How Struggling Cities Can Reinvent Themselves

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A man runs next to the Guggenheim Bilbao Museum

From financial centers like London, to manufacturing hubs like Detroit, cities around the world are set for a thumping as the global economy grinds to a halt.

For anyone in Europe and the U.S. of a certain age, this is a familiar tale. Once booming industrial centers were laid low in the 1970s by the one-two punch of recession and increasing competition from Asia. Detroit shed almost 40% of its industrial jobs in the '70s alone. Many cities — rust belt towns in America's east and Midwest in particular — still face the huge challenge of reinvention. But there are lessons to be learned from places that have been through this before and the authors of a new British guide argue that U.S. cities would do well to look to Europe for some tips. (See pictures of the recession of 1958.)

The guide, entitled A Tale of 7 Cities, is written by academics from the London School of Economics and piles praise on seven European cities for their recovery following the collapse of vital industries toward the end of the 20th century. The cities — Sheffield and Belfast in the U.K., Bremen and Leipzig in Germany, Turin in Italy, Bilbao in Spain, and Saint-Etienne in France — were all industrial behemoths of the 19th century. Belfast and Bremen thrived through shipbuilding. Many of the world's knives, blades and cutlery came from Sheffield. Turin was famous for its car manufacturer Fiat. But from the 1970s onward, fortunes plummeted. As traditional industries folded, inner-city decay and suburban sprawl took hold, turning off prospective investors and keeping residents from putting down roots.

Each of the seven subject cities used differing combinations of strong local leaders, businesses, universities and community groups, to invest in downtown neighborhoods and housing and reposition their towns for the high-tech age. Saint-Etienne's derelict former arms factory became home to a cluster of clever new engineering companies. An advanced technology park with 6,000 new jobs helped recast Bremen as a hub for science.

Crucially, the cities developed local initiatives to raise workers skills and provide access to new jobs. Mass transit systems got an upgrade, too. Saint-Etienne, for instance, laid on a new downtown tram line for locals. Officials also polished their cities' cultural and public spaces. Local government funding in Bilbao, for one, helped transform a derelict patch of riverside into a cultural landmark, with the voluptuous-looking Guggenheim Museum at its center. (See pictures of The Louvre in Paris.)

The returns have been eye-catching. Unemployment dropped in all but one of the towns between 1990 and 2005. After dropping since the 1970s, the populations of five of the cities began recovering between 2000 and 2005. (In Saint-Etienne and Belfast, the rate of decline at least slowed.)

That success has drawn international admirers. Parlaying the benefits of innovation and research clusters into cleaning up inner city areas is "smart economically, and sustainably, since densely built cities use less energy and generate fewer greenhouse gas emissions," says Bruce Katz, director of the Metropolitan Policy Program at the Washington-based Brookings Institution. "The revival of older industrial cities in Europe has much to teach their counterparts in the U.S."

But there are differences. American cities are typified by much greater urban sprawl than that seen in Europe. "If you take population loss and job losses, the American cities have gone through very dramatic shrinkage and vastly greater suburban expansion," says Anne Power, professor of social policy at the LSE, and one of the guide's authors. With public funding for redevelopment is often less available in the U.S., "the result," says Katz, is "weaker city cores [and] the rise of an exit ramp economy. We need a 180-degree turn in federal and state policies in the U.S."

That's not to say there aren't bright spots. Industrial jobs and residents disappeared from the Tennessee city of Chattanooga in the 1980s, but thanks to a local task force, its downtown stands revitalized, with newly created hospitality and leisure sector jobs boosting employment and income levels far more quickly than in comparable cities through the '90s. Elsewhere in the U.S. old industrial towns seem keen to learn, at least. Greater Ohio, a network of groups working to revitalize cities in the state, recently ordered 60 copies of the LSE's guide to distribute to local city mayors "as a way of giving them inspiration and aspirations," says Lavea Brachman, Greater Ohio's co-director and a senior fellow at Brookings. "We here in Ohio, need inspiration." As the U.S. heads deeper into a recession you can bet they aren't the only ones.

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