December 2012 – Looking Forward

The Gotham Innovation Greenhouse met last week at the Municipal Arts Society (MAS) in New York. In response to the problems caused by Hurricane Sandy in the New York metropolitan area, MAS is holding a series of forums to design a plan that will improve the resilience of the region.

To get the thought process initiated, MAS asked the GIG collaborators to start addressing the issue of resilience. The room was filled with a diverse group – scientists, artists, architects, designers, technologists, public policy, etc. Here is a summary of the key take-aways.

With remediation plans in New York and New Jersey costing upwards of $80 billion dollars, it does not make sense to just spend money to recreate the situation as it was before the storm. Instead, the group focused on what needs to be done with that money to make the area more resilient in the face of the well documented threats of rising seas. (This attitude is in marked contrast with the position taken by many others who have spoken on the issue so far.)

Various possible plans were shown, including those that use nature as a bulwark or even work to integrate man-made and natural designs as means to stop the water. However, this is more than a traditional public works problem whose solution is to “build something”.

First, recent experience and scientific data show that the threat to the urban areas is not merely where we see as the water’s edge. In Manhattan and elsewhere, the sea also surged from under the ground. Although the common assumption is that all of New York is built on solid bedrock that goes down thousands of feet, the reality is quite different. Much of it has been built on landfill or natural formations that can be permeated by water.

Second, the city is not just a collection of physical structures so making it resilient also involves the people who live there. The urban community is ultimately what needs to be resilient. This is especially important given that the many of those most affected by the storm were the poor and elderly who have been housed on the edge of the ocean – out of sight and mind. Perhaps just getting the people who lived there back into harm’s way as quickly as possible does not serve their best interests nor the interests of the city at large. Thus, thinking about resilience in this case also means thinking clearly about what constitutes environmental justice.

Thus, MAS, GIG and others need to work to help devise a plan to transform the currently vulnerable metropolis into a resilient Eco-polis. The tools to do this are at hand. The geological and other data is available. Betaville provides a tool for people to collaborate on a joint vision of the future.

GIG invites all who wish to contribute to this effort.

I was also reminded of a statement from Taleb’s recent book:

“Antifragility is beyond resilience or robustness: the resilient resists shocks and stays the same; the antifragile gets better” [… as it learns].

New York needs to develop anti fragility.

[http://njacknis.tumblr.com/post/37845958524/what-does-resilience-mean-for-new-york]

In my presentations on economic growth, I’ve pointed out that, given the new rules of the 21st century economy, the typical incentives that government uses to get corporations to bring new jobs to their area are rapidly declining in effectiveness. Yet these incentives add up to a huge number – now estimated at $80 billion a year.

Instead, I’ve suggested that at least a fraction of that money be spent in more effective, future-oriented ways. These alternative ways include connecting local entrepreneurs to global partners, resources and markets, as well as efficient lifelong learning opportunities for adults so they can increase their potential incomes as individual players in the economy.

Some of these ideas are parallel to the small, but growing, movement of local officials called “economic gardening” in contrast to the industrial era “economic hunting” strategy that is still the normal approach.

So it was with great interest to see the front page of the New York Times this Sunday, which began a three part series on the “UNITED STATES OF SUBSIDIES – A series examining business incentives and their impact on jobs and local economies”.

Part 1 was entitled “As States Vie to Lure Companies, the Winners Are Often the Losers” and began with this story:

Today, General Motors’ Willow Run plant in Ypsilanti Township, Mich., stands empty and silent. The storied facility made bomber planes during World War II and then automobiles after being bought by G.M. Ypsilanti gave G.M. more than $200 million in incentives for Willow Run and another plant there — which has also been closed.

In the end, the money that towns across America gave General Motors did not matter. When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves G.M.’s business partners were among the targets.

Other highlights included:

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies.[The combined amount federal and state governments give up for incentives each year is $170 billion.]

The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.

“If you’re looking at the competitiveness of a region, the most important thing a region can do is to focus on education. And this use of incentives is really transferring money from education to businesses.” Donald J. Hall Jr., Hallmark C.E.O.

Workers are a vital ingredient in any business, yet companies and government officials increasingly view the creation of jobs as an expense that should be subsidized by taxpayers, private consultants and local officials said.

For towns, it became a game of survival, even if the competition turned out to be a mirage.

[http://njacknis.tumblr.com/post/37261748800/what-should-local-gov-do-about-corporate-incentives]

Month: December 2012

What Does Resilience Mean For New York?

What Should Local Gov Do About Corporate Incentives?