Blueprint doesn't guarantee economic success, cities say

THE BALTIMORE SUN

In locations as diverse as Pittsburgh, Indianapolis and Raleig and Durham, N.C., government and business leaders have forged economic development plans, set them in motion and tallied their investment returns in new jobs, new businesses and stronger industries.

Pittsburgh, for instance, shifted from an emphasis on its aging steel industry to a more diverse economy with strengths in computer engineering, biomedicine and business services. North Carolina's Research Triangle leveraged its computer and pharmaceutical research bases to shake the hold that textiles and tobacco had on the region for decades. And Indianapolis has won a worldwide reputation for its sports facilities and associations.

That's the good news.

The bad news: Even business and civic leaders in revitalized cities can't say for sure that their efforts have gone much beyond what a general turnaround in the economy might have done by itself.

And experts agree that planning is no guarantee of success. Austin, Texas, still struggles to get a planned technology-based revolution off the ground. And even though Seattle has worked to build a reputation as the primary U.S. entry point for Far Eastern countries, it remains tied too closely to its biggest manufacturer.

"The old saying, 'When Boeing sneezes, Seattle gets pneumonia,' is true," said Robert Keller, president of the Greater Baltimore Committee, which last month unveiled a comprehensive blueprint to make the Baltimore region the nation's leader in "life sciences."

Baltimore cannot afford to leave its fate in the invisible hands of the free-market economy, the GBC's Economic Vision Task Force argues in a report called "Baltimore. Where Science Comes to Life." If it does, the task force predicts, the region faces a future economy still rooted in its industrial past, one with slowing job growth, rising unemployment, declining wages and an increasingly wide disparity between the rich and the poor.

If the blueprint is followed successfully, the GBC report paints a portrait of a city that leads the nation in everything from genetic engineering and environmental sciences to pharmaceuticals, marine biology and health care.

The four-part strategy for promoting this new economic engine includes reforms and advances in education, physical infrastructure, entrepreneurial activity and community involvement.

Business and political leaders around the country have been trying to shape and reshape their local economies since World War II. But in the last decade, partly because of the recession of the early 1980s and partly because of advances in a spectrum of high-technology industries, those planning efforts have proliferated.

In 1984, for instance, after the near-collapse of the steel industry, Pittsburgh business leaders published a nine-part examination and prescription for the area's economy. In the 1982 recession, Pittsburgh's economy "fell off the cliff," said Robert Pease, who until January was director of the Allegany Conference on Community Development.

With unemployment around 16 percent and 100,000 jobs lost between 1980 and 1983 in the region, the Allegany Conference began working on a revitalization strategy that examined the area's physical infrastructure, the prominence of locally headquartered businesses, the tax and regulatory climate and the overall quality of life, among other issues.

Unlike the GBC's report, which focused on one group of industries, the Allegany Conference's 1984 report called for initiatives that would help all businesses and would improve the overall business climate.

The recommendations included creating venture capital funds, job training programs, federal procurement assistance plans, marketing and promotion and a variety of other programs, Mr. Pease recalled.

The results were impressive, as recounted five years later in another report by the conference. Specific results of the various agencies and programs created in the wake of the 1984 report were reported: The new Pittsburgh Seed Fund invested or attracted $21 million for 10 start-up companies and helped create more than 90 jobs; the Federal Procurement Technical Assistance Program helped win $30 million in federal contracts for 150 companies, which hired or retained more than 600 employees.

Still, much of the improvement was due to the national economy's strong rebound after 1983, and city planners are reluctant to accept all the praise. "We either got lucky or skillful or both," Mr. Pease said.

Planners in the famed Research Triangle area of North Carolina, whose corners are the towns of Raleigh, Durham and Chapel Hill, shaped a development strategy from a strong foundation of academic and research facilities.

That foundation was laid in the late 1950s, according to Gary Shope, vice president of the private, non-profit Research Triangle Foundation of North Carolina. The foundation's primary job is to operate the Research Triangle Park, a 32-year-old, 6,850-acre research and development park in the middle of the triangle.

"The mind-set at that time was if you bring in central research facilities in an industry, what follows is manufacturing," Mr. Shope said. "That, in effect, has happened to a very large extent."

It happened in pharmaceuticals -- both Glaxo Holdings PLC and Burroughs Wellcome Co. have R&D; facilities in the park -- and in computers, with the help of Data General Corp., IBM Corp. and others, Mr. Shope said. Those industries are light-years away from the textile, tobacco and furniture companies that dominated North Carolina's economy until recently.

While the park was attracting high-tech research companies, business leaders broadened their horizons. The North Carolina Microelectronics Center, established in 1980, and a similar biotechnology center set up in 1982 began bringing together government, academic and business groups to establish more of a high-tech culture in the Research Triangle.

The centers worked to strengthen school curriculums in their respective areas, from grade school to universities, Mr. Shope said. They started programs to help commercialize the work being done in the research park, to enhance employee training and retraining programs and to educate the public about the changes to the economy.

A comprehensive effort like North Carolina's has a much better chance of succeeding than what has tried in cities such as Austin, Texas, where planners tried to launch a new economy on the basis of a few central research facilities and ignored other community factors, according to Wallace Katz. He is president of Washington-based Community Business Consultants and the author of an upcoming book tentatively titled, "Fearsome Choices: Socioeconomic Deterioration or Civic Culture in Post-Industrial America."

Austin has an excellent academic and research facility in the University of Texas, Mr. Katz said, and has tried to sell the idea of a new "technopolis" with its Innovation, Creativity and Commercialization Institute.

But with only one major high-tech company headquartered there -- ailing Tracor Inc. -- and other urban problems that aren't being addressed clearly, Mr. Katz said the city hasn't had much success fulfilling its vision.

"They don't have a GBC, they don't have an institutional structure, they have a city council that's been at war with the business community and a weak banking system," Mr. Katz said.

Similarly, Cleveland, which has strong computer and engineering facilities, has been dragged down by the entrenched problems of its inner city, Mr. Katz said.

On the other hand, Indianapolis has built a reputation for sports. All hard feelings aside, Indianapolis wouldn't have been able to lure the Baltimore Colts in 1984 if it hadn't sunk millions into a stadium. It also spent on a host of other sports complexes, from tennis, swimming and bicycle racing to track and field and gymnastics, said David Arland, press secretary to Indianapolis Mayor William Hudnut.

The Indiana Sports Corp., formed in 1979 with seed money from the Indianapolis-based Lilly Foundation,started the planning that ultimately led to construction of more than a dozen sports facilities at a cost of about $168 million, Mr. Arland said.

Those investments allowed the town to lure the 1987 Pan American games, the NCAA basketball tournament's "Final Four" weekend this year and the upcoming world gymnastics championships, Mr. Arland said. Nearly two dozen amateur and professional sports associations also have moved to Indianapolis.

But Mr. Arland said that the city is only beginning to use its new "sports mecca" status to try to solve its problems of downtown retail stagnation, homelessness and crime.

As for Baltimore's chances, Mr. Katz praised the comprehensive approach the GBC has taken. But he warned that as important as technical infrastructures -- the universities, marine biology centers, and the like -- are to economic development strategies, a region cannot afford to ignore what he called the "institu

tional context," which includes schools, the transportation system, crime, housing and other elements that add to an area's quality of life.

"My sense is that most of what happens [with urban economic development] is opportunistic," said James Rouse, chairman of the Enterprise Foundation and Enterprise Development Co. and one of the founders of the Greater Baltimore Committee. "Companies get wind of a certain business opportunity and go after it."

His work, and that of the other business leaders who sparked downtown Baltimore's revival in the 1950s, succeeded because of luck as much as foresight, he said. After Charles Center was conceived and the first building, One Charles Center, was constructed, it was corporate one-upmanship, and not civic planning, that led to construction of the next building across the street, Mr. Rouse said, referring to the One North Charles building. Those two, in turn, led to further office and retail development downtown.

"I think life sciences has a more comprehensible rationale to it than we had back then," Mr. Rouse said. "We were fighting a war of survival back then, as well as growth."

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