Stories of Technology, Innovation, & Entrepreneurship in the Southeast

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February 01, 2024 | Tom Ballard

Richard Florida shares how to align start-ups and established industries in the Heartland

He says regions follow one of two paths in the use of technology to power their overall economic growth. One is “shifting,” the other is “deepening.” Why not both for the Heartland?

Richard Florida is a University Professor at the University of Toronto’s School of Cities and Rotman School of Management and a Distinguished Fellow at New York University’s Schack School of Real Estate.

He’s also a writer and journalist, having penned several global best sellers, including the award-winning The Rise of the Creative Class and his most recent book, The New Urban Crisis. Florida also is Co-Founder of CityLab, the leading publication devoted to cities and urbanism.

Richard Florida

In a recent article in that publication, he writes that “The Heartland (20 inland states) remains the nation’s center of gravity for manufacturing, despite a legacy of deindustrialization. It is home to more than half of U.S. private-sector manufacturing employment, 6.5 million of America’s 12.8 million manufacturing workers. The region’s economic output in 2022 was $16.5 trillion, equivalent to the world’s third-largest economy, and its productivity was roughly 7.5 percent better than that of the nation as a whole.”

Florida writes that regions follow one of two paths in the use of technology to power their overall economic growth. The first, called “shifting,” essentially pivots an economy away from incumbent industries like automobiles or steel in favor of the development of newer high-tech industries like semiconductors, computing and biotechnology. The other is known as “deepening,” the application of new technologies to incrementally improve the efficiencies of existing industries.

“Today, U.S. regions have a unique opportunity to follow both approaches by linking their burgeoning start-up ecosystems to incumbent manufacturers,” he writes. “Alongside the broader national effort to revive and upgrade U.S. industrial capabilities, this can help to inform a more holistic model for growing tech economies — one that can restore America’s economic competitiveness, help rebuild older industrial regions and create more high-paying jobs.”

Florida calls out Sun Belt metros like Nashville and Knoxville; Birmingham and Huntsville, AL; Louisville and Bowling Green, KY; and Jackson, MS which he says “have become critical nodes in the nation’s automotive cluster.” Michigan, Tennessee, Kentucky, Alabama and Texas lead the nation in new investments in electric vehicle and battery manufacturing.

He also notes that many of the Heartland’s leading industrial clusters are close to major universities, which have capability in these crucial technologies.

“The Heartland region has the advanced university research and technology; it is developing the high-tech start-up ecosystems; and it is home to the required manufacturing infrastructure. What is needed is better mechanisms to capitalize on them,” Florida says.

What is his answer?

It is the creation of a Heartland Innovation Council, comprised of the Chief Executive Officers of large companies, venture capitalists and entrepreneurs, university presidents, and the leaders of major philanthropies who can collaborate to better align research and innovation capabilities with its leading industries and national policy priorities.

In his view, that approach would position the Heartland for success with the U.S. Economic Development Administration’s “Tech Hubs” initiative.

Florida also co-authored this article in late November 2023 for Heartland Forward that had additional concrete recommendations.

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