Growth through focus
My last newsletter discussed how various places sought to pivot and grow their economies, both with and without population growth. This newsletter will delve deeper into St. Louis, a city I only briefly mentioned. I think is another example of a place, like Pittsburgh, that has worked for many years to focus its assets to support organic inclusive economic growth that has not depended on population growth. To help show this, I have re-created the charts from the last newsletter, which show striking similarities between St. Louis and Pittsburgh in both population and per capita income trends. St. Louis did this in part through a long-term strategy that was focused not only on a industry sector but also on a physical place.
Source: Bureau of Economic Analysis; “County and MSA personal income summary: personal income, population, per capita personal income”
I recently traveled to St. Louis, which is where my family is from (and which my sister insists is my hometown, but that’s another discussion). In addition to visiting family, enjoying a Cardinals game, and touring the zoo with my son, I also clearly had professional reasons to be excited for the trip. So I took a field trip to talk to various leaders. I learned a lot but want to focus on one idea that I had not thought about much before, but that I think has important implications far beyond efforts to build regional economies. Specifically, I saw the value of a clear strategic focus to enable long-term success.
Focus factors
Cities face innumerable challenges and numerable resources such as funding, real estate, and time. It is why, in a world of many opportunities but limited resources, long-term success often comes from narrowing focus and prioritizing efforts, or “not boiling the ocean.” This is done through strategic documents that seek to understand strengths and opportunities to develop a compelling vision. Successful long-term strategies and plans do three things:
Create the alignment across key actors
Focus of resources needed to tackle big challenges
Support a clear and persuasive story which can gather more excitement and support, especially over time
In economic development, a strategy that concentrates limited resources and energy on a specific area of competitiveness, such as an industry cluster or a physical district, can galvanize early efforts and bring together the various people and organizations needed for a bold idea to gather momentum. A physical area of focus can also align a variety of stakeholders around somewhere physical that can be seen and inhabited. Given we exist in a physical world, a defined district can tangibly complement an intangible concept such as a “cluster” with a real place. It can be the place people know to go when looking to plug into that ecosystem (supporting what Bruce Nowak and Julie Wagner call “networking assets”). More practically, it can also spur real estate development and tax incentive opportunities to sustainably fund long-term efforts.
St. Louis’s dual focus
In the early 2000s, city leaders, especially William Danforth, the then-President of Washington University and local philanthropist (as heir to the Ralston Purina fortune), assessed the long-declining St. Louis economy and found assets in life and plant sciences. This spurred a coalition that included key anchor institutions such as Washington University, Saint Louis University, BJC Healthcare, and University of Missouri-St. Louis to build the physical and organizational infrastructure needed for long-term success: a regional sector-focused backbone organization called BioSTL and a designated innovation district called Cortex.
BioSTL, founded in 2001 and located in Cortex, was set up to advance the region’s life sciences and technology ecosystem. Through initiatives like the BioSTL Innovation Fund and programs to cultivate local talent and startups, BioSTL has helped position the city as a hub for biotech innovation, attracting significant investment and fostering partnerships with coalition institutions.
Cortex is a 200-acre innovation district that has become the centerpiece of Saint Louis' efforts to foster a vibrant innovation economy centered around life and plant sciences. Located in former industrial land nestled in between the city's medical and academic institutions, Cortex was developed as a collaborative space for innovation, where research, entrepreneurship, and industry could co-locate. Cortex now has hundreds of thousands of square feet dedicated to various university research efforts, multiple buildings that include wet lab space for private companies, as well as office space and some retail. As of 2020 it housed nearly 6,000 jobs and had generated $2.1 billion in annual economic output for the St. Louis region
The clarity of a sector focus and a district focus helped bring aligned partners on board and prioritize limited time and money.
So focus. Simple and easy, and maybe even obvious.
Not so fast.
The blurry side of focus
A key challenge for strategy creators is actually committing to a narrow focus. Focus explicitly or implicitly limits resources on areas outside of the focus which also means constraining unfettered opportunism. This creates tension. It may require choosing one place to focus resources, naturally leaving out other important areas. It may leave out important sectors and the stakeholders in those sectors. It may not include very important, but nascent upcoming sectors. Many of us have seen strategies that over time get more and more goals, areas, and actions hung on them, ballooning into an everything-bagel strategy.
I saw a first-hand example of this with the DC Comprehensive Plan that I had to update, which swelled with over 1,000 pages of trying to provide everything to everyone. Every zoning decision had to be “not inconsistent with” the Comp Plan, so perhaps not surprisingly, it quickly became a tool of anti-development. Anyone opposed to a project that needed zoning changes could find some words somewhere that would seem to be inconsistent with a zoning change, giving them enough support to sue to block a project. Some litigants prevailed and others did not, but all of them successfully delayed many housing projects for years (or extracted 5 or 6 figure payments to pull their lawsuit).
Creating focus and maintaining it can be very difficult, especially in an opportunity-hungry field such as economic development where the splash of deals and ribbon cuttings is often the most valuable currency. Once momentum picks up and demand grows, agreeing to narrow sectors or places means potentially passing over opportunities. This is why strong, aligned leadership from various public, private, and institutional leaders is critical for long-term focus.
Cortex has faced challenges of tradeoffs between focus and opportunism. For example, IKEA was interested in locating a store within the Cortex boundaries, which meant making a decision between opening a major regional retail anchor or preserving limited real estate for the priority sectors. Ultimately, IKEA landed there, in part because it would throw off tax revenues that would help support the broader effort. So focus created tension, in terms of forcing a thoughtful discussion, while not dictating a decision.
Maybe everything, everywhere, just not all at once
There were other areas of tension too. Many places struggle with how to deal with multiple potential clusters. After all, resilient places are diversified and not reliant on a single growth sector. But if focus means saying no to things, does that mean a place can only focus on one cluster? The short answer is no, if you look over time.
The answer for St. Louis, and one that I’ve seen in other regions, is that focus can be laddered over time: focus on a nascent sector (or a specific district) until it has some momentum, then add another one. St. Louis did just this in 2016 when the National Geospatial Intelligence Agency located their West Headquarters there, creating a new potential growth sector focused on geospatial (i.e. mapping) and security technologies. As the life sciences effort was 15 years old and had found momentum, new areas could receive focus and resources without detracting from the original efforts. In other words, focus is most important in the beginning of an effort, especially a new one in which stakeholders need to find alignment and a clear narrative needs to develop.
The secret sauce of success?
I have seen lots of strategies, plans, frameworks, initiatives. They all have similar building blocks, such as goals, outcomes, metrics, and initiatives that often become the laser focus of those putting them together. And while those elements are important, they are not sufficient for success, especially in the long-term. They can quickly become the dreaded “plans on shelves” (i.e. plans that don’t get results) if they fail to create the focus needed to spark stakeholder alignment, resource coordination, and a compelling narrative that grows interest over time. The major takeaway from my St. Louis visit is that growth doesn’t always require unfettered expansion—it can actually be the result of strategic limitations of focus.
Some Links
Maybe I should call this the More Housing Corner. A fascinating visual guide entitled “How Even Luxury Housing Can Help Solve The Housing Shortage” (pdf) that is a nice straightforward complement to the more heady Nation article called a “A YIMBY Theory of Power” (warning - discussion of political philosophy). Meanwhile, Bloomberg wrote about a report my colleagues at the Urban Institute released called “Moving Toward Transit-Oriented Development in Nashville” that examines how more housing can and should be built along the upcoming transit lines.
