce development, since Germany already has a highly developed system for vocational training,12 the principal role that the Dortmund-Project plays is to provide information, making students in the local schools aware of the technology sectors and the opportunities they offer, connecting students and companies through internships, and encouraging training providers to orient their activities more closely with emerging industry needs. Since 2009, the Dortmund-Project has modified their strategy to focus more on what they call crossclustering; that is, identifying emerging markets where clusters can be linked to respond to the needs of those markets. Examples of sectors include simulation, mobility, or energy efficiency. Specific product-oriented targets are shown in Figure 2. It may be more accurate to think of the cross-clustering approach as a refinement of the initial cluster strategy, rather than a departure from it. TechnologieZentrum Dortmund The TZDO is the principal vehicle through which facilities and infrastructure for the target clusters
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are provided. It was established in 1985, on land owned by the city and TU Dortmund immediately to the west of the university, reflecting its goal of leveraging the growing talent pool represented by the university.13 The TZDO is a public-private venture, led by the city of Dortmund (the largest shareholder), the two Chambers, a consortium of local lenders, and the citys two principal institutions of higher education, TU Dortmund and the Fachhochschule [University of Applied Sciences].14 The TZDO offers 10 different competence centers. They are mostly located at the main facility near the university, but the logistics center is located at the port, while the micro-technology and production technology centers are located in the flagship Phoenix West development in the southern part of the city. The facilities range from providing basic start-up office space and services, such as the B1st Software-Factory for start-up software designers, to facilities with extensive lab equipment for biotechnology, and even prototype manufacturing capability for micro-technology. Altogether, TZDOs facilities contain roughly 1.3 million square feet (120,000 square meters) of space.15 In order to encourage growing firms to stay in Dortmund after they have outgrown the competence centers, TZDO created a development arm, TZ Investment Co., to build facilities for such firms, formerly on land near the university and increasingly on the TZDO land in the Phoenix development. All in all, the TZDO estimates that it has spun off some 520 firms, of which 280 are still located in Dortmund. Those 280 firms employ 8,500 workers.
13 14

The system, which is based on a combination of apprenticeships and in-school education related to the field of the apprenticeship and which is administered by the two principal business chambers (Kammers), is generally held to be effective and widely admired elsewhere. One informant suggested, however, that it is not as responsive to the needs of emerging technologies as it should be. The two chambers are the Industrie- und Handelskammer (Chamber of Business and Industry) and the Handwerkskammer (Chamber of Crafts). While the former is often translated as Chamber of Commerce their activities and their role in German society are substantially different from those of U.S. Chambers of Commerce.

TU Dortmund was only established in 1968.

The Fachhochschule principally offers degrees in engineering fields and computer science, although it also has programs in economics, social sciences, architecture, and design. Its enrollment is approximately 11,000, or somewhat less than half the size of TU Dortmund. The TZDO is also one of the three partners in the Kitz.DO project, a hands-on technology learning center for children.

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Connecting the Dots for Urban Revitalization

Figure 2: Cross Clustering Around Markets

Market

Simulation
Cluster Biotechnology
Pharmacy studies Business models Serious games Medical imaging

Mobility

Energy

Resources
Industrial biotechnology Efficiency contracting Green marketing Hospital engineering

Lab on a chip Business models for e-mobility Mobile apps Ambient assisted living Mobile apps

Biogass/mass Energy contracting Sustainability awareness-raising Hospital engineering Smart grids

Business services Creative Health care Information technology Logistics Micro-technology Production technology

CAD Supply chain simulation Micro-sensors Production process simulation

Rapid prototyping

e-mobility RFID transponders

Green logistics Energy harvesting Intelligent production buildings

RFID control New surfaces

Mobile maintenance

New materials

None

Proposed

Potential

Actual

SOURCE: Adapted by author from presentation by Dr. Claudia Keides, Dortmund-Project

The Regional Connection: A Short Note While the greater part of Dortmunds economic strategy appears to be driven by the local actors and is designed to focus specifically on the city as such, it would be misleading to suggest that it is not part of a larger regional strategy to which it contributes and from which it benefits. Although the breadth of the citys regional relationships and the extent of regional activity in the Ruhr Valley is a major

subject well beyond the scope of this case study, it is too important not to address at all. Under the rubric of Metropoleruhr, a network of regional organizations and agencies exists to further regional strategies throughout the Ruhr Valley. The Regionalverband Ruhr [Ruhr Regional AssociationRVR] provides overall coordination of municipal and regional planning, and manages important regional assets such as the Industrial

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Heritage and the Emscher Landscape Park. With respect to economic development, a regional quasigovernmental corporation, the Wirtschaftsfrderung [economic development] metropole Ruhr GmbH, supports local efforts through a wide range of planning, service provision, and promotion activities. Regional transportation systems are coordinated through the Verkehrsverbund Rhein-Ruhr, while scientific and research coordination is furthered through the Universittsallianz [Alliance of Universities] Metropole Ruhr, an alliance of the regions three major universities, including TU Dortmund, established in 2007. At the state level, the Land of North RhineWestphalia has adopted a strong cluster-oriented economic development policy under the title of ExcellenceNRW, grounded in a strategy of targeted support to industrial clusters. The states efforts are designed to support and foster public, privat,e and institutional co-operation within 16 industries and technology fields selected on the basis of growth potential and state-level competitive advantage. The presence of this policy, which is highly congruent with the Dortmund-Project, and the level of statelevel support that it provides have both enhanced the ability of Dortmund to pursue its local clusterbased economic development strategy. While it is hard to quantify, the value of being part of an extensive and highly sophisticated network of regional entities is likely to be considerable. The Ruhr Valley was designated the European City of Culture for 2010, and a regional strategy for maximizing the cultural assets of the entire region was developed, in which Dortmund actively participated and from which it benefited. Conversely, the Start2Grow competitions initiated in Dortmund, while initially limited to Dortmund-based entities, have since taken on a regional focus, while still being administered locally. Other regional dimensions are even harder to quantify but are just as important. The regional

focus on industrial heritage [industriekultur] has become a major element of tourist and visitor promotion, and is a culturally unifying theme for people and projects in the entire region. This can be seen in the extent to which the visual symbol of the regions industrial heritage, the distinctivelyshaped mineshaft tower of the Zollverein colliery in Essen (Figure 3), sometimes referred to as the Eiffel Tower of the Ruhr, has started to be absorbed into the regions popular visual vocabulary in such areas as store signs, company logos, and refrigerator magnets. While Dortmunders have a strong sense of local identity, their sense of being part of the Ruhr region and sharing in the elusive quality referred to as Ruhrpott may be even stronger. While their continued economic rivalry with Essen is very real, it is the rivalry of competitive colleagues. Cultural and Creative Strategy Although the technology-driven model of the Dortmund-Project and TZDO represents the dominant economic development model in Dortmund, Figure 3: The Zollverein Tower In Essen

Source: Thomas Wolf (Wikimedia Commons)

Connecting the Dots for Urban Revitalization

the city is also strongly focused on cultural and artistic development, and has recently pursued a Richard Florida-esque approach to identifying and promoting what can loosely be characterized as the creative sectors of the local economy.16 The Kulturbetreib (department of cultural services) is organized as an Eigenbetreib, or semi-autonomous agency of the city of Dortmund. The department includes the bureau of culture (Kulturbro) as well as a number of facilities and programs. These include the Dortmunder U, described below, and the Jedem Kind ein Instrument [Every child an instrument] music school, which enrolls roughly 8,000 children in its programs. The bureau of culture tries to develop facilities and venues for artists and to integrate culture and the arts into the citys life. Bureau staff are proud of the fact that they support a wide range of cultural and artistic activities, including popular arts and new media, in contrast to the high art focus that still remains strong in much of German official cultural life. The citys cultural flagship project is the Dortmunder U, the conversion of a historic brewery at the edge of the city center into an arts and media complex (Figure 4). The project, which was the citys principal contribution to the designation of the Ruhr as the European Capital of Culture in 2010, contains a wide range of facilities to support artists, including museums and gallery space, hands-on workshops focusing on film and new media, classrooms, and performance spaces. Films are projected on its windows and the illuminated U atop the tower a local landmark since initially built in 1927 is visible from much of the city. The Dortmunder U is only one of many arts-related facilities that have been developed by or with the assistance of the city, including jazz clubs, media centers, cultural centers, and artists residence/work spaces. The city is currently exploring the develop16

Figure 4: The Dortmunder U

Source: Mathias Bigge (Wikimedia Commons)

ment of the Rheinischestrasse Quarter south of the Dortmunder U as an arts district. Given that no development of this type exists in Dortmund, the citys goal is not only to accommodate artists desire for a distinctive environment, but, as the director of the Kulturbro commented, to make the city interesting. Dortmund cultural authorities see a strong reciprocal relationship between the citys push for a high-technology economy and the arts. A key part of the theory underlying the citys support for the arts is that in so doing, they can create the type of environment that will enable the city to retain a healthy percentage of the large pool of arts-related graduates from the citys universities, and make the city attractive to the creative class as Florida broadly defines it, thus serving the larger goal of retaining and increasing the technology sector.

Richard Florida identified that a key pillar of a citys economic growth is the ability to attract the creative class and successfully integrate them into a local knowledge economy.

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While such a strategy may show results as long as public money is available to support it, it may have difficulty becoming self-sustaining. Dortmund suffers from some important constraints in that respect; as the same individual noted, it is still a relatively low-income city, with relatively few affluent, educated households, yielding only a small pool of serious arts consumers. As a result, artists who stay in Dortmund have much more difficulty making a living from their art than they might in a city with a stronger, better-established art market.

Dortmund may be a good place for an artist to start out, but may not be a good place for an artist to become establish. The city has also begun to promote the creative sector more broadly under the rubric of Dortmund. Kreativ, including within not only traditional arts, but sectors such as advertising, software design, and media. It is not clear, however, to what extent this has been integrated with other parts of the citys economic development strategy.

Connecting the Dots for Urban Revitalization

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Physical Transformation

n the course of recognizing the need for economic transformation beginning in the 1980s, city officials also recognized the need for physical transformation, particularly of the city center, which had been rebuilt largely from scratch after World War II. Although the buildings built during the 1950s and 1960s are at best undistinguished, they have two virtues. For the most part, the buildings form continuous street walls, and few of them are more than five or six stories high. As a result, the city was able to extensively reconfigure the city center through urban design strategies. Since the adoption of the City-Konzept 2000 plan in 1988, the city center has seen a profound transformation, most visible in the network of interlocking attractive public squares and pedestrian ways that has been created. A signature project to develop the main train station into a nearly 1 million square foot retail, entertainment, and services center was first proposed in 1997 but was abandoned in 2007 when adequate financing did not materialize. For all its attractive public spaces, the city center continues to lack a distinctive character or a coherent hub, while the city as a whole has few notable buildings or monuments. Arguably the single most prominent building in the city, one that is well-known throughout Europe, is the Westfalenstadion, the 80,000 seat stadium built in 1974 where Dortmunds famous Borussia football club plays. Two notable downtown development projects are the Philharmonic Hall and the glass atrium created to link the old and new city government offices. While both play a part in enhancing the quality of life in the city center, neither functions as a central organizing space. Dortmund is a spread out city by German standards, reflecting its origins in a process by which a large number of small, distinct villages and towns were consolidated into a single city. Much of the area between these former villages has been preserved in open space, and the city takes pride in its green

character. Most residential areas are made up of modest and generally well-maintained small multifamily buildings, as shown in Figure 5. The Nordstadt, the neighborhood immediately north of the city center generally considered the most distressed neighborhood in Dortmund, looks little different from other parts of the city except in subtle signs of graffiti and litter. The city is undertaking revitalization projects in a number of areas, including the Nordstadt, Hrde, and the Rheinischestrasse quarter. A drawback of the city from the standpoint of economic development is the reality that while not unattractive, Dortmund lacks variety. While the overall standard of housing is adequate, little Figure 5: Typical Housing Types In Dortmund

Near the city center

A more outlying neighborhood

SOURCE: Google Earth

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The German Marshall Fund of the United States

is distinctive, and few neighborhoods can be said to have a distinctive urban character of their own. Only a handful of the citys neighborhoods, such as the Gartenstadt Sd [Southern Garden City] roughly 2 kilometers east of the city center (Figure 6), offer the larger flats or detached single-family houses (villas) that might draw or retain more affluent professionals or business people. Diversifying the housing stock to that end was an important driving force behind the residential dimension of the Phoenix project. The Phoenix project is the citys flagship redevelopment project (Figure 7). The project is actually two sites linked by a green corridor containing a total of 530 acres (214 hectares), divided by the center of Hrde, a town roughly 4 kilometers southeast of the city center, which was absorbed into the city of Dortmund early in the 20th century. The two sites were previously devoted to a single steel mill that closed in 2001. Site remediation and development has moved ahead steadily, and a great deal of redevelopment has taken place on both sites. Although much more

Figure 6: The Gartenstadt Sd

SOURCE: Google Earth

remains to be done, what remains now is almost entirely a matter of building out development-ready parcels. Reflecting this, the interdepartmental Phoenix working group, which met almost weekly for the past decade as the project gradually moved forward, was dissolved in spring 2013.

Figure 7: The Phoenix Project

SOURCE: Stadt Dortmund / stegepartner

Connecting the Dots for Urban Revitalization

13

Figure 8: New Development on Phoenixsee

tion, while development of the southern bank was slated to begin that year. In contrast to the area around the lake, Phoenix West is being developed to support the continuing growth of the citys technology sector, with a combination of TZDO facilities, including the micro-technology competence center, and sites marketed to or developed for technology-oriented firms, particularly those that have outgrown their space in the competence centers. In addition to new buildings, the western site contains a substantial number of historic industrial buildings that were preserved in the course of development, including the principal blast furnace of the old steel mill. Maintaining and finding appropriate reuses for these buildings, however, has become a difficult challenge for the city, which continues to hold them despite its desire to find private users for them. The Phoenix project is well on a path to success, and represents a significant achievement. Nonetheless, the city still contains large numbers of vacant or underutilized brownfields sites, as well as railroad yards, which await redevelopment.18 Whether Dortmund will be able to mount future redevelopment initiatives on a comparable scale remains to be seen.

SOURCE: Pelz (Wikimedia Commons)

Phoenix East has undergone the most dramatic change. In place of the steel mill, a 60 acre (24 hectare) lake nearly 4,500 feet (1,370 meters) long has been created, surrounded by public open space and terraced banks, on which expensive single family houses are being constructed.17 In the part of the site closest to the center of Hrde, higher density development is under way, principally apartments with ground floor retail and services, designed to connect with and reinforce the older center. Ultimately, some 2,000 housing units are planned for the site. As of spring 2013, development of the areas along the northern and western banks of the lake was more than halfway to comple17

18

According to one informant, prices for the houses run from 700,000 and up.

According to Dortmund-Project staff, the city contains some 1,500 acres (600 hectares), or over 2 square miles, of brownfields sites.

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The German Marshall Fund of the United States

5
I

Dortmund Today: How Extensive has the Transformation Been?

was identified by informants, decisions appear to be made and effective and strategic actions are taken with a strong level of consensus. It is important to note, however, that this is very much an elite network. There appears to be little systematic effort at broader public participation, while few non-governmental organizations (NGOs) appear to play a substantial role in the economic or physical planning process in the city. This appears to be true in many other German cities as well, although there are indications that it may be changing.20 Without suggesting that such activities or organizations are a panacea, their absence may contribute to the difficulty the city is finding in addressing some of its more complex and, it appears, increasingly entrenched social and economic problems. With respect to employment, Dortmund has made a significant, but arguably still incomplete transition to a post-industrial economy. In 1976, Dortmund had 227,000 jobs eligible for social insurance,21 of which approximately 75,000 were in the manufacturing sector; this number, however, already represents a decline from peak manufacturing employment of the 1950s and 1960s. By 2006, the total number of jobs had dropped to 185,000, of which 25,000 were in the manufacturing sector. Thus, during that 30-year period, growth in other sectors replaced only a small percentage of the jobs lost in manufacturing.
20

n many respects, Dortmund can be seen as a model for other cities from an economic development perspective. While they have pursued economic development goals since the 1980s, since the founding of the Dortmund-Project in 2000, the city has organized its economic development efforts around a coherent, well-defined strategic agenda with consistency and focus that are rare in the field of urban economic development, whether in Germany, the United States, or elsewhere. During these years, the city and its partners have made major investments in physical facilities such as the TZDO19 and the Phoenix project, while building human capital and fostering start-up businesses and entrepreneurs. Dortmund has also shown a highly networked approach to its economic development strategy, with strong cooperation and integration between public and private entities. As one informant commented, in the 1990s, we were so far down, everybody agreed we had to work together. The networks include not only governmental partnerships between the city and the land (state) of North Rhine-Westphalia, and between the city and the two Chambers, but also between those entities, the two principal universities, the citys financial institutions, and others. The role of the universities, particularly TU Dortmund, in the citys economic growth is a significant one. They represent a principal means by which the city gains a highly skilled workforce and a body of emerging innovators and entrepreneurs. This is very notable in the field of information technology, where the relationship between TU Dortmund and the TZDO is particularly close, and where the strength of that program was a major element in the Dortmund-Project decision to make IT one of its major cluster targets. While no single strong leader from among the many institutions involved
19

This also appears to be the case in Leipzig, as it appeared from the meetings and presentations during the first CIT study tour. While mechanisms for public participation exist in German law and practice (Friesecke 2011), they do not appear to play a major role in decision-making in Dortmund, judging from informants responses to my questions. To be fair, it should be noted that the scope of the case study did not allow for examination of the citys neighborhood-scale planning and redevelopment efforts. It is also worth noting that in recent years, both national and state governments have placed greater emphasis on civic participation, although the NGO infrastructure remains limited by comparison to the United States. This figure, which reflects full-time wage employment, is the most commonly used employment statistic in Germany. It appears to represent about 70 percent of all workers.

21

According to an informant, total public investment in the TZDO since its inception has been 160 million.

Connecting the Dots for Urban Revitalization

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Figure 9: Jobs in Dortmund 2000-2011

total job growth in recent years. Even so, the total number of jobs in 2012 was still 10 percent below the 1976 level.

SOURCE: Schulze and Ellwein (2012)

This trend appears to have reversed significantly in recent years. While the target of 70,000 new jobs in ten years set by the Dortmund-Project in 2000 was patently unrealistic and not achieved, some progress has been made. Figure 9 shows the number of jobs eligible for social insurance in Dortmund, an increase of 18,500 jobs, or 10 percent, between 2006 and 2011.22 Technology-related23 jobs, although making up only 9 percent of the citys total job base, represented 27 percent of the increase between 2008 and 2012. Since these are heavily exportoriented jobs, their multiplier is likely to account for a significant percentage of the increase in other sectors. It appears not unreasonable to suggest that technology has driven half or more of the citys
22

While Figure 9 suggests that the growth in jobs has had some effect on the unemployment rate, unemployment in Dortmund has remained stubbornly high. At 13.3 percent, it is nearly double the national unemployment rate, while the actual number of unemployed has remained unchanged from 2007 through the spring of 2013. Nearly half of the unemployed have been so for the long term,24 continuously for one year or longer. While this is a very high percentage by United States standards,25 it is close to the German national average, and does not appear to reflect any specific local conditions. The persistence of high unemployment in Dortmund appears to be closely associated with the growing problem of concentrated poverty, which is in turn disproportionately associated with non-ethnic German and immigrant populations. This reflects the problems of social exclusion, and the potential for increasing ethnic and economic divergence in the city, something which may be exacerbated rather than reduced by the focus
24

The curve of job decline and growth shown in Figure 9 closely parallels national trends during this period. The category freiberufliche, wissenschaftliche, und technische Dienstleistungen [free-lance, scientific, and technical services].

While high, this is well below the estimates made by some informants. The percentage of long-term unemployed in the United States, using a much broader definition namely, those unemployed 27 weeks or longer was 37.6 percent in May 2013.

23

25

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The German Marshall Fund of the United States

Figure 10: Unemployment In Dortmund 2000-2012

SOURCE: Schulze and Ellwein (2012)

on technology-driven economic development, particularly if as appears to be the case the local labor market is not able to provide the specialized workforce that this sector needs to sustain its growth.26 The percentage of jobs in Dortmund held by commuters from outside the city has increased from 38 percent in 2000 to nearly 44 percent in 2012.27 A similar issue is posed by the development of the Phoenix project and its potential impact on the social and demographic character of Hrde, one of the citys lowest income neighborhoods. Gentrification and the potential displacement of lower income Hrde residents would appear to be a highly probable outcome of the success of the
26

Phoenix project. Indeed, it is hard to imagine circumstances under which significant change is not likely to happen. The center of Hrde, in addition to providing the nearest shopping district, is the hub of the public transportation services that will be used by the residents of the Phoenix development, and, moreover, is an area that retains rather more of its Wilhelmine charm and walkability than most other parts of Dortmund (Figure 11).

While significant evidence of gentrification has yet to emerge, the city has yet to respond to its potential in the near future. As is true in many similar United States cities where overall property values and housing costs are low by national standards, the tension between addressing gentrification and the compelling goal of fostering stronger property values and a more diverse housing market remains unresolved. Figure 11: Downtown Hrde

One informant reported that many of Dortmunds technology firms are importing workers with specialized skills from overseas, particularly India and China. This is a considerably smaller commuter share than in comparable cities in the United States, and reflects both the less pronounced long-distance commuting patterns of the German workforce as well as the very large geographic area covered by the city of Dortmund (280.4 square kilometers or 108.3 square miles.)

27

SOURCE: Google Earth

Connecting the Dots for Urban Revitalization

17

Dortmund today is a very different city than it was 50 or 100 years ago, although it is a city that continues to be in transition rather than one that has clearly established its 21st century role. It is a far cleaner and greener city, it offers a better quality of life to its residents, and can boast a potentially strong emerging technologically-driven economy than before. At the same time, as Couch (2010)

writes, Dortmund has made considerable progress toward competitiveness. [] The problem is that it started from a position of disadvantage compared with other regional cities such as Dusseldorf, Kln, or Frankfurt, and these cities have not stood still either, so there has been little change in the relative position of Dortmund. That leads to Dortmunds ongoing challenges.

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The German Marshall Fund of the United States

6
C

Future Challenges: Implications for U.S. Cities in Transition

At the same time, the question remains whether Dortmunds technology sector is either selfsustaining or capable of further growth without continued substantial public investment. Can Dortmund hold its high-tech innovators and their firms, or is the city incubating talent that will then migrate to Dusseldorf, Munich, or Silicon Valley? This issue is a critical one to older industrial cities in the United States as well; while Pittsburgh, with its massive eds and meds sector and exceptional quality of life, may be on track to create a selfsustaining critical mass of technology-oriented growth, the same does not yet appear to be true of the other cities in the CIT initiative.28 Moretti (2012) has pointed out the many ways in which a city, once behind in the skills and innovation race, is likely to find it harder and harder to catch up. Low housing prices and cost of living, as well as a generically good quality of life both of which Dortmund offers may not draw or hold the technological innovators, or the pool of highly skilled workforce that they need to succeed. Morettis analysis is even more relevant to the United States; as he writes: There are three Americas. At one extreme are the brain hubs cities with a welleducated labor force and a strong innovation sector. They are growing, adding good jobs, and attracting even more skilled workers. At the other extreme are cities once dominated by traditional manufacturing, which are declining rapidly, losing jobs and residents. In the middle are a number of cities that could go either way. The question is whether history is destiny, and whether a city can make the transition from one of
28

The Central Economic Challenge ouchs observation exemplifies the central challenge to Dortmunds economic development. Dortmund has demonstrated that it can go a considerable way to building a technology sector in the local economy, creating in the process a fairly substantial number of jobs through a massive and focused investment of public resources. It should also be emphasized that public resources are not limited to financial resources. One of the great strengths of the way in which Dortmund has executed its strategy is in the manner in which it has mobilized highly skilled and often specialized human capital to further the growth of its target clusters. Notwithstanding continuing challenges, the intentionality and focus of Dortmunds determined effort to build a new technologically driven local economy are impressive, and many features of this effort are worth serious consideration by economic development planners in the United States, independent of the level of public resources available. While there is undoubtedly some difference between the level of public resources devoted to economic development in Germany compared to the United States, that difference should not be exaggerated or seen as making the Dortmund experience less relevant. Cities in the United States spend substantial sums on economic development, both with respect to staffing public and quasi-public development entities, and in the form of often highly generous incentives for development projects. The central lesson of Dortmunds experience is the extent to which it is a focused strategy focused not only in the decision to prioritize a limited number of technology clusters, but even more in the many decisions about how to most effectively use available resources to maximize outcomes in those clusters. This focus is readily apparent in even the small details of the staffing and operation of the TZDO and its facilities.

Although, among the four other cities, it is clear that Cleveland and Detroit, for all their difficulties, have a significant edge in this respect over Flint and Youngstown. This highlights the additional extent to which small older industrial cities are arguably doubly disadvantaged in the competition for talent and sustainable growth.

Connecting the Dots for Urban Revitalization

19

Figure 12: Job Trends in Five Cities 2002-20111

SOURCE: Bureau of the Census On-The-Map (city data); Bureau of Labor Statistics, Occupational Employment Statistics program (national data)

Jobs 2002 Jobs 2011

% 20022011
- 2.3% - 16.0 - 33.0 + 8.8 - 16.4 + 0.6

Eds/Meds share 2002

22.6% 29.1 25.1 27.6 42.4 13.4
2

Eds/Meds share 2011

36.5% 33.4 37.4 36.8 38.4 15.5

% Eds/ Meds share 2002-2011

+ 61.5% + 14.8 + 49.0 + 33.3 - 9.4 + 15.7

Cleveland Detroit Flint Pittsburgh Youngstown United States

1

262,586 276,083 60,222 245,284 34,947 127,523,760

256,480 231,805 40,373 266,933 29,218 128,278,550

These are the earliest and most recent years available from the Bureau of the Census On The Map site, the only data source to provide jobs data that allows comparisons between municipalities.

2 The national data provided by the BLS uses somewhat different ways of categorizing jobs by sector, as a result of which there may be some inconsistency between the national and local data presented in Figure 7.

the Americas to another. Figure 12 shows recent job trends for the five cities that were part of the GMF initiative. As the figure shows, only one of the five cities, Pittsburgh, showed overall job growth during the last decade, although Clevelands job losses were markedly less than those of the other three cities, supported by growth of over 50 percent in the education and health care sectors. Of the cities shown, it is possible that Pittsburgh may be making that transition; although it has only three-quarters of the population of Cleveland and less than half that of Detroit, it has more jobs than either. Pittsburghs growth is also heavily dependent on the health care and education sectors; between 2002 and 2011, those sectors added over 30,000 jobs in the city, offsetting a loss of 9,000 jobs in other parts of the local economy. Pittsburgh also stands out from the other cities in transition in terms of the educational attainment of its workforce, as shown

in Figure 13.29 This factor has been singled out by Moretti (2012) and many others as a powerful determinant of a city or regions growth potential. The competitiveness challenge may become even greater in coming years. Dortmund and those other cities playing catch-up are likely to be affected by the macroeconomic policies arising from the continuing eurozone fiscal crisis, and this will likely have an impact on social supports or discretionary funds for continued investment in technology sectors or large-scale redevelopment (Bmer 2005). Not surprisingly, uncertainty over the sustainability of their efforts was a recurrent theme in my interviews with both practitioners and observers of Dortmunds economic development efforts. While U.S. cities in transition may have been able to mobilize less public sector support for economic development than German cities, the degree to which both economic development and physical
29

The percentage of adults in Pittsburgh with a bachelors or higher degree (34.4 percent) is significantly higher than the national percentage (28.2 percent).

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The German Marshall Fund of the United States

Figure 13: Percentage of Adults 25+ with a Bachelors or Higher Degree

SOURCE: Five-Year American Community Survey 2007-2011

redevelopment in U.S. cities over the past decades has been fueled by public sector resources should not be underestimated. To the extent that those resources are diminishing, it will also mean that future growth will be largely limited to those economic sectors and geographic areas, if any, that have achieved economic take-off and no longer require public sector support. In many cities, that is likely to constrain development of new economic engines and limit the ability of the city to foster neighborhood revitalization or physical redevelopment outside areas already seen as prime locations, such as University Circle in Cleveland. The Challenge of Physical Redevelopment and Revitalization While the Phoenix project, particularly Phoenix East with its new lake, has been admirably conceived and executed, one cannot say that it is unique or fundamentally different from many successful brownfields redevelopment projects in the United States. Steel industry sites have been successfully redeveloped in Pittsburgh and Youngstown, with Pittsburghs Washingtons Landing or Summerset especially worthy of note.

of pressing problems.

Similarly, many older industrial cities in the United States have seen significant redevelopment take place in their downtowns and in areas surrounding major universities and medical centers. Although such development is particularly notable in Pittsburgh and Cleveland, cities such as Youngstown and Flint have seen life begin to return to their downtowns in recent years despite the persistence

As cities in transition redevelop downtowns and other central core areas, they can learn a useful lesson from Dortmund and other European cities in their treatment of the public realm. While U.S. downtowns have attractive public open spaces, such as Campus Martius in Detroit or Mellon Square Park in Pittsburgh, they are relatively few and rarely linked to a network of open spaces and pedestrian connections. Such a network has enabled Dortmund to create a city center that in many respects is more appealing and livable than most U.S. downtowns, despite the fact that its buildings are far less distinguished than those found in most downtowns of older cities in the United States. While one can argue that this is another manifestation of the greater level of public sector resources available for that purpose in Germany, we would suggest that it has more to do with a lack of serious attention to the quality of the public realm in U.S. cities outside signature projects like Campus Martius. Certainly, cities like Cleveland, where billions of dollars are being invested in mixed-use develop-

Connecting the Dots for Urban Revitalization

21

Figure 14: Median Sales Price by Census Block Group in Cleveland 2012

University Circle and Little Italy Downtown, Warehouse District, Ohio City, and Tremont

SOURCE: The Reinvestment Fund/PolicyMap

ments in downtown and University Circle, and in major medical and entertainment facilities, could work with those developers to create a far more vibrant public realm in those parts of the city. The larger challenge facing cities in transition is how to extend redevelopment and revitalization beyond the central core the downtown and the areas around major university and medical facilities and a handful of closely linked residential

areas to the rest of the city in order to foster both a better quality of life and greater market vitality in the neighborhoods that represent both the lions share of each citys land area and where the great majority of each citys population lives. Gentrification is a far less important issue in cities in transition than is the spread of neighborhood decline and abandonment. Using median house sales prices as a proxy for market strength, Figure 14 illustrates the

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The German Marshall Fund of the United States

pattern in Cleveland. All of the areas in the city that contain any significant market strength are in two small clusters, one near downtown and the other around the University Circle area. The vast majority of the citys land area either has weak market conditions, reflected in house prices that are often under $30,000, or effectively no market, where there were too few sales transactions in the course of the year to enable the median to be calculated. This pattern of small clusters of vitality surrounded by large areas of weakness is typical of cities in transition. In the case of Youngstown and Flint, it is hard to characterize any of the citys residential areas as truly strong market areas, although some retain functional levels of market activity.30 A map of population growth would look very similar; a few pockets of growth in many cases from the in-migration of young single people and couples (so-called millennials) and large areas where population continues to decline. The evidence strongly suggests that growth in eds and meds employment and downtown revival does not lead to broader neighborhood revival, as the new in-migrants tend to cluster in high-density mixed-use areas, and the new jobs created are filled overwhelmingly by suburban commuters. As Aaron Renn has aptly written, the creative class doesnt have much in the way of coattails. (2013) The question of these cities neighborhoods is intimately linked to larger issues of poverty and race, with substantial and in many cases growing racial disparities of income, employment, and educational attainment in cities in transition. The importance of neighborhood effects in perpetuating intergenerational poverty and unemployment has been well documented by recent research (Sampson 2012, Sharkey 2013). Unless this issue is
30

confronted, and successfully addressed, a future in which these cities are made up of enclaves of prosperity surrounded by a sea of poverty and disinvestment is not unrealistic. The Challenge of Social Inclusion The third challenge facing Dortmund and U.S. cities in transition is the extent to which they are divided by social, ethnic, and economic fault lines, which may be growing rather than diminishing. While poverty and unemployment in Dortmund are far from exclusively the problem of ethnic minorities, minorities are significantly overrepresented in the ranks of the poor and unemployed. Twenty-six percent of the unemployed in Dortmund in 2013 were foreign nationals, roughly double their population share. This includes many of the children and grandchildren of the gstarbeiter, so-called guest workers who were recruited to work in the mines and the steel mills during the post-war ramping up of coal and steel production, as well as more recent immigrants from the poorer countries in the EU. Although mitigated in its effects by a stronger social safety net, the social profile visible in Dortmund is similar in many respects to that of U.S. older industrial cities. The German educational system, according to one informant, while highly effective at teaching children from middle-class households, or from households with supportive and engaged parents, is far less effective with the children of low-income households, particularly those from dysfunctional households or nonethnic German backgrounds. Many students drop out before receiving a vocational qualification, sharply increasing the likelihood of their experiencing sustained unemployment and poverty as adults. With the ethnic German population aging, a growing percentage of the young people in Dortmund are from other ethnic backgrounds, and increasingly likely to be poor. According to the same informant, roughly one-third of the children

We would argue that at a minimum, a strong market area must have house prices at or above replacement cost, and thus be adequate to motivate buyers to fix up vacant houses and developers to utilize vacant lots for infill development. By this standard, no part of either Flint or Youngstown even comes close.

Connecting the Dots for Urban Revitalization

23

in the city live in families below the poverty level, compared to 14 percent for the state of North RhineWestphalia.

Figure 15: Percentage of Adults 25+ with a Bachelors or Higher Degree

Dortmunds social divide translates into a spatial divide, in which the northern part of the city is more a lower income area, and the south more affluent. Hrde, a lower income area in the southern part of the city, is an exception to this pattern, but it appears to be at significant risk of gentrification as a result of SOURCE: Five-Year American Community Survey 2007-2011 the impacts of the Phoenix development. While it is far of funds for continued investment at the local level, from a foregone conclusion, there is a significant and largely determine the extent to which older risk that the Dortmund of tomorrow will be a more industrial cities will be able to compete with other segregated city, socially, ethnically and spatially, economically more powerful cities throughout the than the Dortmund of today. While similar cities world. At the same time, as Dortmund has shown, in the United States are already highly segregated strong local strategies and sustained focus on by race and economic status, it is likely that current well-defined economic targets can influence a citys trends will tend to increase rather than mitigate outcome, albeit within the parameters established by existing patterns of segregation.31 larger forces around them. This challenge is two-fold. For any city to be able to mount a sustained effort to tackle the issues of economic and racial inequality and foster greater social and economic inclusion, it will need to maintain a steady level of economic growth. Their ability to sustain economic growth, however, will be affected by larger macroeconomic trends and national (and in Europe, EU) policies. These trends and policies will define overall levels of national and regional economic growth as well as the availability
31

Dissimilarity indices, a widely used measure of racial segregation, are high in all five cities in the GMF initiative, ranging from 79.4 in Cleveland and 76.8 in Flint to 64.2 in Youngstown and 63.3 in Detroit. See http://www.censusscope.org/us/s26/rank_ dissimilarity_white_black.html, accessed September 5, 2013.

To varying degrees, U.S. cities in transition have demonstrated the ability to foster both economic and physical transformation. Pittsburghs reuse of brownfields sites for mixed-use development, Youngstowns industrial redevelopment, and the development of University Circle and the Euclid Avenue corridor in Cleveland, are all significant achievements. At the same time, all of these cities continue to demonstrate significant and growing disparities in economic and social condition, disparities that are considerably exacerbated by race, as illustrated in Figure 15. The central challenge for all of these cities and their European counterparts is to find the key to

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The German Marshall Fund of the United States

leveraging their successful efforts at economic and physical revitalization in order to reduce, rather than exacerbate, racial and economic disparities, and better link the citys population to emerging opportunities. Although not entirely a function of workforce and human capital development strategies, such strategies are a critical element in the picture. They must be multifaceted, and may include any and all of the following: Expanding early childhood education; Improving K-12 schools, and providing better links between public education and the work world; Better mobilizing the resources of training programs and community colleges to improve the workforce skills in lower income communities; Better linking economic development activities with workforce development programs; Working with major area employers to hire more city residents, including development of career ladders to offer opportunities for upward mobility in areas such as the health care sector; Enacting local hire or first source ordinances requiring firms receiving discretionary benefits from local government to hire locally;32 and Improving transportation access for urban workers to major suburban job centers.
32

Economic growth may be a necessary condition for addressing poverty, unemployment, and social exclusion, but abundant evidence has shown that it is not a sufficient condition. As Dortmunds experience shows, but the experience of U.S. cities shows even more powerfully, economic growth and selective spatial revitalization do not solve these problems; a rising tide does not lift all boats. Only by connecting the dots in ways that explicitly confront these issues is there any realistic hope of gaining ground. This demands that a citys leaders engage with the wider community, explicitly confront these issues, work to foster inclusion in planning and decision-making, and muster the political will to implement intentional strategies to overcome the widening economic and social gaps affecting their cities. Cities in the United States and Europe are facing challenges that, however different they may look on the surface, are actually closely related. Not only Germany, but many other countries including France and the U.K., are all facing the challenge of integrating immigrant populations. As such, U.S. and European cities have a great deal to learn from one another by sharing information and by collaborating with one another on projects that integrate transatlantic knowledge-sharing into their design and execution, focused on the central question of connecting the dots, both in the narrower sense of connecting working development, economic development, and physical change, and in the larger sense of fostering equity and inclusion in the cities of tomorrow. We are hopeful that the German Marshall Funds Cities in Transition initiative will be the beginning of a sustained effort in this direction.

A number of cities have also enacted living wage ordinances, which mandate that firms receiving some form of discretionary assistance from the city pay their workers a living wage, which, although varying from city to city, is significantly higher than the statutory minimum wage. There is considerable disagreement over whether such ordinances provide greater benefit by increasing the earnings of low-wage workers, or harm by discouraging firms from locating in cities with such ordinances. In the final analysis, it is likely that the greater a citys competitive advantage, the more likely that the effects of the ordinance will be positive. There is an extensive, but largely inconclusive literature of this subject.

Connecting the Dots for Urban Revitalization

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References

Bell, Daniel A. and Avner de-Shalit (2011). The Spirit of Cities: Why the Identity of a City Matters in a Global Age. Princeton, NJ: Princeton University Press Bmer, Herman (2005). Modern local and regional economic development policies in times of mass-unemployment the example of Dortmund. Dortmund: Institut fr Raumplanung Universitt Dortmund, working paper 182 Couch, Chris and John Herson (2010). Outside Perspective on Dortmund A View from Liverpool, in Bmer et al, ed. Stadtentwicklung in Dortmund seit 1945 [Urban Development in Dortmund since 1945] Dortmund: Technical University of Dortmund Fainstein, Susan (2010). The Just City. Ithaca, NY: Cornell University Press Friesecke, Frank (2011). Public Participation in Urban Development Projects A German Perspective. http://www.fig.net/pub/fig2011/ papers/ts03d/ts03d_friesecke_4868.pdf Jackson, James H. Jr. (1997). Migration and Urbanization in the Ruhr Valley 1821-1914. Boston, MA: Humanities Press Kunzmann, Klaus R., Lars Tata, and Tino Buchholz (2003). Dortmund: A Story of Change. Dortmund: TU Dortmund, City Regions as Intelligent Territories: Inclusion, Competitiveness and Learning (CRITICAL) project Mallach, Alan (2012). In Philadelphias Shadow: Small Cities in the Third Federal Reserve District. Philadelphia, PA: Federal Reserve Bank of Philadelphia

Mehta, Pavan (2008). The Impact of Urban Regeneration on Local Housing Markets A Case Study of Liverpool. Liverpool U.K.: John Murray University https://www.jmu.ac.uk/BLT/ BUE_Docs/mehta.pdf Moretti, Enrico (2012). The New Geography of Jobs. Boston, MA: Houghton Mifflin Harcourt Mhge, Gernot, Debora Jeske, Thomas Kieselbach, and Matthias Knuth (2006). A new Dortmund? Coping with restructuring on the territorial level. The approach of the Dortmund-Project. Bremen: University of Bremen, Monitoring Innovative Restructuring in Europe project. Renn, Aaron M (2013). Is Urbanism the New Trickle-Down Economics? Urbanophile, Feb. 3, http://www.urbanophile.com/2013/02/03/ is-urbanism-the-new-trickle-down-economics/ Sampson, Robert (2012). Great American City: Chicago and the Enduring Neighborhood Effect. Chicago, IL: University of Chicago Press Schulze, Sandra and Harriett Ellwein (2012). Economic Landscape and Developments in Dortmund. Presentation to LAGOTA conference, Pamplona, Spain, Oct. 30,b http://www. lagota-subproject.eu/export/sites/lagota/downloads/Economic_landscape_Dortmund.pdf Sharkey, Patrick (2013). Stuck in Place: Urban Neighborhoods and the End of Progress Toward Racial Equality. Chicago, IL: University of Chicago Press

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