WASHINGTON -- Do you live in a Potemkin city -- a Baltimore or Cleveland where business and political leaders have created a small, glittering downtown core still surrounded by mile after mile of neighborhoods in the grips of biting poverty?

Or a boutique city -- a Seattle, Denver, Boston or San Francisco -- where massive low-lying high-tech suburbs help enable a well-heeled technological elite to enjoy the color and verve of renewed old centers?

Or a New Carthage -- a St. Louis or Detroit still losing population at alarming rates, downtowns like great empty living rooms, all the action and growth in the newest outer rings of suburban growth?

Those are some of the catchy categories for our end-of-the-century metropolises devised by Joel Kotkin, a writer and urbanist at the Pepperdine Institute.

At the same time, some researchers are finding that for all the celebrated comeback of selected cities in the '90s, there's a remaining malaise in practically all urban economies.

Job sprawl

Edward Hill, a professor at Cleveland State University, pinpoints "job sprawl" -- suburban locations, in a robust national economy, are adding jobs 10 times as fast as cities.

Dan Immergluck co-authored a parallel study by the Chicago-based Woodstock Institute, "A Rising Tide . . . But Some Leaky Boats." Despite rave reviews for its throbbing downtown and Miracle Mile, he reports Chicago has experienced a hemorrhaging of manufacturing and retailing jobs even more rapid in the '90s than the '80s.

Mr. Immergluck worries that the national economy may now be so vibrant "that people think there's no problem in cities." That's bound to make things worse when the economy inevitably slows and center cities and older suburbs are hit hard, he told the Council for Urban Economic Development.

With these weaknesses, how do we prepare our great cities, the centers and symbols of our civilization, for the 21st century? Is there a way to construct a stronger economic base under our Potemkin and New Carthage cities?

Is the answer in federal and state subsidies -- tapping the wealth that has flowed to the suburbs? Or do we take the harder route -- to search out business-oriented strategies that might actually trigger private investment in the cities?

Only the business tack will work, replies Harvard economist Michael Porter, founder-leader of the 5-year-old Initiative for a Competitive Inner City.

Subsidies, says Mr. Porter, simply make cities dependent. Any jobs they create are likely to be temporary. Worse, the fact they're considered necessary reinforces the idea that cities are bad places to do business.

Cities are dead wrong, Mr. Porter insists, in claiming that new buildings, convention centers, stadiums, represent economic progress. He's scornful of busing city workers out to suburban jobs, not just because the long routes are grossly inefficient, but because busing feeds a false assumption that business opportunities must all be suburban.

Cities, Mr. Porter insists, have magnificent business advantages that business leaders, politicians and social service advocates have all been ignoring.

No. 1: location. Centrally located in metro regions, usually directly on ports, air and rail lines, cities are logical locations for food processing, printing, publishing, and a host of other services.

Big spenders

Once an inner-city business learns the basics, it has the advantage of easy access to thousands of downtown businesses. As for city retailing, Mr. Porter sees a huge untapped potential. The average retail spending per square mile, even in distressed inner-city areas, runs up to 10 times higher than in the suburbs.

There are, Mr. Porter acknowledges, barriers to city success. Sometimes crime is serious. Other impediments: poor schools, high insurance and utility costs, decayed infrastructure, and often regulations that make it more expensive to do business in the city than a suburb.

But the reputed lack of able-bodied workers in inner cities is a myth, Mr. Porter argues. He tells the story of Sprint's call center at 18th and Vine streets in Kansas City -- set up when the firm's suburban location couldn't find, much less retain, enough workers.

When the new Sprint inner-city center held a job fair for 60 openings, 705 job-seekers showed up. The employee retention rate has been three times higher than at the suburban site.

Misperceptions and biases in the business world too often hold back inner-city reinvestment, says Mr. Porter. He's trying to combat that with a network of business school trainers and a capital equity firm for inner-city ventures.

Critics say Mr. Porter exaggerates his case, that there's still a role for government aid -- to community development corporations, for example. But his central point's refreshing and exciting: Not just some, but all cities can compete regionally, nationally, globally -- by attending to business basics first.

Neal R. Peirce writes a syndicated column on state and urban affairs.

Pub Date: 3/08/99