Engine block?

It shouldn’t be news to anyone that Detroit has been through the mill. It’s a city built on the positive network effects of urban growth in the first half of the twentieth century, and laid low by the darker side of urban life in the second half. But new engines for growth are emerging, says Patrick Hurley.

Published —
07.01.15
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The perceived sunlit uplands of mass industrialisation, defence infrastructure spending and double digit economy growth boosted Detroit’s population from 285,000 in 1900 to nearly two million before 1950. But social problems, exacerbated by short-sighted city planning and weak civic leadership, took their toll. Between 1950 and 2010, Detroit’s population decreased at an average rate of 19,000 each and every year. The city now has just 700,000 residents, its lowest population for a century. The car factories that used to define the landscape now employ a tiny fraction of their old workforce. And a city infrastructure that was built for an age of prosperity is now notable mainly for its derelict buildings and empty lots.

The cherry on the top was the city’s official bankruptcy proceedings in 2013-14. So how does a city come back from something like that? How do the 700,000 people left in Detroit build a new economy in an area noted for its economic and social failures? The answer may be through the combined potential of social enterprise, state support, crowdfunding, charitable endeavour and good old-fashioned hard work.

21st century economics – the global economy – are far more complex than the combustion spark that sent Detroit’s engine roaring in the early 20th century. No one model is ever going to work in bringing the good times back to Detroit. But a patchwork quilt of different models, each working on specific schemes – sometimes separately, sometimes collaboratively – can contribute in a meaningful way to growing the city economy whilst strengthening social bonds. By building a business ecosystem of competing, collaborating and enlightened organisations, Detroit’s residents are slowly helping to turn the tide on decades of localised recession.

Since what has become known as the Great Financial Crisis of 2008, the US economy has recovered from recession at a faster rate than almost any other country in the Western world, but on an increasingly uneven pitch. During 2012, the latest year for which official figures are available, incomes of the wealthiest 1% rose nearly 20%, whilst the income of the remaining 99% rose by just 1% on average. Few of those 1% live in Detroit.

So what is to be done? The only thing left is for local people to rise up and do things for themselves and for each other. And that is precisely what is happening. Whether backed by state money or bootstrapped on a budget; whether run by seasoned professionals or enthusiastic newcomers, new private companies, community organisations and social enterprises are forming to help each other rebuild a city’s business infrastructure.

To try to tackle the sort of income inequality mentioned above and rebalance the economy towards the needs of the many, dozens of innovative projects are taking root in the city, leading to hundreds of new start-ups using the latest business methods to tackle deep-rooted socio-economic problems. By tapping into the entrepreneurial power of the individual, and empowering people to take ownership of their own situation, these projects have the potential to make a real difference to thousands of people’s lives of the next few years. We’ve profiled just a few of them.

Detroit SOUP

http://detroitsoup.com

Probably the initiative with the biggest media profile outside of the US, Detroit SOUP started in February 2010 as an experiment in live crowdfunding. It is a regular micro-grant event, supporting new enterprise projects across the city. The idea is that people pay a donation to come along, listen to a handful of business pitches from aspiring entrepreneurs, and vote on which is the best one. The winner of the vote gets to go home with the takings on the door.

Well over $60,000 has been raised in the five years since the first event, with the overriding aims being to empower residents, create jobs, establish new relationships, promote action, and instil neighbourhood pride. From a small start where ten friends worked together on a bright idea they’d heard about, SOUP is now developing into a global movement, with over a hundred versions across the world, including more than a dozen in the UK.

The Detroit Creative Corridor Center

http://detroitc3.com/

The Detroit Creative Corridor Center, DC3, is an organisation explicitly tasked with promoting the creative industries – design, art, websites, and printmaking. It does this by marketing their services, encouraging specialisation, providing accurate data and lobbying on their behalf. It looks to “cultivate creative density” in one specific quarter of Detroit, which in ordinary terms means populating the quarter with a critical mass of similar organisations which can all learn off each other, share knowledge and experience, and gain a reputation for expertise outside of the region. This taps into an astute side of Social Value policy – that of specialisation in each area, leading to lower costs through economies of scale and inter-regional trade, rather than simply intra-regional trade.

By encouraging expertise in one industry, DC3 is fostering innovation, higher productivity, and a way for the city to try to recapture both its economic status when it specialised in the motor industry and its cultural status when it specialised in music. It remains to be seen whether or not they will succeed, but they’re sure off to a good start in recognising the need to specialise rather than generalise.

Neighbourhood Development Center

http://www.ndc-mn.org/

The blandly-titled Neighbourhood Development Center, NDC, is, in reality, anything but bland. It implements projects concerned with creating, financing, and supporting resident-owned small businesses. These aren’t necessarily classed as “social” enterprises – just resident-owned businesses. So privately-owned companies, sole traders, for-profits, pretty much anything goes, as long as it is owned by a local resident. Thanks in part to the help provided by NDC, there are now 450 resident-owned businesses in Detroit, with the number growing every month.

NDC engages in business training and finance, real estate services. It does this by working in geographical hubs so that each distinct area of the city is served by local outreach – this then builds into a network of hubs creating large-scale impact married to local ownership of provision. NDC partners with a local bank to provide low-cost business loans, it runs classroom-based entrepreneur training, it uses five community buildings to house suburban outreach programs, and it works to make sure that the businesses it helps all collaborate with each other too.

ProsperUS Detroit

http://www.prosperusdetroit.org

This is a training programme for local entrepreneurs from minority ethnic backgrounds. They describe their model in the following terms “Activate Untapped Talent” + “Build Capacity and Leadership” = “More Opportunities, Less Barriers”. ProsperUS provides training, resources and capital for underserved entrepreneurial talent; creates learning communities and secures grants and organisational support for neighbourhood groups. There are three ways people can get involved in the programme.

First, Detroit residents with a business idea can go on a 20 week, 12 session course with 10 hours of one-on-one mentoring. Over 300 people have attended the course and gone on to run their own businesses. Second, experienced business owners and managers can apply to become a trainer, whereby they guide new entrepreneurs to their own success. Lastly, ProsperUS act as a broker for professional services organisations. They help alumni of their courses to access ongoing services in marketing, accounting, IT and legal. This helps to ensure that small businesses get good quality advice and can scale up. It also helps to ensure that ProperUS has a separate revenue stream from former attendees of their courses.

Bamboo Detroit

http://bamboodetroit.com/

You don’t need us to tell you that co-working spaces are undergoing a boom at the moment. Bamboo is, as much as these things can be, a mainstream co-working space providing low-cost office space and associated services to new and established companies. For $99 a month on a 12 month contract, members get access to a centrally-located shared office space, a free bookable conference room, discounts to events and workshops, a postal mailbox, and as much Wi-Fi and coffee as you need. A sparsely furnished, brick and iron building in the heart of the downtown area, at the time of writing Bamboo has 85 members, providing ready access to office essentials. From programmers to writers, estate agents to community organisers, Bamboo welcomes any member of the business sector who wants to get on. Insomniacs are well catered for too – 24/7 access and overnight services are provided as part of the regular membership fee.

Build Institute

http://buildinstitute.org

This is what the Build Institute says about itself online: “We help people turn their business ideas into reality by providing them with the necessary tools, resources, and support network in Detroit.” It sounds like the sort of social enterprise-support system you might expect; like the sort of trite byline behind which an ineffective organisation can hide. But to date, over 500 aspiring and experienced entrepreneurs have graduated from its classes, many of whom have gone on to start successful businesses in the city. So maybe it is actually the real deal. Maybe they really do help people turn their business ideas into reality. In addition to classes, networking events, mentorship, connections to resources and a nurturing community are on offer. Prospective entrants are told: “with a little support, a lot of hard work, and a friendly nudge, you’ll be ready to hit the ground running.”

The institute started in 2012, as a programme of D:hive, a welcome centre and resource hub. It has since grown to become a regular and repeating entrepreneurship training programme.

The Build Institute’s main line in business infrastructure support, though, is a very structured series of business workshops over a three month period – complete with lesson plans, outside activities, recommendations, guest speakers, a formal “business in a box” folder of handouts.

Foodlab Detroit

https://foodlabdetroit.com/

FoodLab is member-led organisation with a mission to “make good food a sustainable reality” across Detroit. They do this by running a number of different programmes, based around topics such as encouraging community action, providing accessible kitchen space to residents, lobbying legislators and state officials, and organising field trips. As of Summer 2015, there are 144 businesses which have signed up to be members of FoodLab, with more in the pipeline.

FoodLab provides guidance for people wanting to start a catering business. The Michigan Cottage Food Laws allow small food businesses to test the market without having to first obtain a commercial licence, corporate insurance or abide by other similar regulations. Members of the Food Lab include those who operate under the Cottage Food Law, which limits sales to $20,000 a year and does not allow either wholesale or online trading.

Michigan Women’s Foundation

www.mwf.org

The MWF has three primary initiatives – accelerating women entrepreneurs, developing the next generation of women leaders and advancing Michigan women’s agenda. It does this through four programmes, which include activities such as weekend-long project management bootcamps, political and community leadership courses for school-age girls, partnering with more than a dozen other organisations to advance the cause of women in business, and running the annual “Women of Achievement and Courage” Awards.

From small beginnings in 1986, when it was started by Mary Jo Pulte, the MWF now runs a wide range of women-focused services, including the Michigan Women’s Microloan Fund, providing loans from $2,500 up to $40,000 for new and existing women entrepreneurs and small business owners.

Michipreneur

www.michipreneur.com

First things first – yes, it is an awful name. Whatever else they do right, Michipreneur is the concatenation from hell. However, if the name is from hell, the flipside is that they work like the devil to publicise the entrepreneurial work done by Michigan’s residents.

Michipreneur is an online publication. With a mission to “empower entrepreneurs, encourage investment, strengthen small business, and foster talent recognition” in the area, a small team of business owners and managers work part-time to promote the local economy. The belief that long-term, enlightened self-interest demands that members of a community help each other and build each other up backs up their work, so, in addition to running the Bamboo Detroit co-working space, Michipreneur founder Amanda Lewin also devotes time to writing, editing and promoting stories of other business owners from the city and the state.

It’s an approach that has succeeded in become a vital part of the Detroit business jigsaw, with Michipreneur helping others to make connections and grow their businesses, whilst building a strong reputation for itself. In a world where publicity and widespread knowledge is essential for growth, Detroit’s community and business sectors would be much the worse off without Michipreneur.

Detroit Young Professionals

www.detroityp.org

One of the problems of profiling business support organisations is that there are only so many times you can read phrases like “we offer an opportunity to promote professional engagement” or “we have a burning desire to expand the region’s business offering” before you want to stick pins in your eyes. And sometimes, even the most innovative organisations can fall victim to such lacklustre descriptions.

Take Detroit Young Professionals for instance. Their name sounds like the blandest thing you’ve ever heard. And their website is barely much better: “DYP seeks to develop an informed, engaged and empowered network of young professionals in the region by providing and promoting civic engagement, professional development and social networking opportunities.” Sounds horrendous to us? But wait… Behind the leaden prose is indeed a hugely innovative non-profit collective with a great agenda to improve the city’s business sector.

Past events have included a gift-giving programme for vulnerable children at Christmas, a community clean-up of a public park, and helping out at a food bank. But it’s not all do-gooder community events. They’ve also run a game of “hunt the murderer” around downtown Detroit ending in a rooftop barbecue, a series of lectures from high profile city figures, a golf tournament, games of Whirly Ball (imagine a cross between the dodgems and basketball) and the obligatory regular socials in a bar.

The mix of socially useful activities, cultural events and excuses to meet people with the same interests as each other seems to prove successful. With an explicit remit to improve Detroit’s cultural appeal as a city for young professionals to move to, DYP is showing that even small changes can make a big difference.