Syracuse Can Rise Again, But Only If The Entrepreneurs Return

In a recent column, I wrote of Syracuse’s past as a model for its future. I celebrated the exceptional history of its innovative entrepreneurs whose companies, founded here, were the basis for one of the wealthiest urban economies in American history. In making the case that, for Syracuse to return to its past, it must engender a new economic thesis — one built on entrepreneurship that brings forth large scale businesses, firms that make jobs and wealth that will effectively change the prospects and incomes of the city’s poor — I touched off a furor about having missed evidence that an economic renaissance is already underway.

The vigor of the criticism suggests a hard and fast rule of human nature – we all want to be proud of where we come from and where we call home. For me, Syracuse is both. As a child, I saw the city at perhaps its economic zenith. The research done by my students in their course on urban dynamics has proposed that 1962 might be considered, economically, the city’s “greatest year.” I graduated from Rosary high school soon after. The city’s population was at an all time high. As I indicated in my column, GE alone employed 17,000 people! Incomes were good, everyone had a job, household savings were above the national average, neighborhoods that now are unimaginably blighted were filled with house-proud families like mine who imagined a wonderful future in which their children and grandchildren would find even better homes, perhaps living in upscale Strathmore, Bradford Hills, Sedgwick Farms, or Fayetteville.

My mother and father had those dreams for me. Want to ask her? At 104, she is the oldest living graduate of St. Joe’s and still lives in Syracuse. I went to LeMoyne College and, per my mother’s plan, was supposed to be a lawyer in Syracuse. But different opportunities called and I joined the diaspora that, whenever/wherever we met one another, a toast to Syracuse, our wonderful “real” home, was always in order just before someone asked, “How many inches of snow so far this winter?”

At Chancellor Nancy Cantor’s invitation, I returned to Syracuse to study economic growth in the city, particularly the strategy that she had been first to articulate, namely to get new businesses forming that one day would be consequential, just as they had been in the city’s past. The now-common belief in Syracuse — that the city’s economic future lies in entrepreneurship — is a vision that Chancellor Cantor brought from the University of Illinois. Indeed, Nancy is a Johnny Appleseed of entrepreneurship – she is the only person to head not one but two universities chosen as “Kauffman Campuses,” schools at which Kauffman Foundation grants sought to imbed entrepreneurship as a cross-disciplinary value that would shape the institutions’ future and those of all their students.

When Dr. Cantor came to Syracuse, she innovated by making the University’s new emphasis on entrepreneurship encompass the city’s aspirations as well. As president of the Kauffman Foundation at that time, I followed all of this very closely, helping to compose the strategy that emerged on twenty campuses around the country that received funds. In several evaluations of our grantees, Syracuse ranked in the top of all such campus programs, in part because of its unique focus on aspiring to help the city prosper by providing support for the city’s residents, as well as other institutions of higher education in the region.

My essay spoke with reverence of the city’s early entrepreneurial industrialists, the men who through their generosity made Syracuse University, now the city’s motor, an institution that would be a worthy adjunct of the companies and city that they were building. How fabulously farsighted they were. As the city’s economic fortunes decline, there is one place, the University, that can help with the analytics and ideas that could lead to a second future of prosperity.

Some hard facts, however, point to just how difficult the job of recovery will be. Understandably, some commenters took exception to the story told by these facts. They suggest that by pointing out these realities (low income levels, poor school performance, high taxes, and horrible infant mortality rates – none of which can be disputed), either I overlook new initiatives that hold great promise or, unbelievably, that merely by observing how tough things are in the city, I make the problem worse! Once, academics made fun of “boosterism” as a silly provincial trait. Now, one comment in reaction to my essay said that by talking about the city’s problems and not its promise, I was in the business of tearing down Syracuse. At LeMoyne, I was taught that the most dangerous thing to do in argument was to impute motives to your opponent. Happily, one commenter read my piece as a “love letter to your home town.”

From 2001 until his death in 2003, Syracuse University’s faculty included Daniel Patrick Moynihan, after he retired from the Senate. He was famous for the phrase, “You are entitled to your own opinion, but you are not entitled to your own facts.” My analysis of what I hope can be the future of my hometown begins with appreciating the incontrovertible facts. A very large portion of the city’s residents is very poor and has been for a very long time. The principal reason for my essay was to lay out the baseline of the nature and magnitude of the city’s challenges before examining ways the city might accelerate economic growth to reach the levels it must to eliminate poverty among its citizens.

The biggest economic challenge for Syracuse is to develop an economic base to provide decent jobs and wages for the city’s poor. This will require that private sector companies — that either come to or start in Syracuse — provide thousands of jobs. Because of the tax and regulatory environment — and no one can avert his or her eyes to the comparative disadvantage this presents — few migrating firms will find the city attractive. Thus, the task falls to indigenous big-scale startups. Syracuse needs a home grown Under Armour, or White Wave Foods, or Starbucks, relatively new companies whose headquarters provide large numbers of jobs in Baltimore, Dallas and Seattle. These are the types of new and vibrant companies upon which a sound economic recovery can be rebased.

Of course the city has a wonderful new arts, entertainment and housing district downtown. I’ve eaten there, I’ve shopped there, I’ve taken my students, too. For all of its attractions, such creative-friendly zones as Armory Square do not a new economy make. Walking the streets a few blocks away in almost any direction, one sees a much different city. This reality cannot be wished away. Lots more people live on those mean streets than will live in the converted department store/lofts on Salina or Fayette. If Syracuse doesn’t recover, it will because these residents, largely living in poverty, can’t find jobs that provide them the means to achieve earned dignity; it won’t be because someone got it wrong on the ratio of hotel rooms to retail/office/gallery space.

Where is the plan — no, much more important — where is the evidence that anyone has cracked the economic code for poor people in these neighborhoods? The Near West Side holds such promise. But, everyone acknowledges its economic future hangs by a thread. For the economic thread to become a line and then a strong rope would be so much more likely if, say, close to Fowler School a new enterprise were to open that made 5,000 jobs, as did the Franklin Auto factory that once occupied the Fowler campus before it was later Carrier’s home. Syracuse University has made a magnificent contribution by helping reverse decay and showing the way to renewal, and the neighborhood surely is on the rebound, but only good jobs for all who want to work can make any neighborhood sustainably strong into the foreseeable future. If jobs could materialize, not only the Near West Side but the North Side and the Valley could bounce back too.

A sobering story is the recent financial collapse of Detroit. Like Syracuse, it was once one of America’s most vibrant cities, a hotbed of innovation. Today, it is emblematic of older industrial cities, a focus of urban revitalization ideas including arts districts, bike paths, trams, and loft housing. But, Detroit couldn’t solve its indigenous economic problem in a way that regenerated the enormous growth that had made the city so rich. African-American unemployment rose through the entire 20-year period of “remaking” Detroit. Michigan state government now has assumed control of the city. The state has but one course of action, which is to slowly shrink the city – a kind way of saying it will provide order to Detroit’s further decline. Unlike the rescue of New York City in the 1970s, Detroit no longer has an economic base sufficient to support the city’s people, its infrastructure and necessary services. To be as clear as possible, a city that cannot provide jobs for its people, especially its poor, will not survive, let alone have any realistic hope of coming back.

I surely don’t have a pat answer to the question of how to make a new, scale, robust economy for Syracuse in which no fewer than 25,000 new private sector jobs must emerge. Many of the people who populate the restaurants and lofts in downtown rely directly or indirectly on the university, the hospitals or state and local government for their livelihoods. In the grand clockworks of economics these “industries” all depend on taxpayers to a greater or lesser extent. That’s why, to be capable of shaping its future and not just surviving, the basis of any solution is that Syracuse will require a robust private sector that pays taxes.

The city’s most important civic task is to crack this atom. Entrepreneurship, as an ingredient in urban renewal that Nancy Cantor first described to me some years before she came to Syracuse, is a big part of the potential answer. The goal is to be a city that can birth companies that stay and grow and make everyone better off. The betting might be against Syracuse, but, on a salt marsh first the settlers, then the merchants, and then the industrialists, built a spectacular economy and a great city. It happened once, and it can happen again. This time it will fall to the entrepreneurs.

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